Closing Purchase Price Adjustment. (a) Unless the parties shall have previously mutually agreed in writing that any portions of the estimated Closing Amounts are to be considered the Final Closing Amounts (as defined below) for purposes hereof (which agreement shall be irrevocable), or with respect to the Final Closing Amount for Used Vehicles which will be irrevocably finalized by the parties no later than five (5) days after the Closing, then, as promptly as practicable, and in any event within forty-five (45) days after the Closing Date (except the Final Closing Amounts for Used Vehicles), the Purchaser shall prepare and deliver to the Seller Parties a statement (the “Revised Closing Statement”) setting forth the Purchaser’s good faith calculation of the Closing Amounts (including all of the components thereof set forth in the definition thereof), together with such schedules and data with respect to the determination thereof as are appropriate to support the calculations set forth in the Revised Closing Statement. The Revised Closing Statement shall be prepared in accordance with the terms of this Agreement and the Purchase Price Calculation/Accounting Principles. The parties agree that the purpose of preparing the Revised Closing Statement and determining the Final Closing Amounts (and all components thereof) and the related adjustments contemplated by this Section 2.07 is to measure the amount of the Final Closing Amounts (and all components thereof) in accordance with the terms of this Agreement and the Purchase Price Calculation/Accounting Principles, and such process is not intended to permit the introduction of different accounting methods, policies, principles, practices, procedures, judgments, classifications or estimation methodologies for the purpose of determining the Final Closing Amounts (and all components thereof) other than those set forth in the Purchase Price Calculation/Accounting Principles. Following the delivery of the Revised Closing Statement, the Purchaser shall provide the Seller Parties and their Representatives with reasonable access to the Transferred Records, work papers and other documents that were used in the preparation of, or otherwise relate to, the Revised Closing Statement, internal and external accountants, relevant personnel and properties of the Purchaser and its Subsidiaries, to permit the Seller Parties and their Representatives to review the Revised Closing Statement and the Purchaser’s calculation of the Closing Amount (and all components thereof) as set forth therein. The Revised Closing Statement shall become final and binding upon the parties on the thirtieth (30th) day following receipt thereof by the Seller Parties, unless the Seller Parties give written notice of their disagreement with the Revised Closing Statement (a “Notice of Disagreement”) to the Purchaser prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so asserted and include the Seller Parties’ calculation of the Closing Amounts. If a timely Notice of Disagreement is received by the Purchaser, then the Revised Closing Statement (as revised in accordance with this sentence) shall become final and binding upon the parties on the earlier of the date on which the Purchaser and the Seller Parties resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement and the date on which all such disputed matters are finally resolved in writing by the Independent Expert pursuant to the procedures set forth in this Section 2.07. During the thirty (30) day period following the delivery of a Notice of Disagreement, the Purchaser and the Seller Parties shall work in good faith to resolve in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement. At the end of such thirty (30) day period, the Purchaser and the Seller Parties shall submit to the Independent Expert for review any and all matters that remain in dispute and were included in the Notice of Disagreement. The parties shall instruct the Independent Expert to render its decision as to such disputed items and the effect of its decision on the Revised Closing Statement as promptly as practicable but in no event later than sixty (60) days after the date of such submission. Each party shall furnish to the Independent Expert such working papers and other relevant documents and information relating to the disputed items, and shall provide interviews, answer questions and otherwise cooperate with the Independent Expert as the Independent Expert may reasonably request in connection with its determination of such disputed items. In the event either party shall participate in teleconferences or meetings with, or make presentations to, the Independent Expert, the other party shall be entitled to reasonable advance notice of, and to participate in, such teleconferences, meetings or presentations. The terms of appointment and engagement of the Independent Expert shall be as agreed upon between the parties in writing. (b) In resolving any such disputed item, the Independent Expert shall act in the capacity of an expert and not as an arbitrator, shall limit its review to matters specifically set forth in the Notice of Disagreement as to a disputed item (other than matters thereafter resolved by mutual written agreement of the parties) and shall not assign a value to any disputed item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party in the Revised Closing Statement or in the Notice of Disagreement, as applicable. The Independent Expert is not authorized to, and shall not, make any other determination, including any determination with respect to any matter included in the Revised Closing Statement or the Notice of Disagreement that was not submitted for resolution to the Independent Expert, any determination as to whether the Purchase Price Calculation/Accounting Principles were followed with respect to the Financial Statements, any determination as to the accuracy of the representations and warranties in this Agreement, or any determination as to compliance by any party with any of its respective covenants in this Agreement. Any dispute not within the scope of the disputed items to be resolved by the Independent Expert pursuant to this Section 2.07 shall be resolved as otherwise provided in this Agreement. (c) The final determination by the Independent Expert of the disputed items submitted to it pursuant to this Section 2.07 shall be in writing, include the Independent Expert’s calculation of the Closing Amounts, include the Independent Expert’s determination of each disputed item submitted to it pursuant to this Section 2.07 and include a brief summary of the Independent Expert’s reasons for its determination regarding each such disputed item. (d) The final determination of the disputed items by the Independent Expert shall be final and binding upon the parties and an order may be entered in respect thereof by a court having jurisdiction over the party against which such determination is to be enforced. Each party agrees that it shall not have any right to, and shall not, institute any Action (as defined below) of any kind challenging such determination by the Independent Expert, which shall be the sole remedy of the parties with respect to the items properly subject to submission to Independent Expert under this Section 2.07, except that the foregoing will not preclude an Action to enforce such determination or to challenge such determination on the ground that it is inconsistent with the terms of this Agreement. The fees and expenses of the Independent Expert incurred pursuant to this Section 2.07 shall be borne 50% by the Seller Parties and 50% by the Purchaser. (e) Following the Closing Amounts becoming final and binding upon the