Net Working Capital Adjustment. (i) As promptly as practicable, but in no event later than 30 days after the Closing Date, the Purchaser shall prepare and deliver to the Seller a balance sheet of the Company as of the open of business on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing the Financial Statements (the "Closing Balance Sheet"), together with a schedule setting forth in reasonable detail the Purchaser's good faith calculation of the Net Working Capital at Closing. (ii) The Purchaser and its accountants shall permit the Seller and their representatives to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of the Closing Balance Sheet and the Purchaser's calculation of the Net Working Capital at Closing and provide the Seller and their representatives with copies thereof (as reasonably requested by the Seller). If the Seller disagrees with the Purchaser's calculation of the Net Working Capital at Closing as set forth on the schedule attached to the Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation of the Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing. (iii) The Purchaser and the Seller shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but in any event shall direct the Accountant to render a determination within 30 days of its retention. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Accountant's determination shall be based solely on presentations by the Purchaser and the Seller (i.e., not on independent review), and on the definition of Net Working Capital included herein. The determination of the Accountant shall be conclusive and binding upon the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement. (iv) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller. (v) Upon the final determination of the Net Working Capital at Closing: (A) if Net Working Capital at Closing is greater than the Net Working Capital Target Amount, the Purchaser shall pay the amount of any such excess to Seller no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, by wire transfer of immediately available funds to an account(s) designated by the Seller in writing. (B) if Net Working Capital at Closing is less than the Net Working Capital Target Amount, the Seller shall pay the amount of any such deficiency to Purchaser no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and (C) if Net Working Capital at Closing is equal to the Net Working Capital Target Amount, no adjustment shall be made to the Purchase Price. All payments made pursuant to this Section 2(h)(v) shall be treated by all Parties as adjustments to the Purchase Price.
Appears in 2 contracts
Sources: Stock Purchase Agreement (Winsloew Furniture Inc), Stock Purchase Agreement (Winsloew Furniture Inc)
Net Working Capital Adjustment. (ia) As promptly as practicable, but in no event later than 30 Within sixty (60) days after the Closing Date, the Purchaser shall prepare and deliver to the Seller a balance sheet statement (the “Closing Statement”) calculating the Net Working Capital as of immediately prior to the Effective Time (the “Closing Net Working Capital”) as well as the adjustments to Transaction Consideration which shall be made pursuant to this Section 1.6, together with all underlying documentation supporting such calculations. Seller shall reasonably cooperate with Purchaser in its preparation of the Company as Closing Statement.
(b) During the sixty (60) days immediately following delivery of the open Closing Statement, Seller and its professional representatives shall be entitled to review the Closing Statement and any working papers, financial records, trial balances and similar materials relating to the Closing Statement prepared by the Purchaser or by Persons retained by it, and Purchaser shall provide Seller with reasonable access to work papers of Purchaser’s accountants relating thereto, and Purchaser shall make reasonably available the individuals in its and its Affiliates’ employ as well as representatives of its accountants responsible for and knowledgeable about the information used in, and the preparation of the Closing Statement, to respond to the reasonable inquiries of, or requests for information by Seller, during normal business hours. If Seller disputes any amounts as shown on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing Statement, Seller shall deliver to Purchaser within thirty (30) days after receipt of the Financial Statements Closing Statement a notice (the "Closing Balance Sheet"), together with a schedule “Dispute Notice”) setting forth Seller’s calculation of Closing Net Working Capital and describing in reasonable detail the Purchaser's good faith calculation basis (including for each component, the difference and the amount thereof and reasons therefor) for the determination of such different amount. If Seller does not deliver a Dispute Notice to Purchaser within such thirty (30) day period, the Closing Statement (and the determination of Closing Net Working Capital at Closing.
(iitherein) The prepared and delivered by Purchaser shall be deemed to be the Final Closing Statement and its accountants the Final Closing Net Working Capital. Any such disputes shall permit the Seller and their representatives be limited to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of assertions that the Closing Balance Sheet Statement (and the Purchaser's calculation determination of the Closing Net Working Capital at Closing therein) was not calculated in accordance with the terms of this Section 1.6. Any component not disputed in the Dispute Notice shall be treated as final and provide binding. Purchaser and Seller shall use commercially reasonable efforts to resolve such differences within a period of thirty (30) days after Seller has given the Seller and their representatives with copies thereof (as reasonably requested by the Seller)Dispute Notice. If Purchaser and Seller resolve such differences, the Seller disagrees with the Purchaser's calculation of the Closing Statement and Closing Net Working Capital agreed to by Purchaser and Seller shall be deemed to be the Final Closing Statement and Final Closing Net Working Capital. If Purchaser and Seller do not reach a final resolution on the Closing Statement and Closing Net Working Capital within thirty (30) days after Seller has delivered the Dispute Notice, unless Purchaser and Seller mutually agree to continue their efforts to resolve such differences, the Neutral Accountant shall resolve such differences with respect to the adjustment under this Section 1.6 pursuant to an engagement agreement among Purchaser, Seller, and the Neutral Accountant (which Purchaser and Seller agree to execute promptly), in the manner provided below. The Neutral Accountant shall have full authority to decide all of the issues or matters relating to the adjustments under this Section 1.6 (it being understood that in making such determination, the Neutral Accountant shall be functioning as an expert and not as an arbitrator), but shall only decide the specific components under dispute in the Dispute Notice (the “Disputed Items”), strictly in accordance with the terms of this Agreement. Purchaser and Seller shall each be entitled to make a presentation to the Neutral Accountant at Closing as which the other shall be entitled to be present and participate, pursuant to procedures to be agreed to among Purchaser, Seller, and the Neutral Accountant (or, if they cannot agree on such procedures, pursuant to procedures determined by the Neutral Accountant), regarding such Party’s determination of the amounts to be set forth on the schedule attached to the Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement Statement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation determination of the Closing Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the therein); and Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller shall use their respective best commercially reasonable efforts to cause the Neutral Accountant to resolve all disagreements the differences between them and determine the amounts to be set forth on the Closing Statement (and the determination of Closing Net Working Capital therein) within twenty (20) days after the engagement of the Neutral Accountant. Each of Purchaser and Seller, as a condition precedent to making a presentation to the Neutral Accountant and having the Neutral Accountant review its calculations, shall provide reasonable advance access to the other Party with respect to such materials and reasonably cooperate with the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but other Party in any event shall direct the Accountant to render a determination within 30 days of its retentionreview and analysis thereof. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Neutral Accountant's ’s determination shall be based solely on such presentations by the of Purchaser and the Seller (i.e., not on independent review), ) and on the definition definitions and other terms included in this Agreement. The Closing Statement (and determination of Closing Net Working Capital included hereintherein) determined by the Neutral Accountant shall be deemed to be the Final Closing Statement and Final Closing Net Working Capital. The Such determination of by the Neutral Accountant shall be conclusive and binding upon the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement.
(iv) Parties, absent fraud or manifest error. The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaserfees, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will the Neutral Accountant shall be allocated 60% to and borne by Purchaser and Seller based on the inverse of the percentage that the Neutral Accountant’s determination (i.e., 300 divided by 500before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accountant. Nothing in this Section 1.6(b) shall be construed to authorize or permit the Neutral Accountant to: (i) determine any questions or matters whatsoever under or in connection with this Agreement, except for the resolution of differences between Purchaser and 40% Seller regarding the determination of the Final Closing Statement (i.e.and Final Closing Net Working Capital calculation therein), 200 divided it being expressly acknowledged and agreed that the Neutral Accountant shall have authority to resolve only matters of an accounting nature and shall not have authority to resolve any disputes of a legal nature (with any dispute as to whether a matter is of an accounting or legal nature to be resolved by 500the Neutral Accountant); or (ii) resolve any such differences by making an adjustment to any component of the Closing Statement and (Closing Net Working Capital calculation therein) that is outside of the range defined by amounts as finally proposed by Purchaser and Seller.
(vc) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target AmountPromptly, the Purchaser shall pay the amount of any such excess to Seller but no later than forty-five ten (4510) Business Days after the final determination of thereof, if the Final Closing Net Working Capital at Closing, by wire transfer of immediately available funds to an account(sset forth in the Final Closing Statement: (i) designated by exceeds the Seller in writing.
(B) if Target Net Working Capital at Range Maximum (taking into consideration any adjustments to the Closing Cash Consideration by reason of the Estimated Net Working Capital calculation as set forth in Section 1.5(b)), Purchaser shall pay such excess amount to Seller; or (ii) is less than the Target Net Working Capital Target AmountRange Minimum (taking into consideration any adjustments to the Closing Cash Consideration by reason of the Estimated Net Working Capital calculation as set forth in Section 1.5(b)), the Seller shall pay such shortfall amount to Purchaser. To the extent the amount of any paid by Seller is less than such deficiency to shortfall, Purchaser no later than forty-five (45) Business Days after may, in Purchaser’s sole discretion, collect such amount from the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is equal to the Net Working Capital Target Amount, no adjustment shall be made to the Purchase PriceEscrow Account. All Any payments made pursuant to this Section 2(h)(v) 1.6 shall be treated as an adjustment to the Transaction Consideration by all the Parties. The Parties as acknowledge that the limitations on indemnification set forth in Article VI are inapplicable to the adjustments to the Purchase Pricebe made under this Section 1.6.
Appears in 2 contracts
Sources: Asset Purchase Agreement (Ranger Energy Services, Inc.), Asset Purchase Agreement (Ranger Energy Services, Inc.)
Net Working Capital Adjustment. (ia) As promptly as practicable, but in no event later than 30 sixty (60) days after the Closing Date, the Purchaser Parent shall prepare (or cause to be prepared) and deliver to the Seller Purchaser for review, a balance sheet of the Company as of the open of business on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing the Financial Statements closing statement (the "Closing Balance SheetStatement"), together with a schedule setting forth in reasonable detail the Purchaser's good faith calculation of the Net Working Capital at Closing.
(ii) The Purchaser and its accountants shall permit the Seller and their representatives to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of the Closing Balance Sheet and the PurchaserParent's calculation of the Net Working Capital at of the Transferred Business as of the close of business of the Closing Date. The "Net Working Capital of the Transferred Business" shall mean the Assets that are current assets less the Assumed Liabilities that are current liabilities.
(b) Purchaser shall cause the employees of the Business to assist Parent and its accountants in the preparation of the Closing Statement and shall provide Parent and its auditors reasonable access, during normal business hours and upon reasonable prior notice, to the Seller personnel, properties, books and records of the Business for such purpose.
(c) During the twenty (20)-day period following Purchaser's receipt of the Closing Statement, Purchaser and its auditors shall be permitted to review the working papers relating to the Closing Statement (provided that Purchaser and its accountants execute and deliver a confidentiality agreement, reasonably satisfactory to the Sellers, and adhere to whatever procedures the Sellers reasonably request to safeguard confidential, non-public or privileged information relating to the Sellers or any of their representatives respective subsidiaries), and the Sellers shall cooperate with copies thereof (as Purchaser and its auditors to provide them with any other information used in preparing the Closing Statement reasonably requested by Purchaser or its auditors. The Closing Statement shall become final and binding upon the Sellerparties on the 20th day following delivery thereof, unless Purchaser delivers to Parent written notice of its disagreement ("Notice of Disagreement") specifying in reasonable detail the amount by which and the reasons why it believes the Closing Statement (i) contains mathematical errors or (ii) was not prepared in accordance with the methodology specified in Section 1.6(g). If the Seller disagrees The Notice of Disagreement shall not specify any basis for disagreement with the Purchaser's calculation of the Net Working Capital at Closing Statement other than as set forth on in the schedule attached to the Closing Balance Sheet or with any other aspect preceding sentence.
(d) If a timely and otherwise sufficient Notice of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period Disagreement shall be extended by any delays resulting from the Purchaser's failure delivered to deliver or make available to SellerParent in accordance with Section 1.6(c), at Seller's request, all necessary materials. The Purchaser and Parent shall, during the Seller thereafter shall negotiate twenty (20) days following such delivery, seek in good faith to resolve in writing any such disagreements differences which they may have with respect to the computation matters specified in the Notice of Disagreement. If during such twenty (20)-day period Purchaser and Parent agree in writing on the Net Working Capital at Closing or any other aspect correct determination of the Closing Balance SheetStatement, such determination shall be final and binding on the parties for all purposes hereunder. If the Purchaser and Parent have not resolved such differences by the Seller reach an agreement as to the computation end of the Net Working Capital at Closingsuch twenty (20)-day period, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable Parent shall promptly submit, in writing, to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national an independent public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "AccountantAccounting Firm") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose their briefs detailing their views as to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation correct amount of Net Working Capital at Closing.
(iii) of the Transferred Business as of the Closing Date, and the Accounting Firm shall determine the final amount of Net Working Capital of the Transferred Business as of the Closing Date, which determination shall be final and binding on the parties for all purposes hereunder. The Accounting Firm shall be the Washington, DC regional office of Ernst & Young LLP or, if such firm is unable or unwilling to act, Deloitte & Touche LLP or KPMG LLP or, if such firms are unable or unwilling to act, such other independent public accounting firm as shall be agreed upon by the parties hereto in writing. Purchaser and the Seller Parent shall use their respective best commercially reasonable efforts to cause the Accountant Accounting Firm to resolve all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to issue a report setting forth its calculation of the Closing Balance Sheet Statement, as soon promptly as practicable, but in any event shall direct within thirty (30) days following the Accountant to render a determination within 30 days submission of its retentionthe matters. The Accountant shall consider only those items fees and amounts in expenses of the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable Accounting Firm pursuant to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Accountant's determination this Section 1.6(d) shall be based solely on presentations borne equally by the Purchaser and the Seller (i.e., not on independent review), and on the definition of Net Working Capital included herein. The determination of the Accountant shall be conclusive and binding upon the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement.
(iv) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or and the SellerSellers, on the other hand. The fees and disbursements of the auditors and other advisors of each party hereto incurred in connection with their review of the Closing Statement and review of any Notice of Disagreement shall be borne by such party.
(e) If the Final Net Working Capital of the Transferred Business is less than $5.0 million by more than $50,000, bears to the Purchase Price shall be decreased by the amount actually contested by such Partieswhich $5.0 million exceeds the Final Net Working Capital of the Transferred Business. For exampleIf the Final Net Working Capital of the Transferred Business is greater than $5.0 million by more than $50,000, if the Seller claims Purchase Price shall be increased by the amount by which the Final Net Working Capital of the Transferred Business exceeds $5.0 million. The "Final Net Working Capital of the Transferred Business" means the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by Transferred Business as (i) shown on the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) Closing Statement pursuant to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(v) Upon the final determination of the Net Working Capital at Closing:
(ASection 1.6(a) if Net Working Capital at Closing no timely and otherwise sufficient Notice of Disagreement is greater than the Net Working Capital Target Amount, the Purchaser shall pay the amount of any such excess delivered to Seller no later than forty-five Parent in accordance with Section 1.6(c) or (45) Business Days after the final determination of Net Working Capital at Closing, by wire transfer of immediately available funds to an account(s) designated by the Seller in writing.
(Bii) if Net Working Capital at Closing a timely and otherwise sufficient Notice of Disagreement is less than the Net Working Capital Target Amountdelivered to Parent in accordance with Section 1.6(c), the Seller shall pay the amount of any such deficiency to Purchaser no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is equal to the Net Working Capital Target Amount, no adjustment shall be made to the Purchase Price. All payments made as determined pursuant to this Section 2(h)(v) shall be treated by all Parties as adjustments to the Purchase Price1.6(d).
Appears in 2 contracts
Sources: Asset Purchase Agreement (Star Scientific Inc), Asset Purchase Agreement (North Atlantic Trading Co Inc)
Net Working Capital Adjustment. (ia) As promptly as practicableWithin sixty (60) days following the Closing, but in no event later than 30 days after the Closing Date, the Purchaser Buyer shall prepare and deliver to Sellers the Seller a balance sheet calculation of the Company final Adjustment Amount as of the open of business on immediately prior to the Closing Date prepared (the “Final Adjustment Amount”). The Final Adjustment Amount shall be calculated in accordance with GAAP with no Change the principles and methodologies set forth in Accounting Principles from those utilized Schedule 3.4. Buyer shall, in preparing a timely manner, provide Sellers such data and information as Sellers may reasonably request in writing to support such calculation of the Financial Statements Final Adjustment Amount.
(b) The calculation of the Final Adjustment Amount shall become final and binding on the date (the "Closing Balance Sheet")“Final Settlement Date”) that is thirty (30) days following receipt thereof by Sellers unless Sellers give written notice of disagreement (“Notice of Disagreement”) to Buyer prior to such date; provided that all such items that are not disputed shall be final and binding upon the Parties. In order to be effective, together with a schedule setting forth Notice of Disagreement must specify in reasonable detail the Purchaser's good faith dollar amount, nature and basis of any disagreement so asserted. If a Notice of Disagreement is received by Buyer in a timely manner, then the calculation of the Net Working Capital at ClosingFinal Adjustment Amount (as revised in accordance with paragraph (d) below, if applicable) shall become final and binding on, and the Final Settlement Date shall be, the earlier of (i) the date upon which Sellers and Buyer agree in writing with respect to all matters specified in the Notice of Disagreement and (ii) the date upon which the calculation of the Final Adjustment Amount is issued by the Neutral Arbitrator.
(iic) The Purchaser During the first twenty (20) days following the date upon which Buyer receives a Notice of Disagreement, Sellers and its accountants Buyer shall permit the Seller and their representatives to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of the Closing Balance Sheet and the Purchaser's calculation of the Net Working Capital at Closing and provide the Seller and their representatives with copies thereof (as reasonably requested by the Seller). If the Seller disagrees with the Purchaser's calculation of the Net Working Capital at Closing as set forth on the schedule attached to the Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser and the Seller thereafter shall negotiate attempt in good faith to resolve in writing any such disagreements differences that they may have with respect to all matters specified in the computation Notice of Disagreement. If at the end of such twenty (20) day period (or earlier by mutual agreement to arbitrate) Buyer and Sellers have not reached agreement on such matters, the matters that remain in dispute shall be submitted to the Neutral Arbitrator for review and resolution. The terms of appointment and engagement of the Net Working Capital at Closing or Neutral Arbitrator shall be as agreed upon in good faith between the Parties and any other aspect associated engagement fees shall initially be borne fifty percent (50%) by Sellers and fifty percent (50%) by Buyer; provided that such fees shall ultimately be allocated in accordance with the fee sharing provisions set forth below in this Section 3.4(c). The hearing date will be scheduled by the Neutral Arbitrator as soon as reasonably practicable, and shall be conducted on a confidential basis. Each of Buyer and Sellers shall, not later than seven (7) days prior to the hearing date set by the Neutral Arbitrator, submit a brief (to include such Party’s calculations with regard to amounts in dispute in the calculation of the Closing Balance SheetFinal Adjustment Amount) for settlement of any amounts set forth in the Notice of Disagreement that remain in dispute. If The Neutral Arbitrator shall render a decision resolving the Purchaser and matters in dispute on the Seller reach an agreement as to the computation basis of the Net Working Capital at Closing, such agreement principles and methodologies set forth in Schedule 3.4 (which decision shall be conclusive include a written statement of findings and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements conclusions) within 30 ten (10) Business Days after the delivery conclusion of the Objection Notice hearing, unless the Parties reach agreement prior thereto and withdraw the dispute from arbitration. The Neutral Arbitrator shall provide to the Purchaser by Parties explanations in writing of the Seller, reasons for its decisions regarding the Purchaser Final Adjustment Amount and shall issue the Seller calculation of the Final Adjustment Amount reflecting such decisions. The decision of the Neutral Arbitrator shall submit be final and binding on the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to ClosingParties. If the Purchaser and Neutral Arbitrator resolves all disputes presented to it entirely in the Seller are unable to agree upon manner proposed by either Sellers or Buyer, as the Accountantcase may be, the Accountant fees and expenses of the Neutral Arbitrator shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed borne by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but in any event shall direct the Accountant to render a determination within 30 days of its retention. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolvenon-prevailing Party. In resolving any disputed itemall other events, the Accountant may not assign a value to any item greater than fees and expenses of the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. The Accountant's determination Neutral Arbitrator shall be shared based solely on presentations by the Purchaser and the Seller (i.e., not on independent review), and on the definition of Net Working Capital included herein. The determination of the Accountant shall be conclusive and binding upon the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement.
