Post-Closing Adjustment. (a) Within 45 days after the Closing Date, the Purchaser will prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet. (b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them. (c) Within 30 days after delivery of the Adjustment Notice, the Seller will either: (i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or (ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein. (d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g). (e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”). (i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm. (ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 2 contracts
Sources: Share Purchase Agreement (Ariad Pharmaceuticals Inc), Share Purchase Agreement (Ariad Pharmaceuticals Inc)
Post-Closing Adjustment. (ai) Within 45 As promptly as reasonably practicable, but in no event later than one hundred twenty (120) calendar days after following the Closing Date, Parent shall cause to be prepared in accordance with the Purchaser will prepare Specified Accounting Principles and deliver delivered to the Seller a written notice (the “Adjustment Notice”) containing (i) Shareholder Representative an unaudited consolidated balance sheet of the Acquired Companies Company as at of the close of business on the day immediately prior to the Closing Date (the “Closing Balance Sheet”), together with a statement (the “Parent Closing Statement”) setting forth in reasonable detail Parent’s calculation of Closing Working Capital.
(ii) From and after the Purchaser’s calculation delivery of the Closing Net Working Capital based on the Closing Balance Sheet and the Parent Closing Statement, Parent shall provide the Shareholder Representative and any accountants or advisors retained by the Shareholder Representative with reasonable access during normal business hours to the books and records of the Surviving Corporation for the purposes of: (A) enabling the “Closing Net Working Capital Statement”)Shareholder Representative and its accountants and advisors to calculate, (iii) the Purchaserand to review Parent’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) Working Capital; and (ivB) identifying any dispute related to the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and set forth in the Parent Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance SheetStatement.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with If the Purchaser and Shareholder Representative disputes the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery calculation of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives Closing Working Capital set forth in the review of Parent Closing Statement, then the Adjustment Notice and (ii) Shareholder Representative shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser deliver a written notice (a “Dispute Notice”) which to Parent and the Escrow Agent during the thirty (30)-day period commencing upon receipt by the Shareholder Representative of the Closing Balance Sheet and the Parent Closing Statement (the “Review Period”). The Dispute Notice shall specify which items are being disputed and set forth, in reasonable detail, the principal basis for the dispute of such calculation.
(iv) If the Shareholder Representative does not deliver a Dispute Notice to Parent prior to the expiration of the Review Period, Parent’s calculation of Closing Working Capital set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will Parent Closing Statement shall be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on Parent, the parties Shareholder Representative and Equityholders for all purposes of Section 2.4(g)this Agreement.
(ev) If the Seller timely Shareholder Representative delivers a Dispute Notice to Parent prior to the Purchaserexpiration of the Review Period, then the Purchaser Shareholder Representative and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), Parent shall use commercially reasonable efforts to agree reach agreement on the Adjustment Calculation for purposes calculation of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g)Closing Working Capital. If the Purchaser Shareholder Representative and Parent are unable to reach agreement on the Seller do not resolve all disputed items by calculation of Closing Working Capital within twenty (20) calendar days after the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Review Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the PurchaserShareholder Representative, on the one hand, or the SellerParent, on the other hand, fails shall have the right to select refer such independent accounting firm during this 10-day perioddispute to the San Jose, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes California office of this Section 2.4 Deloitte & Touche LLP (such selected independent accounting firm, whether pursuant or any successor thereto, being referred to this sentence or the preceding sentence, herein as the “Independent Designated Accounting Firm”).
) after such twentieth (i20th) The Independent day. In connection with the resolution of any such dispute by the Designated Accounting Firm will Firm: (A) act each of Parent and the Shareholder Representative shall have a reasonable opportunity to meet with the Designated Accounting Firm to provide their respective views as an expert to any disputed issues with respect to the calculation of Closing Working Capital; (B) the Designated Accounting Firm shall determine Closing Working Capital in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as accordance with the Specified Accounting Principles within thirty (30) calendar days of such timereferral and, and that have not been deemed pursuant to Section 2.4(c)upon reaching such determination, Section 2.4(d) or Section 2.4(eshall deliver a copy of its calculations (the “Expert Calculations”) to the Shareholder Representative, Parent and the Escrow Agent; and (C) the determination of Closing Working Capital made by the Designated Accounting Firm shall be final and binding on Parent, the PartiesShareholder Representative and the Equityholders for all purposes of this Agreement, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with absent manifest error. In calculating Closing Working Capital, the methods and practices used Designated Accounting Firm shall be limited to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount addressing any particular disputes referred to in the Dispute Notice Notice. The Expert Calculations (X) shall reflect in detail the differences, if any, between Closing Working Capital reflected therein and Closing Working Capital set forth in the Parent Closing Statement, and (DY) render its determination with respect to any specific discrepancy or disagreement, shall be no greater than the items in dispute in a written report that specifies higher amount calculated by Parent or the conclusions of Shareholder Representative, as the Independent Accounting Firm case may be, and no lower than the lower amount calculated by Parent or the Shareholder Representative as to each item in dispute and the resulting Adjustment Calculationcase may be. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs fees and expenses of the Independent Designated Accounting Firm will shall be allocated between borne by Parent and the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears Shareholder Representative in proportion to the amount actually contested by such partywhich their respective determinations of Closing Working Capital differed from the amount determined by the Designated Accounting Firm, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Designated Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 2 contracts
Sources: Merger Agreement (Mellanox Technologies, Ltd.), Merger Agreement
Post-Closing Adjustment. (ai) Within 45 days after the Closing Date, the Purchaser will shall prepare and deliver to Peanuts Seller within ninety (90) calendar days following the Seller Closing Date a written notice (statement setting forth its calculation of the “Adjustment Notice”) containing (i) an unaudited consolidated Closing Working Capital, which statement shall contain a balance sheet of the Acquired Companies Peanuts Business as at immediately prior of the Closing Date (without giving effect to the transactions contemplated herein) and a calculation of the Closing Working Capital (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Date Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance SheetDate Statement shall be prepared using the same accounting methods, practices, principles, policies, procedures, classifications, judgments and valuation and estimation methodologies that were used to calculate the Estimated Working Capital and calculated in the manner set forth in the template attached hereto as Exhibit J.