parties pursuant to this Section 2.07 (such final amounts, the “Final Closing Amounts”), a payment (the “Final Purchase Price Adjustment”) shall be made by or on behalf of the applicable party in accordance with this Section 2.07(e). The Final Purchase Price Adjustment shall be an amount equal to the Closing Purchase Price minus the Final Purchase Price and, if the Final Purchase Price Adjustment is positive, an amount equal to the Final Purchase Price Adjustment shall be paid to the Purchaser (or one or more Affiliates designated by the Purchaser in such amounts designated by the Purchaser) by the Seller Parties (or one or more Affiliates designated by the Seller Parties in such amounts designated by the Seller Parties) and if the Final Purchase Price Adjustment is negative, an amount equal to the absolute value of the Final Purchase Price Adjustment shall be paid to the Seller Parties (or one or more Affiliates designated by the Seller Parties) by the Purchaser (or one or more Affiliates designated by the Purchaser). Any payments pursuant to this Section 2.07(e) shall be made in U.S. Dollars by wire transfer of immediately available funds to an account or accounts designated by the receiving party within five (5) days after the Closing Statement becomes final and binding upon the parties. The Final Purchase Price Adjustment shall be treated as an adjustment to the Closing Purchase Price for all applicable Tax purposes, except as otherwise required pursuant to a final “determination” (within the meaning of Section 1313(a) of the Code) or similar determination under applicable state, local or non-U.S. Tax Law.
Appears in 1 contract
Closing Purchase Price Adjustment. The Purchase Price shall be subject to adjustment after the Closing as specified in this Section 1.6:
(a) Unless the parties shall have previously mutually agreed in writing that any portions of the estimated Closing Amounts are to be considered the Final Closing Amounts (as defined below) for purposes hereof (which agreement shall be irrevocable), or with respect to the Final Closing Amount for Used Vehicles which will be irrevocably finalized by the parties no later than five (5) days after the Closing, then, as As promptly as practicable, and but in any event within forty-five (45) 30 calendar days after following the Closing Date (except the Final Closing Amounts for Used Vehicles)Date, the Purchaser LCC shall at its expense prepare and deliver to the Seller Parties Purchaser a statement of net assets of the LCC Businesses as of the close of business on the Closing Date (the “Revised "Closing Statement”) setting forth Statement of Net Assets"). The Closing Statement of Net Assets shall include only the Purchaser’s good faith calculation book value of the Closing Amounts (including all Purchased Assets and the Assumed Liabilities and shall exclude the book value of the components thereof set forth in Excluded Assets and the definition thereof), together with such schedules Excluded Liabilities and data with respect to the determination thereof as are appropriate to support the calculations set forth in the Revised Closing Statement. The Revised Closing Statement shall otherwise be prepared in accordance with U.S. GAAP applied on a basis consistent with the terms preparation of this Agreement and the Purchase Price Calculation/Accounting PrinciplesMarch 31 Statement of Net Assets (as defined in Section 5.5) including, without limitation, the treatment of 18 software development costs as a capitalized asset (except that the Closing Statement of Net Assets shall not include accruals for liabilities, if any, resulting from or arising out of the use of corporate credit cards issued to employees of the LCC Businesses). The parties agree that the purpose of preparing the Revised Closing Statement and determining the Final Closing Amounts (and all components thereof) and the related adjustments contemplated by this Section 2.07 is to measure the amount net assets of the Final Closing Amounts (and all components thereof) in accordance with the terms of this Agreement and the Purchase Price Calculation/Accounting Principles, and such process is not intended to permit the introduction of different accounting methods, policies, principles, practices, procedures, judgments, classifications or estimation methodologies for the purpose of determining the Final Closing Amounts (and all components thereof) other than those set forth in the Purchase Price Calculation/Accounting Principles. Following the delivery of the Revised Closing Statement, the Purchaser shall provide the Seller Parties and their Representatives with reasonable access to the Transferred Records, work papers and other documents that were used in the preparation of, or otherwise relate to, the Revised Closing Statement, internal and external accountants, relevant personnel and properties of the Purchaser and its Subsidiaries, to permit the Seller Parties and their Representatives to review the Revised Closing Statement and the Purchaser’s calculation LCC Businesses as of the Closing Amount (and all components thereofthe "Closing Net Book Value") shall be calculated as set forth therein. The Revised the excess of the book value of the Purchased Assets reflected on the Closing Statement shall become final and binding upon of Net Assets over the parties book value of the Assumed Liabilities reflected on the thirtieth (30th) day following receipt thereof by the Seller Parties, unless the Seller Parties give written notice of their disagreement with the Revised Closing Statement (a “Notice of Disagreement”) to the Purchaser prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so asserted and include the Seller Parties’ calculation of the Closing Amounts. If a timely Notice of Disagreement is received by the Purchaser, then the Revised Closing Statement (as revised in accordance with this sentence) shall become final and binding upon the parties on the earlier of the date on which the Purchaser and the Seller Parties resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement and the date on which all such disputed matters are finally resolved in writing by the Independent Expert pursuant to the procedures set forth in this Section 2.07. During the thirty (30) day period following the delivery of a Notice of Disagreement, the Purchaser and the Seller Parties shall work in good faith to resolve in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement. At the end of such thirty (30) day period, the Purchaser and the Seller Parties shall submit to the Independent Expert for review any and all matters that remain in dispute and were included in the Notice of Disagreement. The parties shall instruct the Independent Expert to render its decision as to such disputed items and the effect of its decision on the Revised Closing Statement as promptly as practicable but in no event later than sixty (60) days after the date of such submission. Each party shall furnish to the Independent Expert such working papers and other relevant documents and information relating to the disputed items, and shall provide interviews, answer questions and otherwise cooperate with the Independent Expert as the Independent Expert may reasonably request in connection with its determination of such disputed items. In the event either party shall participate in teleconferences or meetings with, or make presentations to, the Independent Expert, the other party shall be entitled to reasonable advance notice of, and to participate in, such teleconferences, meetings or presentations. The terms of appointment and engagement of the Independent Expert shall be as agreed upon between the parties in writingNet Assets.