(iv) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaserdifference between Sellers’ position, on the one hand, or the Sellerand Buyer’s position, on the other hand, bears initially presented to the amount actually contested by such Parties. For example, if Neutral Arbitrator (based on the Seller claims aggregate of all differences taken as a whole) and the Net Working Capital at Closing is $1,000 greater than the amount final resolution as determined by the Purchaser, Neutral Arbitrator in proportion to the total difference between Sellers’ and Buyer’s initial positions. The fees and disbursements of Buyer’s independent public accountants incurred in connection with the procedures performed with respect to the calculation of the Final Adjustment Amount shall be borne by Buyer and the Purchaser contests only $500 fees and disbursements of Sellers’ independent public accountants incurred in connection with their preparation of the amount claimed Notice of Disagreement shall be borne by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the SellerSellers.
(vd) Upon If the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing Final Adjustment Amount is greater less than the Net Working Capital Target Estimated Adjustment Amount, the Purchaser Purchase Price shall pay be decreased by the amount of any such excess difference, and Buyer and Holdings shall deliver joint written instructions to Seller no the Escrow Agent to pay to Buyer an amount equal to the absolute value of such difference from the Adjustment Escrow Amount not later than forty-five three (453) Business Days after the final determination of Net Working Capital at Closing, Final Settlement Date by wire transfer of immediately available funds to an account(saccount or accounts specified by Buyer; and (x) designated by in the Seller in writing.
(B) if Net Working Capital at Closing is less than event that the Net Working Capital Target amount due to Buyer exceeds the Adjustment Escrow Amount, the Seller Sellers shall pay the such excess amount of any such deficiency to Purchaser no Buyer not later than forty-five three (453) Business Days after the final determination Final Settlement Date by wire transfer of Net Working Capital at Closing, provided immediately available funds to an account or accounts specified by Buyer or (y) in the event that if the Note has not then been paid in full, then such payment shall be made by means of setoff Adjustment Escrow Amount exceeds the amount due to payments due on the Note; and
(C) if Net Working Capital at Closing is equal to the Net Working Capital Target Amount, no adjustment shall be made to the Purchase Price. All payments made Buyer pursuant to this Section 2(h)(v) 3.4, such excess amount shall be treated released to Sellers not later than three (3) Business Days after the Final Settlement Date by all Parties as adjustments wire transfer of immediately available funds to an account or accounts specified by Holdings.
(e) If the Final Adjustment Amount is more than the Estimated Adjustment Amount, the Purchase Price shall be increased by the amount of such difference and (x) Buyer and Holdings shall deliver joint written instructions to the Purchase PriceEscrow Agent to pay to Sellers the entire Adjustment Escrow Amount not later than three (3) Business Days after the Final Settlement Date by wire transfer of immediately available funds to an account or accounts specified by Holdings and (y) Buyer shall pay the amount by which the Final Adjustment Amount is more than the Estimated Adjustment Amount to Sellers not later than three (3) Business Days after the Final Settlement Date by wire transfer of immediately available funds to an account or accounts specified by Holdings.
Appears in 2 contracts
Sources: Asset Purchase Agreement, Asset Purchase Agreement (Constellation Energy Group Inc)
Net Working Capital Adjustment. Within ten (i10) As promptly as practicable, but in no event later than 30 days Business Days after the Closing Date, the Purchaser Seller shall prepare and deliver to the Seller a Buyer an unaudited balance sheet of the Company Seller as of the open close of business on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing the Financial Statements (the "“Closing Balance Sheet"”), together with a schedule certificate signed by ▇▇▇▇▇▇ and ▇▇▇▇▇ (i) certifying that the Closing Balance Sheet fairly presents, on a good faith basis and using Seller’s commercially reasonable efforts, the financial position of Seller as of the Closing Date, (ii) setting forth in reasonable detail the Purchaser's good faith amount of Seller’s Net Working Capital as of the Closing Date, (iii) setting forth an accurate and complete list of Seller’s accounts receivable as of the Closing Date which indicates the aging of such accounts receivable and (iv) including Seller’s calculation of the Net Working Capital at Closing.
(ii) The Purchaser and its accountants shall permit the “Closing Balance Sheet Certificate”). Following the delivery by Seller and their representatives to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of the Closing Balance Sheet Certificate, Buyer and its representatives shall be given all such access as they may reasonably require to those books and records of Seller in the Purchaser's calculation possession of, and/or under the control of, Seller and/or the Partners, and access to such current or former Seller Employees or representatives of Seller as they may reasonably require for the Net Working Capital at Closing and provide the Seller and their representatives with copies thereof (as reasonably requested by the Seller). If the Seller disagrees with the Purchaser's calculation purposes of the Net Working Capital at Closing as set forth on the schedule attached resolving any disputes or responding to any matters or inquiries raised concerning the Closing Balance Sheet or with any other aspect and/or the contents of the Closing Balance Sheet for any purpose under this Agreement, the Seller Certificate. Buyer shall notify the Purchaser in writing of such disagreement have ten (the "Objection Notice"10) (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery following receipt of the Closing Balance Sheet Certificate to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser and the notify Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation of writing either that (i) the Net Working Capital at Closing as proposed by Seller is acceptable (“Confirmation Certificate”) or any other aspect of the Closing Balance Sheet. If the Purchaser and the Seller reach an agreement as to the computation of (ii) the Net Working Capital at Closingas proposed by Seller is not acceptable (a “Balance Sheet Dispute Notice”). If a Confirmation Certificate is delivered by Buyer, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute then the Net Working Capital at set forth in the Closing Balance Sheet Certificate shall be the Net Working Capital for purposes of this Agreement. If a Balance Sheet Dispute Notice is delivered by Buyer, the Purchaser Net Working Capital shall be determined by negotiation between Buyer and the Seller. If Buyer and Seller are shall be unable to resolve any reach agreement with respect to such disagreements calculation within 30 Business Days thirty (30) days after the delivery of the Objection a Balance Sheet Dispute Notice to Seller by Buyer, the Purchaser determination of such amount shall be submitted to the San Diego office of Ernst & Young LLP, independent certified public accountants (the “Independent Accountant”), for review and such review by the Independent Accountant shall be limited to (a) such items and calculations as were addressed in the written notice of objection of Buyer that have not been resolved by the parties and (b) any factual or mathematical errors contained in the information provided by Seller, . In the Purchaser event that Buyer and the Seller shall submit the any dispute to the Independent Accountant, each such party may submit a national public accounting firm (or a successor thereto) jointly selected by “position paper” to the Purchaser and Independent Accountant setting forth the Seller (the "Accountant") for resolution; and at the time position of such submissionparty with respect to such dispute, to be considered by such Independent Accountant as it deems fit. The parties shall cause the Independent Accountant to review, subject to limitations of the previous sentence, as promptly as practicable, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation calculation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect make, subject to the Net Working Capital at Closing or otherwise limitations of the previous sentence, such corrections thereto as it deems appropriate consistent with respect to the Closing Balance Sheet as soon as practicable, but in any event terms of this Agreement. The Independent Accountant shall direct the Accountant to render issue a determination within 30 days written report of its retention. The Accountant shall consider only those items and amounts review, setting forth in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Accountant's determination shall be based solely on presentations by the Purchaser and the Seller (i.e., not on independent review), and on the definition reasonable detail its calculation of Net Working Capital included herein. The determination of the Accountant Capital, which calculation shall be conclusive and binding upon on the parties to this Agreement and shall be the sole and exclusive means of resolving such disputes. If requested by the Independent Accountant, Buyer and Seller (on its own behalf and on behalf of the General Partner and the Purchaser Limited Partners) shall execute an engagement letter with the Independent Accountant setting forth the terms and constitute conditions of such engagement, which shall be consistent with the Net Working Capital at Closing terms of this Section 2.3. If the Independent Accountant is engaged pursuant to this Section 2.3, Buyer and Seller shall use commercially reasonable efforts to cause the Independent Accountant to complete its review and written report as soon as reasonably practicable following such engagement. All fees and expenses relating to the engagement of the Independent Accountant shall be borne equally by Buyer and Seller, and the portion of such fees and expenses payable by Seller shall be “Seller Expenses” which Buyer may, in its sole discretion, elect to pay to the Independent Accountant, in which case the amount of Seller Expenses shall be “Losses” for purposes of this Agreement.
(iv) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating Article 9 without regard to the determination Basket and shall, among other remedies available to Buyer, be subject to Buyer’s Rights of Net Working Capital at Closing or any other aspect of Set-Off. Following the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(v) Upon the final determination of the Net Working Capital at Closing:
in accordance with this Section 2.3, (Ai) if Net Working Capital at Closing is greater than the Net Working Capital Target AmountIncrease, the Purchaser if any, shall pay the amount of any such excess be paid to Seller no later than forty-five on the fifth (455th) Business Days after Day following the final date that the determination of Net Working Capital at Closing, by wire transfer of immediately available funds to an account(s) designated by the Seller in writing.
(B) if Net Working Capital at Closing is less than the Net Working Capital Target Amount, the Seller shall pay the amount of any such deficiency to Purchaser no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due become conclusive and binding on the Note; and
parties to this Agreement in accordance with this Section 2.3 or (Cii) if Net Working Capital at Closing is equal to the Net Working Capital Target AmountDecrease, no adjustment shall if any, shall, at the sole election of Buyer, be made “Losses” for purposes of Article 9 without regard to the Purchase Price. All payments made pursuant Basket and be deducted from the Holdback Amount and/or be subject to this Section 2(h)(v) shall be treated by all Parties as adjustments to the Purchase PriceBuyer’s Rights of Set-Off.
Appears in 1 contract
Sources: Asset Purchase Agreement (Amn Healthcare Services Inc)
Net Working Capital Adjustment. (i) As promptly as practicable, but in no event later than 30 days after the Closing Date, the Purchaser shall prepare and deliver to the Seller Sellers' Agent Committee a balance sheet of the Company as of the open of business on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing the Financial Statements including with respect to the nature of accounting in determining the level of reserves or in determining the level of accruals (the "Closing Balance Sheet"), together with a schedule setting forth in reasonable detail the Purchaser's good faith calculation of the Net Working Capital at Closing.
(ii) The Purchaser and its accountants shall permit the Seller Sellers' Agent Committee and their its representatives to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of the Closing Balance Sheet and the Purchaser's calculation of the Net Working Capital at Closing and provide the Seller Sellers' Agent Committee and their representatives with copies thereof (as reasonably requested by the SellerSellers' Agent Committee). If the Seller Sellers' Agent Committee disagrees with the Purchaser's calculation of the Net Working Capital at Closing as set forth on the schedule attached to the Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller Sellers' Agent Committee shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 15 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materialsSellers' Agent Committee. The Purchaser and the Seller Sellers' Agent Committee thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation of the Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller Sellers' Agent Committee are unable to resolve any such disagreements within 30 15 Business Days after the delivery of the Objection Notice to the Purchaser by the SellerSellers' Agent Committee, the Purchaser and the Seller Sellers' Agent Committee shall submit the dispute to a national so- called "big five" public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller Sellers' Agent Committee (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller Sellers' Agent Committee shall each disclose to the other any professional relationships by and between the Seller Sellers and the Purchaser Purchasers and its shareholders, directors, and officers, and any such national "big five" accounting firm firms during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller Sellers are unable to agree upon the Accountant, the Accountant shall be a national so-called "big five" accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller Sellers each exclude one such accounting firm). The Purchaser and the Seller Sellers agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller Sellers' Agent Committee shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but in any event shall direct the Accountant to render a determination within 30 days of its retention. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller Sellers' Agent Committee are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Accountant's determination shall be based solely on presentations by the Purchaser and the Seller Sellers' Agent Committee (i.e., not on independent review), and on the definition of Net Working Capital included herein. The determination of the Accountant shall be conclusive and binding upon the Seller Sellers and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement.
(iv) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the SellerSellers, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims Sellers claim the Net Working Capital at Closing is $1,000 greater less than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the SellerSellers, and if the Accountant ultimately resolves the dispute by awarding the Seller Sellers $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by / 500) to the Purchaser and 40% (i.e., 200 divided by / 500) to the SellerSellers.
(v) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target Amount$6,600,000.00, the Purchaser shall pay the amount of any such excess to Seller the Sellers no later than forty-five (45) three Business Days after the final determination of Net Working Capital at Closing, by wire transfer of immediately available funds to an account(s) account or accounts designated by the Seller Sellers' Agent Committee in writing.;
(B) if Net Working Capital at Closing is less than the Net Working Capital Target Amount6,500,000.00, the Seller Sellers, jointly and severally, shall pay the amount of any such deficiency to the Purchaser no later than forty-five (45) three Business Days after the final determination of Net Working Capital at Closing, provided that if by wire transfer of immediately available funds to an account designated by the Note has not then been paid Purchaser in full, then such payment shall be made by means of setoff to payments due on the Notewriting; and
(C) if Net Working Capital at Closing is less than or equal to the Net Working Capital Target Amount$6,600,000.00 and greater than or equal to $6,500,000.00, no adjustment shall be made to the Purchase Price. All payments made pursuant to this Section 2(h)(v) shall be treated by all Parties as adjustments to the Purchase Price.
Appears in 1 contract
Net Working Capital Adjustment. (ia) As promptly as practicable, but in no event later than 30 Within sixty (60) days after the Closing Date, the Purchaser shall prepare and deliver to the Seller Parties’ Representative a balance sheet of statement (the Company “Closing Statement”) calculating the Net Working Capital as of the open of business Closing Date (the “Closing Net Working Capital”).
(b) If the Seller Parties’ Representative disputes any amounts as shown on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing Statement, the Financial Statements Seller Parties’ Representative shall deliver to Purchaser within twenty (20) days after receipt of the Closing Statement a notice (the "Closing Balance Sheet"), together with a schedule “Dispute Notice”) setting forth the Companies’ calculation of such amount and describing in reasonable detail the Purchaser's good faith calculation basis for the determination of the Net Working Capital at Closing.
(ii) The Purchaser and its accountants shall permit the Seller and their representatives to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of the Closing Balance Sheet and the Purchaser's calculation of the Net Working Capital at Closing and provide the Seller and their representatives with copies thereof (as reasonably requested by the Seller)such different amount. If the Seller disagrees Parties’ Representative does not deliver a Dispute Notice to Purchaser within such twenty (20) day period, the Closing Statement prepared and delivered by Purchaser shall be deemed to be the “Final Closing Statement.” The Parties shall use commercially reasonable efforts to resolve such differences within a period of twenty (20) days after the Seller Parties’ Representative has given the Dispute Notice. If the Parties resolve such differences, the Closing Statement agreed to by the Parties shall be deemed to be the Final Closing Statement. If Purchaser and the Seller Parties’ Representative do not reach a final resolution on the Closing Statement within twenty (20) days after the Seller Parties’ Representative has given the Dispute Notice, unless Purchaser and the Seller Parties’ Representative mutually agree to continue their efforts to resolve such differences the Neutral Accountant shall resolve such differences, pursuant to an engagement agreement among Purchaser, the Seller Parties’ Representative and the Neutral Accountant (which Purchaser and the Seller Parties’ Representative agree to execute promptly), in the manner provided below. The Neutral Accountant shall only decide the specific items under dispute by the Parties (the “Disputed Items”), solely in accordance with the terms of this Agreement. Purchaser and the Seller Parties’ Representative shall each be entitled to make a presentation to the Neutral Accountant, pursuant to procedures to be agreed to among Purchaser's calculation , the Seller Parties’ Representative and the Neutral Accountant (or, if they cannot agree on such procedures, pursuant to procedures determined by the Neutral Accountant), regarding such Party’s determination of the Net Working Capital at Closing as amounts to be set forth on the schedule attached Closing Statement, and the Parties shall use their reasonable efforts to cause the Closing Balance Sheet or with any other aspect of Neutral Accountant to resolve the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The differences between Purchaser and the Seller thereafter shall negotiate in good faith Parties’ Representative and determine the amounts to resolve any such disagreements with respect to be set forth on the computation Closing Statement within twenty (20) days after the engagement of the Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Neutral Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but in any event shall direct the Accountant to render a determination within 30 days of its retention. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Neutral Accountant's ’s determination shall be based solely on such presentations by of the Purchaser and the Seller Parties (i.e., not on independent review), ) and on the definition of Net Working Capital definitions and other terms included herein. The Closing Statement determined by the Neutral Accountant shall be deemed to be the Final Closing Statement. Such determination of by the Neutral Accountant shall be conclusive and binding upon the Seller Parties, absent fraud or manifest error. The fees and expenses of the Purchaser and constitute Neutral Accountant shall be paid by the Party whose calculation of the Closing Net Working Capital at is farther from the Neutral Accountant’s calculation thereof. Nothing in this Section 1.6(b) shall be construed to authorize or permit the Neutral Accountant to: (i) determine any questions or matters whatsoever under or in connection with this Agreement except for the resolution of differences between Purchaser and the Seller Parties’ Representative regarding the determination of the Final Closing for purposes Statement; or (ii) resolve any such differences by making an adjustment to the Closing Statement that is outside of this Agreementthe range defined by amounts as finally proposed by Purchaser and the Seller Parties’ Representative.
(ivc) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(v) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target Amount, the Purchaser shall pay the amount of any such excess to Seller no later than forty-Within five (455) Business Days after the final determination of thereof, if the Closing Net Working Capital at Closing, by wire transfer of immediately available funds to an account(sset forth in the Closing Statement: (i) designated by exceeds the Seller in writing.
(B) if Estimated Net Working Capital at Closing Capital, Purchaser shall pay such excess amount to the Companies (in accordance with the allocations set forth on Schedule 2); or (ii) is less than the Estimated Net Working Capital Target AmountCapital, the Seller Parties shall pay the such shortfall amount of any such deficiency to Purchaser no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is equal to the Net Working Capital Target Amount, no adjustment shall be made to the Purchase PricePurchaser. All Any payments made pursuant to this Section 2(h)(v) 1.6 shall be treated by all Parties as adjustments an adjustment to the Purchase PriceTransaction Consideration by the Parties.
Appears in 1 contract
Net Working Capital Adjustment. (ia) As promptly as practicable, but in no event later than 30 Within one hundred twenty (120) days after the Closing Date, the Purchaser Parent shall prepare and deliver to the Seller Representative a balance sheet of statement (the Company “Closing Statement”) calculating the Net Working Capital as of the open of business Closing Date (the “Closing Net Working Capital”).
(b) If the Representative disputes any amounts as shown on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing Statement, the Financial Statements Representative shall deliver to Parent within thirty (30) days after receipt of the Closing Statement a notice (the "Closing Balance Sheet"), together with a schedule “Dispute Notice”) setting forth the Representative’s calculation of such amount and describing in reasonable detail the Purchaser's good faith calculation basis for the determination of the Net Working Capital at Closing.
