Adjustments to Consideration. (a) Within sixty (60) days following the Closing Date, Parent shall cause to be prepared and delivered to the Stockholder Representative an unaudited statement setting forth Parent’s determination of Working Capital as of the Closing, setting forth separately each of the following components of Working Capital: (i) Cash and Cash Equivalents as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), (ii) Receivables as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), (iii) Inventory as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), and (iv) Accounts Payable as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing) (the “Post-Closing Working Capital Statement”). The Post-Closing Working Capital Statement shall be prepared in accordance with GAAP consistently applied, and shall include all invoices received by the Company at or prior to the Closing Date. If the Post-Closing Working Capital Statement deviates from the Closing Date Working Capital Statement in any respect, it shall be accompanied by an explanation for any such deviation, together with reasonably detailed documentary evidence supporting the basis for any such deviation. (b) In the event that, pursuant to and in accordance with the terms of this Section 7.7 it is finally determined that: (i) such Working Capital Deficit is greater than the Working Capital Deficit (including a Working Capital Deficit of zero) reflected in the Closing Date Working Capital Statement, such difference shall be referred to herein as an “Additional Working Capital Deficit”; and (ii) such Working Capital Deficit (including a Working Capital Deficit of zero) x is less than the Working Capital Deficit reflected in the Closing Date Working Capital Statement, such difference shall be referred to herein as a “Working Capital Surplus.” (c) In the event that, pursuant to the terms of this Section 7.7 it is determined that there exists an Additional Working Capital Deficit, then Parent shall be entitled to recover the amount of such Additional Working Capital Deficit out of the Escrow Fund upon the delivery to the Escrow Agent of an Officer’s Certificate in accordance with and subject to the terms of Section 7.3(b). (d) In the event that, pursuant to the terms of this Section 7.7 it is determined that there exists a Working Capital Surplus, then Parent shall promptly (and in any event, no more than five (5) business days after the Working Capital Confirmation Date) release an amount equal to the Working Capital Surplus to the Payment Agent for distribution to the former Company Stockholders in accordance with their respective Pro Rata Escrow Portions. (e) The Stockholder Representative shall have thirty (30) days following delivery of the Post-Closing Working Capital Statement during which to notify Parent in writing (the “Notice of Objection”) of any good faith objections to the calculation of the Additional Working Capital Deficit or Working Capital Surplus, as applicable, or the Post-Closing Working Capital Statement, as it affects such calculation, setting forth a reasonably specific and detailed description of its objections and the dollar amount of each objection. Following delivery by Parent to the Stockholder Representative of the Post-Closing Working Capital Statement, Parent shall give the Stockholder Representative reasonable access during Parent’s normal business hours to those books and records of the Surviving Corporation in the possession of Parent and any personnel which relate to the preparation of the Post-Closing Working Capital Statement for purposes of resolving any disputes concerning the Post-Closing Working Capital Statement and the calculation of the Additional Working Capital Deficit or Working Capital Surplus, as applicable. (f) If the Stockholder Representative objects to the Post-Closing Working Capital Statement or Parent’s calculation of the Additional Working Capital Deficit or Working Capital Surplus as reflected therein, Parent and the Stockholder Representative shall attempt to resolve any such objections within thirty (30) days of the receipt by Parent of the Notice of Objection. (g) If Parent and the Stockholder Representative are unable to resolve any such dispute within the thirty (30) day period referred to in Section 7.7(f), Parent and the Stockholder Representative shall submit the dispute to the Independent Auditors. Each of the parties to this Agreement shall, and shall cause their respective affiliates and representatives to, provide full cooperation to the Independent Auditors. The Independent Auditors shall (x) act in its capacity as an expert and not as an arbitrator, (y) consider only those matters as to which there is a dispute between the parties and (z) be instructed to reach its conclusions regarding any such dispute within thirty (30) days after its appointment and provide a written explanation of its decision. In the event that Parent and the Stockholder Representative submit any dispute to the Independent Auditors, each such party may submit a “position paper” to the Independent Auditors setting forth the position of such party with respect to such dispute, to be considered by such Independent Auditors as it deems fit. Fifty percent (50%) of any expenses relating to the engagement of the Independent Auditors shall be paid by Parent and fifty percent (50%) of such expenses shall be paid by the Stockholder Representative. (h) If the Stockholder Representative fails to deliver a timely Notice of Objection in accordance with Section 7.7(e) (i.e., within a thirty (30) day period), the Post-Closing Working Capital Statement (together with Parent’s calculation of the Additional Working Capital Deficit or Working Capital Surplus, as applicable reflected therein), shall be deemed to have been finally accepted by all of the parties to this Agreement. In the event that the Stockholder Representative delivers a Notice of Objection in accordance with the provisions above and Parent and the Stockholder Representative are able to resolve such dispute by mutual agreement, the Additional Working Capital Deficit or Working Capital Surplus, as applicable, agreed by such parties, shall be deemed to have been finally accepted by all of the parties to this Agreement. In the event that the Stockholder Representative delivers a Notice of Objection in accordance with the provisions set forth above and Parent and the Stockholder Representative are unable to resolve such dispute by mutual agreement, the determination of the Independent Auditors with respect to the Additional Working Capital Deficit or Working Capital Surplus, as applicable, shall be deemed to have been finally accepted by all of the parties to this Agreement. The date upon which the calculation of the Additional Working Capital Deficit or Working Capital Surplus reflected thereon is deemed to have been accepted by all parties shall be referred to as the “Working Capital Confirmation Date.” Following the Working Capital Confirmation Date no further adjustments shall be made thereto and neither Parent nor the Stockholder Representative shall have any further right to challenge such calculation of the Working Capital Surplus or Additional Working Capital Deficit, as applicable.
Appears in 1 contract
Sources: Merger Agreement (Polycom Inc)
Adjustments to Consideration. (a1) Within sixty (60) 60 days following the Closing Date, Parent shall cause Mascoma will prepare and deliver to be SunOpta a consolidated closing balance sheet of the SBI Group prepared and delivered to the Stockholder Representative an unaudited statement setting forth Parent’s determination of Working Capital as of the Closing, setting forth separately each close of the following components of Working Capital: (i) Cash and Cash Equivalents as of business on the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), (ii) Receivables as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), (iii) Inventory as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), and (iv) Accounts Payable as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing) Date (the “Post-Draft Closing Working Capital StatementBalance Sheet”). The Post-Draft Closing Working Capital Statement shall Balance Sheet is to be prepared in accordance with GAAP consistently appliedU.S. generally accepted accounting principles, and shall include all invoices received by consistent with the Company at or prior to the Closing Date. If the Post-Closing Working Capital Statement deviates from the Closing Date Working Capital Statement in any respect, it shall be accompanied by an explanation for any such deviation, together with reasonably detailed documentary evidence supporting the basis for any such deviationSBI Audited Financial Statements.
(b2) In the event that, pursuant to and in accordance with the terms of this Section 7.7 it is finally determined that:
(i) such Working Capital Deficit is greater than the Working Capital Deficit (including a Working Capital Deficit of zero) reflected in the Closing Date Working Capital Statement, such difference shall be referred to herein as an “Additional Working Capital Deficit”; and
(ii) such Working Capital Deficit (including a Working Capital Deficit of zero) x is less than the Working Capital Deficit reflected in the Closing Date Working Capital Statement, such difference shall be referred to herein as a “Working Capital Surplus.”