(ii) If Peanuts Seller does not notify Purchaser in writing within forty-five (45) calendar days after Peanuts Seller’s receipt of the Closing Date Statement that it disputes any of the information or calculations provided to Peanuts Seller in the Closing Date Statement, the Closing Net Working Capital Date Statement shall be final and the Closing Net Cash Statement will be prepared in accordance conclusive. If Peanuts Seller disagrees with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation any of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the information or calculations provided by Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on in the Closing Date and Statement, Peanuts Seller may, within forty-five (iii45) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 calendar days after delivery of the Adjustment Noticesuch statement to it, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser deliver a written notice (a “Dispute Notice”) which to Purchaser stating the existence and nature of such disagreement. Any such notice of disagreement shall specify those items or amounts as to which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) Peanuts Seller disagrees. If the Seller fails to take either such notice of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which casedisagreement is delivered, the Adjustment Calculation will be final and binding parties shall use their reasonable best efforts to reach agreement on the parties for purposes of Section 2.4(g).
disputed items or amounts within ten (e10) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Business Days after Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g)notice. If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller parties are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, reach agreement on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and disputed items within such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party issues in dispute will be the submitted to a mutually agreed firm of nationally recognized independent accounting firm selected by the parties for purposes of this Section 2.4 certified public accountants (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting FirmAccountants”).
(i) The Independent Accounting Firm will (A) act for review and resolution, with instructions to complete the review as an expert in accounting, and not promptly as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each Each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm Accountants such work papers workpapers and other documents and information relating to the disputed items on a timely delivered Dispute Notice issues as the Independent Accounting Firm Accountants may reasonably request and are available to that party or its Affiliates (or its Representativesindependent public accountants). A copy of any such work papers , and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm Accountants any material related relating to the disputed items on a timely delivered Dispute Notice determination and to discuss such items the determination with the Independent Accounting FirmAccountants. The parties shall instruct the Accountants that their determination shall not result in a Closing Adjustment in an amount higher than the Closing Adjustment proposed by Peanuts Seller or an amount lower than the Closing Adjustment proposed by Purchaser. The resolution of the Accountants in accordance with the provisions of this Section 3.2 shall be conclusive and binding on the parties. Peanuts Seller and Purchaser shall each pay one-half of the fees and expenses charged by the Accountants.
(iii) If there is a Working Capital Deficiency (as determined pursuant to Section 3.2(b)(ii)), with any such presentation or discussion on a net basis after taking into account the Closing Working Capital determined under the Strawberry Shortcake Transaction Agreement, Peanuts Seller shall pay to be held in the presence Purchaser, by wire transfer of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein immediately available funds to the contraryan account designated by Purchaser, the dispute resolution mechanism contained amount of such Working Capital Deficiency within five (5) Business Days after the final determination of the Closing Working Capital made in this accordance with Section 2.4(e3.2(b)(ii). If there is a Working Capital Excess (as determined pursuant to Section 3.2(b)(ii)), on a net basis after taking into account the Closing Working Capital determined under the Strawberry Shortcake Transaction Agreement, Purchaser shall pay to Peanuts Seller by wire transfer of immediately available funds to an account designated by Peanuts Seller, the amount of such Working Capital Excess within five (5) will be Business Days after the exclusive mechanism for resolving any disputes regarding final determination of the Adjustment CalculationClosing Working Capital made in accordance with Section 3.2(b)(ii).
Appears in 2 contracts
Sources: Membership Interest Purchase Agreement (DHX Media Ltd.), Membership Interest Purchase Agreement (DHX Media Ltd.)
Post-Closing Adjustment. (a) Within 45 forty-five (45) days after the Closing Date, the Purchaser will prepare Parent shall cause to be prepared and deliver delivered to the Seller a written notice (the “Adjustment Notice”) containing Purchasers (i) an unaudited consolidated balance sheet adjustment statement setting forth the amount of the Acquired Companies as at immediately prior to Closing Cash, the Vault Cash, the Closing Working Capital and the Closing Indebtedness (the “Closing Balance Sheet”), "Preliminary Adjustment Statement") and (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet Cash, the Vault Cash, the Closing Working Capital and the Closing Indebtedness as derived therefrom, the Parent's written calculation of the Purchase Price, and the adjustments necessary to reconcile the Estimated Purchase Price to the Purchase Price (the “"Preliminary Post-Closing Net Working Capital Statement”Adjustment"), (iii) the Purchaser’s calculation . The Preliminary Adjustment Statement shall each be prepared as of Closing Net Cash based 12:01 a.m. on the Closing Date consistent with, and using the same accounting methods, policies, practices and procedures as used in the preparation of the Pro Forma Balance Sheet (as if the “Closing Net Cash Statement”) Date was an interim month end, except that the Preliminary Adjustment Statement shall only reflect those assets and (iv) the Purchaser’s calculation liabilities of the amount of any payments required pursuant Business necessary to Section 2.4(g) (calculate the “Adjustment Calculation”). The Closing Balance SheetCash, the Vault Cash, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be Indebtedness and shall include details reasonably sufficient to enable Purchasers to determine whether it was prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheetthis clause (a).
(b) During The Purchasers shall review the preparation of Preliminary Adjustment Statement and the Preliminary Post-Closing Adjustment Noticeand, at if the Purchaser’s requestPurchasers reasonably believe that either was not prepared in accordance with Section 2.6(a), the Seller willPurchasers shall so notify the Parent no later than the tenth (10) Business Day after the Purchasers' receipt thereof, and will cause each of setting forth in such notice the Acquired Companies to, (i) provide Purchasers' objection or objections to the Purchaser Preliminary Adjustment Statement or the Preliminary Post-Closing Adjustment with particularity and the Purchaser’s Representatives with reasonable access specific changes or adjustments which the Purchasers claim are required to be made thereto in order to conform the same to the books, records, facilities and Employees terms of the Acquired Companies Section 2.6(a). Any notice of objection delivered pursuant to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (ithis Section 2.6(b) shall reasonably cooperate and assist, and shall cause its Representatives to assist, specify in reasonable detail the Seller and its Representatives in the review nature of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themdisagreement so asserted.
(c) Within 30 days after delivery Each Party shall cooperate fully with all representatives of the other Parties in the preparation and review of the Preliminary Adjustment NoticeStatement, including, without limiting the Seller will either:
(i) agree generality of the foregoing, causing the books and records of the Business to be made available after the Closing during normal business hours to such representatives upon reasonable advance notice, and shall cause the necessary personnel of the Business to assist such representatives in writing with the preparation and/or review of the Preliminary Adjustment CalculationStatement, in which case including, without limitation, granting such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering Persons access to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed facilities and set forth in other assets of the other upon reasonable detail the basis for each disputed item thereinadvance notice.