(b) In resolving LCC shall consult with Purchaser prior to delivering the Closing Statement of Net Assets and shall deliver drafts thereof and reasonable supporting documentation as and when they become available. LCC and Purchaser shall attempt to resolve any differences relating to amounts set forth on the Closing Statement of Net Assets prior to delivery thereof pursuant to paragraph (a) or to be set forth above and, if not so resolved by such disputed item, the Independent Expert shall act in the capacity of an expert and not as an arbitratortime, shall limit its review attempt to matters specifically set forth in the Notice of Disagreement resolve such differences as to a disputed item (other than matters thereafter resolved by mutual written agreement of the parties) and shall not assign a value to any disputed item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party in the Revised Closing Statement or in the Notice of Disagreement, promptly as applicable. The Independent Expert is not authorized to, and shall not, make any other determination, including any determination with respect to any matter included in the Revised Closing Statement or the Notice of Disagreement that was not submitted for resolution to the Independent Expert, any determination as to whether the Purchase Price Calculation/Accounting Principles were followed with respect to the Financial Statements, any determination as to the accuracy of the representations and warranties in this Agreement, or any determination as to compliance by any party with any of its respective covenants in this Agreement. Any dispute not within the scope of the disputed items to be resolved by the Independent Expert pursuant to this Section 2.07 shall be resolved as otherwise provided in this Agreementpracticable thereafter.
(c) The final determination by In the Independent Expert event LCC and Purchaser are unable to resolve their differences within 10 Business Days after LCC's delivery of the Closing Statement of Net Assets, LCC shall submit the disputed items submitted to it pursuant to this Section 2.07 a nationally recognized independent accounting firm (which may be LCC's regularly engaged independent accounting firm) selected by LCC with the consent of Purchaser (which consent shall not be unreasonably withheld). The independent accounting firm so selected (the "Accounting Firm") shall resolve the disputed items as promptly as practicable. The resolution of disputed items by the Accounting Firm shall be in writingdeemed to be and shall be final, include binding and conclusive on the Independent Expert’s calculation of the Closing Amounts, include the Independent Expert’s determination of each disputed item submitted to it pursuant to this Section 2.07 and include a brief summary of the Independent Expert’s reasons for its determination regarding each such disputed itemparties hereto.
(d) The final determination Within three Business Days of all disputed items on the Closing Statement of Net Assets being resolved pursuant to paragraphs (b) and (c) above, a Purchase Price adjustment shall be made as follows:
(i) in the event that the Closing Net Book Value is less than $17,734,112 (the "March 31 Net Book Value", which the parties agree to be the excess of the disputed items by book value of the Independent Expert Purchased Assets over the book value of the Assumed Liabilities reflected on the March 31 Statement of Net Assets), then the Purchase Price shall be final adjusted downward in an amount equal to such shortfall and binding upon LCC shall, within five Business Days of such determination, pay such amount to the parties and an order may be entered Purchaser by wire transfer in respect thereof by a court having jurisdiction over immediately available funds; and
(ii) in the party against which such determination is to be enforced. Each party agrees event that it shall not have any right tothe Closing Net Book Value exceeds the March 31 Net Book Value, and shall not, institute any Action (as defined below) of any kind challenging such determination by then the Independent Expert, which Purchase Price shall be adjusted upward in an amount equal to such excess and the sole remedy Purchaser shall, within five Business Days of such determination, pay the parties with respect amount of such excess to the items properly subject to submission to Independent Expert under this Section 2.07LCC by wire transfer in immediately available funds; provided, except however, that the foregoing will not preclude an Action to enforce such determination or to challenge such determination difference between the amount of accounts receivable, net of reserves therefor, set forth on the ground that it is inconsistent with Closing Statement of Net Assets and the terms amount of this Agreement. The fees and expenses accounts receivable, net of reserves therefor, set forth on the Independent Expert incurred pursuant to this Section 2.07 shall be borne 50% by the Seller Parties and 50% by the Purchaser.March 31 Statement of Net Assets (which amount the
(e) Following In the event LCC delivers to Purchaser a good faith estimate of the amount of accounts receivable to be included in the Purchased Assets as of the Closing Amounts becoming final and binding upon Date, net of reserves therefor, then the parties pursuant to this Section 2.07 (such final amounts, calculation of the “Final Closing Amounts”), a payment (the “Final Purchase Price Adjustment”) and the Holdback Amount shall be made by or on behalf of the applicable party in accordance with this Section 2.07(e). The Final Purchase Price Adjustment shall be an amount equal adjusted appropriately to the Closing Purchase Price minus the Final Purchase Price and, if the Final Purchase Price Adjustment is positive, an amount equal to the Final Purchase Price Adjustment shall be paid to the Purchaser (or one or more Affiliates designated by the Purchaser in reflect such amounts designated by the Purchaser) by the Seller Parties (or one or more Affiliates designated by the Seller Parties in such amounts designated by the Seller Parties) and if the Final Purchase Price Adjustment is negative, an amount equal to the absolute value of the Final Purchase Price Adjustment shall be paid to the Seller Parties (or one or more Affiliates designated by the Seller Parties) by the Purchaser (or one or more Affiliates designated by the Purchaser). Any payments pursuant to this Section 2.07(e) shall be made in U.S. Dollars by wire transfer of immediately available funds to an account or accounts designated by the receiving party within five (5) days after the Closing Statement becomes final and binding upon the parties. The Final Purchase Price Adjustment shall be treated as an adjustment to the Closing Purchase Price for all applicable Tax purposes, except as otherwise required pursuant to a final “determination” (within the meaning of Section 1313(a) of the Code) or similar determination under applicable state, local or non-U.S. Tax Lawestimate.