(c) In the event that, pursuant to the terms of this Section 7.7 it is determined that there exists an Additional Working Capital Deficit, then Parent shall be entitled to recover the amount of such Additional Working Capital Deficit out Within 30 days following receipt of the Escrow Fund upon Draft Closing Balance Sheet, SunOpta shall review the delivery to the Escrow Agent of an Officer’s Certificate in accordance with Draft Closing Balance Sheet and subject to the terms of Section 7.3(b).
(d) In the event that, pursuant to the terms of this Section 7.7 it is determined that there exists a Working Capital Surplus, then Parent shall promptly (and in any event, no more than five (5) business days after the Working Capital Confirmation Date) release an amount equal to the Working Capital Surplus to the Payment Agent for distribution to the former Company Stockholders in accordance with their respective Pro Rata Escrow Portions.
(e) The Stockholder Representative shall have thirty (30) days following delivery of the Post-Closing Working Capital Statement during which to notify Parent Mascoma in writing (the “Notice of Objection”) of if it has any good faith objections to the calculation Draft Closing Balance Sheet. The notice of objection must contain a statement of the Additional Working Capital Deficit or Working Capital Surplus, as applicable, or basis of each of the Post-Closing Working Capital Statement, as it affects such calculation, setting forth a reasonably specific and detailed description of its objections and the dollar each amount in dispute. Mascoma shall provide access, upon every reasonable request, to SunOpta and its auditors or other representatives to all relevant work papers of each objection. Following delivery by Parent to the Stockholder Representative of the Post-Closing Working Capital StatementMascoma, Parent shall give the Stockholder Representative reasonable access during Parent’s normal business hours to those accounting books and records of and the Surviving Corporation in appropriate personnel and outside advisors to verify the possession of Parent accuracy, presentation and any personnel which relate other matters relating to the preparation of the Post-Draft Closing Working Capital Statement Balance Sheet. SunOpta shall be deemed to have accepted the Draft Closing Balance Sheet if SunOpta has not notified Mascoma of its objection within the said period of 30 days.
(3) If SunOpta disputes the Draft Closing Balance Sheet, SunOpta and Mascoma will work expeditiously and in good faith in an attempt to resolve such dispute within a further period of 30 days (or such longer period as they may agree) after the date of notification by SunOpta to Mascoma of such dispute, failing which the dispute shall be submitted for purposes determination to an independent national firm of resolving any disputes concerning chartered accountants mutually agreed to by SunOpta and Mascoma (and, failing such agreement between SunOpta and Mascoma within a further period of 5 Business Days, such independent national firm of chartered accountants shall be Ernst & Young LLP, or if such firm is unable to act, KPMG LLP) (the Post-Closing Working Capital Statement and the calculation “Independent Firm”). The determination of the Additional Working Capital Deficit or Working Capital SurplusIndependent Firm shall be final and binding upon the parties and shall not be subject to appeal, absent manifest error. The Independent Firm shall be deemed to be acting as experts and not as arbitrators.
(4) SunOpta and Mascoma, as applicable, shall each bear the fees and expenses of their respective advisors, auditors and representatives in preparing or reviewing, as the case may be, the Draft Closing Balance Sheet. In the case of a dispute and the retention of an Independent Firm to determine such dispute, the costs and expenses of such Independent Firm shall be borne equally by Mascoma and SunOpta. However, each party shall each bear its own costs in presenting its case to the Independent Firm.
(f5) If Immediately following the Stockholder Representative objects to the Post-Closing Working Capital Statement or Parent’s calculation of the Additional Working Capital Deficit or Working Capital Surplus as reflected therein, Parent and the Stockholder Representative shall attempt to resolve any such objections within thirty (30) days of the receipt by Parent of the Notice of Objection.
(g) If Parent and the Stockholder Representative are unable to resolve any such dispute within the thirty (30) 30 day period referred to in Section 7.7(f2.05(2) or the resolution of any dispute in accordance with the foregoing, as the case may be, Mascoma will deliver to SunOpta the final consolidated closing balance sheet of the SBI Group prepared as of the close of business on the Closing Date (the “Closing Balance Sheet”). Such Closing Balance Sheet shall be final and binding upon the parties hereto for the purposes of the Cash Adjustment and the Working Capital Adjustment and shall not be subject to appeal, absent manifest error.
(6) If the dollar amount of the Cash Equivalents is lower than $14,000,000, then SunOpta shall pay (the “Cash Adjustment”), Parent dollar-for-dollar, the amount of the difference between $14,000,000 and the Stockholder Representative shall submit the dispute to the Independent Auditors. Each dollar amount of the parties to this Agreement shallCash Equivalents.
(7) If the Working Capital (as determined from the Closing Balance Sheet) is lower than the Target Working Capital by more than $100,000, and then SunOpta shall cause their respective affiliates and representatives topay (the “Working Capital Adjustment”), provide full cooperation to dollar-for-dollar, the Independent Auditors. The Independent Auditors shall (x) act in its capacity as an expert and not as an arbitrator, (y) consider only those matters as to which there is a dispute amount of the difference between the parties and (z) be instructed to reach its conclusions regarding any such dispute within thirty (30) days after its appointment and provide a written explanation of its decision. In the event that Parent Target Working Capital and the Stockholder Representative submit Working Capital set forth on the Closing Balance Sheet less any dispute amount payable by SunOpta on account of the Cash Adjustment pursuant to the Independent Auditors, each such party may submit a “position paper” to the Independent Auditors setting forth the position of such party with respect to such dispute, to be considered by such Independent Auditors as it deems fit. Fifty percent Section 2.05(6).
(50%) 8) The amount of any expenses relating to the engagement of the Independent Auditors Cash Adjustment and/or Working Capital Adjustment shall be paid by Parent SunOpta to Mascoma, in cash by bank draft or certified cheque, within five (5) Business Days of the Closing Balance Sheet becoming final and fifty percent (50%) of such expenses shall be paid by the Stockholder Representativebinding.
(h9) If the Stockholder Representative fails All amounts payable by SunOpta to deliver a timely Notice of Objection in accordance with Mascoma pursuant to this Section 7.7(e) (i.e., within a thirty (30) day period), the Post-Closing Working Capital Statement (together with Parent’s calculation of the Additional Working Capital Deficit or Working Capital Surplus, as applicable reflected therein), shall 2.05 will be deemed to have been finally accepted by all be a decrease to the Consideration.
(10) The determination and adjustment of the parties to this Agreement. In the event that the Stockholder Representative delivers a Notice of Objection Consideration in accordance with the provisions above and Parent and of this Section 2.05 shall not limit or affect any other rights or causes of action Mascoma or the Stockholder Representative are able to resolve such dispute by mutual agreement, the Additional Working Capital Deficit or Working Capital Surplus, as applicable, agreed by such parties, shall be deemed to Purchaser may have been finally accepted by all of the parties to this Agreement. In the event that the Stockholder Representative delivers a Notice of Objection in accordance with the provisions set forth above and Parent and the Stockholder Representative are unable to resolve such dispute by mutual agreement, the determination of the Independent Auditors with respect to the Additional Working Capital Deficit or Working Capital Surplusrepresentations, as applicablewarranties, shall be deemed to have been finally accepted by all of the parties to covenants and indemnities in their favour contained in this Agreement. The date upon which the calculation of the Additional Working Capital Deficit or Working Capital Surplus reflected thereon is deemed to have been accepted by all parties shall be referred to as the “Working Capital Confirmation Date.” Following the Working Capital Confirmation Date no further adjustments shall be made thereto and neither Parent nor the Stockholder Representative shall have any further right to challenge such calculation of the Working Capital Surplus or Additional Working Capital Deficit, as applicable.