(d) If the Seller fails Purchasers timely notify the Parent in accordance with Section 2.6(b) of an objection by the Purchasers to take either of the foregoing actions Preliminary Adjustment Statement or the Preliminary Post-Closing Adjustment, and if the Purchasers and the Parent are unable otherwise to resolve such dispute through good faith negotiations between the Purchasers and the Parent within 30 fifteen (15) days after the Purchasers' delivery of the Adjustment Noticesuch notice of objection, then the Seller will Parties shall mutually engage and submit such dispute to, and the same shall be deemed to have irrevocably accepted finally resolved in accordance with the Adjustment Calculation, in which caseprovisions of this Agreement by, the Adjustment Calculation will New York, New York office of BDO ▇▇▇▇▇▇▇, LLP, or such other accounting firm of national reputation as shall be final mutually acceptable to the Purchasers and binding the Parent (the "Independent Accountants"). The Independent Accountants shall determine and report in writing to the Purchasers and the Parent as to the resolution of all disputed matters submitted to the Independent Accountants and the effect of such determinations on the parties for purposes Preliminary Adjustment Statement and the Preliminary Post-Closing Adjustment within twenty (20) days after such submission or such longer period as the Independent Accountants may reasonably require, and such determinations shall be final, binding and conclusive as to the Purchasers, the Parent and their respective Affiliates. The fees and disbursements of Section 2.4(g)the Independent Accountants shall be shared equally by the Purchasers on the one hand and the Parent on the other hand.
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser The Preliminary Adjustment Statement and the Seller will attempt in good faith, for a period of 30 days following Preliminary Post-Closing Adjustment shall become the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the "Final Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser Statement" and the Seller memorialized in writing "Final Post-Closing Adjustment," respectively, and signed by both as such shall become final, binding and conclusive upon the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to servePurchasers, the Purchaser Parent and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties their respective Affiliates for all purposes of this Agreement, upon the earliest to occur of the following:
(i) the mutual acceptance by the Purchasers and the Parent of the Preliminary Adjustment Statement and the Preliminary Post-Closing Adjustment, respectively, with such changes or adjustments thereto, if any, as may be proposed by the Purchasers and consented to by the Parent;
(ii) the expiration of ten (10) Business Days after the Purchasers' receipt of the Preliminary Adjustment Statement and the Preliminary Post-Closing Adjustment, respectively, without timely written objection thereto by the Purchasers in accordance with Section 2.4 2.6(b); or
(such selected independent accounting firm, whether iii) the delivery to the Purchasers and the Parent by the Independent Accountants of the report of their determination of all disputed matters submitted to them pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”Section 2.6(c).
(if) The Independent Accounting Firm will (A) act If the Purchase Price, calculated as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute Section 2.2, as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination finally determined in accordance with this Agreement and otherwise Section 2.6, is greater than the Estimated Purchase Price, then the Purchasers shall pay the amount of such difference to the Parent (to the extent appropriate, as agent of EFC) by means of a wire transfer of immediately available funds to the Parent's Account. If the Purchase Price, calculated as set forth in Section 2.2, as finally determined in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheetthis Section 2.6, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable Estimated Purchase Price, the Parent (if appropriate, as agent of EFC) shall pay the amount in the Dispute Notice and (D) render its determination with respect of such difference to the items in dispute in Purchasers by means of a written report that specifies wire transfer of immediately available funds to an account designated by the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment CalculationPurchasers. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to executeFinal Post-Closing Adjustment, if requested by the Independent Accounting Firmany, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser shall be due and the Seller will furnish payable pursuant to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.this
Appears in 2 contracts
Sources: Purchase Agreement (Efunds Corp), Purchase Agreement (TRM Corp)
Post-Closing Adjustment. (ai) Within 45 days after the Closing Date, the Purchaser will shall prepare and deliver to Peanuts Seller within ninety (90) calendar days following the Seller Closing Date a written notice (statement setting forth its calculation of the “Adjustment Notice”) containing (i) an unaudited consolidated Closing Working Capital, which statement shall contain a balance sheet of the Acquired Companies Peanuts Business as at immediately prior of the Closing Date (without giving effect to the transactions contemplated herein) and a calculation of the Closing Working Capital (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Date Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance SheetDate Statement shall be prepared using the same accounting methods, practices, principles, policies, procedures, classifications, judgments and valuation and estimation methodologies that were used to calculate the Estimated Working Capital and calculated in the manner set forth in the template attached hereto as Exhibit J.
(ii) If Peanuts Seller does not notify Purchaser in writing within forty-five (45) calendar days after Peanuts Seller’s receipt of the Closing Date Statement that it disputes any of the information or calculations provided to Peanuts Seller in the Closing Date Statement, the Closing Net Working Capital Date Statement shall be final and the Closing Net Cash Statement will be prepared in accordance conclusive. If Peanuts Seller disagrees with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation any of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the information or calculations provided by Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on in the Closing Date and Statement, Peanuts Seller may, within forty-five (iii45) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 calendar days after delivery of the Adjustment Noticesuch statement to it, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser deliver a written notice (a “Dispute Notice”) which to Purchaser stating the existence and nature of such disagreement. Any such notice of disagreement shall specify those items or amounts as to which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) Peanuts Seller disagrees. If the Seller fails to take either such notice of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which casedisagreement is delivered, the Adjustment Calculation will be final and binding parties shall use their reasonable best efforts to reach agreement on the parties for purposes of Section 2.4(g).
disputed items or amounts within ten (e10) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Business Days after Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g)notice. If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller parties are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, reach agreement on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and disputed items within such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party issues in dispute will be the submitted to a mutually agreed firm of nationally recognized independent accounting firm selected by the parties for purposes of this Section 2.4 certified public accountants (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting FirmAccountants”).
(i) The Independent Accounting Firm will (A) act for review and resolution, with instructions to complete the review as an expert in accounting, and not promptly as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each Each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm Accountants such work papers workpapers and other documents and information relating to the disputed items on a timely delivered Dispute Notice issues as the Independent Accounting Firm Accountants may reasonably request and are available to that party or its Affiliates (or its Representativesindependent public accountants). A copy of any such work papers , and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm Accountants any material related relating to the disputed items on a timely delivered Dispute Notice determination and to discuss such items the determination with the Independent Accounting FirmAccountants. The parties shall instruct the Accountants that their determination shall not result in a Closing Adjustment in an amount higher than the Closing Adjustment proposed by Peanuts Seller or an amount lower than the Closing Adjustment proposed by Purchaser. The resolution of the Accountants in accordance with the provisions of this Section 3.2 shall be conclusive and binding on the parties. Peanuts Seller and Purchaser shall each pay one-half of the fees and expenses charged by the Accountants.