(ii) The Purchaser and its accountants shall permit the Seller and their representatives to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of the Closing Balance Sheet and the Purchaser's calculation of the Net Working Capital at Closing and provide the Seller and their representatives with copies thereof (as reasonably requested by the Seller)such different amount. If the Seller disagrees Representative does not deliver a Dispute Notice to Parent within such thirty (30) day period, the Closing Statement prepared and delivered by Parent shall be deemed to be the “Final Closing Statement.” The Parties shall use commercially reasonable efforts to resolve such differences within a period of thirty (30) days after the Representative has given the Dispute Notice. If the Parties resolve such differences, the Closing Statement agreed to by the Parties shall be deemed to be the Final Closing Statement. If Parent and the Representative do not reach a final resolution on the Closing Statement within thirty (30) days after the Representative has given the Dispute Notice, unless Parent and the Representative mutually agree to continue their efforts to resolve such differences the Neutral Accountant shall resolve such differences, pursuant to an engagement agreement among Parent, the Representative and the Neutral Accountant (which Parent and the Representative agree to execute promptly), in the manner provided below. The Neutral Accountant shall only decide the specific items under dispute by the Parties, solely in accordance with the Purchaser's calculation terms of this Agreement. Parent and the Representative shall each be entitled to make a presentation to the Neutral Accountant, pursuant to procedures to be agreed to among Parent, the Representative and the Neutral Accountant (or, if they cannot agree on such procedures, pursuant to procedures determined by the Neutral Accountant), regarding such Party’s determination of the Net Working Capital at Closing as amounts to be set forth on the schedule attached to the Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser Statement; and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation of the Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller Parties shall use their respective best commercially reasonable efforts to cause the Neutral Accountant to resolve all disagreements with respect the differences between Parent and the Representative and determine the amounts to the Net Working Capital at Closing or otherwise with respect to be set forth on the Closing Balance Sheet as soon as practicable, but in any event shall direct Statement within twenty (20) days after the Accountant to render a determination within 30 days engagement of its retentionthe Neutral Accountant. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Neutral Accountant's ’s determination shall be based solely on such presentations by of the Purchaser and the Seller Parties (i.e., not on independent review), ) and on the definition of Net Working Capital definitions and other terms included herein. The Closing Statement determined by the Neutral Accountant shall be deemed to be the Final Closing Statement. Such determination of by the Neutral Accountant shall be conclusive and binding upon the Seller Parties, absent fraud or manifest error. The fees and expenses of the Purchaser and constitute Neutral Accountant shall be paid by the Party whose calculation of the Closing Net Working Capital at is farther from the Neutral Accountant’s calculation thereof. Nothing in this Section 1.9(b) shall be construed to authorize or permit the Neutral Accountant to: (i) determine any questions or matters whatsoever under or in connection with this Agreement except for the resolution of differences between Parent and the Representative regarding the determination of the Final Closing for purposes Statement; or (ii) resolve any such differences by making an adjustment to the Closing Statement that is outside of this Agreementthe range defined by amounts as finally proposed by Parent and the Representative.
(ivc) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the PurchaserPromptly, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(v) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target Amount, the Purchaser shall pay the amount of any such excess to Seller but no later than forty-five (455) Business Days after the final determination of thereof, if the Closing Net Working Capital at Closing, by wire transfer of immediately available funds to an account(sset forth in the Closing Statement: (i) designated by exceeds the Seller in writing.
(B) if Estimated Net Working Capital at Closing Capital, Parent shall pay such excess amount to the Representative, for the benefit of the Stockholders; or (ii) is less than the Estimated Net Working Capital Target AmountCapital, at the Seller option and in the sole discretion of the Representative either (A) the Representative and Parent shall pay deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver to Parent from the Escrow Amount an amount of any such deficiency to Purchaser no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is equal to such shortfall or (B) the Net Working Capital Target Amount, no adjustment Stockholders shall be made deliver to Parent an amount in immediately available funds equal to such shortfall and the Representative and Parent shall deliver joint written instructions to the Purchase PriceEscrow Agent instructing the Escrow Agent to deliver to Representative, for the benefit of the Stockholders from the Escrow Amount an amount equal to such shortfall. All Any payments made pursuant to this Section 2(h)(v) 1.9 shall be treated by all Parties as adjustments an adjustment to the Purchase PriceMerger Consideration by the Parties.
Appears in 1 contract
Sources: Merger Agreement (RumbleON, Inc.)
Net Working Capital Adjustment. (ia) As promptly as practicable, but in no event later than 30 Within 60 days after the Closing DateDate (or such other date as is mutually agreed to by Buyers and Sellers in writing), the Purchaser (i) Sellers shall prepare and deliver to the Seller Buyers a balance sheet calculation of the Company Net Working Capital as of the open of business on at the Closing Date prepared for the Bald Mountain Mining Business, calculated in accordance with GAAP with no Change the manner set forth in Accounting Principles from those utilized Schedule 4.4(a) – Part 1, and (ii) Buyers shall deliver to Sellers a calculation of Net Working Capital as at the Closing Date for the Round Mountain Business, calculated in preparing the Financial Statements manner set forth in Schedule 4.4(a) – Part 2 (the "Closing Balance Sheet"“Net Working Capital Calculations”), together with a schedule setting forth in reasonable detail the Purchaser's good faith calculation .
(b) Within 30 days following receipt of the Net Working Capital at ClosingCalculations, each party shall review the other’s Net Working Capital Calculations and shall notify the other party in writing if it has any objections to the other party’s Net Working Capital Calculation. The notice of objection must contain a statement of the basis of the objections and the amount in dispute. A party shall be deemed to have accepted the preparing party’s Net Working Capital Calculation if it does not notify the preparing party in writing of its objection within such 30-day period, which shall then be final and binding upon the parties and shall not be subject to appeal, absent manifest error.
(iic) If a party disputes the preparing party’s Net Working Capital Calculation, the parties will work expeditiously and in good faith in an attempt to resolve such dispute within a further period of 15 days after the date of notification by the disputing party to the preparing party of such dispute, failing which the dispute shall be submitted for determination to an independent national firm of certified public accountants mutually agreed to by Sellers and Buyers (and, failing agreement between Sellers and Buyers on the firm of certified public accountants within a further period of five Business Days, each of Sellers and Buyers shall select a firm of certified public accountants and such firms shall in good faith jointly select such independent national firm of certified public accountants to serve for purposes of this Section 4.4). The determination of the firm of certified public accountants shall be final and binding upon the parties and shall not be subject to appeal. The firm of certified public accountants shall be deemed to be acting as experts and not as arbitrators.
(d) Sellers and Buyers shall each bear the fees and expenses of their respective auditors and accountants, if any, in preparing or reviewing the Net Working Capital Calculation. In the case of a dispute and the retention of a national firm of certified public accountants to determine such dispute, if such firm of certified public accountant’s findings determines that the Net Working Capital Calculation prepared by a party is misstated by 15% or greater, the costs and expenses of such firm of certified public accountants shall be borne by such party and shall otherwise be borne by the other party. However, Sellers on the one hand and Buyers on the other hand shall each bear their own costs in presenting their respective cases to the firm of certified public accountants.
(e) The Purchaser and its accountants Purchase Price shall permit be increased or decreased, as the Seller and their representatives to have full access case may be, dollar-for-dollar, to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of extent that the Closing Balance Sheet and the Purchaser's calculation aggregate amount of the Net Working Capital at Closing and provide the Seller and their representatives with copies thereof (as reasonably requested by the Seller). If the Seller disagrees with the Purchaser's calculation of the Net Working Capital at Closing as set forth on the schedule attached to the Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation of the Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but in any event shall direct the Accountant to render a determination within 30 days of its retention. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any item greater than the greatest value for such item claimed by either party Calculations is more or less than the smallest value for such item claimed by either party. The Accountant's determination shall be based solely on presentations by aggregate amount of the Purchaser and the Seller (i.e., not on independent review), and on the definition of Target Net Working Capital included herein. The determination set forth in Schedule 4.4(a) If there is an increase in the Purchase Price, Buyers shall pay the excess amount to Sellers (allocated to one or more Sellers as Sellers may direct in writing) in cash by wire transfer within five Business Days of the Accountant shall be conclusive and binding upon the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement.
(iv) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(v) Upon the final determination of the Net Working Capital at Closing:
Calculation. If there is a decrease in the Purchase Price, Sellers shall pay the deficient amount to Buyers (Aallocated to one or more Buyers as Buyers may direct in writing) if Net Working Capital at Closing is greater than in cash by wire transfer within five Business Days of the final determination of the Net Working Capital Target Amount, Calculation. The determination and adjustment of the Purchaser Purchase Price in accordance with the provisions of this Section 4.4(e) shall pay not limit or affect any other rights or causes of action any of the amount of any such excess to Seller no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, by wire transfer of immediately available funds to an account(s) designated by the Seller in writing.
(B) if Net Working Capital at Closing is less than the Net Working Capital Target Amount, the Seller shall pay the amount of any such deficiency to Purchaser no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is equal parties may have with respect to the Net Working Capital Target Amountrepresentations, no adjustment shall be made to the Purchase Price. All payments made pursuant to warranties, covenants and indemnities in its favor contained in this Section 2(h)(v) shall be treated by all Parties as adjustments to the Purchase PriceAgreement.
Appears in 1 contract
Net Working Capital Adjustment. (a) At or prior to Closing, the Sellers shall provide to the Purchaser a written statement (the "Working Capital Statement"), in form and substance satisfactory to the Purchaser, setting forth the amount of the Company's Working Capital as of the Closing Date by category (including cash, accounts receivable ("Closing Date Receivables"), accounts payable and accrued liabilities (such accounts payable and accrued liabilities referred to collectively as the "Closing Date Payables") in reasonable detail. Immediately prior to the Closing, the Sellers shall cause the Company to pay all outstanding accounts payable included within the Closing Date Payables, and shall cause the Company to retain cash in an amount equal to the accrued liabilities included within the Closing Date Payables. The balance of cash shall be paid as bonuses or otherwise distributed at Seller's discretion. Notwithstanding the foregoing, the Sellers agree to provide, at Closing, a non-interest bearing loan to the Company in the amount of $100,000, to be repaid upon the earlier of (i) As promptly as practicableCompany cash on hand of at least $150,000, but in no event later than 30 or (ii) June 30, 2007.
(b) During the period from the Closing Date through the date that is 120 days after the Closing Date, the Purchaser Company shall prepare and deliver use commercially reasonable efforts to the Seller a balance sheet of the Company as of the open of business on collect the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing Receivables for the Financial Statements (the "Closing Balance Sheet"), together with a schedule setting forth in reasonable detail the Purchaser's good faith calculation benefit of the Net Working Capital at Closing.
(ii) The Purchaser Sellers and its accountants pay such amounts to Sellers or an entity designated by the Sellers as a consulting fee when collected; provided, that the Company shall permit the Seller and their representatives to have full access to the books, records and other documents (including work papers) pertaining to or used not be required in connection with preparation of any such collection efforts to institute any action, suit or proceeding, or incur any cost or expense, or to take any action other than normal and customary collection procedures. The Company shall not be liable to the Sellers for any uncollected Closing Balance Sheet and the Purchaser's calculation of the Net Working Capital at Closing and provide the Seller and their representatives with copies thereof (Date Receivables as reasonably requested by the Seller). If the Seller disagrees with the Purchaser's calculation of the Net Working Capital at Closing to which it undertakes commercially reasonable collection efforts, as set forth on above. After the schedule attached to the 120 day period, any remaining Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period Date Receivables shall be extended by any delays resulting from the Purchaser's failure assigned to deliver Seller (or make available to Seller, at Seller's request, all necessary materials. The Purchaser and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation of the Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firmdesignated entity). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but in any event shall direct the Accountant to render a determination within 30 days of its retention. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Accountant's determination shall be based solely on presentations by the Purchaser and the Seller (i.e., not on independent review), and on the definition of Net Working Capital included herein. The determination of the Accountant shall be conclusive and binding upon the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement.
(iv) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(v) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target Amount, the Purchaser shall pay the amount of any such excess to Seller no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, by wire transfer of immediately available funds to an account(s) designated by the Seller in writing.
(B) if Net Working Capital at Closing is less than the Net Working Capital Target Amount, the Seller shall pay the amount of any such deficiency to Purchaser no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is equal to the Net Working Capital Target Amount, no adjustment shall be made to the Purchase Price. All payments made pursuant to this Section 2(h)(v) shall be treated by all Parties as adjustments to the Purchase Price.
Appears in 1 contract
Sources: Stock Purchase Agreement (National Investment Managers Inc.)
Net Working Capital Adjustment. (i) As promptly soon as practicable, but and in no any event later than 30 within ninety (90) days after the Closing Date, the Purchaser shall prepare and Buyer will deliver to the Seller a an unaudited consolidated balance sheet of the Company Companies as of immediately prior to the open of business Closing Date (the "CLOSING BALANCE SHEET"). The Closing Balance Sheet shall include a line item that sets forth the Closing Net Working Capital and each line item included on the Closing Date Balance Sheet shall be prepared in accordance with GAAP GAAP, applied on a basis consistent with no Change in Accounting Principles from those utilized in preparing the basis on which the Audited Financial Statements (the "Closing Balance Sheet"), together with a schedule setting forth in reasonable detail the Purchaser's good faith calculation of the Net Working Capital at Closingwere prepared.
(ii) The Purchaser and its accountants shall permit the Seller and their representatives to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation After receipt of the Closing Balance Sheet and the PurchaserBuyer's proposed calculation of the Closing Net Working Capital at Capital, Seller shall have thirty (30) days to review it. Buyer shall, and shall cause the Companies to, (i) assist Seller in its review of the Closing Balance Sheet and provide the Seller and their its representatives with copies thereof (as reasonably requested by reasonable access during normal business hours to the Seller). If the Seller disagrees with the Purchaser's calculation books, records, facilities and employees of the Net Working Capital at Companies and (ii) cooperate fully with Seller and its representatives, including the provision of all information necessary or useful in reviewing and analyzing the Closing as set forth on the schedule attached Balance Sheet. At any time during such 30-day review period, Seller may deliver a written notice to Buyer describing in reasonable detail all items of disagreement related to the Closing Balance Sheet or with any other aspect Buyer's proposed calculation of Closing Net Working Capital and the basis therefor and providing the calculation by the Buyer of the Closing Net Working Capital (the "OBJECTION NOTICE"). Any determination set forth in the Closing Balance Sheet that is not specifically objected to by Seller in the Objection Notice shall be deemed agreed to by Seller and shall be final, binding and conclusive for all purposes under this Agreement upon delivery of the Objection Notice. If Seller delivers the Objection Notice to Seller within the 30-day period referred to above, then Buyer and Seller will, for twenty (20) days following the date of receipt of the Objection Notice (the "RESOLUTION PERIOD"), attempt to resolve any purpose such item of disagreement themselves, and any written resolution by them as to any disputed item shall be final, binding and conclusive on each of the Parties for all purposes under this Agreement, . If Seller fails to deliver the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth to Seller within the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of 30-day period referred to above, then the Closing Balance Sheet delivered by Buyer to the Seller, which time period shall be extended by any delays resulting from the PurchaserSeller and Buyer's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation proposed calculation of the Closing Net Working Capital at Closing or any other aspect shall be deemed agreed to by Seller and shall be final, binding and conclusive on each of the Parties for all purposes under this Agreement. Buyer shall provide Seller with reasonable access to the work papers it generates in connection with the preparation of the Closing Balance Sheet. If the Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser If at the conclusion of the Resolution Period Seller and the Seller shall use their respective best efforts to cause the Accountant to resolve Buyer have not reached an agreement on all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but in any event shall direct the Accountant to render a determination within 30 days items of its retention. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified disagreement set forth in the Objection Notice as being Notice, then all items which remaining in dispute may, at the Purchaser and written election of either Party delivered to the Seller are unable to resolve. In resolving any disputed item, other Party (the Accountant may not assign a value to any 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. The Accountant's determination shall be based solely on presentations by the Purchaser and the Seller (i.e., not on independent review"AUDIT NOTICE"), be submitted by Buyer and on the definition of Net Working Capital included herein. The determination of the Accountant shall be conclusive and binding upon the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement.
(iv) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(v) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target Amount, the Purchaser shall pay the amount of any such excess to Seller no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, by wire transfer of immediately available funds to an account(s) designated by the Seller in writing.
(B) if Net Working Capital independent certified public accountant with a nationally recognized independent accounting firm which has at Closing is less than the Net Working Capital Target Amount, the Seller shall pay the amount of any such deficiency to Purchaser no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is equal to the Net Working Capital Target Amount, no adjustment shall be made to the Purchase Price. All payments made pursuant to this Section 2(h)(v) shall be treated by all Parties as adjustments to the Purchase Price.least
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (American Real Estate Partners L P)
Net Working Capital Adjustment. (ia) As promptly as practicablePromptly following the Closing Date, but in no event later than 30 ninety (90) days after the Closing Date, the Purchaser Buyer shall prepare and deliver or cause to be delivered to the Seller Sellers a balance sheet of the Company Acquired Companies on a consolidated and combined basis as of immediately prior to the open of business on the Closing Date Effective Time, prepared in accordance a manner that is consistent with GAAP with no Change in Accounting Principles from those utilized in preparing the Financial Statements model balance sheet attached as Exhibit B (the "Closing “Model Balance Sheet"”), together with a schedule statement (the “Proposed Closing Statement”) setting forth forth, in reasonable detail detail, the Purchaser's good faith Buyer’s calculation of the Net Working Capital at Closing.
(ii) The Purchaser of the Acquired Companies on a consolidated and its accountants shall permit the Seller and their representatives to have full access combined basis as of immediately prior to the books, records and other documents Effective Time (including work papers) pertaining to or used in connection with preparation of the Closing Balance Sheet and the Purchaser's calculation of the “Proposed Net Working Capital at Amount”). To the extent reasonably required to complete their review of the Buyer’s Proposed Closing and provide Statement, the Seller Sellers and their representatives with copies thereof Representatives shall have full and timely access to all supporting work papers and other documentation used in, and the personnel responsible for preparation of, the Buyer’s Proposed Closing Statement. In the event the Sellers dispute the correctness of any portion of the Proposed Closing Statement or the Proposed Net Working Capital Amount, the Sellers shall notify the Buyer in writing of their objections within thirty (as reasonably requested by 30) days after receipt of the SellerBuyer’s Proposed Closing Statement and shall set forth, in writing and in reasonable detail, the reasons for the Sellers’ objections (including the amount in dispute and the basis for such dispute) (the “Statement of Objections”). If the Seller disagrees with Sellers fail to deliver such Statement of Objections within the Purchaser's calculation time period required by the preceding sentence, the Sellers shall be deemed to have accepted the Buyer’s calculations and such calculations, the Proposed Closing Statement and each of the Net Working Capital at Closing as amounts set forth on the schedule attached to Proposed Closing Statement shall be final, conclusive and binding on the Closing Balance Sheet or with any other aspect of Parties. To the Closing Balance Sheet for any purpose under extent the Sellers object within the time period contemplated by this AgreementSection 2.6(a), the Seller shall notify specific items on the Purchaser in writing of such disagreement (Buyer’s Proposed Closing Statement to which the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period Sellers object shall be extended by any delays resulting from considered to be in dispute, and the Purchaser's failure Sellers shall be deemed to deliver or make available have accepted the Buyer’s calculation in respect of all other matters and such other matters shall not be considered to Seller, at Seller's request, all necessary materialsbe in dispute. The Purchaser Sellers and the Seller thereafter Buyer shall negotiate endeavor in good faith to resolve any such disagreements with respect disputed matters (which shall include at least one face-to-face meeting between ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ or his successor as chief executive officer of MHGC) within thirty (30) days after the Buyer’s receipt of the Statement of Objections. If the Sellers and the Buyer are unable to resolve the disputed matters within the 30-day period described in the preceding sentence, the Sellers and the Buyer shall engage the Accounting Firm for binding arbitration of the disputed matters only and to make any adjustments to the computation Proposed Closing Adjustment, as the case may be. In performing its review, the Accounting Firm (i) shall, before reaching its decision, review any written presentations made by the Parties and, if either Party requests, their respective Representatives, and thereafter, have at least one meeting with the Parties and, if either Party requests, their respective Representatives, (ii) shall apply the principles underlying the Model Balance Sheet and determine the accurate application of such principles to only those items or amounts in the Proposed Closing Statement as to which the Sellers have, in the Statement of Objections, disagreed and such other issues as may reasonably be affected by the items to which the Sellers have so disagreed, and no other issue, and (iii) shall resolve all issues of interpretation, including legal and accounting issues. The Parties agree that all adjustments shall be made without regard to materiality. The Accounting Firm shall only decide the specific items under dispute by the parties and its decision for each disputed matter must be within the range of values assigned to each such item in the Proposed Closing Statement and the Statement of Objections (to the extent such amounts are determinable by the Sellers), respectively. The Parties shall promptly comply with all reasonable requests by the Accounting Firm for information, books, records and similar items.
(b) As finally determined pursuant to Section 2.6(a) (whether by failure of the Sellers to deliver notice of objection, by agreement of the Sellers and the Buyer or by determination of the Accounting Firm), the Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the Purchaser and the Seller reach an agreement Acquired Companies as of immediately prior to the computation of Effective Time is referred to herein as the “Final Net Working Capital at ClosingAmount,” and the final statement thereof is referred to herein as the “Final Closing Statement.”