Appears in 1 contract
Adjustments to Consideration. (a) Within sixty (60) ninety days following the Closing Date, Parent the Purchaser shall cause the Preliminary Closing Date Balance Sheet and the Working Capital Statements to be prepared prepared, each at the Purchaser's expense, and to be delivered to the Stockholder Representative an unaudited statement setting forth Parent’s determination of Working Capital as of the Closing, setting forth separately each of the following components of Working Capital: (i) Cash and Cash Equivalents as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), (ii) Receivables as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), (iii) Inventory as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), and (iv) Accounts Payable as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing) (the “Post-Closing Working Capital Statement”). The Post-Closing Working Capital Statement shall be prepared in accordance with GAAP consistently applied, and shall include all invoices received by the Company at or prior to the Closing Date. If the Post-Closing Working Capital Statement deviates from the Closing Date Working Capital Statement in any respect, it shall be accompanied by an explanation for any such deviation, together with reasonably detailed documentary evidence supporting the basis for any such deviationShareholders' Representative.
(b) In the event that, pursuant to and in accordance with the terms of this Section 7.7 it is finally determined that:
(i) such Working Capital Deficit is greater than Upon receipt of the Preliminary Closing Date Balance Sheet, the Shareholders' Representative and his representatives shall during the succeeding thirty-day period have the right to examine, at the Shareholders' expense, the Preliminary Closing Date Balance Sheet, the Working Capital Deficit (including a Working Capital Deficit of zero) reflected in Statement and all records used to prepare the Preliminary Closing Date Balance Sheet and Working Capital Statement, such difference . The Shareholders' Representative shall be referred to herein as an “Additional Working Capital Deficit”; and
(ii) such Working Capital Deficit (including a Working Capital Deficit of zero) x is less than the Working Capital Deficit reflected in the Closing Date Working Capital Statement, such difference shall be referred to herein as a “Working Capital Surplus.”
(c) In the event that, pursuant give written notice to the terms Purchaser, on or before the close of this Section 7.7 it is determined that there exists an Additional Working Capital Deficit, then Parent shall be entitled to recover business on the amount last day of such Additional Working Capital Deficit out of the Escrow Fund upon the delivery to the Escrow Agent of an Officer’s Certificate in accordance with and subject to the terms of Section 7.3(b).
(d) In the event thatthirty-day period, pursuant to the terms of this Section 7.7 it is determined that there exists a Working Capital Surplus, then Parent shall promptly (and in any event, no more than five (5) business days after the Working Capital Confirmation Date) release an amount equal to the Working Capital Surplus to the Payment Agent for distribution to the former Company Stockholders in accordance with their respective Pro Rata Escrow Portions.
(e) The Stockholder Representative shall have thirty (30) days following delivery of the Post-Closing Working Capital Statement during which to notify Parent in writing (the “Notice of Objection”) of any good faith objections to the Preliminary Closing Date Balance Sheet, the proposed calculation of the Additional Difference in Consolidated Working Capital Deficit or Working Capital Surplus, as applicable, or the Post-Closing Working Capital Statementproposed adjustment, as it affects such calculationif any, to the Consideration, setting forth a reasonably specific and detailed description of its the Shareholders' Representative's objections and the dollar amount of each objection. Following delivery If the Shareholders' Representative does not deliver such notice within such thirty-day period, the Preliminary Closing Date Balance Sheet and the Working Capital Statement shall be deemed to have been accepted by Parent the Shareholders.
(ii) If the Shareholders' Representative in good faith objects to the Stockholder Representative of Preliminary Closing Date Balance Sheet or the Post-Closing Working Capital Statement, Parent shall give the Stockholder Shareholders' Representative reasonable access during Parent’s normal business hours to those books and records of the Surviving Corporation in the possession of Parent and any personnel which relate to the preparation of the Post-Closing Working Capital Statement for purposes of resolving any disputes concerning the Post-Closing Working Capital Statement and the calculation of the Additional Working Capital Deficit or Working Capital Surplus, as applicable.
(f) If the Stockholder Representative objects to the Post-Closing Working Capital Statement or Parent’s calculation of the Additional Working Capital Deficit or Working Capital Surplus as reflected therein, Parent and the Stockholder Representative Purchaser shall attempt to resolve any such objections the issues in dispute within thirty (30) days ten Business Days of receipt of the receipt by Parent of Shareholders' Representative's objections. If the Notice of Objection.
(g) If Parent Shareholders' Representative and the Stockholder Representative Purchaser are unable to resolve any the matter within such dispute ten-Business Day period, they shall jointly appoint Price WaterhouseCoopers LLP (or, if Price WaterhouseCoopers LLP shall not agree to so serve, they shall cause their respective accounting firms to promptly select a replacement for such firm). Such firm shall be instructed to, within fifteen Business Days, reach a conclusion solely as to whether (A) the thirty amounts proposed by the Shareholders' Representative or (30B) day period referred to the amounts proposed by the Purchaser more accurately reflect the Difference in Section 7.7(f)Consolidated Working Capital calculated in accordance with the terms of this Agreement. Any such resolution shall be conclusive and binding on the Purchaser and all of the Shareholders. The fees of such firm of independent public accountants shall be divided equally between the Shareholders, Parent on the one hand, and the Stockholder Representative shall submit Purchaser, on the dispute to other hand. The Shareholders and the Independent Auditors. Each of the parties to this Agreement Purchaser shall, and shall cause their respective affiliates the Company and representatives the Company Subsidiaries to, provide full cooperation to such firm.
(b) If the Independent Auditorsamount of Consolidated Actual Working Capital exceeds the amount of Consolidated Required Working Capital, then the Consideration shall be increased by the amount of such excess. The Independent Auditors shall (x) act in its capacity as an expert and not as an arbitrator, (y) consider only those matters as to which there is a dispute between the parties and (z) be instructed to reach its conclusions regarding any such dispute within thirty (30) days after its appointment and provide a written explanation of its decision. In the event that Parent and the Stockholder Representative submit any dispute Any adjustments to the Independent Auditors, each such party may submit a “position paper” Consideration pursuant to the Independent Auditors setting forth the position of such party with respect to such dispute, to be considered by such Independent Auditors as it deems fit. Fifty percent (50%this Section 3.3(b) of any expenses relating to the engagement of the Independent Auditors shall be paid within ten Business Days of the final determination of the Difference in Consolidated Working Capital pursuant to Section 3.3(a), together with interest accrued thereon, from the Closing Date, at the average three month LIBOR rate published during such period in The Wall Street Journal, to the Shareholders by Parent and fifty percent (50%wire transfer of immediately available funds to the accounts designated by the Shareholders. Each Shareholder's share of the Consideration increase pursuant to this Section 3.3(b) shall be equal to the aggregate amount of such expenses increase multiplied by such Shareholder's percentage share of the Consideration paid on the Closing Date.