(iii) If there is a Working Capital Deficiency (as determined pursuant to Section 3.2(b)(ii)), on a net basis after taking into account the Closing Working Capital determined under the Strawberry Shortcake Transaction Agreement, Peanuts Seller shall pay to Purchaser, by wire transfer of immediately available funds to an account designated by Purchaser, the amount of such Working Capital Deficiency within five (5) Business Days after the final determination of the Closing Working Capital made in accordance with any Section 3.2(b)(ii). If there is a Working Capital Excess (as determined pursuant to Section 3.2(b)(ii)), on a net basis after taking into account the Closing Working Capital determined under the Strawberry Shortcake Transaction Agreement, Purchaser shall pay to Peanuts Seller by wire transfer of immediately available funds to an account designated by Peanuts Seller, the amount of such presentation or discussion to be held Working Capital Excess within five (5) Business Days after the final determination of the Closing Working Capital made in accordance with Section 3.2(b)(ii). *** Confidential treatment has been requested for redacted portions of this exhibit. This copy omits the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein information subject to the contrary, confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment CalculationSecurities and Exchange Commission.
Appears in 2 contracts
Sources: Membership Interest Purchase Agreement (Iconix Brand Group, Inc.), Membership Interest Purchase Agreement (Iconix Brand Group, Inc.)
Post-Closing Adjustment. (a) Within 45 As promptly as practicable, but in no event later than 10 calendar days after following the Closing Date, the Purchaser will Company shall prepare and deliver to the Seller Parent, a written notice (the “Adjustment Notice”) containing (i) certificate, certified as true and correct as of such date by an authorized representative of Company, to include an unaudited consolidated balance sheet of the Acquired Companies Company as at immediately prior to of 12:01 a.m. (PT) on the Closing Date (the “Closing Balance Sheet”), together with a statement (the “Company Closing Statement”) setting forth in reasonable detail Company’s good faith calculation of each of (i) Closing Cash, (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”)Indebtedness, (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) Transaction Expenses, and (iv) the PurchaserNet Aggregate Consideration and attaching all relevant backup materials and schedules; together with a reasonably detailed computation, and reasonable supporting materials, in each case, using the same methodologies and accounting practices and principles applied on a consistent basis by the Company prior to Closing. (b) From and after the delivery of the Closing Balance Sheet and the Company Closing Statement, Company shall provide the Parent and any accountants or advisors retained by Parent with reasonable access during normal business hours to the books and records and personnel of the Surviving Company, including relevant work papers and back-up materials and such other information and materials as reasonably requested by Parent, solely for the purposes of: (A) enabling the Parent and its accountants and advisors to calculate and to review Company’s calculations as reflected Closing Balance Sheet and Company Closing Statement; and (B) identifying any dispute related to the calculations set forth in the Company Closing Statement. (c) If the Parent disputes the calculation of Closing Cash, Closing Indebtedness, Transaction Expenses, or the amount Net Aggregate Consideration set forth in the Company Closing Statement, then Parentshall deliver a written notice (an “Adjustment Dispute Notice”) to Company, Representative and the Escrow Agent during the thirty (30) day period commencing upon receipt by Parent of any payments required pursuant to Section 2.4(g) the Closing Balance Sheet and the Company Closing Statement (the “Adjustment CalculationReview Period”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Dispute Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculationset forth, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail detail, the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt dispute of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser calculation and the Seller memorialized in writing attaching all relevant backup materials and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”)schedules.
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 2 contracts
Sources: Merger Agreement (Oddity Tech LTD), Merger Agreement (Oddity Tech LTD)
Post-Closing Adjustment. (a) Within 45 seventy-five (75) days after following the Closing Date, the Purchaser will prepare and deliver to Buyer shall furnish the Seller Representative with a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies Company as at immediately prior to of the Closing Date on a post-Closing basis (the “Closing Balance Sheet”)) prepared in accordance with Modified GAAP, (ii) which shall set forth the Purchaser’s calculation Closing Working Capital of the Company, the Indebtedness for Borrowed Money, the Non-Ordinary Course Liabilities and, as applicable, the Closing Net Working Capital based on Deficit or the Closing Working Capital Surplus (collectively, the “Closing Adjustments”). Each Seller shall assist the Buyer in the preparation of the Closing Balance Sheet if reasonably requested by the Buyer.
(the “Closing Net Working Capital Statement”), b) The Seller Representative shall have a period of fifteen (iii15) the Purchaser’s calculation days after receipt of Closing Net Cash based on the Closing Balance Sheet (to notify the “Buyer of its election to accept or reject the Closing Net Cash Statement”) Balance Sheet. In the case of a rejection, such notice must contain the reasons for such rejection in reasonable detail and (iv) the Purchaser’s calculation of must set forth the amount of any payments required pursuant to Section 2.4(g) the requested adjustment (the “Adjustment Calculation”or a reasonable estimate thereof). The In the event no notice is received by the Buyer during such fifteen (15) day period, the Closing Balance Sheet and any required adjustments resulting therefrom shall be deemed accepted by the Seller Representative and the Sellers and final and binding on the Parties hereto. In the event that the Seller Representative shall timely reject the Closing Balance Sheet, the Closing Net Working Capital Statement Buyer and the Seller Representative shall promptly (and in any event within thirty (30) days following the date upon which the Seller Representative shall reject the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice), at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access attempt to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as make a joint determination of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date Adjustments and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice such determination and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) required adjustments resulting therefrom shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties Parties hereto solely for purposes of this Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein1.6.