Appears in 1 contract
Closing Purchase Price Adjustment. (a) Unless the parties shall have previously mutually agreed in writing that any portions of the estimated Closing Amounts are to be considered the Final Closing Amounts (as defined below) for purposes hereof (which agreement shall be irrevocable), or with respect to the Final Closing Amount for Used Vehicles which will be irrevocably finalized by the parties no later than five (5) days after the Closing, then, as promptly as practicable, and in any event within forty-forty- five (45) days after the Closing Date (except the Final Closing Amounts for Used Vehicles), the Purchaser shall prepare and deliver to the Seller Parties a statement (the “Revised Closing Statement”) setting forth the Purchaser’s good faith calculation of the Closing Amounts (including all of the components thereof set forth in the definition thereof), together with such schedules and data with respect to the determination thereof as are appropriate to support the calculations set forth in the Revised Closing Statement. The Revised Closing Statement shall be prepared in accordance with the terms of this Agreement and the Purchase Price Calculation/Accounting Principles. The parties agree that the purpose of preparing the Revised Closing Statement and determining the Final Closing Amounts (and all components thereof) and the related adjustments contemplated by this Section 2.07 is to measure the amount of the Final Closing Amounts (and all components thereof) in accordance with the terms of this Agreement and the Purchase Price Calculation/Accounting Principles, and such process is not intended to permit the introduction of different accounting methods, policies, principles, practices, procedures, judgments, classifications or estimation methodologies for the purpose of determining the Final Closing Amounts (and all components thereof) other than those set forth in the Purchase Price Calculation/Accounting Principles. Following the delivery of the Revised Closing Statement, the Purchaser shall provide the Seller Parties and their Representatives with reasonable access to the Transferred Records, work papers and other documents that were used in the preparation of, or otherwise relate to, the Revised Closing Statement, internal and external accountants, relevant personnel and properties of the Purchaser and its Subsidiaries, to permit the Seller Parties and their Representatives to review the Revised Closing Statement and the Purchaser’s calculation of the Closing Amount (and all components thereof) as set forth therein. The Revised Closing Statement shall become final and binding upon the parties on the thirtieth (30th) day following receipt thereof by the Seller Parties, unless the Seller Parties give written notice of their disagreement with the Revised Closing Statement (a “Notice of Disagreement”) to the Purchaser prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so asserted and include the Seller Parties’ calculation of the Closing Amounts. If a timely Notice of Disagreement is received by the Purchaser, then the Revised Closing Statement (as revised in accordance with this sentence) shall become final and binding upon the parties on the earlier of (i) the date on which the Purchaser and the Seller Parties resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement and (ii) the date on which all such disputed matters are finally resolved in writing by the Independent Expert pursuant to the procedures set forth in this Section 2.07. During the thirty (30) day period following the delivery of a Notice of Disagreement, the Purchaser and the Seller Parties shall work in good faith to resolve in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement. At the end of such thirty (30) day period, the Purchaser and the Seller Parties shall submit to the Independent Expert for review any and all matters that remain in dispute and were included in the Notice of Disagreement. The parties shall instruct the Independent Expert to render its decision as to such disputed items and the effect of its decision on the Revised Closing Statement as promptly as practicable but in no event later than sixty (60) days after the date of such submission. Each party shall furnish to the Independent Expert such working papers and other relevant documents and information relating to the disputed items, and shall provide interviews, answer questions and otherwise cooperate with the Independent Expert as the Independent Expert may reasonably request in connection with its determination of such disputed items. In the event either party shall participate in teleconferences or meetings with, or make presentations to, the Independent Expert, the other party shall be entitled to reasonable advance notice of, and to participate in, such teleconferences, meetings or presentations. The terms of appointment and engagement of the Independent Expert shall be as agreed upon between the parties in writing.
