Common use of Calculation of Closing Net Working Capital Clause in Contracts

Calculation of Closing Net Working Capital. Within sixty (60) days after the Closing Date, Buyer, with the assistance of its representatives, will prepare and present to the Shareholders a calculation of the Closing Net Working Capital (the “Proposed Net Working Capital Calculation”). Upon delivery of such calculation, Buyer shall make available to Shareholders and their representatives to the extent reasonably requested all books, records, work papers and personnel of the Company; provided, however, that Shareholders and their representatives will conduct their work in a manner that does not unreasonably interfere with or disrupt the conduct of the Business by the Company after the Closing. The parties agree that the Proposed Net Working Capital Calculation shall be prepared so that it presents fairly the Closing Net Working Capital, in accordance with GAAP, except for such deviations from GAAP as set forth on Schedule 2.04. The Proposed Net Working Capital Calculation shall be binding upon the parties to this Agreement unless the Shareholders give written notice of disagreement with any of the values or amounts contained therein to Buyer within twenty (20) Business Days after their receipt of the Proposed Net Working Capital Calculation, specifying in reasonable detail the nature and extent of such disagreement. If Buyer and the Shareholders mutually agree upon the Proposed Net Working Capital Calculation, within twenty (20) Business Days after Buyer’s delivery of such applicable notice, such agreement shall be binding upon the parties to this Agreement. If Buyer and the Shareholders are unable to resolve any such disagreement within such period, the disputed amount shall be referred for final determination to Deloitte & Touche USA LLP (the “First Choice”) or, if such firm is not available, such other independent accounting firm selected by the mutual agreement of Buyer and the Shareholders (the “Selected Firm”). If Buyer and the Shareholders cannot agree on the Selected Firm, it shall be chosen by the First Choice. If issues are submitted to the First Choice or Selected Firm, as applicable, for resolution, (i) the First Choice or Selected Firm, as applicable, shall use GAAP, except for such deviations from GAAP as set forth on Schedule 2.04; (ii) Buyer, the Company and the Shareholders will furnish or cause to be furnished to the First Choice or Selected Firm, as applicable, such work papers and other documents and information relating to the disputed issues as the First Choice or Selected Firm, as applicable, may request and are available to that party or its agents and will be afforded the opportunity to present to the First Choice or Selected Firm, as applicable, any material relating to the disputed issues and to discuss the issues with the First Choice or Selected Firm, as applicable; (iii) the determination by the First Choice or Selected Firm, as applicable, as set forth in a notice to be delivered to the Buyer, the Company and the Shareholders within thirty (30) Business Days of the submission to the First Choice or Selected Firm, as applicable, of the issues remaining in dispute, will be final, binding and conclusive on the parties, will be used in the calculation of the Closing Net Working Capital, and will be accompanied by a certificate of the First Choice or Selected Firm, as applicable, that it reached such determination in accordance with the provisions of this Section 2.04; (iv) such First Choice or Selected Firm, as applicable, shall be authorized to resolve only those items remaining in dispute between the parties in accordance with the provisions of this Section 2.04 within the range of the difference between Buyer’s position with respect thereto and the Shareholders position with respect thereto; and (v) the costs of any dispute resolution pursuant to this Section 2.04, including the fees and expenses of the First Choice or Selected Firm, as applicable, and of any enforcement of the determination thereof, shall be divided evenly among the Buyer, on the one hand, and the Shareholders, on the other hand. The fees and disbursements of the representatives of each party incurred in connection with their preparation or review of the Proposed Net Working Capital Calculation and the preparation or review of any notice of objection, as applicable, shall be borne by such party. The Proposed Net Working Capital Calculation as finally determined is referred to herein as the “Final Net Working Capital.”