(c) If the amount of Consolidated Actual Working Capital is less than the amount of Consolidated Required Working Capital, then the Consideration shall be reduced by the amount of such deficit. Any adjustments to the Consideration pursuant to this Section 3.3(c) shall be paid within ten Business Days of the final determination of the Difference in Consolidated Working Capital pursuant to Section 3.3(a), together with interest accrued thereon, from the Closing Date, at the average three month LIBOR rate as published during such period in The Wall Street Journal, to the Purchaser by wire transfer of immediately available funds to an account designated by the Stockholder RepresentativePurchaser. Each Shareholder shall be jointly and severally obligated to pay to the Purchaser an amount equal to the aggregate amount of the Consideration reduction pursuant to this Section 3.3(c).
(hd) If The Purchaser shall pay any Proceeds from the Stockholder Representative fails to deliver a timely Notice Contingent Assets that are realized after the close of Objection in accordance with Section 7.7(e) (i.e., within a thirty (30) business on the day period), on which the Post-Closing Working Capital Statement (together with Parent’s calculation of the Additional Working Capital Deficit or Working Capital Surplus, as applicable reflected therein), shall be deemed to have been finally accepted by all of the parties to this Agreement. In the event that the Stockholder Representative delivers a Notice of Objection in accordance with the provisions above and Parent and the Stockholder Representative are able to resolve such dispute by mutual agreement, the Additional Working Capital Deficit or Working Capital Surplus, as applicable, agreed by such parties, shall be deemed to have been finally accepted by all of the parties to this Agreement. In the event that the Stockholder Representative delivers a Notice of Objection in accordance with the provisions set forth above and Parent and the Stockholder Representative are unable to resolve such dispute by mutual agreement, the determination of the Independent Auditors with respect Date occurs to the Additional Working Capital Deficit or Working Capital Surplus, as applicable, Shareholders in the same manner provided for payments pursuant to Section 3.3(b); provided that interest thereon shall be deemed to have been finally accepted accrue from the date after the Closing Date such Proceeds from the Contingent Assets were received by all of the parties to this Agreement. The date upon which the calculation of the Additional Working Capital Deficit or Working Capital Surplus reflected thereon is deemed to have been accepted by all parties shall be referred to as the “Working Capital Confirmation DateSurviving Corporation.” Following the Working Capital Confirmation Date no further adjustments shall be made thereto and neither Parent nor the Stockholder Representative shall have any further right to challenge such calculation of the Working Capital Surplus or Additional Working Capital Deficit, as applicable.
Appears in 1 contract
Sources: Merger Agreement (Firstamerica Automotive Inc /De/)
Adjustments to Consideration. (a1) Within sixty (60) 60 days following the Closing Date, Parent shall cause Mascoma will prepare and deliver to be SunOpta a consolidated closing balance sheet of the SBI Group prepared and delivered to the Stockholder Representative an unaudited statement setting forth Parent’s determination of Working Capital as of the Closing, setting forth separately each close of the following components of Working Capital: (i) Cash and Cash Equivalents as of business on the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), (ii) Receivables as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), (iii) Inventory as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), and (iv) Accounts Payable as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing) Date (the “Post-Draft Closing Working Capital StatementBalance Sheet”). The Post-Draft Closing Working Capital Statement shall Balance Sheet is to be prepared in accordance with GAAP consistently appliedU.S. generally accepted accounting principles, and shall include all invoices received by consistent with the Company at or prior to the Closing Date. If the Post-Closing Working Capital Statement deviates from the Closing Date Working Capital Statement in any respect, it shall be accompanied by an explanation for any such deviation, together with reasonably detailed documentary evidence supporting the basis for any such deviationSBI Audited Financial Statements.
(b2) In the event that, pursuant to and in accordance with the terms of this Section 7.7 it is finally determined that:
(i) such Working Capital Deficit is greater than the Working Capital Deficit (including a Working Capital Deficit of zero) reflected in the Closing Date Working Capital Statement, such difference shall be referred to herein as an “Additional Working Capital Deficit”; and
(ii) such Working Capital Deficit (including a Working Capital Deficit of zero) x is less than the Working Capital Deficit reflected in the Closing Date Working Capital Statement, such difference shall be referred to herein as a “Working Capital Surplus.”
(c) In the event that, pursuant to the terms of this Section 7.7 it is determined that there exists an Additional Working Capital Deficit, then Parent shall be entitled to recover the amount of such Additional Working Capital Deficit out Within 30 days following receipt of the Escrow Fund upon Draft Closing Balance Sheet, SunOpta shall review the delivery to the Escrow Agent of an Officer’s Certificate in accordance with Draft Closing Balance Sheet and subject to the terms of Section 7.3(b).
(d) In the event that, pursuant to the terms of this Section 7.7 it is determined that there exists a Working Capital Surplus, then Parent shall promptly (and in any event, no more than five (5) business days after the Working Capital Confirmation Date) release an amount equal to the Working Capital Surplus to the Payment Agent for distribution to the former Company Stockholders in accordance with their respective Pro Rata Escrow Portions.
(e) The Stockholder Representative shall have thirty (30) days following delivery of the Post-Closing Working Capital Statement during which to notify Parent Mascoma in writing (the “Notice of Objection”) of if it has any good faith objections to the calculation Draft Closing Balance Sheet. The notice of objection must contain a statement of the Additional Working Capital Deficit or Working Capital Surplus, as applicable, or basis of each of the Post-Closing Working Capital Statement, as it affects such calculation, setting forth a reasonably specific and detailed description of its objections and the dollar each amount in dispute. Mascoma shall provide access, upon every reasonable request, to SunOpta and its auditors or other representatives to all relevant work papers of each objection. Following delivery by Parent to the Stockholder Representative of the Post-Closing Working Capital StatementMascoma, Parent shall give the Stockholder Representative reasonable access during Parent’s normal business hours to those accounting books and records of and the Surviving Corporation in appropriate personnel and outside advisors to verify the possession of Parent accuracy, presentation and any personnel which relate other matters relating to the preparation of the Post-Draft Closing Working Capital Statement Balance Sheet. SunOpta shall be deemed to have accepted the Draft Closing Balance Sheet if SunOpta has not notified Mascoma of its objection within the said period of 30 days.
(3) If SunOpta disputes the Draft Closing Balance Sheet, SunOpta and Mascoma will work expeditiously and in good faith in an attempt to resolve such dispute within a further period of 30 days (or such longer period as they may agree) after the date of notification by SunOpta to Mascoma of such dispute, failing which the dispute shall be submitted for purposes determination to an independent national firm of resolving any disputes concerning chartered accountants mutually agreed to by SunOpta and Mascoma (and, failing such agreement between SunOpta and Mascoma within a further period of 5 Business Days, such independent national firm of chartered accountants shall be Ernst & Young LLP, or if such firm is unable to act, KPMG LLP) (the Post-Closing Working Capital Statement and the calculation “Independent Firm”). The determination of the Additional Working Capital Deficit or Working Capital SurplusIndependent Firm shall be final and binding upon the parties and shall not be subject to appeal, absent manifest error. The Independent Firm shall be deemed to be acting as experts and not as arbitrators.