(b) In resolving any such disputed item, the Independent Expert (i) shall act in the capacity of an expert and not as an arbitrator, (ii) shall limit its review to matters specifically set forth in the Notice of Disagreement as to a disputed item (other than matters thereafter resolved by mutual written agreement of the parties) and (iii) shall not assign a value to any disputed item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party in the Revised Closing Statement or in the Notice of Disagreement, as applicable. The Independent Expert is not authorized to, and shall not, make any other determination, including (A) any determination with respect to any matter included in the Revised Closing Statement or the Notice of Disagreement that was not submitted for resolution to the Independent Expert, (B) any determination as to whether the Purchase Price Calculation/Accounting Principles were followed with respect to the Financial Statements, (C) any determination as to the accuracy of the representations and warranties in this Agreement, or (D) any determination as to compliance by any party with any of its respective covenants in this Agreement. Any dispute not within the scope of the disputed items to be resolved by the Independent Expert pursuant to this Section 2.07 shall be resolved as otherwise provided in this Agreement.
(c) The final determination by the Independent Expert of the disputed items submitted to it pursuant to this Section 2.07 shall (i) be in writing, (ii) include the Independent Expert’s calculation of the Closing Amounts, (iii) include the Independent Expert’s determination of each disputed item submitted to it pursuant to this Section 2.07 and (iv) include a brief summary of the Independent Expert’s reasons for its determination regarding each such disputed item.
(d) The final determination of the disputed items by the Independent Expert shall be final and binding upon the parties and an order may be entered in respect thereof by a court having jurisdiction over the party against which such determination is to be enforced. Each party agrees that it shall not have any right to, and shall not, institute any Action (as defined below) of any kind challenging such determination by the Independent Expert, which shall be the sole remedy of the parties with respect to the items properly subject to submission to Independent Expert under this Section 2.07, except that the foregoing will not preclude an Action to enforce such determination or to challenge such determination on the ground that it is inconsistent with the terms of this Agreement. The fees and expenses of the Independent Expert incurred pursuant to this Section 2.07 shall be borne 50% by the Seller Parties and 50% by the Purchaser.
(e) Following the Closing Amounts becoming final and binding upon the parties pursuant to this Section 2.07 (such final amounts, the “Final Closing Amounts”), a payment (the “Final Purchase Price Adjustment”) shall be made by or on behalf of the applicable party in accordance with this Section 2.07(e). The Final Purchase Price Adjustment shall be an amount equal to the Closing Purchase Price minus the Final Purchase Price and, (i) if the Final Purchase Price Adjustment is positive, an amount equal to the Final Purchase Price Adjustment shall be paid to the Purchaser (or one or more Affiliates designated by the Purchaser in such amounts designated by the Purchaser) by the Seller Parties (or one or more Affiliates designated by the Seller Parties in such amounts designated by the Seller Parties) and (ii) if the Final Purchase Price Adjustment is negative, an amount equal to the absolute value of the Final Purchase Price Adjustment shall be paid to the Seller Parties (or one or more Affiliates designated by the Seller Parties) by the Purchaser (or one or more Affiliates designated by the Purchaser). Any payments pursuant to this Section 2.07(e) shall be made in U.S. Dollars by wire transfer of immediately available funds to an account or accounts designated by the receiving party within five (5) days after the Closing Statement becomes final and binding upon the parties. The Final Purchase Price Adjustment shall be treated as an adjustment to the Closing Purchase Price for all applicable Tax purposes, except as otherwise required pursuant to a final “determination” (within the meaning of Section 1313(a) of the Code) or similar determination under applicable state, local or non-U.S. Tax Law.
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Closing Purchase Price Adjustment. After the Closing, the Closing Purchase Price shall be increased or decreased, as applicable, on a dollar-for-dollar basis, by the sum of the following, in each case determined in accordance with (i) GAAP consistently applied in accordance with the Company’s past practices as set forth on Exhibit B and (ii) the Illustrative Working Capital Calculation:
(a) Unless the parties shall have previously mutually agreed Actual Closing Net Working Capital minus the Estimated Closing Net Working Capital; plus
(b) the Actual Cash Amount minus the Estimated Cash Amount; plus
(c) the Estimated Closing Debt minus the Actual Closing Debt; plus (d) the Estimated Unpaid Transaction Expenses minus the Actual Unpaid Transaction Expenses (clauses (a) through (d), collectively, the “Adjustment Amount”). Seller and ▇▇▇▇▇ will cooperate with each other and each other’s Representatives in writing that any portions all reasonable respects in connection with the matters in this Section 1.5, including giving the other and such Representatives reasonable access at reasonable times to the applicable executive-level personnel, preparers of the estimated Closing Amounts are to be considered notices and calculations set forth in this Section 1.5, and books and records of the Final Closing Amounts Company for such matters.
1.5.1 Within one hundred twenty (as defined below) for purposes hereof (which agreement shall be irrevocable), or with respect to the Final Closing Amount for Used Vehicles which will be irrevocably finalized by the parties no later than five (5120) days after the ClosingClosing Date, thenBuyer will prepare and deliver, or cause to be prepared and delivered, to Seller a statement (the “Preliminary Closing Statement”) stating, in reasonable detail, Buyer’s determination of: (a)
(i) the Closing Net Working Capital and the Net Working Capital Surplus or the Net Working Capital Deficit, if any, (ii) the Cash Amount, (iii) the Closing Debt and (iv) the Unpaid Transaction Expenses; and (b) based on such calculations, the Adjustment Amount, if any. The Preliminary Closing Statement will be prepared (y) in accordance with (1) GAAP consistently applied in accordance with the Company’s past practices as promptly set forth on Exhibit B and (2) the Illustrative Working Capital Calculation and (z) without giving effect to any other changes arising as practicablea result of the Contemplated Transactions.