Calculation of Closing Net Working Capital. Within (a) As soon as practicable after the Closing Date, but in no event later than ninety (90) days following the Closing Date, Buyer shall prepare and deliver to the Company a statement of the Net Working Capital of the Company, determined as of the Closing Date (hereinafter the “Proposed Statement of Closing Net Working Capital”). For purposes of this Agreement, the Proposed Statement of Closing Net Working Capital shall be prepared based on the books and records of the Company shall be based on the Current Assets and the Current Liabilities transferred to the Asset Buyer and, for the avoidance of doubt, shall include only the Current Assets and the Current Liabilities of the Company (and not ADSI). (b) The Proposed Statement of Closing Net Working Capital shall be subject to verification and examination by Sellers and, in order to facilitate such verification and examination, Buyer shall, at such reasonable times and places as may be requested by Sellers Representative, deliver copies of all supporting documents to Sellers Representative and any Persons designated in writing by Sellers Representative and provide to Sellers Representative and any Person designated in writing by Sellers Representative, the right to examine or take copies of any work papers (other than proprietary work papers) used by Buyer in the preparation of the Proposed Statement of Closing Net Working Capital. (c) Sellers Representative shall have a period of sixty (60) days after delivery of the Proposed Statement of Closing Net Working Capital to Sellers Representative, to present in writing to Buyer any objections Sellers Representative may have to the accuracy of the Proposed Statement of Closing Net Working Capital, which objections shall be set forth in reasonable detail. If no objections are raised within such sixty (60) day period, the Proposed Statement of Closing Net Working Capital shall be deemed to be accepted and approved by Sellers, the amount of the Net Working Capital as contained in the Proposed Statement of Closing Net Working Capital shall be deemed to be the amount of the Closing DateNet Working Capital and any amounts required to be paid by Section 3.05 hereof shall be paid by the Sellers or Buyer as the case may be. (d) If Sellers Representative shall disagree as to the accuracy of the amount of the Closing Net Working Capital as contained in the Proposed Statement of Closing Net Working Capital, Sellers Representative shall present to Buyer written notice within the sixty (60) day period described in Section 3.03(c) above specifying such disagreement. Following receipt of such notice by Buyer, Sellers Representative and Buyer shall use their best efforts to promptly resolve the matter or matters in disagreement. If Sellers Representative and Buyer resolve the matter or matters in disagreement, Sellers Representative and the Buyer shall either confirm or revise the original Proposed Statement of Closing Net Working Capital and the amount of the Closing Net Working Capital whereupon the amount of the Net Working Capital of the Business as contained in the confirmed or revised Proposed Statement of Closing Net Working Capital shall be deemed to be the amount of the Closing Net Working Capital, shall be final and binding upon the parties hereto and any amounts required to be paid as provided for in Section 3.05 hereof shall be paid by Sellers or Buyer as the case may be. (e) If Sellers Representative and Buyer are unable to resolve the matter or matters in disagreement within thirty (30) days following Buyer’s receipt of written notice from Sellers Representative of disagreement with the assistance accuracy of its representativesthe amount of the Closing Net Working Capital contained in the Proposed Statement of Closing Net Working Capital, will prepare then such disagreement or disagreements (and present only such disagreement or disagreements) shall be referred for resolution to a nationally recognized firm of independent certified public accountants that is mutually agreeable to Buyer and Sellers Representative (the “Independent Accountants”). The Independent Accountants shall be directed to furnish written notice to Sellers Representative and Buyer of their resolution of any such disagreements referred to them (to the Shareholders extent such amounts are in dispute) as soon as practicable but in no event later than twenty (20) days following the referral of such dispute to the Independent Accountants. Buyer and Sellers Representative shall instruct the Independent Accountants not to, and the Independent Accountants shall not, assign a value to any item in dispute greater than the greatest value for such item assigned by Buyer, on the one hand, or Sellers Representative, on the other hand, or less than the smallest value for such item assigned by Buyer, on the one hand, or Sellers Representative, on the other hand. Buyer and Sellers Representative shall also instruct the Independent Accountants to, and the Independent Accountants shall, make its determination based solely on presentations by Buyer and Sellers Representative that are in accordance with this Agreement (i.e., not on the basis of an independent review). The amount of the Closing Net Working Capital as determined by the Independent Accountants shall be final and binding upon the parties and any amounts required to be paid by Section 3.05 hereof shall be paid or adjusted (as hereinafter provided) as provided in Section 3.05 by Sellers or Buyer, as the case may be. (f) Notwithstanding anything to the contrary in this Section 3.03 during the period that the determination of the Closing Net Working Capital shall remain in dispute, neither party shall be required to pay to the other party the amount that would otherwise be payable under this Section 3.03 and Section 3.04 if no such disagreement were to exist. (g) During and with respect to the audit and reviews referred to in this Section 3.03, Sellers