Common use of Base Purchase Price Adjustment Clause in Contracts

Base Purchase Price Adjustment. 2.3.1 No later than two (2) Business Days prior to the Closing Date, (a) the Company shall prepare and deliver to Buyer a statement setting forth its reasonably detailed good faith estimate as of the open of business on the Closing Date of the Working Capital (the “Estimated Working Capital”) and (b) the Members shall deliver a certificate signed by ▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇, certifying that such statement was prepared in accordance with the definition of Working Capital and procedures set forth in Annex II. Upon receipt of the statement and certificate referred to in the immediately preceding sentence, and in connection with Buyer’s review of such statement, Buyer and its Representatives shall be given reasonable access, during normal business hours and upon reasonable notice, to (a) all of the books and records of the Company relating to such statement, including a copy of the schedules, computations and workpapers of the Company used in connection with such statement, and (b) the finance personnel of the Company. 2.3.2 On the Closing Date, the Base Purchase Price shall be (a) increased, if the Estimated Working Capital exceeds NEGATIVE One Million Five Hundred Seventy Eight Thousand Dollars (-$1,578,000) (the “Reference Working Capital”), by an amount equal to the difference between the Estimated Working Capital and the Reference Working Capital or (b) decreased, if the Estimated Working Capital is less than the Reference Working Capital, by an amount equal to the difference between the Reference Working Capital and the Estimated Working Capital. 2.3.3 Within ninety (90) days following the Closing Date, Buyer shall deliver or cause to be delivered to the Members the following (collectively, the “Preliminary Closing Statement”): 2.3.3.1 an unaudited balance sheet of the Company immediately prior to the Closing (the “Preliminary Closing Balance Sheet”), prepared in accordance with the definition of Working Capital and procedures set forth in Annex II; 2.3.3.2 a reasonably detailed calculation by Buyer of the Working Capital as of the open of business on the Closing Date based on the Preliminary Closing Balance Sheet (the “Preliminary Working Capital”); and 2.3.3.3 a certificate of an officer of Buyer, certifying that the Preliminary Closing Balance Sheet has been prepared in accordance with GAAP consistently applied with the Balance Sheet and that the Preliminary Working Capital was prepared in accordance with the definition of Working Capital and procedures set forth in Annex II. Upon receipt of the Preliminary Closing Statement, and in connection with the Members’ review of such statement, the Member Representatives and their Representatives shall be given reasonable access, during normal business hours and upon reasonable notice, to (a) all of the books and records of the Company and Buyer relating to such statement, including a copy of the schedules, computations and workpapers of the Company and Buyer used in connection with the Preliminary Closing Statement, and (b) the finance personnel of the Company and Buyer, in each case, excluding any materials prepared in connection with any dispute or potential dispute between the Members, on the one hand, and Buyer, on the other hand. 2.3.4 The Members shall have sixty (60) Business Days following receipt of the Preliminary Closing Statement to review the Preliminary Closing Balance Sheet and the calculation of Preliminary Working Capital and to notify Buyer in writing if the Members dispute any item or amount of the Preliminary Working Capital set forth on the Preliminary Closing Statement, specifying the reasons therefor in reasonable detail together with the Members’ calculation of such item or amount (the “Dispute Notice” and each item or amount on the Dispute Notice, a “Disputed Item”). Other than the Disputed Items, the Members shall be deemed to have accepted all items and amounts contained in the Preliminary Closing Balance Sheet and the calculation of Preliminary Working Capital delivered by Buyer pursuant to Section 2.3.3. 2.3.5 In the event that the Members shall deliver a Dispute Notice to Buyer, Buyer and the Members shall attempt to resolve any Disputed Item as promptly as practicable and, upon such resolution, if any, any adjustments to the Preliminary Closing Balance Sheet and the Preliminary Working Capital shall be made in accordance with the agreement of Buyer and the Members. If, for any reason, Buyer and the Members are unable to resolve any Disputed Item within fifteen (15) Business Days of the Members’ delivery of such Dispute Notice, such dispute shall be resolved by Ernst &Young LLP (the “Independent Accountant Arbitrator”); provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Buyer and the Members shall within fifteen (15) Business Days after the end of such fifteen (15)-Business Day period agree on an alternate independent accounting firm, or in default thereof such selection shall be made by the American Arbitration Association (“AAA”), which accounting firm shall be the “Independent Accountant Arbitrator” hereunder, and such determination shall be final and binding on, and shall not be subject to appeal by, Buyer or the Members, and may be entered and enforced as provided in Section 12.3. If there is a referral to the Independent Accountant Arbitrator, each of Buyer and the Members agree, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and submit to the Independent Accountant Arbitrator, not later than ten (10) Business Days after its appointment, a written statement summarizing such Party’s position on the Disputed Items, together with such supporting documentation as such Party deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Buyer and the Members, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Buyer’s calculation delivered pursuant to Section 2.3.3, on the one hand, and the Members’ calculation delivered pursuant to Section 2.3.4, on the other hand. The Independent Accountant Arbitrator shall be instructed to use reasonable best efforts to deliver to Buyer and the Members a written report setting forth the resolution of each Disputed Item within thirty (30) days of submission of the Preliminary Closing Balance Sheet and the Preliminary Working Capital to it and, in any case, as promptly as practicable after such submission. Any expenses relating to the engagement of the Independent Accountant Arbitrator in respect of its services pursuant to this Section 2.3.5 shall be shared equally by (i) subject to Section 12.16, the Members, severally based on their Allocable Share, on the one hand, and (ii) Buyer, on the other hand. The “Final Closing Balance Sheet” and the “Final Working Capital” shall be (a) if no Dispute Notice has been timely delivered by the Members, the Preliminary Closing Balance Sheet and the Preliminary Working Capital, respectively, as originally submitted by Buyer, or (b) if a Dispute Notice has been timely delivered by the Members, the Preliminary Closing Balance Sheet and the Preliminary Working Capital, respectively, as adjusted to take into account (i) the items and amounts accepted or deemed to have been accepted by the Members, (ii) Disputed Items settled by negotiation and (iii) Disputed Items determined by the Independent Accountant Arbitrator.