(dc) If In the event the Seller fails Representative and the Buyer shall be unable to take either agree upon a joint determination of Closing Adjustments within one hundred twenty (120) days from the foregoing actions within 30 days after delivery of the Adjustment NoticeClosing Date, then within one hundred thirty (130) days from the Closing Date, the Buyer and the Seller will be deemed Representative shall submit the dispute to have irrevocably accepted the Adjustment Calculation, in which case, Accounting Firm. The Buyer and the Adjustment Calculation will Seller Representative shall request that the Accounting Firm render its determination prior to the expiration of one hundred sixty (160) days from the Closing Date and such determination and any required adjustments resulting therefrom shall be final and binding on all the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties Parties hereto solely for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation1.6. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs fees and expenses of the Independent Accounting Firm will shall be allocated between to be paid by the Parties Buyer and/or the Sellers, respectively, based upon the percentage which the portion of the total amount contested amount and not awarded to each such party bears to the total amount actually contested by such partycontested, as determined by the Independent Accounting Firm. The Buyer and Nothing stated or disclosed in the Representative agree Closing Balance Sheet or in connection with the determination thereof shall waive or be deemed to execute, if requested waive any inaccuracy or breach of any representation or warranty made by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor Company or any Seller or any right to indemnification hereunder and shall be without prejudice to any other right or remedy of the Independent Accounting FirmBuyer under this Agreement, at equity or at law.
(iid) For purposes If the Closing Working Capital as finally determined in accordance with the provisions of complying with this Section 2.41.6 is less than the Estimated Working Capital, then the Purchaser and amount of the Seller will furnish difference shall be paid by the Sellers to the Independent Accounting Firm such work papers and other documents and information relating Buyer, in proportion to their respective First Per Share Post-Closing Amounts, as an adjustment to the disputed items Purchase Price by wire transfer in immediately available funds within seven (7) days after such determination. If the Closing Working Capital as finally determined in accordance with the provisions of this Section 1.6 is more than the Estimated Working Capital, then the amount of the difference shall be paid by the Buyer to the Sellers as an adjustment to the Purchase Price by wire transfer in immediately available funds in proportion to their respective First Per Share Post-Closing Amounts within seven (7) days after such determination.
(e) If the Indebtedness for Borrowed Money and/or the Non-Ordinary Course Liabilities determined pursuant to this Section 1.6 exceed the Indebtedness for Borrowed Money and/or the Non-Ordinary Course Liabilities, respectively, set forth on a timely delivered Dispute Notice the Estimated Closing Balance Sheet, such excess shall be paid as an adjustment to the First Post-Closing Payment by the Sellers to the Buyer by wire transfer in immediately available funds within seven (7) days after such determination. If the Indebtedness for Borrowed Money and/or the Non-Ordinary Course Liabilities determined pursuant to this Section 1.6 are less than the Indebtedness for Borrowed Money and/or the Non-Ordinary Course Liabilities, respectively, set forth on the Estimated Closing Balance Sheet, such deficit shall be paid as an adjustment to the First Post-Closing Payment by the Buyer to the Sellers, in proportion to their respective First Per Share Post-Closing Amounts, by wire transfer in immediately available funds within seven (7) days after such determination. The adjustments described in Sections 1.6(d) and (e) shall be referred to collectively as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives)“Post-Closing Adjustment”. A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently If either Party does not so pay to the other party free of charge. Each party will Party by the due date, such amounts shall be afforded the opportunity to present deemed Damages under Article IX hereof which shall be paid in full without regard to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice limitations set forth in Sections 9.4 and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation9.5 hereof.
Appears in 2 contracts
Sources: Stock Purchase Agreement (Si International Inc), Stock Purchase Agreement (Si International Inc)
Post-Closing Adjustment. (a) Within 1.6.2.1 No later than 45 days after following the Closing Date, the Purchaser GCI will prepare and deliver to the Seller Company a written notice statement (the “Adjustment NoticeClosing Date Statement”) containing (i) an unaudited consolidated balance sheet showing, in reasonable detail, a calculation of the Acquired Companies Shareholders’ Equity as at of immediately prior to the Closing (the “Closing Balance SheetDate Shareholders’ Equity”), (ii) .
1.6.2.2 Within 45 days after the Purchaser’s calculation of date GCI delivers to the Company the Closing Net Working Capital based on Date Statement, if the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the PurchaserCompany disagrees in good faith with GCI’s calculation of Closing Net Cash based on Date Shareholders’ Equity as set forth in the Closing Balance Sheet Date Statement, then the Company may give BUS_RE\1394606.17 written notice (the “Closing Net Cash StatementObjection Notice”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, GCI within such 45-day period (i) provide setting forth the Purchaser and the PurchaserCompany’s Representatives with reasonable access to the books, records, facilities and Employees determination of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice Shareholders’ Equity and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth specifying in reasonable detail the Company’s basis for each disputed item therein.
(d) disagreement with GCI’s determination of Closing Date Shareholders’ Equity. The failure by the Company to deliver an Objection Notice within such 45-day period shall constitute the acceptance of GCI’s computation of Closing Date Shareholders’ Equity. If the Seller fails Company and GCI are unable to take either resolve any matter raised in the Objection Notice with respect to the determination of the foregoing actions Closing Date Shareholders’ Equity within 30 days after delivery of the Adjustment Objection Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute shall be submitted to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination arbitration in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used Section 10.1. The final computation of Closing Date Shareholders’ Equity, determined by reference to prepare the Company Interim Balance Sheeteither GCI’s computation of Closing Date Shareholders’ Equity, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess agreement of the applicable amount in parties or binding arbitration, as the Adjustment Notice or (2) that case may be, is referred to herein as the “Final Shareholders’ Equity.”
1.6.2.3 If, after the Final Shareholders’ Equity has been determined, the Cash Consideration is less than the applicable Estimated Cash Consideration, the Sellers shall promptly pay to GCI, within five days after the Final Shareholders’ Equity has been determined, an amount in equal to such difference plus interest accruing on such amount at a rate of 8% per annum from the Dispute Notice and (D) render its determination with respect Closing Date until such amount is paid, by wire transfer of immediately available funds to an account designated by GCI. If the Estimated Cash Consideration is less than the Cash Consideration, GCI shall promptly pay to the items in dispute in Company, within five days after the Final Shareholders’ Equity has been determined, an amount equal to such difference plus interest accruing on such amount at a written report that specifies rate of 8% per annum from the conclusions Closing Date until such amount is paid, by wire transfer of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect immediately available funds to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined account designated by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmCompany.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 2 contracts
Sources: Stock Purchase Agreement (General Communication Inc), Stock Purchase Agreement (Gci Inc)
Post-Closing Adjustment. (a) Within 45 forty-five (45) days after the Closing Date, the Purchaser will Seller shall prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing Purchaser (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement Company and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending Subsidiaries dated as of the close of business on the Closing Date (the "Closing Balance Sheet") showing the Net Worth of the Acquired Company and the Subsidiaries at the Closing Date (the "Preliminary Net Worth Amount") and (iiiii) reasonably cooperate a schedule (the "Closing Debt Schedule") of the amount of Long Term Debt at the Closing Date (the "Preliminary Debt Amount"). The Closing Balance Sheet shall be prepared in accordance with the Purchaser definitions and procedures set forth on the Post-Closing Adjustment Schedule. In connection with the preparation of the Closing Balance Sheet and the Purchaser’s RepresentativesClosing Debt Schedule, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assistgive, and shall cause the Acquired Company and its Representatives representatives to assistgive, the to Seller and its Representatives in representatives full access at all reasonable times to the review books, records and other materials of the Adjustment Notice Acquired Company and (ii) shall provide the Subsidiaries and the personnel of, and work papers prepared by or for Purchaser, the Acquired Company and the Subsidiaries or their respective accountants, including, without limitation, to such historical financial information relating to the Acquired Company and the Subsidiaries as Seller may reasonably request in order to permit the timely preparation and its Representatives delivery of the Closing Balance Sheet and the Closing Debt Schedule in accordance with any information reasonably requested by themthis Section 1.05(a).