(c) The Accounting Firm shall be required to deliver to the Buyer and the Sellers, as promptly as practicable, but no later than thirty (30) calendar days after the Accounting Firm is engaged, a written report setting forth its resolution and, if applicable, its calculation of the disputed items or amounts. Upon delivery of the Accounting Firm’s report, such agreement report and the calculations set forth therein shall be final, conclusive and binding upon the Purchaser Buyer Parties and the Seller and constitute Sellers absent manifest error.
(d) If the Final Net Working Capital at Closing for purposes Amount is greater than $500,000, then forty percent (40%) of this Agreementthe excess amount shall be paid to the Sellers by the Buyer. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Final Net Working Capital at Closing.
Amount is less than $500,000, then forty percent (iii40%) The Purchaser and of the Seller deficient amount shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect be paid to the Net Working Capital at Closing or otherwise with respect to Buyer by the Closing Balance Sheet as soon as practicable, but in any event shall direct the Accountant to render a determination within 30 days of its retentionSellers. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Accountant's determination Any payment required under this Section 2.6(d) shall be based solely on presentations by the Purchaser and the Seller (i.e., made in immediately available funds not on independent review), and on the definition of Net Working Capital included herein. The determination of the Accountant shall be conclusive and binding upon the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement.
(iv) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(v) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target Amount, the Purchaser shall pay the amount of any such excess to Seller no later than forty-five (455) Business Days after the final determination of the Final Closing Statement and the Final Net Working Capital at Closing, Amount by wire transfer of immediately available funds to an account(s) a bank account designated in writing by the Seller in writing.
(B) if Party entitled to receive the payment. The Final Net Working Capital at Closing is less than Amount may be subject to adjustment after the Net Working Capital Target Amountinitial payment in accordance with Section 2.7(e), in which event the Seller Sellers or the Buyer shall pay make the required adjustment amount of any such deficiency to Purchaser no payment not later than forty-five (455) Business Days after the final determination of the adjusted Final Net Working Capital at Closing, provided that if Amount under Section 2.7(e).
(e) All fees and expenses of the Note has not then been paid in full, then such payment Accounting Firm shall be made paid one-half by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is equal to Buyer and one-half by the Net Working Capital Target Amount, no adjustment shall be made to the Purchase Price. All payments made pursuant to this Section 2(h)(v) shall be treated by all Parties as adjustments to the Purchase PriceSellers.
Appears in 1 contract
Sources: Master Purchase Agreement (Morgans Hotel Group Co.)
Net Working Capital Adjustment. (ia) As promptly The Parties agree that the Working Capital as practicableof the Closing Date (the “Closing Working Capital”), but as calculated in no event accordance with and set forth on the statement of Working Capital, the form of which is attached hereto as Exhibit A (the “Form of Working Capital Statement”), shall be $2,000,000. “Working Capital” shall be an amount that is determined pursuant to the Form of Working Capital Statement.
(b) For purposes of this Agreement, Working Capital, Estimated Working Capital and Closing Working Capital shall be calculated using the same accounting methods, policies, practices and procedures, with consistent classifications, judgments and estimation methodology, as were used by the Company in the ordinary course of business prior to Closing, which are described on the Form of Working Capital Statement; provided, however, Working Capital shall not be calculated to include any changes in assets or liabilities as a result of purchase accounting adjustments or other changes arising from or resulting as a consequence of the transactions contemplated hereby other than as expressly set forth on the Form of Working Capital Statement.
(c) Not earlier than five (5) Business Days and not later than 30 three (3) Business Days prior to the Closing, the Seller shall cause to be prepared and delivered to the Buyer a reasonable and good faith estimate of the Closing Working Capital (the “Estimated Working Capitil”). The Estimated Working Capital shall be in the same form as the Form of Working Capital Statement.
(d) Not more than one hundred twenty (120) days after the Closing DateClosing, the Purchaser Buyer shall cause the Company to prepare and deliver to the Seller a balance sheet calculations of the Company as of the open of business on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing the Financial Statements Working Capital (the "Closing Balance Sheet"“Buyer Calculation”), together with a schedule setting forth in reasonable detail such schedules and data with respect to the Purchaser's good faith calculation determination of the Net Closing Working Capital at Closingas may be appropriate to support such Buyer Calculation. The Closing Working Capital shall be in the same form as the Form of Working Capital Statement.
(e) Within twenty (20) days after delivery to the Seller of the Buyer Calculation by the Company pursuant to Section 1.3(d), the Seller may deliver to the Company a written notice (the “Seller Calculation”) either (i) advising the Buyer and the Company that the Seller agrees with and accepts the Buyer Calculation or (ii) The Purchaser and its accountants shall permit setting forth a detailed explanation of those items in the Buyer Calculation that the Seller disputes and their representatives to have full access a statement, with reasonable detail as to the booksdisputed matters, records of what the Seller believes is the correct calculation of Closing Working Capital. All matters, components, calculations and other documents (including work assumptions in the Buyer Calculation that the Seller does not specifically dispute shall not be subject to further review, challenge or adjustment by the Seller. The Seller and the accountants engaged by the Seller shall be entitled to review the working papers) pertaining , trial balances and similar materials relating to or used in connection with the Company’s preparation of the Closing Balance Sheet and the Purchaser's calculation Working Capital as of the Net Working Capital at Closing and Date, if any, for purposes of reviewing the Buyer Calculation. The Company shall also provide the Seller and their representatives its accountants and Representatives with copies thereof (as reasonably requested by timely and reasonable access, during normal business hours, to the properties and the Business Books and Records, to the extent necessary for the Seller)’s review of the Buyer Calculation. If the Company shall concur with the Seller Calculation, or if the Company shall not object to the Seller Calculation in a writing (the “Buyer Dispute Notice”) delivered to the Seller within fifteen (15) days after delivery of the Seller Calculation, the calculation of the Closing Working Capital set forth in the Seller Calculation shall become final and binding on the Parties and shall not be subject to further review, challenge or adjustment. If the Seller disagrees with does not submit a Seller Calculation within the Purchaser's calculation of twenty (20) day period provided herein, then the Net Working Capital at Closing as set forth Buyer Calculation shall become final and binding on the schedule attached Parties and shall not be subject to further review, challenge or adjustment.
(f) In the Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation of the Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and event that the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller Company are unable to resolve any such disagreements disputes regarding the Closing Working Capital as set forth in the Buyer Dispute Notice within 30 Business Days twenty (20) days after the Company’s delivery of the Objection Notice Buyer Dispute Notice, then such disputes shall be referred to PricewaterhouseCoopers LLP, or, if PricewaterhouseCoopers LLP shall be unavailable or unable to do so, such other independent firm of nationally recognized financial experts selected by mutual written agreement of the Seller and the Company (the “Settlement Arbitrator”), and the determination of the Settlement Arbitrator shall be final and binding upon the Parties and shall not be subject to further review, challenge or adjustment. The Settlement Arbitrator shall use the same accounting methods, policies, practices and procedures, with consistent classifications, judgments and estimation methodology, as set forth on Exhibit A in making its determination. The Seller and the Company shall use commercially reasonable efforts to cause the Settlement Arbitrator to reach a determination, solely with respect to the Purchaser matters specifically raised in the Buyer Dispute Notice, not more than thirty (30) days after such referral. Nothing herein shall be construed to authorize or permit the Settlement Arbitrator to resolve or otherwise review any items which are not specifically raised in the Buyer Dispute Notice. Each party shall initially bear its own fees and expenses, and the fees and expenses of the Settlement Arbitrator shall be shared equally by the SellerCompany and Seller and advanced by them from time to time as required; provided, that at the conclusion of the determination of the Settlement Arbitrator with respect to the matters raised in the Buyer Dispute Notice, the Purchaser fees, costs and expenses of the prevailing party (as determined by the Settlement Arbitrator), including the fees and expenses of the Settlement Arbitrator previously advanced by the prevailing party and the fees and expenses of the prevailing party’s attorneys, accountants and other experts, shall be paid (or reimbursed) by the non-prevailing party. Except as otherwise expressly provided herein, each of the Company and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser pay their own costs and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firmexpenses incurred in connection with this Section 1.3(f). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iiig) The Purchaser and the Seller shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect to the Net “Working Capital at Closing Adjustment Amount,” which may be positive or otherwise with respect negative, shall mean an amount equal to (i) the Closing Balance Sheet Working Capital, as soon as practicablefinally determined in accordance with this Section 1.3, but in any event shall direct the Accountant to render a determination within 30 days of its retention. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Accountant's determination shall be based solely on presentations by the Purchaser and the Seller minus (i.e., not on independent review), and on the definition of Net Working Capital included herein. The determination of the Accountant shall be conclusive and binding upon the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreementii) $2,000,000.
(ivh) The Accountant shall determine If the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital at Closing Adjustment Amount is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contestedpositive, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) Buyer shall deliver or cause the Company to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(v) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target Amount, the Purchaser shall pay the amount of any such excess to Seller no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closingdeliver, by wire transfer of immediately available funds to an account(s) account designated in writing by the Seller in writing.
(B) if Net Seller, an amount equal to the Working Capital at Closing is less than Adjustment Amount. If the Net Working Capital Target AmountAdjustment Amount is a negative number, then the Seller shall pay deliver, by wire transfer of immediately available funds to an account designated in writing by the Buyer, an amount equal to the absolute value of the Working Capital Adjustment Amount. Any payments made by any such deficiency Party pursuant to Purchaser no later than forty-this Section 1.3(h) shall be made by wire transfer of immediately available funds within five (455) Business Days after the first date on which the Closing Working Capital, or any dispute with respect thereto, shall no longer be subject to further review, challenge or adjustment. If the Working Capital Adjustment Amount is not paid within such five (5) Business Day period, the Party entitled to the Working Capital Adjustment Amount shall be entitled to seek and shall receive, in addition to the Working Capital Adjustment Amount, interest on such portion not paid until paid and the Party’s cost and expenses of collection (including reasonable attorneys’ fees and expenses). For purpose of this Section 1.3(h), interest shall be determined at the rate of interest published as the “Prime Rate” in the “Money Rates” column of the Eastern Edition of The Wall Street Journal (or the average of such rates if more than one rate is indicated) on the Closing Date plus three percent (3%) and all computations of interest shall be made on the basis of a year of 365 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable.
(i) The payment of the Working Capital Adjustment Amount shall be treated as an adjustment to the Purchase Price for financial reporting and Tax purposes.
(j) The final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is equal to the Net Working Capital Target Amount, no adjustment shall be made to the Purchase Price. All payments made pursuant to Price under this Section 2(h)(v) 1.3 shall be treated by all Parties as adjustments not impair any other rights of a Party under this Agreement including, without limitation, any rights to the Purchase Priceindemnification.
Appears in 1 contract
Net Working Capital Adjustment. (a) No later than the third (3rd) Business Day prior to the anticipated Closing Date, Seller shall deliver to Buyer a statement (the “Estimated Closing Statement”) setting forth in reasonable detail (i) As promptly as practicableSeller’s good faith estimate of the Net Asset Value and (ii) a calculation of the estimated Purchase Price (such amount, but in no event later than 30 the “Estimated Purchase Price”).
(b) Within ninety (90) calendar days after the Closing Date, the Purchaser Buyer shall prepare and deliver to the Seller a balance sheet statement (the “Closing Statement”) setting forth Buyer’s good faith determination of (i) the actual amount of the Company as Net Asset Value together with all documentation supporting its calculation thereof and (ii) a calculation of any adjustment to the Net Asset Value and the corresponding Purchase Price based on such amount. The Closing Statement and the determination of calculations set forth therein shall become final and binding upon the Parties on the sixtieth (60th) calendar day after the date upon which such Closing Statement is received by Seller (such 60-day period, the “Objection Period”), unless Seller delivers to Buyer written notice that it disputes any aspect of the open Closing Statement (an “Objection Notice”) prior to the end of business on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing the Financial Statements (the "Closing Balance Sheet"), together with a schedule setting forth such Objection Period. The Objection Notice shall specify in reasonable detail the Purchaser's good faith calculation nature of any dispute so asserted, and any amount contained in the Closing Statement that is not specifically disputed in the Objection Notice shall be final and binding on the Parties as set forth in the Closing Statement. If an Objection Notice is delivered to Buyer prior to the end of the Net Working Capital at Closing.
Objection Period, then the Closing Statement and the determination of calculations set forth therein (as revised in accordance with clause (i) or (ii) below) shall become final and binding upon the Parties on the earlier to occur of (i) the date Buyer and Seller resolve in writing any differences they have with respect to the matters specified in the Objection Notice or (ii) the date any disputed matters are finally resolved by the Accounting Firm as provided below. The Purchaser Purchase Price as set forth in the version of the Closing Statement that becomes final and binding on the Parties in accordance with this Section 2.8(b) is referred to herein as the “Final Purchase Price.”
(c) From the Closing until such time as all matters set forth in the Objection Notice have been fully and finally resolved in accordance herewith, Buyer shall (i) maintain and provide to Seller and its accountants shall permit the Seller and their representatives to have full Representatives reasonable access to the books, records all documents and other documents (information utilized by Buyer and its Representatives in connection with Buyer’s preparation of the Closing Statement, including all financial statements, work papers) pertaining , schedules, accounts, analysis and books and records relating to or used the Closing Statement as was utilized by Buyer in connection with preparation of the Closing Balance Sheet Statement; (ii) provide Seller and Representatives reasonable access to such employees, auditors, advisors and other Representatives of Buyer who participated in the Purchaser's calculation preparation or review of, or otherwise have relevant knowledge concerning, the Closing Statement; and (iii) reasonably cooperate with Seller in providing the information and personnel reasonably required by Seller to resolve the matters set forth in any Objection Notice; provided, that any access provided to Seller pursuant to this Section 2.6(b) shall be (x) during regular business hours, (y) with no less than two (2) Business Days’ prior written notice to Buyer and (z) in a manner which will not unreasonably interfere with the operation of the Net Working Capital at Closing and Business. The rights of Seller under this Agreement shall not be prejudiced by the failure of Buyer to comply with this Section 2.6(c) and, without limiting the generality of the foregoing, the time period by which Seller is required to provide an Objection Notice under Section 2.6(b) shall be automatically extended by the number of days Buyer fails to comply with this Section 2.6(c).
(d) In the event that Seller provides an Objection Notice to Buyer prior to the end of the Objection Period, then Seller and their representatives with copies thereof Buyer shall, within twenty (as reasonably requested by the 20) calendar days following Seller). If the Seller disagrees with the Purchaser's calculation ’s delivery of the Net Working Capital at Closing as set forth on the schedule attached to the Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth (such 20-day period, the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller“Dispute Resolution Period”), which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser and the Seller thereafter shall negotiate in good faith seek to resolve the items disputed in the Objection Notice.
(e) If, during the Dispute Resolution Period, Seller and Buyer resolve their differences in writing as to any disputed amount, such disagreements resolution shall be deemed final and binding with respect to such amount for the computation purpose of determining that component of the Net Working Capital at Closing or any other aspect Final Purchase Price. In the event that Seller and Buyer do not resolve all of the Closing Balance Sheet. If the Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but in any event shall direct the Accountant to render a determination within 30 days of its retention. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified disputed in the Objection Notice as being prior to the end of the Dispute Resolution Period, all such unresolved disputed items which shall be submitted by Buyer or Seller to Deloitte & Touche LLC, or if Deloitte & Touche is unable to handle such dispute for any reason, to another neutral, nationally recognized accounting firm (the Purchaser “Accounting Firm”) for resolution, and Buyer and Seller shall promptly sign an engagement letter with the Accounting Firm in a form customary for an engagement of this type. The Accounting Firm shall determine only those items still in dispute (on a basis consistent with the calculation of the disputed items in the Sample Net Asset Value Calculation and, to the extent not inconsistent therewith, in accordance with GAAP), and for each such item shall determine a value within the range of values submitted therefor by Buyer and Seller in the Closing Statement and the Seller are unable to resolve. In resolving any disputed itemObjection Notice, the Accountant may not assign a value to any 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 partyrespectively. The Accountant's Accounting Firm shall deliver to Buyer and Seller a written determination shall (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on presentations information provided to the Accounting Firm by Buyer and Seller) of the disputed amounts within thirty (30) calendar days of submission to the Accounting Firm of such disputed amounts (such 30-day period, the “Adjudication Period”), which determination shall be final and binding. In the event that either Buyer or Seller fails to submit its respective statement regarding any items remaining in dispute within the time determined by the Purchaser and Accounting Firm, then the Seller (i.e., not on independent review), and Accounting Firm shall render a decision based solely on the definition information timely submitted to the Accounting Firm by Buyer and Seller. Notwithstanding the foregoing, if either Party prevents the other Party from obtaining access to any information that such Party has reasonably requested pursuant to this Section 2.6, or if a Party otherwise fails to provide such information on a timely basis after receiving a reasonably specific request for access from the other Party, the Accounting Firm shall have the authority, in its sole discretion, to (i) extend the Adjudication Period for such amount of Net Working Capital included herein. The determination time as the Accounting Firm deems equitable; (ii) direct that the withholding Party promptly provide the other Party with such access as the Accounting Firm deems equitable; and/or (iii) render a decision adverse to the withholding Party in respect of any issue or amount that the Accountant shall be conclusive and binding upon Accounting Firm deems equitable given the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreementinformation that has been withheld.
(ivf) The Accountant shall determine In the allocation of its costs and expenses in resolving any disputes relating to event that the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital at Closing Final Purchase Price is $1,000 greater less than the Estimated Purchase Price, Seller shall pay to Buyer an amount determined by equal to such difference in the Purchaser, and manner provided in Section 2.8(g). In the Purchaser contests only $500 of event that the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(v) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing Final Purchase Price is greater than the Net Working Capital Target AmountEstimated Purchase Price, the Purchaser Buyer shall pay the amount of any such excess to Seller no later than forty-five (45) Business Days after an amount equal to such difference in the final determination of Net Working Capital at Closing, by wire transfer of immediately available funds to an account(s) designated by the Seller manner provided in writingSection 2.8(g).
(Bg) if Net Working Capital at Closing is less than the Net Working Capital Target Amount, the Seller shall pay the amount of any such deficiency All payments to Purchaser no later than forty-five (45be made pursuant to Section 2.8(f) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
second (C2nd) if Net Working Capital at Business Day following the date on which the Closing is equal to Statement becomes final and binding on the Net Working Capital Target Amount, no adjustment shall be made to the Purchase PriceParties in accordance with Section 2.8(b). All payments made pursuant to this Section 2(h)(v2.8(g) shall be made via wire transfer of immediately available funds to such account or accounts as shall be designated in writing by the recipient, without interest.
(h) All fees and expenses relating to the work, if any, to be performed by the Accounting Firm shall be allocated between Buyer, on the one hand, and Seller, on the other hand, in the same proportion that the aggregate amount of the disputed items so submitted to the Accounting Firm that are unsuccessfully disputed by such Party (as finally determined by the Accounting Firm) bears to the total amount of the disputed items so submitted. Buyer, on the one hand, and Seller, on the other hand, shall each pay one-half of any indemnification payments due to the Accounting Firm pursuant to the terms of the Accounting Firm’s engagement hereunder.
(i) The Net Asset Value calculation set forth in the Estimated Closing Statement and in the Closing Statement shall be prepared and calculated on a basis consistent with the Sample Net Asset Value Calculation and, to the extent not inconsistent therewith, in accordance with GAAP. In the event of any discrepancy between the Sample Net Asset Value Calculation and GAAP for purposes of such calculation, the Sample Net Asset Value Calculation shall control.
(j) For Tax purposes, any payments pursuant to Section 2.8(g) shall be treated by all Parties as adjustments to the Purchase PricePrice to the extent permitted by Applicable Law.
Appears in 1 contract
Net Working Capital Adjustment. (ia) As promptly as practicable, but in no event later than 30 sixty (60) days after the Closing Date, the Purchaser shall prepare cause to be prepared and deliver delivered to the Seller a closing balance sheet of the Company as of the open Closing (the “Closing Balance Sheet”), certified by a senior executive officer of business on the Purchaser, reflecting the Purchaser’s calculation, as of the Closing, of the (i) Net Working Capital (“Closing Net Working Capital”); (ii) Indebtedness (“Closing Indebtedness”); and (iii) Transaction Expenses (the “Closing Transaction Expenses”). The Closing Balance Sheet shall be prepared, and the Closing Date prepared Net Working Capital shall be calculated, in accordance with GAAP with no Change in Specified Accounting Principles from those utilized and calculated in preparing the Financial Statements (the "Closing Balance Sheet")manner, together with a schedule setting forth in reasonable detail and not inconsistent with, Schedule C. Upon execution of such access letters as may be reasonably required by the Purchaser's good faith calculation of , Seller and Parent and their respective Representatives shall, during regular business hours and upon reasonable notice to the Net Working Capital at Closing.