1.5.2 If Seller disagrees with any of the calculations set forth in the Preliminary Closing Statement, and in any event Seller shall, within forty-five (45) days after receipt of the Preliminary Closing Date (except the Final Closing Amounts for Used Vehicles), the Purchaser shall prepare and deliver to the Seller Parties a statement Statement (the “Revised Closing StatementStatement Review Period”), deliver a written notice (a “Closing Statement Objection Notice”) to Buyer setting forth in reasonable detail Seller’s disagreement with any of the Purchaser’s good faith calculation calculations set forth therein. In the event Seller does not provide such Closing Statement Objection Notice prior to the end of the Closing Amounts Statement Review Period (including all or earlier provides written notice of the components thereof set forth in the definition thereof), together with such schedules and data with respect to the determination thereof as are appropriate to support its acceptance of the calculations set forth in the Revised Preliminary Closing Statement. The Revised Closing Statement ), Seller shall be prepared in accordance with deemed to have accepted the terms of this Agreement and the Purchase Price Calculation/Accounting Principles. The parties agree that the purpose of preparing the Revised Closing Statement and determining the Final Closing Amounts (and all components thereof) and the related adjustments contemplated by this Section 2.07 is to measure the amount of the Final Closing Amounts (and all components thereof) in accordance with the terms of this Agreement and the Purchase Price Calculation/Accounting Principles, and such process is not intended to permit the introduction of different accounting methods, policies, principles, practices, procedures, judgments, classifications or estimation methodologies for the purpose of determining the Final Closing Amounts (and all components thereof) other than those set forth in the Purchase Price Calculation/Accounting Principles. Following the delivery of the Revised Closing Statement, the Purchaser shall provide the Seller Parties and their Representatives with reasonable access to the Transferred Records, work papers and other documents that were used in the preparation of, or otherwise relate to, the Revised Closing Statement, internal and external accountants, relevant personnel and properties of the Purchaser and its Subsidiaries, to permit the Seller Parties and their Representatives to review the Revised Preliminary Closing Statement and the Purchaser’s calculation of the Closing Amount (and all components thereof) as computations set forth therein. The Revised , and the Preliminary Closing Statement and the calculations set forth therein shall become final be final, binding and binding upon conclusive on the parties on the thirtieth (30th) day following receipt thereof by the Seller Parties, unless the Seller Parties give written notice hereto for purposes of their disagreement with the Revised Closing Statement (a “Notice of Disagreement”) to the Purchaser prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so asserted and include the Seller Parties’ calculation of the Closing Amounts. If a timely Notice of Disagreement is received by the Purchaser, then the Revised Closing Statement (as revised in accordance with this sentence) shall become final and binding upon the parties on the earlier of the date on which the Purchaser and the Seller Parties resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement and the date on which all such disputed matters are finally resolved in writing by the Independent Expert pursuant to the procedures set forth in this Section 2.07. During the thirty (30) day period following the delivery of a Notice of Disagreement, the Purchaser and the Seller Parties shall work in good faith to resolve in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement. At the end of such thirty (30) day period, the Purchaser and the Seller Parties shall submit to the Independent Expert for review any and all matters that remain in dispute and were included in the Notice of Disagreement. The parties shall instruct the Independent Expert to render its decision as to such disputed items and the effect of its decision on the Revised Closing Statement as promptly as practicable but in no event later than sixty (60) days after the date of such submission. Each party shall furnish to the Independent Expert such working papers and other relevant documents and information relating to the disputed items, and shall provide interviews, answer questions and otherwise cooperate with the Independent Expert as the Independent Expert may reasonably request in connection with its determination of such disputed items1.5. In the event either party shall participate in teleconferences or meetings with, or make presentations to, the Independent Expert, the other party shall be entitled to reasonable advance notice of, and to participate in, such teleconferences, meetings or presentations. The terms of appointment and engagement of the Independent Expert shall be as agreed upon between the parties in writing.
(b) In resolving any such disputed item, the Independent Expert shall act in the capacity of an expert and not as an arbitrator, shall limit its review to matters specifically set forth in the Notice of Disagreement as to a disputed item (other than matters thereafter resolved by mutual written agreement of the parties) and shall not assign a value to any disputed item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party in the Revised Closing Statement or Objection Notice is delivered, ▇▇▇▇▇ and Seller will attempt to resolve in the Notice of Disagreementgood faith any disputes identified therein. If ▇▇▇▇▇ and Seller, as applicable. The Independent Expert is not authorized tonotwithstanding such good-faith efforts, and shall do not, make any other determination, including any determination with respect to any matter included in the Revised Closing Statement or the Notice of Disagreement that was not submitted for resolution to the Independent Expert, any determination as to whether the Purchase Price Calculation/Accounting Principles were followed with respect to the Financial Statements, any determination as to the accuracy of the representations and warranties in this Agreement, or any determination as to compliance by any party with any of its respective covenants in this Agreement. Any dispute not within the scope of the disputed items to be resolved by the Independent Expert pursuant to this Section 2.07 shall be resolved as otherwise provided in this Agreement.
(c) The final determination by the Independent Expert of the disputed items submitted to it pursuant to this Section 2.07 shall be in writing, include the Independent Expert’s calculation of the Closing Amounts, include the Independent Expert’s determination of each disputed item submitted to it pursuant to this Section 2.07 and include a brief summary of the Independent Expert’s reasons for its determination regarding each such disputed item.