(cb) Within 30 days after delivery Upon receipt of the Adjustment NoticeClosing Balance Sheet and the Closing Debt Schedule, Purchaser shall have thirty (30) days (the Seller will either:
(i"Review Period") agree to review such Closing Balance Sheet and the Closing Debt Schedule and related computations of the Net Worth of the Acquired Company and the Subsidiaries and the Closing Debt on the Closing Date. If Purchaser has accepted such Closing Balance Sheet Closing Debt Schedule in writing with or has not given written notice to Seller setting forth in reasonable detail any objection of Purchaser to such Closing Balance Sheet or Closing Debt Schedule(a "Statement of Objections") prior to the Adjustment Calculationexpiration of the Review Period, in which case then such calculation will Closing Balance Sheet and Closing Debt Schedule shall be final and binding on upon the parties, and the Preliminary Net Worth Amount shall be deemed the Net Worth amount of the Acquired Company and the Subsidiaries as of the Closing Date (the "Final Net Worth Amount") and the Preliminary Debt Amount shall be deemed to be the amount of Long Term Debt as of the Closing Date (the "Final Debt Amount"). In addition, to the extent any portion of the Closing Balance Sheet or of the calculation of the Preliminary Net Worth Amount, of the Closing Debt Schedule or of the calculation of the Preliminary Debt Amount shall not be expressly objected to in the Statement of Objections, such matters shall be deemed to have been accepted and approved by Purchaser and shall be final and binding upon the parties for purposes of Section 2.4(g); or
(ii) dispute hereof. In the Adjustment Calculation by delivering to the event that Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to Statement of Objections during the PurchaserReview Period, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each shall use their commercially reasonable efforts to cause agree on the Independent Accounting Firm to render its determination within 30 days after referral amount of Net Worth of the disputed items Acquired Company and the Subsidiaries on a timely delivered Dispute Notice the Closing Date within thirty (30) days following the receipt by Seller of the Statement of Objections. If the parties are unable to reach an agreement as to such firm amounts within such thirty (30) day period, then the matter shall be submitted to Deloitte & Touche LLP, or such other accountant as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will shall be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated mutually agreed between the Parties based upon parties hereto (such accountant, the percentage which "Settlement Accountant"), who shall determine the portion of matters still in dispute and adjust the contested amount not awarded Closing Balance Sheet to reflect such determination and establish the Final Net Worth Amount and adjust the Closing Debt Schedule and establish the Final Debt Amount. If issues in dispute are submitted to the Settlement Accountant for resolution, each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm Settlement Accountant such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice issues as the Independent Accounting Firm Settlement Accountant may reasonably request request, and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm Settlement Accountant any material related relating to the resolution of the disputed items on a timely delivered Dispute Notice and to discuss such the resolution of the disputed items with the Independent Accounting FirmSettlement Accountant; provided, that no party shall have any ex parte discussions with the Settlement Accountant (other than after reasonable notice to the other party and such party's refusal or failure to participate). The Settlement Accountant will be instructed in performing the review that Purchaser and Seller will each be provided with copies of any such presentation or discussion and all correspondence and drafts distributed to any party, and Purchaser and Seller will be held granted access to information contained in the presence of both documents made available to the Settlement Accountant by the other party. The Settlement Accountant shall determine only those matters in dispute (and based solely on the materials and other information presented by Seller and Purchaser and not by independent investigation). The Settlement Accountant shall make its determination within thirty (30) days (or as soon as practicable thereafter if the Seller and/or their respective Representatives. Notwithstanding anything herein Settlement Accountant notifies the parties that it requires additional time to make such determination) following the submission of the matter to the contrarySettlement Accountant for resolution, and such determination shall be final and binding upon Purchaser and Seller. Purchaser and Seller will each bear fifty percent (50%) of the dispute resolution mechanism contained in this Section 2.4(efees, charges and expenses of the Settlement Accountant.
(c) will be In the exclusive mechanism for resolving any disputes regarding event that the Adjustment CalculationFinal Net Worth Amount is greater than the Target Net Worth Amount, such excess is referred to herein as the "Excess Net Worth Amount".
(d) In the event that the Final Net Worth Amount is less than the Target Net Worth Amount, such deficiency is referred to herein as the "Net Worth Deficiency".
Appears in 2 contracts
Sources: Stock Purchase Agreement (Emergency Medical Services CORP), Stock Purchase Agreement (Emergency Medical Services CORP)
Post-Closing Adjustment. (a) Within 45 60 days after the Closing Date, the Purchaser will shall prepare and deliver to the Seller Sellers a written notice statement (the “Adjustment NoticeClosing Working Capital Statement”) containing (i) setting forth its calculation of the Closing Working Capital and Company Cash which statement shall contain an unaudited consolidated audited balance sheet of the Acquired Companies Company as at immediately of the Closing Date (without giving effect to the transactions contemplated herein) which audit shall be in accordance with GAAP, a calculation of Closing Working Capital and Company Cash, a reconciliation of the audited balance sheet to a balance sheet prepared using the Accounting Principles used prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation and a certificate of the Closing Net Working Capital based on Chief Financial Officer of the Purchaser that the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be reconciled balance sheet were prepared in accordance with GAAP the Accounting Principles applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at Audited Financial Statements for the Purchaser’s request, most recent fiscal year end as if such Closing Working Capital Statement was being prepared and audited as of a fiscal year end. For the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as purposes of the Closing DateWorking Capital Statement, (ii) provide the Purchaser, within ten Business Days payroll costs and invoices for expenses covering a period of time both prior to and after the Closing DateDate should be allocated based on a time basis during the month, with normal month-end closing financial information for such that payroll costs and expenses relating to the period ending as of prior to Closing are borne by the close of business on Sellers and payroll costs and expenses relating to the period post Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested are borne by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) The post-closing adjustment shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering an amount equal to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail Closing Working Capital minus the basis for each disputed item therein.