and Buyer shall: (i) fully cooperate with all reasonable requests of Sellers Representative, Buyer and the Independent Accountants, as the case be; (ii) upon reasonable request make available to Sellers Representative, Buyer and the Independent Accountants, all work papers, (excluding proprietary programs and information of Sellers and Buyer) supporting schedules, documents and other information (including access to all appropriate knowledgeable personnel of Sellers) upon which the Proposed Statement of Closing Net Working Capital was prepared and the Closing Net Working Capital was determined; and (iii) promptly provide the Independent Accountants with such management representation letters (in customary form) executed by appropriate personnel of Sellers and Buyer as applicable, as may reasonably be requested with respect to the calculation of the Closing Net Working Capital (and the “Proposed Net Working Capital Calculation”). Upon delivery of such calculation, Buyer shall make available to Shareholders and their representatives to the extent reasonably requested all books, records, work papers and personnel preparation of the Company; provided, however, that Shareholders and their representatives will conduct their work in a manner that does not unreasonably interfere with or disrupt the conduct Closing Statement of the Business by the Company after the Closing. The parties agree that the Proposed Net Working Capital Calculation shall be prepared so that it presents fairly the Closing Net Working Capital, in accordance with GAAP, except for such deviations from GAAP as set forth on Schedule 2.04. The Proposed Net Working Capital Calculation shall be binding upon . (h) With the parties to this Agreement unless the Shareholders give written notice exception of disagreement with any of the values or amounts contained therein to Buyer within twenty (20) Business Days after their receipt of the Proposed Net Working Capital Calculation, specifying in reasonable detail the nature and extent of such disagreement. If Buyer and the Shareholders mutually agree upon the Proposed Net Working Capital Calculation, within twenty (20) Business Days after Buyer’s delivery of such applicable notice, such agreement shall be binding upon the parties to this Agreement. If Buyer and the Shareholders are unable to resolve any such disagreement within such period, the disputed amount shall be referred for final determination to Deloitte & Touche USA LLP (the “First Choice”) or, if such firm is not available, such other independent accounting firm selected by the mutual agreement of Buyer and the Shareholders (the “Selected Firm”). If Buyer and the Shareholders cannot agree on the Selected Firm, it shall be chosen by the First Choice. If issues are submitted to the First Choice or Selected Firm, as applicable, for resolution, (i) the First Choice or Selected Firm, as applicable, shall use GAAP, except for such deviations from GAAP as set forth on Schedule 2.04; (ii) Buyer, the Company and the Shareholders will furnish or cause to be furnished to the First Choice or Selected Firm, as applicable, such work papers and other documents and information relating to the disputed issues as the First Choice or Selected Firm, as applicable, may request and are available to that party or its agents and will be afforded the opportunity to present to the First Choice or Selected Firm, as applicable, any material relating to the disputed issues and to discuss the issues with the First Choice or Selected Firm, as applicable; (iii) the determination by the First Choice or Selected Firm, as applicable, as set forth in a notice to be delivered to the Buyer, the Company and the Shareholders within thirty (30) Business Days of the submission to the First Choice or Selected Firm, as applicable, of the issues remaining in dispute, will be final, binding and conclusive on the parties, will be used in the calculation of the Closing Net Working Capital, and will be accompanied by a certificate of the First Choice or Selected Firm, as applicable, that it reached such determination in accordance with the provisions of this Section 2.04; (iv) such First Choice or Selected Firm, as applicable, shall be authorized to resolve only those items remaining in dispute between the parties in accordance with the provisions of this Section 2.04 within the range of the difference between Buyer’s position with respect thereto and the Shareholders position with respect thereto; and (v) the costs of any dispute resolution pursuant to this Section 2.04, including the fees and expenses of the First Choice or Selected FirmIndependent Accountants, as applicable, and of any enforcement of the determination thereof, shall be divided evenly among the Buyer, on the one hand, and the Shareholders, on the other hand. The all fees and disbursements expenses of Sellers relating to the representatives of each party incurred matters described in connection with their preparation or review of the Proposed Net Working Capital Calculation and the preparation or review of any notice of objection, as applicable, this Section 3.03 shall be borne by Sellers and all fees and expenses of the Buyer relating to the matters described in this Section 3.03 shall be borne by Buyer. The costs and expenses of the Independent Accountants shall be allocated between Buyer and Seller based upon the percentage of the portion of the contested amount not awarded to Buyer or Seller bears to the amount actually contested by such party. The Proposed For example, if Seller claims the Closing Net Working Capital Calculation as finally determined is referred $1,000 greater than the amount claimed by Buyer, and Buyer contests only $500 of the amount claimed by Seller, and if the Independent Accountants ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of the Independent Accountants will be allocated 60% (i.e., 300 ÷ 500) to herein as the “Final Net Working CapitalBuyer and 40% (i.e., 200 ÷ 500) to Seller.”