(d) The final determination of the disputed items by the Independent Expert shall be final and binding upon the parties and an order may be entered in respect thereof by a court having jurisdiction over the party against which such determination is to be enforced. Each party agrees that it shall not have any right to, and shall not, institute any Action (as defined below) of any kind challenging such determination by the Independent Expert, which shall be the sole remedy of the parties with respect to the items properly subject to submission to Independent Expert under this Section 2.07, except that the foregoing will not preclude an Action to enforce such determination or to challenge such determination on the ground that it is inconsistent with the terms of this Agreement. The fees and expenses of the Independent Expert incurred pursuant to this Section 2.07 shall be borne 50% by the Seller Parties and 50% by the Purchaser.
(e) Following the Closing Amounts becoming final and binding upon the parties pursuant to this Section 2.07 (such final amounts, the “Final Closing Amounts”), a payment (the “Final Purchase Price Adjustment”) shall be made by or on behalf of the applicable party in accordance with this Section 2.07(e). The Final Purchase Price Adjustment shall be an amount equal to the Closing Purchase Price minus the Final Purchase Price and, if the Final Purchase Price Adjustment is positive, an amount equal to the Final Purchase Price Adjustment shall be paid to the Purchaser (or one or more Affiliates designated by the Purchaser in such amounts designated by the Purchaser) by the Seller Parties (or one or more Affiliates designated by the Seller Parties in such amounts designated by the Seller Parties) and if the Final Purchase Price Adjustment is negative, an amount equal to the absolute value of the Final Purchase Price Adjustment shall be paid to the Seller Parties (or one or more Affiliates designated by the Seller Parties) by the Purchaser (or one or more Affiliates designated by the Purchaser). Any payments pursuant to this Section 2.07(e) shall be made in U.S. Dollars by wire transfer of immediately available funds to an account or accounts designated by the receiving party within five (5) days after the Closing Statement becomes final and binding upon the parties. The Final Purchase Price Adjustment shall be treated as an adjustment to the Closing Purchase Price for all applicable Tax purposes, except as otherwise required pursuant to a final “determination” (within the meaning of Section 1313(a) of the Code) or similar determination under applicable state, local or non-U.S. Tax Law.
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Closing Purchase Price Adjustment. (a) Unless Not less than three (3) Business Days prior to the parties date hereof, the Selling Shareholders shall have previously mutually agreed in writing that any portions of caused the estimated Closing Amounts are Company to be considered the Final Closing Amounts (as defined below) for purposes hereof (which agreement shall be irrevocable), or with respect to the Final Closing Amount for Used Vehicles which will be irrevocably finalized by the parties no later than five (5) days after the Closing, then, as promptly as practicable, and in any event within forty-five (45) days after the Closing Date (except the Final Closing Amounts for Used Vehicles), the Purchaser shall prepare and deliver to the Seller Parties Purchaser a statement (the “Revised Preliminary Closing Statement”) setting forth the PurchaserCompany’s good faith estimate of the (i) Unearned Revenue Amount, (ii) Company Debt Amount, (iii) Company Cash Amount, (iv) Transaction Expenses, (v) Estimated Working Capital and (vi) Estimated Working Capital Change Amount, each determined in accordance with this Agreement. The Preliminary Closing Statement has been prepared by the Company in good faith in accordance with Exhibit A and has been certified by the Seller Representative to be their good faith estimate of all such items as of the Closing Date.
(b) As promptly as practicable following the Closing Date and in any event within ninety (90) days after the Closing Date, Purchaser shall prepare a statement (the “Final Closing Statement”) setting forth Purchaser’s calculation of the (i) Unearned Revenue Amount, (ii) Company Debt Amount, (iii) Company Cash Amount, (iv) Transaction Expenses, (v) Closing Amounts Working Capital and (including all of the components thereof set forth vi) Closing Working Capital Change Amount, each determined in the definition thereof), together accordance with such schedules and data with respect to the determination thereof as are appropriate to support the calculations set forth in the Revised Closing Statementthis Agreement. The Revised Final Closing Statement shall be prepared by Purchaser in good faith in accordance with Exhibit A and shall be certified by an officer of Purchaser to be its good faith calculation of all such items as of the terms of this Agreement Closing Date. Purchaser shall promptly provide the Seller Representative with such information and documentation as the Purchase Price Calculation/Accounting Principles. The parties agree that Selling Shareholders reasonably requests to allow the purpose of preparing Seller Representative to examine the Revised Closing Statement and determining the Final Closing Amounts (and all components thereof) and the related adjustments contemplated by this Section 2.07 is to measure the amount accuracy of the Final Closing Amounts (and all components thereof) in accordance with the terms of this Agreement and the Purchase Price Calculation/Accounting Principles, and such process is not intended to permit the introduction of different accounting methods, policies, principles, practices, procedures, judgments, classifications or estimation methodologies for the purpose of determining the Final Closing Amounts (and all components thereof) other than those set forth in the Purchase Price Calculation/Accounting Principles. Following the delivery of the Revised Closing Statement, the Purchaser shall provide the Seller Parties and their Representatives with reasonable access to the Transferred Records, work papers and other documents that were used in the preparation of, or otherwise relate to, the Revised Closing Statement, internal and external accountants, relevant personnel and properties of the Purchaser and its Subsidiaries, to permit the Seller Parties and their Representatives to review the Revised Closing Statement and the Purchaser’s calculation of the Closing Amount (and all components thereof) as set forth therein. The Revised Closing Statement shall become final and binding upon the parties on the thirtieth (30th) day following