(ii) The Purchaser Purchaser, be given reasonable access to all Purchaser’s and its accountants shall permit the Seller and their representatives to have full access to the Representatives’ books, records records, and other documents (documents, including work papers) pertaining to or , worksheets, notes and schedules, used in connection with the preparation of the Closing Balance Sheet and the Purchaser's calculation determination of the Closing Net Working Capital at Capital, the Closing Indebtedness and provide the Seller and their representatives with copies thereof Closing Transaction Expenses.
(as reasonably requested by the Seller). b) If the Seller disagrees with the Purchaser's ’s calculation of the Closing Net Working Capital at Capital, Closing Indebtedness and Closing Transaction Expenses delivered pursuant to Section 1.07(a), the Seller may, within thirty (30) days after receipt of the Closing Balance Sheet, deliver a notice to the Purchaser disagreeing with such calculation and setting forth the Seller’s calculation of any such amounts (such notice, a “Notice of Disagreement”). Any Notice of Disagreement will specify those items or amounts as set forth on to which the schedule attached Seller disagrees, and the Seller will be deemed to have agreed with all other items and amounts contained in the Closing Balance Sheet or with any other aspect and the calculation of the Closing Balance Sheet for any purpose under this AgreementWorking Capital, the Seller shall notify the Purchaser Closing Indebtedness and Closing Transaction Expenses in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation of the Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the Purchaser Seller does not deliver a Notice of Disagreement within the thirty (30)-day period specified in the first sentence of this Section 1.07(b), then Seller will be deemed to have agreed to the Closing Balance Sheet, and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement Closing Balance Sheet shall thereupon be conclusive and binding upon on the Purchaser, the Seller and their respective Affiliates, and the calculations of Net Working Capital, Indebtedness and Transaction Expenses set forth in such Closing Balance Sheet shall be deemed “Final Net Working Capital”, “Final Indebtedness” and “Final Transaction Expenses”, as applicable.
(c) If a Notice of Disagreement is duly delivered pursuant to Section 1.07(b), the Purchaser and the Seller and constitute will, during the thirty (30) days following such delivery, negotiate in good faith to reach agreement on the disputed items or amounts in order to determine, as may be required, the amounts of the Closing Net Working Capital at Capital, the Closing for purposes Indebtedness or the Closing Transaction Expenses, which amounts will not be less (in the case of this Agreementthe Closing Net Working Capital) or more (in the case of the Closing Indebtedness or the Closing Transaction Expenses) than the amount thereof shown in the Purchaser’s calculations delivered pursuant to Section 1.07(a) nor more (in the case of the Closing Net Working Capital) or less (in the case of the Closing Indebtedness or the Closing Transaction Expenses) than the amount thereof shown in the Seller’s calculations delivered pursuant to Section 1.07(b). If the Purchaser and the Seller so resolve all disputes, the computations of the Closing Net Working Capital, the Closing Indebtedness and the Closing Transaction Expenses, as amended to the extent necessary to reflect the resolution of the dispute, will be conclusive and binding on the Purchaser, the Seller and their respective Affiliates and shall be deemed Final Net Working Capital, Final Indebtedness and Final Transaction Expenses, as applicable.
(d) If during the thirty (30)-day period set forth in Section 1.07(c) (or such longer period as may be agreed upon by the Purchaser and the Seller), the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after reach an agreement, they will promptly thereafter cause the delivery offices of the Objection Notice to the Purchaser by the SellerKPMG or, if not available, the Purchaser offices of Ernst & Young, in each case located in Buffalo, New York or, if both KPMG and Ernst & Young are not available, an office located in the Seller shall submit the dispute to a national United States of another impartial nationally recognized firm of independent certified public accounting firm (or a successor thereto) jointly selected accountants, appointed by mutual agreement of the Purchaser and the Seller (the "Accountant"“Independent Accounting Firm”) to review this Agreement and the disputed items or amounts for resolution; the purpose of calculating the Closing Net Working Capital, Closing Indebtedness and at Closing Transaction Expenses (it being understood that in making such calculation, the time Independent Accounting Firm will be functioning as an expert and not as an arbitrator). In making such calculation, the Independent Accounting Firm will consider only those items or amounts in the Closing Balance Sheet and the Seller’s calculations of the Closing Net Working Capital, Closing Indebtedness and Closing Transaction Expenses as to which the Seller has disagreed. The Independent Accounting Firm will deliver to the Purchaser and the Seller, as promptly as practicable (but, in any case, no later than thirty (30) days from the date of engagement of the Independent Accounting Firm), a report setting forth such submissioncalculations, and such calculations shall be deemed Final Net Working Capital, Final Indebtedness and Final Transaction Expenses, as applicable. Such report will be final and binding on the Purchaser and the Seller. The fees, costs, and expenses of the Independent Accounting Firm’s review and report will be allocated to and borne by the Purchaser and the Seller shall each disclose based on the inverse of the percentage that the Independent Accounting Firm’s determination (before such allocation) bears to the other any professional relationships by and between total amount of the Seller total items in dispute as originally submitted to the Independent Accounting Firm. For example, should the items in dispute total USD$1,000 and the Independent Accounting Firm awards USD$600 in favor of the Seller’s position, sixty percent (60%) of the costs of its review would be borne by Purchaser and its shareholders, directors, and officers, and any such national accounting firm during forty percent (40%) of the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall costs would be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed borne by the Accountant in resolving any dispute concerning the computation of Net Working Capital at ClosingSeller.
(iiie) The Purchaser and the Seller shall use will, and will cause their respective best efforts to cause the Accountant to resolve all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicableRepresentatives to, but in any event shall direct the Accountant to render a determination within 30 days of its retention. The Accountant shall consider only those items cooperate and amounts assist in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Accountant's determination shall be based solely on presentations by the Purchaser and the Seller (i.e., not on independent review), and on the definition of Net Working Capital included herein. The determination of the Accountant shall be conclusive and binding upon the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement.
(iv) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect preparation of the Closing Balance Sheet based upon and the percentage calculations of the Closing Net Working Capital, Closing Indebtedness or Closing Transaction Expenses and in the conduct of the review referred to in this Section 1.07(e), including the making available to the extent necessary of books, records, work papers, and personnel.
(f) The Closing Date Payment shall be:
(i) (A) increased by the amount, if any, by which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Final Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(v) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the August 31 Net Working Capital Target Amount(“Purchase Price Increase”); (B) decreased by the amount, if any, by which the Final Indebtedness is greater than the Estimated Indebtedness; and (C) decreased by the amount, if any, by which the Final Transaction Expenses is greater than the Estimated Transaction Expenses; and/or
(ii) (A) decreased by the amount, if any, that the August 31 Net Working Capital exceeds the Final Net Working Capital; (B) increased by the amount, if any, that the Estimated Indebtedness exceeds the Final Indebtedness; and (C) increased by the amount, if any, that the Estimated Transaction Expenses exceeds the Final Transaction Expenses (collectively, “Purchase Price Decrease”). To the extent there is a Purchase Price Increase as a result of and in accordance with this Section 1.07(f), the Purchaser shall pay will pay, in the manner provided in Section 1.07(g), to the Seller, the amount of any such excess excess. To the extent there is a Purchase Price Decrease as a result of and in accordance with this Section 1.07(f), the Seller will pay to Seller no later than forty-five the Purchaser, in the manner provided in Section 1.07(g), the amount of such excess.
(45iii) Any payment pursuant to Section 1.07(f) will be made at a mutually convenient time and place within three (3) Business Days after the final determination of Final Net Working Capital at ClosingCapital, Final Indebtedness and Final Transaction Expenses have been determined by wire transfer of immediately available funds by Purchaser or Seller to an account(s) account designated by Purchaser or Seller, as the Seller in writingcase by may be.
(Bg) if Net Working Capital at Closing is less than the Net Working Capital Target Amount, the Seller shall pay the amount of any such deficiency to Purchaser no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is equal to the Net Working Capital Target Amount, no adjustment shall be made to the Purchase Price. All Any payments made pursuant to this Section 2(h)(v) shall 1.07 or Article 6, or the release of any portion of the Estimated Net Working Capital Adjustment Amount pursuant to Section 1.08, will be treated by all Parties as adjustments an adjustment to the Purchase PricePrice by the parties for Tax purposes, unless otherwise required by applicable Law.
Appears in 1 contract
Net Working Capital Adjustment. The Purchase Price shall be subject to adjustment as follows:
(ia) As promptly as practicable, but in no event later than 30 days after At least two (2) Business Days prior to the Closing Date, the Seller Representative shall estimate the Net Working Capital of the Companies (taken as a whole) as of the close of business on March 25, 2005 (the "ESTIMATED NET WORKING CAPITAL"); provided that, in the event Purchaser disagrees, in good faith, with the Seller Representative's estimate, the Parties shall prepare mutually determine such estimate. The Estimated Net Working Capital shall be prepared consistent with Exhibit C and deliver shall use the methodologies and treatment for certain items as set forth on Schedule 2.3 and shall in any event be calculated in accordance with the principles and adjustments used in the determination of Net Working Capital as set forth in the definition thereof. The cash consideration payable at Closing by Purchaser to the Seller Representative Account pursuant to Section 2.2 shall be (i) increased by the amount, if any, by which the Estimated Net Working Capital exceeds the Normalized Working Capital Amount or (ii) decreased by the amount, if any, by which the Normalized Working Capital Amount exceeds the Estimated Net Working Capital.
(b) Within forty-five (45) days following the Closing, the Purchaser shall have prepared and delivered to the Seller Representative (i) a balance sheet of the Company Companies (prepared as if the Companies reported on a consolidated basis with each other (an "AS IF CONSOLIDATED BASIS") as of the open of business on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing the Financial Statements (the "Closing Balance SheetNET WORKING CAPITAL BALANCE SHEET"), together with using the methodologies and treatment for certain items as set forth on Schedule 2.3, and (ii) a schedule setting forth in reasonable detail the Purchaser's good faith calculation of the Net Working Capital at Closing.
(ii) The Purchaser and its accountants shall permit of the Seller and their representatives to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation Companies as of the Closing Balance Sheet and Date, prepared on the Purchaser's calculation basis of the Net Working Capital at Closing Balance Sheet, which shall (A) be prepared consistent with Exhibit C, (B) use the methodologies and provide treatment for certain items as set forth on Schedule 2.3, (C) be calculated in accordance with the principles and adjustments used in the determination of Net Working Capital as set forth in the definition thereof, and (D) notwithstanding anything else in the definition of Net Working Capital to the contrary, include as "current liabilities" of the Companies any costs incurred by, or attributable to, the Sellers that are obligations of any of the Companies, including, without limitation, any amounts reflected in the Net Working Capital Balance Sheet in respect of the items set forth on Schedule 2.2 hereto that are in excess of such amounts set forth on Schedule 2.2 hereto (the "NET WORKING CAPITAL CALCULATION"). The Net Working Capital Balance Sheet and Net Working Capital Calculation shall be prepared in a manner consistent with the application of the accounting principles applied in preparing the Estimated Net Working Capital. In connection with the preparation of the Net Working Capital Balance Sheet, the Seller Representative and their representatives Purchaser shall jointly cause to be performed a physical inventory of all raw materials, work-in-process and finished goods normally reflected as "inventory" on the financial statements of the Companies, except with copies respect to consigned goods (for which actual March 25, 2005 figures will be adjusted to the Closing Date based on the Companies' records) and rolling stock.
(c) Within forty-five (45) days after the Net Working Capital Balance Sheet and the Net Working Capital Calculation are delivered to the Seller Representative pursuant to Section 2.3(b) hereof, the Seller Representative shall complete its examination thereof and shall deliver to the Purchaser either
(as reasonably requested by i) a written acknowledgment accepting the SellerNet Working Capital Balance Sheet and the Net Working Capital Calculation; or (ii) a written report setting forth in reasonable detail any proposed adjustments to the Net Working Capital Balance Sheet and the Net Working Capital Calculation (the "ADJUSTMENT REPORT"). If the Seller disagrees with Representative fails to respond to the Purchaser's calculation of Purchaser within such forty-five (45) day period, the Seller Representative shall be deemed to have accepted and agreed to the Net Working Capital at Closing as set forth on the schedule attached to the Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation of the Net Working Capital at Closing or any other aspect Calculation as delivered pursuant to Section 2.3(b) hereof. In the event of the Closing Balance Sheet. If the Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Selleran Adjustment Report, the Purchaser and the Seller Representative shall submit attempt to resolve the dispute to a national public accounting firm adjustments proposed therein within thirty (or a successor thereto30) jointly selected by days after delivery of the Purchaser Adjustment Report, and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant Representative shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser deemed to have accepted and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect agreed to the Net Working Capital at Closing or otherwise with respect Balance Sheet and the Net Working Capital Calculation except as to the Closing Balance Sheet proposed adjustments set forth in the Adjustment Report.
(d) In the event the Seller Representative and the Purchaser fail to agree on any of the Seller Representative's proposed adjustments contained in the Adjustment Report within thirty (30) days after the Purchaser receives the Adjustment Report, then the Seller Representative and the Purchaser mutually agree to jointly engage KPMG LLP, certified public accountants (the "INDEPENDENT AUDITORS"), to resolve such dispute(s). As promptly as soon as practicablepracticable thereafter, but in any event the Seller Representative and the Purchaser shall direct each prepare and submit a presentation to the Accountant Independent Auditors and shall cause the Independent Auditors to render make a determination within 30 days of its retention. The Accountant shall consider only those items and amounts in as to each disputed item based upon the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Accountant's determination shall be based solely on presentations by the Purchaser and the Seller (i.e., not on independent review), and on the definition of Net Working Capital included herein. The determination of the Accountant shall be conclusive and binding upon the Seller Representative and the Purchaser and constitute in light of the terms and provisions of this Agreement; provided that the Independent Auditors shall not make a final determination as to any particular item which is higher than the highest position set forth by either of the Parties or lower than the lowest position set forth by either of the Parties. The fees and expenses of the Independent Auditors shall be apportioned between the Seller Representative and the Purchaser in inverse proportion to the aggregate amounts reflected in the determinations made by the Independent Auditors on all disputes in relation to the respective positions of the Seller Representative and the Purchaser. All determinations made by the Independent Auditors will be final, conclusive and binding on the Parties.
(e) The Net Working Capital Calculation shall be determined based on the Net Working Capital at Closing for purposes of this Agreement.
(iv) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded delivered pursuant to the PurchaserSection 2.3(b), on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For exampleas adjusted, if the Seller claims at all, pursuant to this Section 2.3. The date on which the Net Working Capital at Closing Calculation is $1,000 greater than finally determined pursuant to this Section 2.3 shall hereinafter be referred to as the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller"SETTLEMENT DATE."
(vf) Upon In the final determination of event the Net Working Capital at Closing:
(A) if Calculation is less than the Estimated Net Working Capital at Closing is greater than Capital, the Net Seller Representative (on behalf of the Sellers) shall (i) deliver written instructions signed by the Seller Representative to the Escrow Agent directing the Escrow Agent to release to the Purchaser from the Working Capital Target Escrow Account an amount equal to such deficiency (with the remainder of such Working Capital Escrow Amount, if any, being concurrently delivered to the Seller Representative), and (ii) to the extent that the Working Capital Escrow Amount is less than such deficiency, pay to the Purchaser shall pay the amount of any such excess to Seller no later than forty-five within three (453) Business Days after the final determination of Net Working Capital at Closing, by wire transfer of immediately available funds Settlement Date an amount equal to an account(sthe difference between (A) designated by the Seller in writing.
such deficiency and (B) if Net Working Capital at Closing is less than the Net Working Capital Target Amount, the Seller shall pay the amount of any such deficiency to Purchaser no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is equal to the Net Working Capital Target Amount, no adjustment shall be made to the Purchase Price. All payments made pursuant to this Section 2(h)(v) shall be treated by all Parties as adjustments to the Purchase Price.Working
Appears in 1 contract
Net Working Capital Adjustment. (i) As promptly as practicable, but in no event later than 30 days after the Closing Date, the Purchaser shall prepare and deliver to the Seller Sellers a balance sheet of the Company as of the open of business on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing the Financial Statements Statements, with the exception of the accrual for vacation and holidays (the "Closing Balance Sheet"), together with a schedule setting forth in reasonable detail the Purchaser's good faith calculation of the Net Working Capital at Closing.
(ii) The Purchaser and its accountants shall permit the Seller Sellers and their representatives to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of the Closing Balance Sheet and the Purchaser's calculation of the Net Working Capital at Closing and provide the Seller Sellers and their representatives with copies thereof (as reasonably requested by the SellerSellers). If the Seller disagrees Sellers disagree with the Purchaser's calculation of the Net Working Capital at Closing as set forth on the schedule attached to the Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller Sellers shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the SellerSellers, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to SellerSellers, at Seller's Sellers' request, all necessary materials. The Purchaser and the Seller Sellers thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation of the Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the Purchaser and the Seller Sellers reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller Sellers and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller Sellers are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the SellerSellers, the Purchaser and the Seller Sellers shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller Sellers (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller Sellers shall each disclose to the other any professional relationships by and between the Seller Sellers and the Purchaser Purchasers and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller Sellers are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller Sellers each exclude one such accounting firm). The Purchaser and the Seller Sellers agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller Sellers shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but in any event shall direct the Accountant to render a determination within 30 days of its retention. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller Sellers are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Accountant's determination shall be based solely on presentations by the Purchaser and the Seller Sellers (i.e., not on independent review), and on the definition of Net Working Capital included herein. The determination of the Accountant shall be conclusive and binding upon the Seller Sellers and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement.
(iv) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the SellerSellers, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims Sellers claim the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the SellerSellers, and if the Accountant ultimately resolves the dispute by awarding the Seller Sellers $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the SellerSellers.
(v) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target Amount, the Purchaser shall pay the amount of any such excess to Seller the Sellers no later than forty-five (45) three Business Days after the final determination of Net Working Capital at Closing, by wire transfer of immediately available funds to an account(s) account or accounts designated by the Seller Sellers in writing.;
(B) if Net Working Capital at Closing is less than the Net Working Capital Target Amount, the Seller Sellers, jointly and severally, shall pay the amount of any such deficiency to the Purchaser no later than forty-five (45) three Business Days after the final determination of Net Working Capital at Closing, provided that if by wire transfer of immediately available funds to an account designated by the Note has not then been paid Purchaser in full, then such payment shall be made by means of setoff to payments due on the Notewriting; and
(C) if Net Working Capital at Closing is equal to the Net Working Capital Target Amount, no adjustment shall be made to the Purchase Price. All payments made pursuant to this Section 2(h)(v) shall be treated by all Parties as adjustments to the Purchase Price.
Appears in 1 contract
Net Working Capital Adjustment. (ia) As promptly as practicable, but in no event later than 30 days after Prior to the Closing Date, the Purchaser Shareholders shall prepare and deliver to Parent a worksheet, attached as EXHIBIT B hereto, setting forth a reasonable estimate of the Seller Net Working Capital (which may be a balance sheet positive or negative number) of the Company as of the open Closing Date (the "ESTIMATED NET WORKING CAPITAL"). The worksheet shall be prepared by the Shareholders and agreed to by Parent. If the Estimated Net Working Capital minus $1,302,000 (the "DEVIATION") is a negative number, the cash portion of business on the Merger Consideration payable at Closing shall be decreased in an amount equal to the Deviation. If the Deviation is a positive number, the Merger Consideration shall be increased, in cash and Parent Shares in the same proportion as the balance of the Merger Consideration payable under SECTION 3.1(A), in an amount equal to the Deviation; provided, however, in no event shall the Parent Shares issued to the Shareholders for the Deviation together with the Parent Shares issued as part of the Merger Consideration exceed 20% of the total outstanding shares of Parent Common Stock. If the sum of the Parent Shares issued as part of the Merger Consideration and the Parent Shares issued as part of the Deviation exceeds 20%, the Shareholders shall receive the remaining Deviation amount in cash.