(d) If Target Closing Working Capital plus the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment NoticeExcess Cash, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice if any (the “Resolution PeriodPost-Closing Adjustment”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm Post-Closing Adjustment is unwilling or unable to servea positive number (an “Excess”), the Purchaser shall pay to the Sellers an amount equal to the Post-Closing Adjustment and if the Seller will engage another mutually agreeable independent accounting firm of recognized international standingPost-Closing Adjustment is a negative number (a “Shortfall”), which firm is not the regular auditing firm of Sellers shall pay to the Purchaser or an amount equal to the Acquired CompaniesPost-Closing Adjustment. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm Any payment of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10Post-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 Closing Adjustment (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination finally determined in accordance with this Agreement and otherwise Section 2.3(b)) shall be paid in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmSection 2.3(c).
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 days As promptly as practicable following the Closing Date (but in no event later than 15 Business Days after the Closing Date), Seller’s Accountants shall prepare a closing balance sheet reflecting only the Purchaser Assets and Assumed Liabilities of the Business immediately prior to the Effective Time (the “Proposed Closing Balance Sheet”) and reflecting the Net Working Capital as of such time, prepared through full and consistent application of the conventions and procedures used by Seller in preparation of the Statement Date Net Asset Statement and provided, further, that the assets procured by Seller pursuant to Section 6.9 shall be reflected on such balance sheet at their actual documented invoice price. Upon completion of the Proposed Closing Balance Sheet, Seller shall promptly deliver the same to Veritek with a notice (the “Notice of Adjustment”) setting forth its proposed adjustment, if any, as contemplated hereby. During the preparation of and after the completion of the Proposed Closing Balance Sheet until the Final Determination Date, Seller shall provide Veritek and its advisors with timely access to the work papers, trial balances and similar materials used in connection with the preparation of the Proposed Closing Balance Sheet.
(b) Following receipt of the Notice of Adjustment, Veritek shall have 20 Business Days (the “Twenty-Day Period”) to review the Proposed Closing Balance Sheet and the Notice of Adjustment. At or before the end of the Twenty-Day Period, Veritek will prepare and either (A) accept the Proposed Closing Balance Sheet in its entirety or (B) deliver to the Seller a written notice (the “Adjustment Objection Notice”) containing (i) an unaudited consolidated balance sheet a reasonably detailed written explanation of those items in the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Proposed Closing Balance Sheet (which Veritek disputes, in which case the “Closing Net Working Capital Statement”), (iii) items identified by Veritek shall be deemed to be in dispute. If Veritek delivers the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied Objection Notice in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Noticetimely manner, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaserthen, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by from the end of the Resolution PeriodTwenty -Day Period the parties and, then if desired, their accountants, will attempt to resolve in good faith any disputed items and reach a written agreement (the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for “Settlement Agreement”) with respect thereto. Failing such resolution, the unresolved disputed items will promptly be referred for final binding resolution to a nationally recognized auditing firm other than Square ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, LLP, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or if that firm is unwilling any auditor of a Buyer or unable Seller, reasonably acceptable to serveVeritek and Seller, each acting in good faith (the “Accountant”), the Purchaser fees and the Seller will engage another mutually agreeable independent accounting firm expenses of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser shall be borne equally by Veritek and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, Parent on the one hand, and the Seller, on the other hand, hand and in such case the Closing Balance Sheet will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected be as determined by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 Accountant. Such determination (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting FirmAccountant’s Determination”).
(i) The Independent Accounting Firm will shall be (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Partieswriting, (B) render its determination furnished to Veritek and Seller as soon as practicable after the items in accordance with this Agreement and otherwise dispute have been referred to the Accountant, (C) made in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions nonappealable and incontestable by Veritek, Seller and each of the Independent Accounting Firm as to each item in dispute their respective Affiliates and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it successors and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firmcollateral attack for any reason.
(iic) For purposes If the Net Working Capital as reflected on the Closing Balance Sheet is greater than $8,350,000 or if the Gross Property, Plant and Equipment as reflected on the Closing Balance Sheet is more than $4,186,000 (the aggregate amount of complying with this Section 2.4, the Purchaser and the Seller will furnish such excess being referred to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice herein as the Independent Accounting Firm may reasonably request “Underpayment”), then Veritek or Parent will not make any payment to Seller. If the Net Working Capital as reflected on the Closing Balance Sheet is less than $8,350,000 or if the Gross Property, Plant and are Equipment as reflected on the Closing Balance Sheet is less than $4,186,000 (the aggregate amount of such deficiencies being referred to herein as the “Overpayment”), then within five Business Days following the Final Determination Date, Seller shall deliver the Overpayment to Veritek by wire transfer of immediately available to that party (or its Representatives). A copy funds at the direction of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment CalculationVeritek.
Appears in 1 contract
Sources: Asset Purchase Agreement (Remec Inc)
Post-Closing Adjustment. (a) Within 45 sixty (60) days after following the Closing Date, the Purchaser will prepare Parent shall prepare, or cause to be prepared, and deliver deliver, or cause to be delivered, to the Seller a written notice (the “Adjustment Notice”) containing Stockholders' Representative (i) an unaudited a consolidated balance sheet of the Acquired Companies Company and its Subsidiaries (the "Final Closing Balance Sheet") prepared using the Balance Sheet Principles and a calculation, in reasonable detail based upon such Final Closing Balance Sheet, setting forth the amount of Net Working Capital (the "Closing Working Capital"), the amount of cash and cash equivalents reflected thereon (the "Closing Cash Amount") and the Closing Underage (as at defined in Section 2.7(b)), each as of immediately prior to the Closing (the “Closing Balance Sheet”), and (ii) a certificate of an executive officer of Parent certifying that the Purchaser’s calculation of the Closing Net Working Capital based on the Final Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be such calculations were prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim this Section 2.7(a). The Final Closing Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser Sheet and the Purchaser’s Representatives with reasonable access related calculations of Closing Working Capital, Closing Cash Amount and Closing Underage are referred to as the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the "Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) Statement." Parent shall reasonably cooperate and assistgive, and shall cause its Representatives advisers to assistgive, the Seller Stockholders' Representative and its Representatives in advisers reasonable access to such books, records and personnel of Parent and Surviving Corporation (including the review work papers of Parent and Surviving Corporation and their accountants relating to the preparation of the Adjustment Notice Final Closing Balance Sheet and (iirelated calculations) shall provide as may be necessary to enable the Seller Stockholders' Representative and its Representatives with any information reasonably requested by them.