receipt thereof by the Seller Parties, unless the Seller Parties give written notice of their disagreement with the Revised Closing Statement (a “Notice of Disagreement”) to the Purchaser prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so asserted and include the Seller Parties’ calculation of the Closing Amounts. If a timely Notice of Disagreement is received by the Purchaser, then the Revised Closing Statement (as revised in accordance with this sentence) shall become final and binding upon the parties on the earlier of the date on which the Purchaser and the Seller Parties resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement and the date on which all such disputed matters are finally resolved in writing by the Independent Expert pursuant to the procedures set forth in this Section 2.07. During the thirty (30) day period following the delivery of a Notice of Disagreement, the Purchaser and the Seller Parties shall work in good faith to resolve in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement. At the end of such thirty (30) day period, the Purchaser and the Seller Parties shall submit to the Independent Expert for review any and all matters that remain in dispute and were included in the Notice of Disagreement. The parties shall instruct the Independent Expert to render its decision as to such disputed items and the effect of its decision on the Revised Closing Statement as promptly as practicable but in no event later than sixty (60) days after the date of such submission. Each party shall furnish to the Independent Expert such working papers and other relevant documents and information relating to the disputed items, and shall provide interviews, answer questions and otherwise cooperate with the Independent Expert as the Independent Expert may reasonably request in connection with its determination of such disputed items. In the event either party shall participate in teleconferences or meetings with, or make presentations to, the Independent Expert, the other party shall be entitled to reasonable advance notice of, and to participate in, such teleconferences, meetings or presentations. The terms of appointment and engagement of the Independent Expert shall be as agreed upon between the parties in writing.
(b) In resolving any such disputed item, the Independent Expert shall act in the capacity of an expert and not as an arbitrator, shall limit its review to matters specifically set forth in the Notice of Disagreement as to a disputed item (other than matters thereafter resolved by mutual written agreement of the parties) and shall not assign a value to any disputed item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party in the Revised Closing Statement or in the Notice of Disagreement, as applicable. The Independent Expert is not authorized to, and shall not, make any other determination, including any determination with respect to any matter included in the Revised Closing Statement or the Notice of Disagreement that was not submitted for resolution to the Independent Expert, any determination as to whether the Purchase Price Calculation/Accounting Principles were followed with respect to the Financial Statements, any determination as to the accuracy of the representations and warranties in this Agreement, or any determination as to compliance by any party with any of its respective covenants in this Agreement. Any dispute not within the scope of the disputed items to be resolved by the Independent Expert pursuant to this Section 2.07 shall be resolved as otherwise provided in this Agreement.
(c) The final determination by the Independent Expert of the disputed items submitted to it pursuant to this Section 2.07 shall be in writing, include the Independent Expert’s calculation of the Closing Amounts, include the Independent Expert’s determination of each disputed item submitted to it pursuant to this Section 2.07 and include a brief summary of the Independent Expert’s reasons for its determination regarding each such disputed item.
(d) The final determination of the disputed items by the Independent Expert shall be final and binding upon the parties and an order may be entered in respect thereof by a court having jurisdiction over the party against which such determination is to be enforced. Each party agrees that it shall not have any right to, and shall not, institute any Action (as defined below) of any kind challenging such determination by the Independent Expert, which shall be the sole remedy of the parties with respect to the items properly subject to submission to Independent Expert under this Section 2.07, except that the foregoing will not preclude an Action to enforce such determination or to challenge such determination on the ground that it is inconsistent with the terms of this Agreement. The fees and expenses of the Independent Expert incurred pursuant to this Section 2.07 shall be borne 50% by the Seller Parties and 50% by the Purchaser.
(e) Following the Closing Amounts becoming final and binding upon the parties pursuant to this Section 2.07 (such final amounts, the “Final Closing Amounts”), a payment (the “Final Purchase Price Adjustment”) shall be made by or on behalf of the applicable party in accordance with this Section 2.07(e). The Final Purchase Price Adjustment shall be an amount equal to the Closing Purchase Price minus the Final Purchase Price and, if the Final Purchase Price Adjustment is positive, an amount equal to the Final Purchase Price Adjustment shall be paid to the Purchaser (or one or more Affiliates designated by the Purchaser in such amounts designated by the Purchaser) by the Seller Parties (or one or more Affiliates designated by the Seller Parties in such amounts designated by the Seller Parties) and if the Final Purchase Price Adjustment is negative, an amount equal to the absolute value of the Final Purchase Price Adjustment shall be paid to the Seller Parties (or one or more Affiliates designated by the Seller Parties) by the Purchaser (or one or more Affiliates designated by the Purchaser). Any payments pursuant to this Section 2.07(e) shall be made in U.S. Dollars by wire transfer of immediately available funds to an account or accounts designated by the receiving party within five (5) days after the Closing Statement becomes final and binding upon the parties. The Final Purchase Price Adjustment shall be treated as an adjustment to the Closing Purchase Price for all applicable Tax purposes, except as otherwise required pursuant to a final “determination” (within the meaning of Section 1313(a) of the Code) or similar determination under applicable state, local or non-U.S. Tax Law.
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Sources: Stock Purchase Agreement (Zix Corp)