(b) Within 45 days after the Closing, Parent shall cause the Surviving Corporation to prepare a consolidated balance sheet (the "CLOSING DATE BALANCE SHEET") of the Company as of the Closing Date, including a computation of the actual Net Working Capital of the Company as of the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing the Financial Statements (the "Closing Balance SheetACTUAL NET WORKING CAPITAL"), together with a schedule setting forth in reasonable detail the Purchaser's good faith calculation of the Net Working Capital at Closing.
(ii) The Purchaser and its accountants shall permit the Seller and their representatives to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of the Closing Balance Sheet and the Purchaser's calculation of the Net Working Capital at Closing and provide the Seller and their representatives with copies thereof (as reasonably requested by the Seller). If the Seller disagrees with the Purchaser's calculation of the Net Working Capital at Closing as set forth on the schedule attached to the Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's 15 days following delivery of the Closing Date Balance Sheet the Shareholders shall not object in writing thereto, then the Actual Net Working Capital shall be computed using such Closing Date Balance Sheet. If the Shareholders shall object in writing to the Sellercomputation, which time period shall be extended by any delays resulting from then the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser Shareholders and the Seller thereafter Parent shall negotiate in good faith and attempt to resolve any their disagreement. Should such disagreements with respect negotiations not result in an agreement within 20 days, then the matter shall be submitted to an independent accounting firm of national reputation mutually acceptable to Shareholders and Parent (the "NEUTRAL AUDITORS"). If Shareholders and Parent are unable to agree on the Neutral Auditors, then Shareholders and Parent shall request the American Arbitration Association to appoint the Neutral Auditors. All fees and expenses relating to appointment of the Neutral Auditors and the work, if any, to be performed by the Neutral Auditors will be borne equally by Shareholders and Parent. The Neutral Auditors will deliver to Shareholders and Parent a written determination (such determination to include a worksheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided to the computation Neutral Auditors by Shareholders and Parent, or their respective affiliates) of the disputed items within 30 days of receipt of the disputed items, which determination will be final, binding and conclusive on the parties.
(c) Promptly following agreement on or delivery of the final, binding and conclusive Closing Date Balance Sheet setting forth the Actual Net Working Capital, the parties shall account to each other as provided for in this SECTION 3.2(C). If the Actual Net Working Capital at Closing or any other aspect of LESS the Closing Balance SheetEstimated Net Working Capital is a positive number, the Shareholders shall have a right to receive a cash payment equal to such excess. If the Purchaser and the Seller reach an agreement as to the computation of the Actual Net Working Capital at Closing, such agreement shall be conclusive and binding upon LESS the Purchaser and the Seller and constitute the Estimated Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Selleris a negative number, the Purchaser Parent shall be entitled to receive a cash payment from the Shareholders equal to such deficit. Any such excess or deficit payment shall be due and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the payable within three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (business days after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but in any event shall direct the Accountant to render a determination within 30 days of its retention. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Accountant's determination shall be based solely on presentations by the Purchaser and the Seller (i.e., not on independent review), and on the definition of Net Working Capital included herein. The determination of the Accountant shall be conclusive and binding upon the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement.
(iv) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(v) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target Amount, the Purchaser shall pay the amount of any such excess to Seller no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, by wire transfer of immediately available funds to an account(s) designated by the Seller in writing.
(B) if Net Working Capital at Closing is less than the Net Working Capital Target Amount, the Seller shall pay the amount of any such deficiency to Purchaser no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is equal to the Net Working Capital Target Amount, no adjustment shall be made to the Purchase Price. All payments made pursuant to this Section 2(h)(v) shall be treated by all Parties as adjustments to the Purchase PriceSECTION 3.2.
Appears in 1 contract
Net Working Capital Adjustment. (ia) Sellers shall deliver to Buyer a statement setting forth Sellers’ good faith estimate of the Net Working Capital of Abacus as of 12:01 a.m. on the Closing Date (the “Estimated Net Working Capital”) (as illustrated on Schedule 2.3(a) hereto), which statement shall be prepared in accordance with GAAP applied on a consistent basis with Abacus’s pre-Closing methodologies used in preparation of monthly unaudited balance sheets, together with reasonably detailed supporting documentation for such calculation.
(b) As promptly as practicable, practicable after the Closing (but in no event later than 30 sixty (60) days after the Closing Date), the Purchaser Sellers shall prepare and deliver to the Seller Buyer a balance sheet of the Company as of the open of business on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing the Financial Statements (the "Closing Balance Sheet"), together with a schedule statement setting forth in reasonable detail the Purchaser's Sellers’ good faith calculation of the Net Working Capital at Closing.
(ii) The Purchaser and its accountants shall permit the Seller and their representatives to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of Abacus as of the Closing Balance Sheet and Date (the Purchaser's calculation of the “Closing Net Working Capital at Closing and provide the Seller and their representatives with copies thereof (as reasonably requested by the SellerCapital”). If Such calculation shall be based upon an unaudited balance sheet prepared in accordance with GAAP (except for the Seller disagrees with the Purchaser's calculation of the Net Working Capital at Closing exceptions to GAAP as set forth on Schedule 2.4(b)), applied on a consistent basis with Abacus’s pre-Closing methodologies in the schedule attached to the Closing Balance Sheet or preparation of monthly unaudited balance sheets (as illustrated on Schedule 1.1(a) hereto). If Buyer disagrees with any other aspect Sellers’ calculation of the Closing Balance Sheet for any purpose under Net Working Capital delivered pursuant to this AgreementSection 2.4(b), Buyer may, within twenty (20) days after receipt of the statement containing the Closing Net Working Capital, deliver a notice to Sellers disagreeing with such calculation and setting forth Buyer’s calculation of such amount. Any such notice of disagreement shall specify in reasonable detail those items or amounts as to which Buyer disagrees. If a notice of disagreement shall be duly delivered pursuant to this Section 2.4(b), Sellers and Buyer shall, during the twenty (20) days after such delivery, use their commercially reasonable efforts to reach agreement on the disputed items or amounts in order to determine, as may be required, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery amount of the Closing Balance Sheet to the SellerNet Working Capital, which time period amount shall not be extended by any delays resulting from more than the Purchaser's failure amount thereof shown in Sellers’ calculation delivered pursuant to deliver or make available this Section 2.4(b) nor less than the amount thereof shown in Buyer’s calculation delivered pursuant to Sellerthis Section 2.4(b). If during such period, at Seller's requestSellers and Buyer are unable to reach such agreement, all necessary materials. The Purchaser they shall promptly thereafter cause an Accounting Referee to review this Agreement and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to disputed items or amounts for the computation purpose of calculating the Closing Net Working Capital at Closing or (it being understood that in making such calculation, the Accounting Referee shall be functioning as an expert and not as an arbitrator). The Accounting Referee shall deliver to Sellers and Buyer as promptly as practicable (but in any other aspect case no later than thirty (30) days from the date of engagement of the Closing Balance SheetAccounting Referee), a report setting forth such calculation. If the Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement Such report shall be conclusive final and binding upon the Purchaser Sellers and the Seller and constitute the Net Working Capital at Closing for purposes of this AgreementBuyer. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time The cost of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant review shall be a national accounting firm (or a successor thereto) selected borne equally by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but in any event shall direct the Accountant to render a determination within 30 days of its retention. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Accountant's determination shall be based solely on presentations by the Purchaser and the Seller (i.e., not on independent review), and on the definition of Net Working Capital included herein. The determination of the Accountant shall be conclusive and binding upon the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement.
(iv) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the PurchaserSellers, on the one hand, or the Sellerhand and Buyer, on the other hand. Buyer and Sellers shall, bears and shall cause their respective representatives to, and Buyer shall cause Abacus and its respective representatives (including outside auditors) to, cooperate and assist in the determination of the Closing Net Working Capital and in the conduct of the review set forth in this Section 2.4, including making available, to the amount actually contested by such Parties. For exampleextent necessary, if the Seller claims books, records, work papers and personnel.
(c) If the Net Working Capital at Closing is as conclusively determined as provided in Sections 2.4(b) (the “Final Net Working Capital”) is:
(1) Greater than $1,000 greater than 190,000 (the “Target Net Working Capital”), Buyer shall pay to Sellers, in the manner provided in Section 2.4(d), the amount equal to the difference between the Final Net Working Capital and the Target Net Working Capital; provided, however, that if the amount determined by pursuant to this clause (d)(1) is a negative number, Sellers shall pay the Purchaserabsolute value of such amount to Buyer; or
(2) Less than the Target Net Working Capital, and Sellers shall pay to Buyer, in the Purchaser contests only $500 of manner provided in Section 2.4(d), the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) equal to the Purchaser and 40% (i.e., 200 divided by 500) to difference between the Seller.
(v) Upon the final determination of the Target Net Working Capital at Closing:
(A) if and the Final Net Working Capital at Closing Capital,; provided, however, that if the amount determined pursuant to this clause (c)(2) is greater than the Net Working Capital Target Amounta negative number, the Purchaser Buyer shall pay the absolute value of such amount of any such excess to Seller no later than forty-Sellers; or
(d) Any payment pursuant to Section 2.4(c) shall be made at a mutually convenient time and place within five (455) Business Days after the final determination of Final Net Working Capital at Closing, by wire transfer of immediately available funds has been determined pursuant to an account(s) designated by the Seller in writingSection 2.4(b).
(Be) if Net Working Capital at Closing is The Aggregate Purchase Price shall be allocated between goodwill, intangible assets and other assets, which combined are the total purchase price. The parties shall report this Transaction on any Tax Returns in a consistent manner. In the event less than 80% of the Net Working Capital Target Amount, the Seller shall pay the amount of any such deficiency to Purchaser no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing total purchase price is equal allocated to the Net Working Capital Target Amountsum of goodwill plus intangible assets, no adjustment less the allocation to covenant not-to-compete, Buyer shall be made reimburse Sellers for the difference in tax between ordinary income and capital gains, to the Purchase Price. All payments made pursuant extent the portion allocable to this Section 2(h)(v) shall be treated by all Parties as adjustments goodwill plus intangibles, less the allocation to the Purchase Pricecovenant not-to-compete, falls less than 80%.
Appears in 1 contract
Net Working Capital Adjustment. (ia) As promptly as practicable, but in no event later than 30 Within one hundred five (105) days after the Closing DateEffective Time, the Purchaser shall prepare and deliver to the Seller a balance sheet of the Company as of the open of business on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing the Financial Statements statement (the "“Closing Balance Sheet"Statement”), together with a schedule setting forth in reasonable detail the Purchaser's good faith calculation of calculating the Net Working Capital at Closingas of the Effective Time (subject to Section 1.4(b), the “Closing Net Working Capital”).
(iib) The If Seller disputes any amounts as shown on the Closing Statement, Seller shall deliver to Purchaser and its accountants shall permit the Seller and their representatives to have full access to the books, records and other documents within thirty (including work papers30) pertaining to or used in connection with preparation days after receipt of the Closing Balance Sheet and Statement a notice (the Purchaser's calculation of the “Net Working Capital at Closing Dispute Notice”), setting forth Seller’s calculation of such amount and provide describing the Seller and their representatives with copies thereof (as reasonably requested by basis for the Seller)determination of such different amount. If the Seller disagrees with the Purchaser's calculation of the does not deliver a Net Working Capital at Closing as set forth on the schedule attached Dispute Notice to Purchaser within such thirty (30) day period, the Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Statement prepared and delivered by Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from deemed to be the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. “Final Closing Statement.” The Purchaser and the Seller thereafter Parties shall negotiate act in good faith to resolve any such disagreements with respect to the computation differences within a period of thirty (30) days after Seller has given the Net Working Capital at Closing or any other aspect of the Closing Balance SheetDispute Notice. If the Parties resolve such differences, the Closing Statement agreed to by the Parties shall be deemed to be the Final Closing Statement. If Purchaser and Seller do not reach a final resolution on the Closing Statement within thirty (30) days after Seller reach an agreement as to the computation of has given the Net Working Capital at ClosingDispute Notice, such agreement shall be conclusive and binding upon the unless Purchaser and Seller mutually agree to continue their efforts to resolve such differences, the Neutral Accountant shall resolve such differences, pursuant to an engagement agreement among Purchaser, Seller and constitute the Net Working Capital at Closing for purposes Neutral Accountant (which Purchaser and Seller agree to execute promptly), in the manner provided below. The Neutral Accountant shall only decide the specific items under dispute by the Parties, solely in accordance with the terms of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose be entitled to make a presentation to the other any professional relationships by and between the Neutral Accountant, pursuant to procedures to be agreed to among Purchaser, Seller and the Purchaser and its shareholdersNeutral Accountant (or, directorsif they cannot agree on such procedures, and officerspursuant to procedures determined by the Neutral Accountant), and any regarding such national accounting firm during Party’s determination of the three (3) year period immediately prior amounts to Closing. If be set forth on the Purchaser Closing Statement; and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller Parties shall use their respective best commercially reasonable efforts to cause the Neutral Accountant to resolve all disagreements with respect the differences between Purchaser and Seller and determine the amounts to the Net Working Capital at Closing or otherwise with respect to be set forth on the Closing Balance Sheet as soon as practicable, but in any event shall direct Statement within forty-five (45) days after the Accountant to render a determination within 30 days engagement of its retentionthe Neutral Accountant. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Neutral Accountant's ’s determination shall be based solely (i) on such presentations of the Parties, (ii) if deemed necessary or appropriate by the Purchaser and Neutral Accountant, on the Seller (i.e., not on Neutral Accountant’s independent review), including its independent review of the books and records of the Company and its Subsidiaries, and (iii) on the definition of Net Working Capital definitions and other terms included herein. The determination Each Party shall cooperate fully with the Neutral Accountant and the other Party in resolving any disputes including by giving the other Party and its representatives reasonable access to the books and records and all other relevant materials of the Company and its Subsidiaries. The Closing Statement determined by the Neutral Accountant shall be deemed to be the Final Closing Statement. Such determination by the Neutral Accountant shall be conclusive and binding upon the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement.
(iv) Parties, absent fraud or manifest error. The Accountant shall determine the allocation of its costs fees and expenses in resolving any disputes relating of the Neutral Accountant related to the determination of the Closing Net Working Capital at Closing or any other aspect shall be paid by the Party whose calculation of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital is farther from the Neutral Accountant’s calculation thereof, but only if such Party’s calculation is at Closing is least $1,000 greater than 250,000 farther from the amount determined by the Purchaser, and the Purchaser contests only $500 Neutral Accountant’s calculation of the amount claimed by Closing Net Working Capital than is the Sellerother Party’s calculation thereof; otherwise, the Parties shall split the Neutral Accountant’s fees and if expenses related to the Accountant ultimately resolves the dispute by awarding the Seller $300 determination of the $500 contestedClosing Net Working Capital, then with each bearing fifty percent (50%) of the costs total fees and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) the Neutral Accountant related to the determination of the Closing Net Working Capital. Nothing in this Section 1.4(b) shall be construed to authorize or permit the Neutral Accountant to: (i) determine any questions or matters whatsoever under or in connection with this Agreement except for the resolution of differences between Purchaser and 40% Seller regarding the determination of the Final Closing Statement; or (i.e., 200 divided ii) resolve any such differences by 500) making an adjustment to the SellerClosing Statement other than within the ranges submitted by the Parties in their presentations to the Neutral Accountant.
(vc) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target AmountPromptly, the Purchaser shall pay the amount of any such excess to Seller but no later than forty-five (455) Business Days after the final determination of thereof, if the Closing Net Working Capital at Closing, by wire transfer of immediately available funds to an account(sset forth in the Final Closing Statement: (i) designated by exceeds the Seller in writing.
(B) if Estimated Net Working Capital at Closing Capital, Purchaser shall pay such excess amount to Seller; or (ii) is less than the Estimated Net Working Capital Target AmountCapital, the Seller shall pay the such excess amount of any such deficiency to Purchaser no later (or, alternatively, Purchaser shall have the option, if an amount is owed to Purchaser under this Section 1.4(c), to offset such amount against the Holdback Amount rather than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then having Seller pay such payment shall be made by means of setoff amount to payments due on the Note; and
(C) if Net Working Capital at Closing is equal to the Net Working Capital Target Amount, no adjustment shall be made to the Purchase PricePurchaser). All Any payments made pursuant to this Section 2(h)(v) 1.4 shall be treated by all Parties as adjustments an adjustment to the Purchase PriceTransaction Consideration by the Parties.
Appears in 1 contract
Net Working Capital Adjustment. (ia) As promptly as practicableAt least three (3) Business Days, but no more than seven (7) Business Days, prior to the Closing Date, Seller shall cause to be prepared and delivered to Purchaser a good faith estimate of the Net Working Capital of the Company as of the Measurement Time (subject to the last sentence hereof, the “Estimated Net Working Capital”), which shall be certified by a duly authorized officer of the Company as Seller’s good faith estimate of the Net Working Capital as of the Measurement Time, which statement shall quantify in no event later than 30 reasonable detail the estimates of each item included in such calculation, in each case calculated in accordance with the provisions of this Agreement. The Parties shall reasonably cooperate with one another in connection with the preparation and evaluation of such estimate. The Company Parties shall promptly provide Purchaser and its representatives access to all personnel, relevant documents, and information reasonably requested by Purchaser or its representatives in connection with their review of the Estimated Net Working Capital (including all components thereof). Prior to the Closing Date, Purchaser shall notify Seller of any objections to the Estimated Net Working Capital (including any component thereof), and Seller shall consider Purchaser’s comments and work with Purchaser in good faith to resolve such objections.
(b) Within sixty (60) days after the Closing Date, the Purchaser shall prepare and deliver to the Seller a balance sheet of the Company as of the open of business on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing the Financial Statements statement (the "“Closing Balance Sheet"), together with a schedule Statement”) setting forth in reasonable detail the Purchaser's ’s good faith calculation of the Net Working Capital at Closing.
as of the Measurement Time (iithe “Closing Net Working Capital”) The Purchaser and its accountants shall permit as well as the Seller and their representatives to have full access adjustments to the books, records and other documents (including work papers) pertaining Purchase Price which shall be made pursuant to or used this Section 1.3. Seller shall reasonably cooperate with Purchaser in connection with its preparation of the Closing Balance Sheet Statement. Upon delivery of the Closing Statement, Purchaser shall promptly provide Seller access to all personnel, relevant documents and information to the extent they relate to the Closing Statement (or preparation thereof) reasonably requested by Seller in connection with its review of the Closing Statement and Purchaser's ’s calculation of the Closing Net Working Capital at Closing and provide the Seller and their representatives with copies thereof (as reasonably requested by the Sellerincluding all components thereof). If the Seller disagrees , provided that such access is in a manner that does not unreasonably or materially interfere with the Purchaser's normal business operations of Purchaser and its Affiliates.