(4) SunOpta and Mascoma, as applicable, shall each bear the fees and expenses of their respective advisors, auditors and representatives in preparing or reviewing, as the case may be, the Draft Closing Balance Sheet. In the case of a dispute and the retention of an Independent Firm to determine such dispute, the costs and expenses of such Independent Firm shall be borne equally by Mascoma and SunOpta. However, each party shall each bear its own costs in presenting its case to the Independent Firm.
(f5) If Immediately following the Stockholder Representative objects to the Post-Closing Working Capital Statement or Parent’s calculation of the Additional Working Capital Deficit or Working Capital Surplus as reflected therein, Parent and the Stockholder Representative shall attempt to resolve any such objections within thirty (30) days of the receipt by Parent of the Notice of Objection.
(g) If Parent and the Stockholder Representative are unable to resolve any such dispute within the thirty (30) 30 day period referred to in Section 7.7(f2.05(2) or the resolution of any dispute in accordance with the foregoing, as the case may be, Mascoma will deliver to SunOpta the final consolidated closing balance sheet of the SBI Group prepared as of the close of business on the Closing Date (the “Closing Balance Sheet”). Such Closing Balance Sheet shall be final and binding upon the parties hereto for the purposes of the Cash Adjustment and the Working Capital Adjustment and shall not be subject to appeal, absent manifest error.
(6) If the dollar amount of the Cash Equivalents is lower than $14,000,000, then SunOpta shall pay (the “Cash Adjustment”), Parent dollar-for-dollar, the amount of the difference between $14,000,000 and the Stockholder Representative shall submit the dispute to the Independent Auditors. Each dollar amount of the parties to this Agreement shallCash Equivalents.
(7) If the Working Capital (as determined from the Closing Balance Sheet) is lower than the Target Working Capital by more than $100,000, and then SunOpta shall cause their respective affiliates and representatives topay (the “Working Capital Adjustment”), provide full cooperation to dollar-for-dollar, the Independent Auditors. The Independent Auditors shall (x) act in its capacity as an expert and not as an arbitrator, (y) consider only those matters as to which there is a dispute amount of the difference between the parties and (z) be instructed to reach its conclusions regarding any such dispute within thirty (30) days after its appointment and provide a written explanation of its decision. In the event that Parent Target Working Capital and the Stockholder Representative submit Working Capital set forth on the Closing Balance Sheet less any dispute amount payable by SunOpta on account of the Cash Adjustment pursuant to the Independent Auditors, each such party may submit a “position paper” to the Independent Auditors setting forth the position of such party with respect to such dispute, to be considered by such Independent Auditors as it deems fit. Fifty percent Section 2.05(6) .
(50%) 8) The amount of any expenses relating to the engagement of the Independent Auditors Cash Adjustment and/or Working Capital Adjustment shall be paid by Parent SunOpta to Mascoma, in cash by bank draft or certified cheque, within five (5) Business Days of the Closing Balance Sheet becoming final and fifty percent (50%) of such expenses shall be paid by the Stockholder Representativebinding.
(h9) If the Stockholder Representative fails All amounts payable by SunOpta to deliver a timely Notice of Objection in accordance with Mascoma pursuant to this Section 7.7(e) (i.e., within a thirty (30) day period), the Post-Closing Working Capital Statement (together with Parent’s calculation of the Additional Working Capital Deficit or Working Capital Surplus, as applicable reflected therein), shall 2.05 will be deemed to have been finally accepted by all be a decrease to the Consideration.
(10) The determination and adjustment of the parties to this Agreement. In the event that the Stockholder Representative delivers a Notice of Objection Consideration in accordance with the provisions above and Parent and of this Section 2.05 shall not limit or affect any other rights or causes of action Mascoma or the Stockholder Representative are able to resolve such dispute by mutual agreement, the Additional Working Capital Deficit or Working Capital Surplus, as applicable, agreed by such parties, shall be deemed to Purchaser may have been finally accepted by all of the parties to this Agreement. In the event that the Stockholder Representative delivers a Notice of Objection in accordance with the provisions set forth above and Parent and the Stockholder Representative are unable to resolve such dispute by mutual agreement, the determination of the Independent Auditors with respect to the Additional Working Capital Deficit or Working Capital Surplusrepresentations, as applicablewarranties, shall be deemed to have been finally accepted by all of the parties to covenants and indemnities in their favour contained in this Agreement. The date upon which the calculation of the Additional Working Capital Deficit or Working Capital Surplus reflected thereon is deemed to have been accepted by all parties shall be referred to as the “Working Capital Confirmation Date.” Following the Working Capital Confirmation Date no further adjustments shall be made thereto and neither Parent nor the Stockholder Representative shall have any further right to challenge such calculation of the Working Capital Surplus or Additional Working Capital Deficit, as applicable.
Appears in 1 contract
Adjustments to Consideration. All adjustments to the Consideration shall be determined and (if applicable) paid as set forth in this Section 2.3.
(a) Within sixty The Consideration shall be increased by the amount, if any, by which the Specified Current Assets are greater than the Specified Current Liabilities (60) days following the Closing Datesuch excess amount, Parent shall cause to be prepared and delivered to the Stockholder Representative an unaudited statement setting forth Parent’s determination of Working Capital as of the Closingif any, setting forth separately each of the following components of Working Capital: (i) Cash and Cash Equivalents as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), (ii) Receivables as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), (iii) Inventory as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), and (iv) Accounts Payable as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing) (the “Post-Closing Working Capital StatementSpecified Net Current Asset Difference”). The Post-Closing Working Capital Statement shall be prepared in accordance with GAAP consistently applied, and shall include all invoices received by the Company at or prior to the Closing Date. If the Post-Closing Working Capital Statement deviates from the Closing Date Working Capital Statement in any respect, it shall be accompanied by an explanation for any such deviation, together with reasonably detailed documentary evidence supporting the basis for any such deviation.
(b) In Within 90 days after the event thatClosing Date, pursuant Purchaser shall prepare and deliver to Parent Purchaser’s calculation of the Specified Current Assets and the Specified Current Liabilities (such delivery, the “Purchaser Calculation”). Without limiting any other obligation of Parent or Seller under this Agreement, Parent and Seller will make available or cause to be made available to Purchaser and its Representatives upon reasonable notice and at reasonable times all personnel and information necessary to assist Purchaser and its Representatives in accordance connection with the terms preparation of this Section 7.7 it is finally determined that:
the Purchaser Calculation. Parent shall have 45 days from the date Purchaser delivers the Purchaser Calculation to Parent (isuch period, the “Dispute Period”) to notify Purchaser, in writing, as to whether Parent agrees or disagrees with the Purchaser Calculation, which such Working Capital Deficit is greater than notice shall identify in reasonable detail those items and amounts to which Parent objects, the Working Capital Deficit reasons therefor and Parent’s proposed calculation of the Specified Current Assets and the Specified Current Liabilities and the portion, if any, of the Purchaser Calculation that Parent does not dispute (including a Working Capital Deficit such written notice, the “Dispute Notice”). During the Dispute Period, Parent and its accountants shall be permitted to review (during regular business hours and upon reasonable prior notice) the working papers of zeroPurchaser and (where applicable) reflected Purchaser’s accountants to the extent relating to the matters set forth in the Closing Date Working Capital StatementPurchaser Calculation, such difference in each case as is reasonably requested in writing by Parent. If Parent fails to deliver a Dispute Notice to Purchaser during the Dispute Period, Purchaser’s calculation of the Specified Current Assets and the Specified Current Liabilities shall be referred deemed to herein as an “Additional Working Capital Deficit”; and
(ii) such Working Capital Deficit (including be final and correct and shall be binding upon all parties. If Parent delivers a Working Capital Deficit Dispute Notice to Purchaser with respect to some, but not all, of zero) x is less than the Working Capital Deficit reflected amounts or items included in the Closing Date Working Capital Statement, such difference shall be referred to herein as a “Working Capital Surplus.”
(c) In Purchaser Calculation during the event that, pursuant to the terms of this Section 7.7 it is determined that there exists an Additional Working Capital DeficitDispute Period, then Parent shall be entitled deemed to recover have agreed with Purchaser’s calculations of all amounts set forth in such Purchaser Calculation that were not disputed in such duly and timely delivered Dispute Notice.
(c) If Parent delivers a Dispute Notice to Purchaser during the amount Dispute Period, Parent and Purchaser shall, for a period of 30 days from the date the Dispute Notice is delivered to Purchaser (such Additional Working Capital Deficit out period, the “Resolution Period”), negotiate in good faith and use commercially reasonable efforts to amicably resolve the items in dispute. Any items so resolved shall be deemed to be final and correct as so resolved and shall be binding upon each of the Escrow Fund upon the delivery to the Escrow Agent of an Officer’s Certificate in accordance with and subject to the terms of Section 7.3(b)parties hereto.
(d) In If Parent and Purchaser are unable in good faith to resolve all of the event thatitems in dispute during the Resolution Period, pursuant then, upon the expiration of the Resolution Period or such earlier date as Purchaser and Parent mutually agree, either Purchaser or Parent may refer the items remaining in dispute in writing to the terms Independent Accounting Firm and shall deliver to the Independent Accounting Firm, at the time of this Section 7.7 it is determined that there exists a Working Capital Surplussuch referral, then the Purchaser Calculation and the Dispute Notice. Within five Business Days after referral of the matter to the Independent Accounting Firm, Purchaser and Parent shall promptly agree on the procedures to be followed by the Independent Accounting Firm (including procedures with regard to presentation of evidence). Such procedures shall not alter the accounting policies, practices and in any event, no more than five (5) business days after the Working Capital Confirmation Date) release an amount equal principles to the Working Capital Surplus to the Payment Agent for distribution to the former Company Stockholders in accordance with their respective Pro Rata Escrow Portions.
(e) The Stockholder Representative shall have thirty (30) days following delivery of the Post-Closing Working Capital Statement during which to notify Parent in writing (the “Notice of Objection”) of any good faith objections be applied to the calculation of the Additional Working Capital Deficit or Working Capital Surplus, as applicable, or the Post-Closing Working Capital Statement, as it affects such calculation, setting forth a reasonably specific and detailed description of its objections Specified Current Assets and the dollar amount of each objectionSpecified Current Liabilities, which will be those required by this Agreement. Following delivery by If Purchaser and Parent to the Stockholder Representative of the Post-Closing Working Capital Statement, Parent shall give the Stockholder Representative reasonable access during Parent’s normal business hours to those books and records of the Surviving Corporation in the possession of Parent and any personnel which relate to the preparation of the Post-Closing Working Capital Statement for purposes of resolving any disputes concerning the Post-Closing Working Capital Statement and the calculation of the Additional Working Capital Deficit or Working Capital Surplus, as applicable.
(f) If the Stockholder Representative objects to the Post-Closing Working Capital Statement or Parent’s calculation of the Additional Working Capital Deficit or Working Capital Surplus as reflected therein, Parent and the Stockholder Representative shall attempt to resolve any such objections within thirty (30) days of the receipt by Parent of the Notice of Objection.
(g) If Parent and the Stockholder Representative are unable to resolve any agree upon such dispute within procedures before the thirty (30) day period referred to in Section 7.7(f), Parent and the Stockholder Representative shall submit end of five Business Days after referral of the dispute to the Independent AuditorsAccounting Firm, the Independent Accounting Firm shall establish such procedures giving due regard to the intention of Purchaser and Parent to resolve disputes as quickly, efficiently and inexpensively as possible, which procedures may be, but need not be, those proposed by Purchaser or Parent. Each The parties shall also furnish the Independent Accounting Firm with such other information and documents as the Independent Accounting Firm may reasonably request in order for it to resolve the items in dispute. Parent and Purchaser shall also, within 20 days of the parties to this Agreement shall, and shall cause their respective affiliates and representatives to, provide full cooperation date the items in dispute are referred to the Independent AuditorsAccounting Firm, provide the Independent Accounting Firm with a written statement (a “Position Statement”) describing in reasonable detail their respective positions on the items in dispute (copies of which will be provided by the Independent Accounting Firm to the other party after such time, if any, that both parties have delivered a Position Statement to the Independent Accounting Firm). If any party fails to timely deliver its Position Statement to the Independent Accounting Firm, the Independent Accounting Firm shall resolve the items in dispute solely upon the basis of the information otherwise provided to it. The Independent Auditors Accounting Firm shall (x) act resolve all disputed items in its capacity a written determination to be delivered to Purchaser and Parent within 30 days after such matter is referred to it; provided, however, that any delay in delivering such determination shall not invalidate such determination or deprive the Independent Accounting Firm of jurisdiction to resolve the items in dispute; provided, further, that, in resolving any disputed item, the Independent Accounting Firm shall adhere to the definitions contained in this Agreement and the practices and other principles referred to herein. In no event shall the Independent Accounting Firm assign a value to the Specified Net Current Asset Difference that is greater than the highest or less than the lowest calculation thereof proposed by Purchaser in the Purchaser Calculation and Parent in the Dispute Notice. The decision of the Independent Accounting Firm, acting as an expert and not as an arbitrator, (y) consider only those matters as to which there is a dispute between shall be final and binding upon the parties hereto and (z) shall not be instructed subject to reach its conclusions regarding any such dispute within thirty (30) days after its appointment judicial review. The fees and provide a written explanation expenses of its decision. In the event that Parent and the Stockholder Representative submit any dispute to the Independent AuditorsAccounting Firm shall be borne by Parent, each such party may submit a “position paper” to on the one hand, and Purchaser, on the other hand, in equal portions, unless the Independent Auditors setting forth the position of such party Accounting Firm decides, based on its determination with respect to such dispute, to be considered by such Independent Auditors as it deems fit. Fifty percent (50%) of any expenses relating to the engagement reasonableness of the Independent Auditors shall be paid by Parent respective positions of the parties, that the fees and fifty percent (50%) of such expenses shall be paid by the Stockholder Representativeborne in unequal proportions.