(c) If Seller disputes any amounts as shown on the Closing Statement, Seller shall deliver to Purchaser within thirty (30) days after receipt of the Closing Statement a notice (the “Dispute Notice”) setting forth Seller’s calculation of the Closing Net Working Capital and describing in reasonable detail the basis (including for each component, the difference and the amount thereof and reasons therefor) for the determination of such different amount. If Seller does not deliver a Dispute Notice to Purchaser within such thirty (30) day period, the Closing Statement (and the determination of Closing Net Working Capital therein) prepared and delivered by Purchaser will be deemed to be the Final Closing Statement and the Final Closing Net Working Capital. Any such disputes shall be limited to assertions that the Closing Statement (and the determination of Closing Net Working Capital therein) was not calculated in accordance with the provisions of this Section 1.3, including all defined terms in this Agreement. Any component not disputed in the Dispute Notice shall be treated as final and binding. Purchaser and Seller shall use commercially reasonable efforts to resolve such differences within a period of thirty (30) days after Seller has given the Dispute Notice. If Purchaser and Seller resolve such differences, the Closing Statement and the Closing Net Working Capital agreed to by Purchaser and Seller will be deemed to be the Final Closing Statement and the Final Closing Net Working Capital. If Purchaser and Seller do not reach a final resolution on the Closing Statement and the Closing Net Working Capital within thirty (30) days after Seller has delivered the Dispute Notice, unless Purchaser and Seller mutually agree to continue their efforts to resolve such differences, the Neutral Accountant shall resolve such differences with respect to the adjustment under this Section 1.3 pursuant to a reasonable engagement agreement among Purchaser, Seller, and the Neutral Accountant (which Purchaser and Seller agree to execute promptly), in the manner provided below. Each of Purchaser and Seller shall be deemed to have executed such engagement agreement if it fails to do so within twenty (20) days after receiving a draft thereof. The Neutral Accountant shall have full authority to arbitrate all of the issues or matters relating to the adjustments under this Section 1.3, but shall only decide the specific components under dispute in the Dispute Notice (the “Disputed Items”), solely in accordance with the terms of this Agreement. Each of Purchaser and Seller will be entitled to make a presentation to the Neutral Accountant at Closing as which the other will be entitled to be present and participate, pursuant to procedures to be agreed to between Purchaser, Seller, and the Neutral Accountant (or, if they cannot agree on such procedures, pursuant to procedures determined by the Neutral Accountant), regarding such Party’s determination of the amounts to be set forth on the schedule attached to Closing Statement (and the Closing Balance Sheet or with any other aspect determination of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation of the Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the therein); and Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller shall use their respective best commercially reasonable efforts to cause the Neutral Accountant to resolve all disagreements the differences between them and determine the amounts to be set forth on the Closing Statement (and the determination of the Closing Net Working Capital therein) within twenty (20) days after the engagement of the Neutral Accountant. Each of Purchaser and Seller, as a condition precedent to making a presentation to the Neutral Accountant and having the Neutral Accountant review its calculations, shall provide reasonable advance access to the other Party with respect to such materials and reasonably cooperate with the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but other Party in any event shall direct the Accountant to render a determination within 30 days of its retentionreview and analysis thereof. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Neutral Accountant's ’s determination shall be based solely on such presentations by the of, and materials provided by, Purchaser and the Seller (i.e., not on independent review), ) and on the definition definitions and other terms and conditions included in this Agreement. The Closing Statement (and determination of the Closing Net Working Capital included herein. The determination of therein) determined by the Neutral Accountant shall be deemed to be the Final Closing Statement and the Final Closing Net Working Capital. Such determination by the Neutral Accountant will be conclusive and binding upon the Parties, absent fraud or manifest error, and will be an arbitral award that is non-appealable. The fees and expenses of the Neutral Accountant shall be borne by Seller and Purchaser in proportion to the Purchaser and constitute amounts by which their respective calculations of the Closing Net Working Capital at differ from the Final Closing for purposes of Net Working Capital as finally determined by the Neutral Accountant. Nothing in this Section 1.3(c) is to be construed to authorize or permit the Neutral Accountant to: (i) determine any questions or matters whatsoever under or in connection with this Agreement.
(iv) The Accountant shall determine , except for the allocation resolution of its costs differences between Purchaser and expenses in resolving any disputes relating to Seller regarding the determination of the Final Closing Statement (and the Final Closing Net Working Capital at Closing calculation therein); or (ii) resolve any other aspect such differences by making an adjustment to any component of the Closing Balance Sheet based upon Statement (and the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Closing Net Working Capital at Closing calculation therein) that is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 outside of the amount claimed range defined by the Seller, amounts as finally proposed by ▇▇▇▇▇▇▇▇▇ and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(vd) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target AmountPromptly, the Purchaser shall pay the amount of any such excess to Seller but no later than forty-five ten (4510) Business Days after the final determination of thereof: (i) if there is a Net Working Capital at ClosingSurplus, by wire transfer of immediately available funds to an account(s) designated by the Seller in writing.
(B) if Net Working Capital at Closing is less than the Net Working Capital Target Amount, the Seller then Purchaser shall pay the an amount of any such deficiency to Purchaser no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is equal to the Net Working Capital Target AmountSurplus to Seller; (ii) if there is a Net Working Capital Shortfall, no adjustment then, at Purchaser’s election (A) Purchaser may set-off the amount of the Net Working Capital Shortfall against the Note or (B) Seller shall be made pay to Purchaser by wire transfer an amount equal to the Purchase PriceNet Working Capital Shortfall. All Any payments made pursuant to this Section 2(h)(v) 1.3 shall be treated by all Parties as adjustments an adjustment to the Purchase PricePrice by the Parties. The Parties acknowledge that the limitations on indemnification set forth in Section 7 are inapplicable to the adjustments to be made under this Section 1.3.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Cannabist Co Holdings Inc.)
Net Working Capital Adjustment. (ia) As promptly as practicable, but in no event later than 30 Within one hundred twenty (120) days after the Closing Date, the Purchaser shall prepare and deliver to the Seller Representative a balance sheet of statement (the Company “Closing Statement”) calculating the Net Working Capital as of the open of business Closing Date (the “Closing Net Working Capital”).
(b) If the Representative disputes any amounts as shown on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing Statement, the Financial Statements Representative shall deliver to Purchaser within thirty (30) days after receipt of the Closing Statement a notice (the "Closing Balance Sheet"), together with a schedule “Dispute Notice”) setting forth Representative’s calculation of such amount and describing in reasonable detail the Purchaser's good faith calculation basis for the determination of the Net Working Capital at Closing.
(ii) The Purchaser and its accountants shall permit the Seller and their representatives to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of the Closing Balance Sheet and the Purchaser's calculation of the Net Working Capital at Closing and provide the Seller and their representatives with copies thereof (as reasonably requested by the Seller)such different amount. If the Seller disagrees Representative does not deliver a Dispute Notice to Purchaser within such thirty (30) day period, the Closing Statement prepared and delivered by Purchaser shall be deemed to be the “Final Closing Statement.” The Parties shall use commercially reasonable efforts to resolve such differences within a period of thirty (30) days after the Representative has given the Dispute Notice. If the Parties resolve such differences, the Closing Statement agreed to by the Parties shall be deemed to be the Final Closing Statement. If Purchaser and the Representative do not reach a final resolution on the Closing Statement within thirty (30) days after the Representative has given the Dispute Notice, unless Purchaser and the Representative mutually agree to continue their efforts to resolve such differences the Neutral Accountant shall resolve such differences, pursuant to an engagement agreement among Purchaser, the Representative and the Neutral Accountant (which Purchaser and the Representative agree to execute promptly), in the manner provided below. The Neutral Accountant shall only decide the specific items under dispute by the Parties, solely in accordance with the terms of this Agreement. Purchaser and the Representative shall each be entitled to make a presentation to the Neutral Accountant, pursuant to procedures to be agreed to among Purchaser's calculation , the Representative and the Neutral Accountant (or, if they cannot agree on such procedures, pursuant to procedures determined by the Neutral Accountant), regarding such Party’s determination of the Net Working Capital at Closing as amounts to be set forth on the schedule attached to the Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser Statement; and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation of the Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller Parties shall use their respective best commercially reasonable efforts to cause the Neutral Accountant to resolve all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but in any event shall direct the Accountant to render a determination within 30 days of its retention. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the differences between Purchaser and the Seller are unable Representative and determine the amounts to resolve. In resolving any disputed item, be set forth on the Accountant may not assign a value to any item greater than Closing Statement within twenty (20) days after the greatest value for such item claimed by either party or less than engagement of the smallest value for such item claimed by either partyNeutral Accountant. The Neutral Accountant's ’s determination shall be based solely on such presentations by of the Purchaser and the Seller Parties (i.e., not on independent review), ) and on the definition of Net Working Capital definitions and other terms included herein. The Closing Statement determined by the Neutral Accountant shall be deemed to be the Final Closing Statement. Such determination of by the Neutral Accountant shall be conclusive and binding upon the Seller Parties, absent fraud or manifest error. The fees and expenses of the Purchaser and constitute Neutral Accountant shall be paid by the Party whose calculation of the Closing Net Working Capital at is farther from the Neutral Accountant’s calculation thereof. Nothing in this Section 1.6(b) shall be construed to authorize or permit the Neutral Accountant to: (i) determine any questions or matters whatsoever under or in connection with this Agreement except for the resolution of differences between Purchaser and the Representative regarding the determination of the Final Closing for purposes Statement; or (ii) resolve any such differences by making an adjustment to the Closing Statement that is outside of this Agreementthe range defined by amounts as finally proposed by Purchaser and the Representative.
(ivc) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the PurchaserPromptly, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(v) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target Amount, the Purchaser shall pay the amount of any such excess to Seller but no later than forty-five (455) Business Days after the final determination of thereof, if the Closing Net Working Capital at Closing, by wire transfer of immediately available funds to an account(sset forth in the Closing Statement: (i) designated by exceeds the Seller in writing.
(B) if Estimated Net Working Capital at Closing Capital, Purchaser shall pay such excess amount to Sellers, or (ii) is less than the Estimated Net Working Capital Target AmountCapital, at the Seller option and in the sole discretion of the Representative either (A) the Representative and Purchaser shall pay deliver joint written instructions to the amount of any such deficiency Escrow Agent instructing the Escrow Agent to deliver to Purchaser no later than forty-five (45) Business Days after from the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is Escrow Amount an amount equal to such shortfall or (B) the Net Working Capital Target Amount, no adjustment Sellers shall be made deliver to Purchaser an amount in immediately available funds equal to such shortfall and the Representative and Purchaser shall deliver joint written instructions to the Purchase PriceEscrow Agent instructing the Escrow Agent to deliver to Representative, for the benefit of the Sellers from the Escrow Amount an amount equal to such shortfall. All Any payments made pursuant to this Section 2(h)(v) 1.6 shall be treated by all Parties as adjustments an adjustment to the Purchase PricePrice by the Parties.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (RumbleON, Inc.)
Net Working Capital Adjustment. (ia) As promptly as practicable, but in no event later than 30 Within sixty (60) days after the Closing Date, the Purchaser shall prepare and deliver to the Seller a balance sheet statement (the “Closing Statement”) calculating the Net Working Capital as of immediately prior to the Effective Time (the “Closing Net Working Capital”) as well as the adjustments to Transaction Consideration which shall be made pursuant to this Section 1.6, together with all underlying documentation supporting such calculations. Seller shall reasonably cooperate with Purchaser in its preparation of the Company as Closing Statement.
(b) During the sixty (60) days immediately following delivery of the open Closing Statement, Seller and its professional representatives shall be entitled to review the Closing Statement and any working papers, financial records, trial balances and similar materials relating to the Closing Statement prepared by the Purchaser or by Persons retained by it, and Purchaser shall provide Seller with reasonable access to work papers of Purchaser’s accountants relating thereto, and Purchaser shall make reasonably available the individuals in its and its Affiliates’ employ as well as representatives of its accountants responsible for and knowledgeable about the information used in, and the preparation of the Closing Statement, to respond to the reasonable inquiries of, or requests for information by Seller, during normal business hours. If Seller disputes any amounts as shown on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing Statement, Seller shall deliver to Purchaser within thirty (30) days after receipt of the Financial Statements Closing Statement a notice (the "Closing Balance Sheet"), together with a schedule “Dispute Notice”) setting forth Seller’s calculation of Closing Net Working Capital and describing in reasonable detail the Purchaser's good faith calculation basis (including for each component, the difference and the amount thereof and reasons therefor) for the determination of such different amount. If Seller does not deliver a Dispute Notice to Purchaser within such thirty (30) day period, the Closing Statement (and the determination of Closing Net Working Capital at Closing.
(iitherein) The prepared and delivered by Purchaser shall be deemed to be the Final Closing Statement and its accountants the Final Closing Net Working Capital. Any such disputes shall permit the Seller and their representatives be limited to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of assertions that the Closing Balance Sheet Statement (and the Purchaser's calculation determination of the Closing Net Working Capital at Closing therein) was not calculated in accordance with the terms of this Section 1.6. Any component not disputed in the Dispute Notice shall be treated as final and provide binding. Purchaser and Seller shall use commercially reasonable efforts to resolve such differences within a period of thirty (30) days after Seller has given the Seller and their representatives with copies thereof (as reasonably requested by the Seller)Dispute Notice. If Purchaser and Seller resolve such differences, the Seller disagrees with the Purchaser's calculation of the Closing Statement and Closing Net Working Capital agreed to by Purchaser and Seller shall be deemed to be the Final Closing Statement and Final Closing Net Working Capital. If Purchaser and Seller do not reach a final resolution on the Closing Statement and Closing Net Working Capital within thirty (30) days after Seller has delivered the Dispute Notice, unless Purchaser and Seller mutually agree to continue their efforts to resolve such differences, the Neutral Accountant shall resolve such differences with respect to the adjustment under this Section 1.6 pursuant to an engagement agreement among Purchaser, Seller, and the Neutral Accountant (which Purchaser and Seller agree to execute promptly), in the manner provided below. The Neutral Accountant shall have full authority to decide all of the issues or matters relating to the adjustments under this Section 1.6 (it being understood that in making such determination, the Neutral Accountant shall be functioning as an expert and not as an arbitrator), but shall only decide the specific components under dispute in the Dispute Notice (the “Disputed Items”), strictly in accordance with the terms of this Agreement. Purchaser and Seller shall each be entitled to make a presentation to the Neutral Accountant at Closing as which the other shall be entitled to be present and participate, pursuant to procedures to be agreed to among Purchaser, Seller, and the Neutral Accountant (or, if they cannot agree on such procedures, pursuant to procedures determined by the Neutral Accountant), regarding such Party’s determination of the amounts to be set forth on the schedule attached to the Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement Statement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation determination of the Closing Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the therein); and Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller shall use their respective best commercially reasonable efforts to cause the Neutral Accountant to resolve all disagreements the differences between them and determine the amounts to be set forth on the Closing Statement (and the determination of Closing Net Working Capital therein) within twenty (20) days after the engagement of the Neutral Accountant. Each of Purchaser and Seller, as a condition precedent to making a presentation to the Neutral Accountant and having the Neutral Accountant review its calculations, shall provide reasonable advance access to the other Party with respect to such materials and reasonably cooperate with the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but other Party in any event shall direct the Accountant to render a determination within 30 days of its retentionreview and analysis thereof. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Neutral Accountant's ’s determination shall be based solely on such presentations by the of Purchaser and the Seller (i.e., not on independent review), ) and on the definition definitions and other terms included in this Agreement. The Closing Statement (and determination of Closing Net Working Capital included hereintherein) determined by the Neutral Accountant shall be deemed to be the Final Closing Statement and Final Closing Net Working Capital. The Such determination of by the Neutral Accountant shall be conclusive and binding upon the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement.
(iv) Parties, absent fraud or manifest error. The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaserfees, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will the Neutral Accountant shall be allocated 60% to and borne by Purchaser and Seller based on the inverse of the percentage that the Neutral Accountant’s determination (i.e., 300 divided by 500before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accountant. Nothing in this Section 1.6(b) shall be construed to authorize or permit the Neutral Accountant to: (i) determine any questions or matters whatsoever under or in connection with this Agreement, except for the resolution of differences between Purchaser and 40% Seller regarding the determination of the Final Closing Statement (i.e.and Final Closing Net Working Capital calculation therein), 200 divided it being expressly acknowledged and agreed that the Neutral Accountant shall have authority to resolve only matters of an accounting nature and shall not have authority to resolve any disputes of a legal nature (with any dispute as to whether a matter is of an accounting or legal nature to be resolved by 500the Neutral Accountant); or (ii) resolve any such differences by making an adjustment to any component of the Closing Statement and (Closing Net Working Capital calculation therein) that is outside of the range defined by amounts as finally proposed by Purchaser and Seller.
(vc) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target AmountPromptly, the Purchaser shall pay the amount of any such excess to Seller but no later than forty-five ten (4510) Business Days after the final determination of thereof, if the Final Closing Net Working Capital at Closing, by wire transfer of immediately available funds to an account(s) designated by set forth in the Seller in writing.
(B) if Net Working Capital at Final Closing Statement is less than the Target Net Working Capital Target Amount(taking into consideration any adjustments to the Closing Cash Consideration by reason of the Estimated Net Working Capital calculation as set forth in Section 1.5(b)), the Seller shall pay such shortfall amount to Purchaser. To the extent the amount of any paid by Seller is less than such deficiency to shortfall, Purchaser no later than forty-five (45) Business Days after may, in Purchaser’s sole discretion, offset such amount against the final determination of Net Working Capital at Closing, provided that if amounts payable under the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Indemnity Note; and
(C) if Net Working Capital at Closing is equal to the Net Working Capital Target Amount, no adjustment shall be made to the Purchase Price. All Any payments made pursuant to this Section 2(h)(v) 1.6 shall be treated as an adjustment to the Transaction Consideration by all the Parties. The Parties as acknowledge that the limitations on indemnification set forth in Article VI are inapplicable to the adjustments to the Purchase Pricebe made under this Section 1.6.
Appears in 1 contract
Sources: Asset Purchase Agreement (Ranger Energy Services, Inc.)
Net Working Capital Adjustment. (ia) As promptly as practicable, but in no event later than 30 Within ninety (90) days after the Closing Date, the Purchaser shall prepare and deliver to the Seller Representative a balance sheet of statement (the Company “Closing Statement”) calculating the Net Working Capital as of the open of business Closing Date (the “Closing Net Working Capital”); provided, however, that a failure by Purchaser to deliver the Closing Statement within such ninety (90) day period shall not prevent Purchaser from obtaining a Net Working Capital adjustment hereunder pursuant to a Closing Statement delivered thereafter.
(b) If the Representative disputes any amounts as shown on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing Statement, the Financial Statements Representative shall deliver to Purchaser within thirty (30) days after receipt of the Closing Statement a statement (the "Closing Balance Sheet"), together with a schedule “Dispute Notice”) setting forth the Representative’s calculation of such amount and describing in reasonable detail the Purchaser's good faith calculation basis for the determination of the Net Working Capital at Closing.
(ii) The Purchaser and its accountants shall permit the Seller and their representatives to have full access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of the Closing Balance Sheet and the Purchaser's calculation of the Net Working Capital at Closing and provide the Seller and their representatives with copies thereof (as reasonably requested by the Seller)such different amount. If the Seller disagrees with the Purchaser's calculation of the Net Working Capital at Closing as set forth on the schedule attached Representative does not deliver a Dispute Notice to Purchaser within such thirty (30) 4 day period, the Closing Balance Sheet or with any other aspect Statement prepared and delivered by Purchaser shall be deemed to be the “Final Closing Statement.” Purchaser and Representative shall use commercially reasonable efforts to resolve such differences within a period of thirty (30) days after the Representative has given the Dispute Notice. If Purchaser and Representative resolve such differences, the Closing Balance Sheet for any purpose under this Agreement, Statement agreed to by the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period Parties shall be extended by any delays resulting from deemed to be the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materialsFinal Closing Statement. The If Purchaser and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation of the Net Working Capital at Closing or any other aspect of Representative do not reach a final resolution on the Closing Balance Sheet. If Statement within thirty (30) days after the Representative has given the Dispute Notice, unless Purchaser and the Seller reach Representative mutually agree to continue their efforts to resolve such differences the Neutral Accountant shall resolve such differences, pursuant to an engagement agreement as to among Purchaser, the computation of Representative and the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Neutral Accountant (which Purchaser and the Seller and constitute Representative agree to execute promptly), in the Net Working Capital at Closing for purposes manner provided below. The Neutral Accountant shall only decide the specific items under dispute by the Parties (the “Disputed Items”), solely in accordance with the terms of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but in any event shall direct the Accountant to render a determination within 30 days of its retention. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed itemDisputed Item, the Neutral Accountant may not assign a value to any item greater than the greatest value for such item claimed by either party Purchaser or Representative or less than the smallest value for such item claimed by either partyParty. Purchaser and the Representative shall each be entitled to make a presentation to the Neutral Accountant, pursuant to procedures to be agreed to among Purchaser, the Representative and the Neutral Accountant (or, if they cannot agree on such procedures, pursuant to procedures determined by the Neutral Accountant), regarding such Party’s determination of the amounts to be set forth on the Closing Statement; and the Parties shall use commercially reasonable efforts to cause the Neutral Accountant to resolve the differences between Purchaser and the Representative and determine the amounts to be set forth on the Closing Statement within twenty (20) days after the engagement of the Neutral Accountant. The Neutral Accountant's ’s determination shall be based solely on such presentations by of the Purchaser and the Seller Parties (i.e., not on independent review), ) and on the definition of Net Working Capital definitions and other terms included herein. The Closing Statement determined by the Neutral Accountant shall be deemed to be the Final Closing Statement. Such determination of by the Neutral Accountant shall be conclusive and binding upon the Seller Parties, absent fraud or manifest error. The fees and expenses of the Purchaser and constitute Neutral Accountant shall be paid by the Party whose calculation of the Closing Net Working Capital at is farther from the Neutral Accountant’s calculation thereof. Nothing in this Section 1.4(b) shall be construed to authorize or permit the Neutral Accountant to: (i) determine any questions or matters whatsoever under or in connection with this Agreement except for the resolution of differences between Purchaser and the Representative regarding the determination of the Final Closing for purposes Statement; or (ii) resolve any such differences by making an adjustment to the Closing Statement that is outside of this Agreementthe range defined by amounts as finally proposed by Purchaser and the Representative.