(he) If Within seven days after the Stockholder Representative fails final determination of the Specified Current Assets and the Specified Current Liabilities and the calculation of any Specified Net Current Asset Difference (whether through failure of Parent to timely deliver a timely Notice of Objection in accordance with Section 7.7(e) (i.e.Dispute Notice, within a thirty (30) day period), the Post-Closing Working Capital Statement (together with Parent’s calculation of the Additional Working Capital Deficit or Working Capital Surplus, as applicable reflected therein), shall be deemed to have been finally accepted by all agreement of the parties to this Agreement. In the event that the Stockholder Representative delivers a Notice of Objection in accordance with the provisions above and Parent and the Stockholder Representative are able to resolve such dispute by mutual agreement, the Additional Working Capital Deficit or Working Capital Surplus, as applicable, agreed by such parties, shall be deemed to have been finally accepted by all of the parties to this Agreement. In the event that the Stockholder Representative delivers a Notice of Objection in accordance with the provisions set forth above and Parent and the Stockholder Representative are unable to resolve such dispute by mutual agreement, the determination of the Independent Auditors Accounting Firm), if there is a positive Specified Net Current Asset Difference, then Purchaser shall pay such Specified Net Current Asset Difference to Seller in immediately available funds via wire transfer (in which case there shall be an immediate upward adjustment of the Consideration in such amount); provided, however, that Purchaser shall pay any portion of such Specified Net Current Asset Difference (i) not earlier than the final determination of such Specified Net Current Asset Difference, (ii) only after such time that CNAC and its Subsidiaries have received payment of trade accounts receivable of CNAC and its Subsidiaries reflected in the Specified Current Assets up to the dollar amount whereby the Specified Net Current Asset Difference would have been zero (such dollar amount, the “Base Receivables”) and (iii) once the threshold in Section 2.3(e)(ii) is met, only as and when (and to the extent) CNAC and its Subsidiaries have received payment of trade accounts receivable of CNAC and its Subsidiaries reflected in the Specified Current Assets in an amount exceeding the Base Receivables (such amount exceeding the Base Receivables, the “Collected Receivables”). In order to effectuate the payment of any Specified Net Current Asset Difference, Purchaser agrees (A) to use efforts to collect such Collected Receivables that are not materially less than the efforts it otherwise employs to collect the Base Receivables or other trade accounts receivable of the Business, (B) that, with respect to any amounts collected by CNAC and its Subsidiaries from any payor that has trade accounts receivable reflected in the Additional Working Capital Deficit Specified Current Assets, for purposes of this Section 2.3, such amounts shall, unless otherwise expressly provided by the payor, be attributable to the Specified Current Assets prior to being attributed to any trade accounts receivable that are not Specified Current Assets, (C) to remit to Seller, on a weekly basis commencing the week following the final determination of any Specified Net Current Asset Difference, the amount of the Base Receivables and the Collected Receivables, and (D) to provide to Seller, concurrent with any such remittance of Collected Receivables, a list setting forth in respect of such Collected Receivables (x) the payor of each portion of such Collected Receivables and (y) the amount of Collected Receivables paid by each such payor.
(f) The dispute resolution procedures set forth in this Section 2.3 are the sole and exclusive means and remedy for determining and calculating the Specified Current Assets, the Specified Current Liabilities and any Specified Net Current Asset Difference and the components thereof, other than in the event of fraud or Working Capital Surpluswillful misconduct, as applicable, in which case the aggrieved party shall be deemed entitled to have been finally accepted such other rights and remedies as are permitted by all of the parties to this Agreement. The date upon which the calculation of the Additional Working Capital Deficit or Working Capital Surplus reflected thereon is deemed to have been accepted by all parties shall be referred to as the “Working Capital Confirmation Dateapplicable Law.” Following the Working Capital Confirmation Date no further adjustments shall be made thereto and neither Parent nor the Stockholder Representative shall have any further right to challenge such calculation of the Working Capital Surplus or Additional Working Capital Deficit, as applicable.
Appears in 1 contract
Sources: Unit Purchase Agreement (Cliffs Natural Resources Inc.)
Adjustments to Consideration. (a) At least three (3) business days prior to the Closing Date, BMR shall deliver to Buyer a statement prepared in accordance with GAAP consistently applied (the "Estimated Working Capital Statement") setting forth an estimate of the Working Capital as of the close of business on the Closing Date (the "Estimated Working Capital") and the Estimated Closing Balance Sheet. In the event that the Estimated Working Capital is greater than the Working Capital as of June 30, 2006, the calculation of which is set forth on Schedule 2.07 attached hereto (the "Target Working Capital") (such excess, the "Estimated Working Capital Surplus"), the Unadjusted Consideration shall be increased by the amount of such Estimated Working Capital Surplus. In the event that the Estimated Working Capital is less than the Target Working Capital (such deficiency, the "Estimated Working Capital Deficiency"), the amount of the Unadjusted Consideration shall be reduced by the amount of such Estimated Working Capital Deficiency.
(b) Within sixty (60) days following the Closing Date, Parent Buyer shall cause deliver to be BMR a statement prepared and delivered to on the Stockholder Representative an unaudited statement same basis as the Estimated Working Capital Statement setting forth Parent’s determination of the actual Working Capital as of the Closing, setting forth separately each close of the following components of Working Capital: (i) Cash and Cash Equivalents as of business on the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), (ii) Receivables as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), (iii) Inventory as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing), and (iv) Accounts Payable as of the Closing (without giving effect to any actions taken by Parent that may become effective as of the Closing) Date (the “Post-"Closing Working Capital Statement”").
(c) BMR shall deliver to Buyer, by the Objection Deadline Date, either a notice indicating that BMR accepts the Closing Working Capital Statement or a detailed statement describing its objections (if any) to the Closing Working Capital Statement. The Post-Buyer will provide to BMR reasonable access to the books and records of Buyer to the extent reasonably required to verify the information presented on the Closing Working Capital Statement. If BMR delivers to Buyer a notice accepting the Closing Working Capital Statement, or BMR does not deliver a written objection to the Closing Working Capital Statement by the Objection Deadline Date, then, effective as of either the date of delivery of such notice of acceptance or as of the close of business on the Objection Deadline Date, the Closing Working Capital Statement shall be prepared in accordance with GAAP consistently applied, and shall include all invoices received by deemed to be the Company at or prior Final Closing Working Capital Statement. If BMR timely objects to the Closing Date. If the Post-Closing Working Capital Statement deviates from the Closing Date Working Capital Statement in any respectStatement, it such objections shall be accompanied by an explanation for any such deviation, together with reasonably detailed documentary evidence supporting the basis for any such deviation.
(b) In the event that, pursuant to and in accordance with the terms of this Section 7.7 it is finally determined thatresolved as follows:
(i) Buyer and BMR shall first use reasonable efforts to resolve such Working Capital Deficit is greater than the Working Capital Deficit (including a Working Capital Deficit of zero) reflected in the Closing Date Working Capital Statement, such difference shall be referred to herein as an “Additional Working Capital Deficit”; andobjections.
(ii) such Working Capital Deficit If Buyer and BMR do not reach a resolution of all objections set forth on BMR's statement of objections within thirty (including a Working Capital Deficit of zero30) x is less than the Working Capital Deficit reflected in the Closing Date Working Capital Statement, such difference shall be referred to herein as a “Working Capital Surplus.”
(c) In the event that, pursuant to the terms of this Section 7.7 it is determined that there exists an Additional Working Capital Deficit, then Parent shall be entitled to recover the amount days after delivery of such Additional Working Capital Deficit out statement of the Escrow Fund upon the delivery to the Escrow Agent of an Officer’s Certificate in accordance with objections, Buyer and subject to the terms of Section 7.3(b).
(d) In the event thatBMR shall, pursuant to the terms of this Section 7.7 it is determined that there exists a Working Capital Surplus, then Parent shall promptly (and in any event, no more than five (5) business days after the Working Capital Confirmation Date) release an amount equal to the Working Capital Surplus to the Payment Agent for distribution to the former Company Stockholders in accordance with their respective Pro Rata Escrow Portions.
(e) The Stockholder Representative shall have within thirty (30) days following delivery the expiration of such thirty (30)-day period, engage the Accountant, pursuant to an engagement agreement executed by Buyer, BMR and the Accountant, to resolve any remaining objections set forth on BMR's statement of objections (the "Unresolved Objections").
(iii) Buyer and BMR shall jointly submit to the Accountant, within ten (10) days after the date of the Post-Closing engagement of the Accountant (as evidenced by the date of the engagement agreement), a copy of the Estimated Working Capital Statement during which to notify Parent in writing (Statement, the “Notice of Objection”) of any good faith objections to the calculation of the Additional Working Capital Deficit or Working Capital Surplus, as applicable, or the Post-Closing Working Capital Statement, as it affects such calculationa copy of the statement of objections delivered by BMR to Buyer, and a statement setting forth the resolution of any objections agreed to by Buyer and BMR. Each of Buyer and BMR shall submit to the Accountant (with a reasonably specific copy delivered to the other party on the same day), within forty-five (45) days after the date of the engagement of the Accountant, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of Buyer and detailed description BMR may (but shall not be required to) submit to the Accountant (with a copy delivered to the other party on the same day), within sixty (60) days after the date of the engagement of the Accountant, a memorandum responding to the initial memorandum submitted to the Accountant by the other party. Unless requested by the Accountant in writing, neither party may present any additional information or arguments to the Accountant, either orally or in writing.
(iv) Within ninety (90) days after the date of its engagement hereunder, the Accountant shall determine whether the objections raised by BMR are appropriate and shall issue a ruling which shall include a balance sheet, comprised of the dollar amount of each objection. Following delivery Closing Working Capital Statement as adjusted pursuant to any resolutions to objections agreed upon by Parent Buyer and BMR and pursuant to the Stockholder Representative Accountant's resolution of the Post-Unresolved Objections. Such balance sheet shall be deemed to be the Final Closing Working Capital Statement, Parent shall give .
(v) The resolution by the Stockholder Representative reasonable access during Parent’s normal business hours to those books and records Accountant of the Surviving Corporation Unresolved Objections shall be conclusive and binding upon Buyer and BMR. Buyer and BMR agree that the procedure set forth in the possession of Parent and any personnel which relate this Section 2.07(c) for resolving disputes with respect to the preparation of the Post-Closing Working Capital Statement shall be the sole and exclusive method for purposes of resolving any such disputes; provided, that this provision shall not prohibit either party from instituting litigation to enforce the ruling of the Accountant.
(vi) The fees and expenses of the Accountant in connection with the resolution of disputes concerning pursuant to this Section 2.07 shall be shared equally by Buyer and BMR; provided, that if the Post-Accountant determines that one party has adopted a position or positions with respect to the Closing Working Capital Statement that is frivolous and clearly without merit, the calculation Accountant may, in its discretion, assign a greater portion of any such fees and expenses to such party.
(d) If the Additional Working Capital Deficit or as shown on the Final Closing Working Capital SurplusStatement is less than the Estimated Working Capital, the Consideration shall be reduced by such deficiency, and BMR shall pay to Buyer, by wire transfer or other delivery of immediately available funds, within three (3) business days after the date on which the Final Closing Working Capital Statement is finally determined pursuant to this Section 2.07, an amount equal to such deficiency.
(e) If the Working Capital as applicableshown on the Final Closing Working Capital Statement exceeds the Estimated Working Capital, the Consideration shall be increased by such excess amount, and Buyer shall pay to BMR, by wire transfer or other delivery of immediately available funds, within three (3) business days after the date on which the Final Closing Working Capital Statement is finally determined pursuant to this Section 2.07, an amount equal to such excess.
(f) If the Stockholder Representative objects Consideration is adjusted pursuant to this Section 2.07, the Post-Closing Working Capital Statement Allocation Schedule shall be appropriately modified to reflect increases or Parent’s calculation of decreases in the Additional Working Capital Deficit or Working Capital Surplus as reflected therein, Parent and the Stockholder Representative shall attempt various asset categories which give rise to resolve any such objections within thirty (30) days of the receipt by Parent of the Notice of Objectionadjustments.
(g) If Parent For purposes of this Agreement, "Working Capital" shall mean the excess of BMR's current assets over BMR's current liabilities, as shown on the applicable working capital statement; provided, however, that BMR's current assets shall exclude any Excluded Property and BMR's current liabilities shall exclude the Stockholder Representative are unable to resolve current portion of BMR's capital lease obligations and any such dispute within the thirty (30) day period referred to in Section 7.7(f)Excluded Obligations, Parent and the Stockholder Representative and; provided, further, that BMR's current assets shall submit the dispute include an amount equal to the Independent Auditors. Each cost of capital assets, improvements and deposits the parties to this Agreement shallacquisition of which was funded by cash expenditures of BMR paid or incurred after June 30, 2006, and shall cause their respective affiliates and representatives to, provide full cooperation prior to the Independent Auditors. The Independent Auditors shall (x) act in its capacity as an expert and not as an arbitrator, (y) consider only those matters as to which there is a dispute between the parties and (z) be instructed to reach its conclusions regarding any such dispute within thirty (30) days after its appointment and provide a written explanation of its decision. In the event that Parent and the Stockholder Representative submit any dispute to the Independent Auditors, each such party may submit a “position paper” to the Independent Auditors setting forth the position of such party with respect to such dispute, to be considered by such Independent Auditors as it deems fit. Fifty percent (50%) of any expenses relating to the engagement of the Independent Auditors shall be paid by Parent and fifty percent (50%) of such expenses shall be paid by the Stockholder Representative.
(h) If the Stockholder Representative fails to deliver a timely Notice of Objection in accordance with Section 7.7(e) (i.e., within a thirty (30) day period), the Post-Closing Working Capital Statement (together with Parent’s calculation of the Additional Working Capital Deficit or Working Capital Surplus, as applicable reflected therein), shall be deemed to have been finally accepted by all of the parties to this Agreement. In the event that the Stockholder Representative delivers a Notice of Objection in accordance with the provisions above and Parent and the Stockholder Representative are able to resolve such dispute by mutual agreement, the Additional Working Capital Deficit or Working Capital Surplus, as applicable, agreed by such parties, shall be deemed to have been finally accepted by all of the parties to this Agreement. In the event that the Stockholder Representative delivers a Notice of Objection in accordance with the provisions set forth above and Parent and the Stockholder Representative are unable to resolve such dispute by mutual agreement, the determination of the Independent Auditors with respect to the Additional Working Capital Deficit or Working Capital Surplus, as applicable, shall be deemed to have been finally accepted by all of the parties to this Agreement. The date upon which the calculation of the Additional Working Capital Deficit or Working Capital Surplus reflected thereon is deemed to have been accepted by all parties shall be referred to as the “Working Capital Confirmation Date.” Following the Working Capital Confirmation Date no further adjustments shall be made thereto and neither Parent nor the Stockholder Representative shall have any further right to challenge such calculation of the Working Capital Surplus or Additional Working Capital Deficit, as applicable.
Appears in 1 contract