(ivc) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the PurchaserPromptly, on the one hand, or the Seller, on the other hand, bears to the amount actually contested by such Parties. For example, if the Seller claims the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 divided by 500) to the Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(v) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target Amount, the Purchaser shall pay the amount of any such excess to Seller but no later than forty-five (455) Business Days after the final determination of thereof, if the Closing Net Working Capital at Closing, by wire transfer of immediately available funds to an account(sset forth in the Closing Statement: (i) designated by exceeds the Seller in writing.
(B) if Estimated Net Working Capital at Closing Capital, Purchaser shall pay such excess amount within five (5) Business Days of the determination and delivery to the Purchaser of the Final ▇▇▇▇▇▇▇▇ Project Expenditures Statement in accordance with Section 1.5, after netting such excess amount against any payment or deduction made pursuant to Section 1.5, to the Representative, for the benefit of Sellers; or (ii) is less than the Estimated Net Working Capital Target AmountCapital, Purchaser and the Seller Representative shall pay deliver joint written instructions to the amount of any such deficiency Escrow Agent instructing the Escrow Agent to deliver to Purchaser no later than forty-five (45) Business Days after from the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is SPA Escrow Amount an amount equal to the Net Working Capital Target Amountsuch shortfall, no adjustment shall be after netting such shortfall amount against any payment or deduction made pursuant to the Purchase PriceSection 1.5. All payments Any payment or deduction made pursuant to this Section 2(h)(v) 1.4 shall be treated by all Parties as adjustments an adjustment to the Purchase PriceTransaction Consideration by the Parties.
Appears in 1 contract
Sources: Stock Purchase Agreement (Fresh Del Monte Produce Inc)
Net Working Capital Adjustment. (ia) As promptly as practicable, but in no event later than 30 days Within [* * *] after the Closing Date, the Purchaser shall prepare and deliver to the Seller a balance sheet of statement (the Company “Closing Statement”) calculating Net Working Capital as of the open of business Closing Date (the “Closing Net Working Capital”) accompanied by reasonably detailed back-up documentation for such calculations and any additional information reasonably requested by Seller.
(b) If Seller disputes any amounts as shown on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing Statement, Seller shall deliver to Purchaser within [* * *] after receipt of the Financial Statements Closing Statement a notice (the "Closing Balance Sheet"), together with a schedule “Dispute Notice”) setting forth Seller calculation of such amount and describing in reasonable detail the Purchaser's good faith calculation basis for the determination of the Net Working Capital at Closing.
(ii) The such different amount. If Seller does not deliver a Dispute Notice to Purchaser and its accountants shall permit the Seller and their representatives to have full access to the bookswithin such [* * *], records and other documents (including work papers) pertaining to or used in connection with preparation of the Closing Balance Sheet Statement prepared and delivered by Purchaser shall be deemed to be the Purchaser's calculation “Final Closing Statement.” The Parties shall use commercially reasonable efforts to resolve such differences within a period of [* * *] after Seller has given the Net Working Capital at Closing and provide the Seller and their representatives with copies thereof (as reasonably requested by the Seller)Dispute Notice. If the Parties resolve such differences, the Closing Statement agreed to by the Parties shall be deemed to be the Final Closing Statement. If Purchaser and Seller disagrees do not reach a final resolution on the Closing Statement within [* * *] after Seller has given the Dispute Notice, unless Purchaser and Seller mutually agree to continue their efforts to resolve such differences, the Neutral Accountant who, acting as experts and not arbitrators, shall resolve such differences, pursuant to an engagement agreement among Purchaser, Seller and the Neutral Accountant (which Purchaser and Seller agree to execute promptly), in the manner provided below. The Neutral Accountant shall only decide the specific items under dispute by the Parties (the “Disputed Items”), solely in accordance with the terms of this Agreement. Purchaser and Seller shall each be entitled to make a presentation to the Neutral Accountant, pursuant to procedures to be agreed to among Purchaser's calculation , Seller and the Neutral Accountant (or, if they cannot agree on such procedures, pursuant to procedures determined by the Neutral Accountant), regarding such Party’s determination of the Net Working Capital at Closing as amounts to be set forth on the schedule attached to the Final Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser Statement; and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation of the Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolution; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser and the Seller Parties shall use their respective best commercially reasonable efforts to cause the Neutral Accountant to resolve all disagreements with respect the differences between Purchaser and Seller and determine the amounts to be set forth on the Net Working Capital at Final Closing or otherwise with respect to Statement within [* * *] after the Closing Balance Sheet as soon as practicable, but in any event shall direct engagement of the Accountant to render a determination within 30 days of its retentionNeutral Accountant. The Accountant shall consider only those items and amounts in the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Neutral Accountant's ’s determination shall be based solely on such presentations by of the Purchaser and the Seller Parties (i.e., not on independent review), ) and on the definition of Net Working Capital definitions and other terms included herein. The Closing Statement determined by the Neutral Accountant shall be deemed to be the Final Closing Statement. Such determination of by the Neutral Accountant shall be conclusive and binding upon the Seller Parties and shall not be appealable, absent fraud or manifest error. The fees and expenses of the Neutral Accountant shall be borne by Purchaser and constitute Seller based on the Net Working Capital at Closing for purposes of this Agreement.
(iv) The Accountant shall determine [* * *] percentage that the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect [* * *] of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaser, on the one hand, or the Seller, on the other hand, [* * *] covered by [* * *] bears to the amount actually contested by [* * *] of such Parties. For [* * *] as [* * *] to the [* * *] (for example, if the Seller claims [* * *] of such [* * *] as [* * *] to the Net Working Capital at Closing is $1,000 greater than the amount determined by the Purchaser, [* * *] equals [* * *] and the Purchaser contests only $500 [* * *] awards [* * *] in favor of [* * *], [* * *] ([* * *]%) of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 [* * *] of the $500 contested, then [* * *] would be [* * *] and [* * *] ([* * *]%) of the costs [* * *] of the [* * *] would be [* * *]). Nothing in this Section 1.5(b) shall be construed to authorize or permit the Neutral Accountant to: (i) determine any questions or matters whatsoever under or in connection with this Agreement except for the resolution of differences between Purchaser and expenses Seller regarding the determination of arbitration will be allocated 60% the Final Closing Statement; or (i.e., 300 divided ii) resolve any such differences by 500) making an adjustment to the Closing Statement that is outside of the range defined by amounts as finally proposed by Purchaser and 40% (i.e., 200 divided by 500) to the Seller.
(vc) Upon the final determination of the Net Working Capital at Closing:
(A) if Net Working Capital at Closing is greater than the Net Working Capital Target AmountPromptly, the Purchaser shall pay the amount of any such excess to Seller but no later than forty-five (45) Business Days [* * *] after the final determination of thereof, if the Closing Net Working Capital at Closingset forth in the Final Closing Statement: (i) exceeds the Estimated Net Working Capital (the amount of such excess, the “Adjustment Surplus”), then Purchaser shall pay such Adjustment Surplus to Seller by wire transfer of immediately available funds to an account(saccount or accounts designated in writing by Seller, and Purchaser and Seller shall jointly direct the Escrow Agent to pay the Adjustment Escrow Amount to Seller, or (ii) is less than the Estimated Net Working Capital (the amount by which it is less, the “Adjustment Shortfall”), then (A) if the Adjustment Shortfall is less than the Adjustment Escrow Amount, Purchaser and Seller shall jointly direct the Escrow Agent to pay to an account designated in writing by Purchaser an amount in cash from the Seller Adjustment Escrow Amount equal to the Adjustment Shortfall and to pay the balance of the Adjustment Escrow Amount in writing.
cash to Seller, in each case within [* * *] after the Adjustment Shortfall is determined, and (B) if the Adjustment Shortfall exceeds the Adjustment Escrow Amount, Seller shall pay to an account designated in writing by Purchaser an amount in cash equal to the amount by which the Adjustment Shortfall exceeds the Adjustment Escrow Amount and Purchaser and Seller shall jointly direct the Escrow Agent to release the Adjustment Escrow Amount to Purchaser, in each case within [* * *] after the Adjustment Shortfall is determined; provided, that, if the Closing Net Working Capital at Closing is less than within the Net Working Capital Target AmountCollar, the Purchaser and Seller shall jointly direct the Escrow Agent to pay the amount of Adjustment Escrow Amount to Seller, Purchaser and Seller shall have no obligation to take any such deficiency further actions, neither Purchaser nor Seller shall have any Liability to Purchaser no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is equal other with respect to the Net Working Capital Target AmountAdjustment, and no adjustment amounts shall be made payable to Purchaser or Seller pursuant to or arising out of this Section 1.5 other than the Purchase Pricepayment of the of the Adjustment Escrow Amount to Seller. All Any payments made pursuant to this Section 2(h)(v) 1.5 shall be treated by all Parties as adjustments an adjustment to the Purchase PriceTransaction Consideration by the Parties.
Appears in 1 contract
Net Working Capital Adjustment. (a) Prior to the Closing, Seller delivered to Purchaser a statement (the “Estimated Closing Statement”), setting forth Seller’s good faith estimates, prepared in accordance with GAAP, of (i) As promptly as practicablethe Net Working Capital Amount (the “Estimated Net Working Capital Amount”), but in no event later than 30 (ii) the Net Working Capital Shortfall (if any) (the “Estimated Net Working Capital Shortfall”), (iii) the Net Working Capital Surplus (if any) (the “Estimated Net Working Capital Surplus”), (iv) the Accrued Compensation and (v) the resulting calculation of the Closing Payment Amount.
(b) Within ninety (90) days after the Closing Date, the Purchaser shall prepare and deliver to the Seller a balance sheet of the Company as of the open of business on the Closing Date prepared in accordance with GAAP with no Change in Accounting Principles from those utilized in preparing the Financial Statements statement (the "“Closing Balance Sheet"), together with a schedule Statement”) setting forth in reasonable detail Purchaser’s calculation of (i) the Purchaser's good faith Net Working Capital Amount, along with the corresponding Net Working Capital Shortfall or Net Working Capital Surplus (as applicable), (ii) the Accrued Compensation and (iii) the resulting calculation of the Purchase Price based on the foregoing (the “Purchaser Closing Calculation”). The Purchaser Closing Calculation shall be prepared in a manner consistent with the methodologies and principles utilized to prepare the Illustrative Net Working Capital Schedule.
(c) The Closing Statement and the Purchaser Closing Calculations set forth therein shall be final and binding upon the Parties on the thirtieth (30th) day following delivery thereof (the “Final Objection Date”), unless Seller objects to the Purchaser Closing Calculations set forth in the Closing Statement by providing written notice of such objection to Purchaser prior to 5:00 PM New York time on the Final Objection Date (the “Notice of Objection”). Any Notice of Objection shall (i) specify in reasonable detail the nature of any disagreement so asserted, and (ii) only include disagreements based on mathematical errors or based on the calculation of the Net Working Capital at ClosingAmount not being calculated in a manner consistent with the methodologies and principles utilized to prepare the Illustrative Net Working Capital Schedule, along with the corresponding Net Working Capital Shortfall or Net Working Capital Surplus (as applicable), the calculation of Accrued Compensation, and the resulting calculation of the Purchase Price based on the foregoing. If a Notice of Objection is received by Purchaser prior to 5:00 PM New York time on the Final Objection Date, then the Closing Statement (as finally determined in accordance with this sentence) shall become final and binding upon the Parties on the earlier of (A) the date Seller and Purchaser resolve in writing any differences they have with respect to the matters specified in the Notice of Objection and (B) the date any disputed matters are finally resolved by the Accounting Firm in accordance with this Agreement.
(d) During the thirty (30)-day period following the delivery of a Notice of Objection, Seller and Purchaser shall seek in good faith to resolve any differences that they may have with respect to the matters specified in the Notice of Objection. At the end of such thirty (30)-day period, if Purchaser and Seller are unable to reach a resolution, Purchaser and Seller shall submit to the Accounting Firm for resolution of only those matters that were included by Seller in the Notice of Objection and that remain in dispute.
(e) In resolving matters submitted to it pursuant to Section 2.06(d), the Accounting Firm: (i) shall make its final determination on all matters within thirty (30) days of its appointment; (ii) shall not hold any hearings; (iii) shall not be entitled to take or order the taking of depositions or other testimony under oath; and (iv) with respect to each matter submitted to it, shall not resolve such matter in a manner that is more favorable to Purchaser than the Closing Statement or more favorable to Seller than the Notice of Objection. The Purchaser scope of the disputes to be resolved by the Accounting Firm shall be limited to (A) whether the Closing Statement and its accountants shall permit the Seller calculations thereon were prepared in a manner consistent with the methodologies and their representatives principles utilized to have full access prepare the Illustrative Net Working Capital Schedule with respect to matters that were submitted for resolution to the booksAccounting Firm, records (B) whether there were mathematical errors in the Closing Statement and other documents (including work papersC) pertaining the fees and expenses allocation pursuant to or used in connection with preparation Section 2.06(f).
(f) The final determination by the Accounting Firm of the Closing Balance Sheet and matters submitted to it pursuant to Section 2.06(d) shall: (i) be in writing; (ii) include the Purchaser's Accounting Firm’s calculation of the Net Working Capital at Closing and provide Amount, along with the Seller and their representatives with copies thereof corresponding Net Working Capital Shortfall or Net Working Capital Surplus (as reasonably requested by applicable), the Seller). If Accrued Compensation, and the Seller disagrees with the Purchaser's resulting calculation of the Net Working Capital at Closing as set forth Purchase Price based on the schedule attached to the Closing Balance Sheet or with any other aspect of the Closing Balance Sheet for any purpose under this Agreement, the Seller shall notify the Purchaser in writing of such disagreement (the "Objection Notice") (such Objection Notice setting forth the basis for such disagreement in reasonable detail) within 30 Business Days after the Purchaser's delivery of the Closing Balance Sheet to the Seller, which time period shall be extended by any delays resulting from the Purchaser's failure to deliver or make available to Seller, at Seller's request, all necessary materials. The Purchaser and the Seller thereafter shall negotiate in good faith to resolve any such disagreements with respect to the computation of the Net Working Capital at Closing or any other aspect of the Closing Balance Sheet. If the Purchaser and the Seller reach an agreement as to the computation of the Net Working Capital at Closing, such agreement shall be conclusive and binding upon the Purchaser and the Seller and constitute the Net Working Capital at Closing for purposes of this Agreement. If the Purchaser and the Seller are unable to resolve any such disagreements within 30 Business Days after the delivery of the Objection Notice to the Purchaser by the Seller, the Purchaser and the Seller shall submit the dispute to a national public accounting firm (or a successor thereto) jointly selected by the Purchaser and the Seller (the "Accountant") for resolutionforegoing; and at the time of such submission, the Purchaser and the Seller shall each disclose to the other any professional relationships by and between the Seller and the Purchaser and its shareholders, directors, and officers, and any such national accounting firm during the three (3) year period immediately prior to Closing. If the Purchaser and the Seller are unable to agree upon the Accountant, the Accountant shall be a national accounting firm (or a successor thereto) selected by lot (after the Purchaser and the Seller each exclude one such accounting firm). The Purchaser and the Seller agree to release the Accountant from any and all claims or liabilities for any services performed by the Accountant in resolving any dispute concerning the computation of Net Working Capital at Closing.
(iii) The Purchaser include the Accounting Firm’s determination of each matter submitted to it pursuant to Section 2.06(d); (iv) include the fees and expenses allocation pursuant to this Section 2.06(f); and (v) include a brief summary of the Seller shall use their respective best efforts to cause the Accountant to resolve all disagreements with respect to the Net Working Capital at Closing or otherwise with respect to the Closing Balance Sheet as soon as practicable, but in any event shall direct the Accountant to render a Accounting Firm’s reasons for its determination within 30 days of its retentioneach issue. The Accountant shall consider only those items and amounts in determinations of the Closing Balance Sheet which are identified in the Objection Notice as being items which the Purchaser and the Seller are unable to resolve. In resolving any disputed item, the Accountant may not assign a value to any 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. The Accountant's determination Accounting Firm shall be based solely final and binding on presentations the Parties for all purposes hereunder, absent fraud or manifest error by the Purchaser and Accounting Firm. Judgment may be entered upon the Seller (i.e., not on independent review), and on the definition of Net Working Capital included herein. The determination of the Accountant Accounting Firm in any court having jurisdiction over the Party against which such determination is to be enforced in accordance with Section 11.12. The fees and expenses of the Accounting Firm incurred pursuant to Section 2.06 shall be conclusive and binding upon the Seller and the Purchaser and constitute the Net Working Capital at Closing for purposes of this Agreement.
(iv) The Accountant shall determine the allocation of its costs and expenses in resolving any disputes relating to the determination of Net Working Capital at Closing or any other aspect of the Closing Balance Sheet based upon the percentage which the portion of the contested amount not awarded to the Purchaserborne by Seller, on the one hand, or the Sellerand Purchaser, on the other hand, based on the inverse of the percentage that the Accounting Firm’s resolution of the disputed items bears to the total amount actually contested by such Partiesof the disputed items as originally submitted to the Accounting Firm. For example, if the Seller claims total amount of the Net Working Capital at Closing is disputed items as originally submitted to the Accounting Firm equals $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only Accounting Firm awards $500 600 in favor of Seller’s position, 60% of the amount claimed by the Seller, and if the Accountant ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs fees and expenses of arbitration will the Accounting Firm would be allocated 60% (i.e., 300 divided borne by 500) to the Purchaser and 40% (i.e., 200 divided of the fees and expenses of the Accounting Firm would be borne by 500) to the Seller.
(vg) Upon If the final determination Purchase Price as finally determined pursuant to Section 2.06(c), Section 2.06(d), or Section 2.06(f), as the case may be (the “Final Closing Calculation”), is less than the Closing Payment Amount (the absolute value of such difference, the Net Working Capital at Closing:“Final Shortfall”), Seller shall pay to Purchaser an amount equal to the Final Shortfall, by wire transfer in immediately available U.S. dollar funds, to an account or accounts designated prior to the payment date by Purchaser in a writing to Seller.
(Ah) if Net Working Capital at If the Final Closing Calculation is greater than the Net Working Capital Target AmountClosing Payment Amount (such difference, the “Final Surplus”), Purchaser shall pay the amount of any such excess to Seller no later than forty-five (45) Business Days after an amount equal to the final determination of Net Working Capital at ClosingFinal Surplus, by wire transfer of in immediately available funds U.S. dollar funds, to an account(s) account or accounts designated prior to the payment date by the Seller in writinga writing to Purchaser.
(Bi) if Net Working Capital at Closing is less than the Net Working Capital Target Amount, the Seller shall pay the amount of any such deficiency Any payments to Purchaser no later than forty-five (45) Business Days after the final determination of Net Working Capital at Closing, provided that if the Note has not then been paid in full, then such payment shall be made by means of setoff to payments due on the Note; and
(C) if Net Working Capital at Closing is equal to the Net Working Capital Target Amount, no adjustment shall be made to the Purchase Price. All payments made pursuant to this Section 2(h)(v2.06 shall be made by the obligated Party no later than five (5) Business Days following the date on which the Final Closing Calculation becomes final and binding on the Parties, and shall be treated by all Parties as adjustments an adjustment to the Purchase PricePrice by the Parties for Tax purposes, unless otherwise required by Law. Notwithstanding anything in this Agreement to the contrary, the process set forth in this Section 2.06 shall be the sole and exclusive method for resolving any such disputes related to the Estimated Closing Statement, the Closing Statement, the Notice of Objection and any amounts set forth therein.
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