advisers to review the Final Closing Balance Sheet and such calculations during the Review Period (c) Within 30 days after delivery as defined below). The preparation of the Adjustment NoticeClosing Statement shall be for the sole purpose of determining the Closing Underage and Closing Cash Amount. The Stockholders' Representative shall have fifteen (15) days following its receipt of the Closing Statement (the "Review Period") to review the same. On or before the expiration of the Review Period, the Seller will either:
(i) agree in writing with Stockholders' Representative shall deliver to Parent a written statement accepting or objecting to the Adjustment Calculationcalculation of any portion of the Closing Working Capital, in which case such calculation will be final and binding Closing Underage or Closing Cash Amount set forth on the parties for purposes of Section 2.4(g)Closing Statement; or
(ii) provided that the Stockholders' Representative may dispute the Adjustment Calculation by delivering to calculation of the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and Closing Working Capital, Closing Underage or Closing Cash Amount as set forth in reasonable detail the Closing Statement only on the basis for each disputed item therein.
(d) that such calculation was not made in accordance with the Balance Sheet Principles or on the basis of arithmetic error. In the event that the Stockholders' Representative shall object to the Closing Statement, such statement shall include a detailed itemization of the Stockholders' Representative's objections and the reasons therefor. If the Seller fails Stockholders' Representative does not deliver such statement to take either of Parent within the foregoing actions within 30 days after delivery of Review Period, the Adjustment Notice, then the Seller will Stockholders' Representative shall be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g)Closing Statement.
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Merger Agreement (Fisher Scientific International Inc)
Post-Closing Adjustment. (a) Within 45 days after the Closing Date, the Purchaser ▇▇▇▇ will prepare and deliver to Company Representative within sixty (60) days after the Seller a written notice Closing Date its calculation of the Net Working Capital (as defined in Exhibit C) (the “Adjustment NoticePreliminary Net Working Capital”) containing and the Closing Cash (i) an unaudited consolidated balance sheet the “Preliminary Closing Cash”), each determined in accordance with and subject to the terms of the Acquired Companies Exhibit C as at of immediately prior to the Closing (the “Preliminary Closing Balance SheetAdjustments”). ▇▇▇▇ will make available to Company Representative and the Shareholders’ professional advisors all work papers and other pertinent information used in connection with the preparation of the Preliminary Closing Adjustments.
(b) Within thirty (30) days after the Preliminary Closing Adjustments are delivered to Company Representative, Company Representative will complete its examination thereof and will deliver to ▇▇▇▇ either (i) a written acknowledgement accepting the Preliminary Closing Adjustments, or (ii) a written report setting forth in reasonable detail any proposed adjustments to the Preliminary Closing Adjustments (the “Adjustment Objections Report”). Any failure by Company Representative to deliver the Adjustment Objections Report within the required 30-day period will constitute Company Representative’s acceptance of the Preliminary Closing Adjustments. All items included in the Preliminary Closing Adjustments that are not disputed in the Adjustment Objections Report will be deemed to be accepted by Company Representative. During a period of thirty (30) days following the receipt by ▇▇▇▇ of the Adjustment Objections Report, Company Representative and ▇▇▇▇ will attempt, in good faith, to resolve any disputes they may have with respect to the matters raised in the Adjustment Objections Report and to revise the Preliminary Closing Adjustments accordingly.
(c) If ▇▇▇▇ and Company Representative fail to resolve the matters raised in the Adjustment Objections Report within the applicable 30-day period, then Company Representative and ▇▇▇▇ will engage a mutually-agreed independent third-party accounting firm (the “Accountant”) to make the final determination with respect to the accuracy of the proposed adjustments in the Working Capital Adjustment Report, but only with respect to those items in the Working Capital Adjustment Report that are still in dispute between ▇▇▇▇ and Company Representative following the completion of the thirty (30) day period. To that end, ▇▇▇▇ and Company Representative will instruct the Accountant to resolve the disputed items in accordance with the terms and definitions of this Agreement, and the Accountant’s determination (i) will be based solely on the information and materials provided by ▇▇▇▇ and Company Representative (i.e., not on the basis of an independent review), and (ii) will not assign a value higher than the highest value assigned to such item by any party or lower than the lowest value assigned to such item by any party. Subject to the guidelines and limitations in the immediately preceding sentence, ▇▇▇▇ and Company Representative will use commercially reasonable efforts to aid the Accountant in rendering its decision, including by promptly complying with all reasonable requests by the Accountant for information, books, records and similar items. The Accountant will act as an expert and not an arbitrator. The costs and expenses of the Accountant pursuant to this Section will be paid by Company Representative, on the one hand, and ▇▇▇▇, on the other hand, in proportion to the dollar value of the item(s) subject to the dispute determined in favor of the other party, as determined by the Accountant. The Accountant will review the various relevant reports and calculations and the former books and records of Company Representative now owned by ▇▇▇▇ as well as Company Representative’s books and records, as applicable, and will, as soon as practicable, but in any event within thirty (30) days after the submission of the matter, provide to Company Representative and ▇▇▇▇ in writing a final determination as to each of the items in dispute (and each item affected thereby) and the methodology used in computing such items, in light of the terms and provisions of this Agreement. The decision of the Accountant will, absent fraud or manifest error, be final and binding on Company Representative and ▇▇▇▇ and may be used in a court of law by Company Representative or ▇▇▇▇ for purposes of enforcing such decision.
(d) Upon (i) acceptance or deemed acceptance by Company Representative of the Preliminary Net Working Capital, (ii) revision by mutual agreement of Company Representative and ▇▇▇▇ in accordance with Section 2.2(b) above, or (iii) adjustment as determined by the Purchaser’s calculation of Accountant in accordance with Section 2.2(c) above, the Preliminary Net Working Capital, as accepted, revised or adjusted, will be deemed the “Closing Net Working Capital.”
(i) If the Closing Net Working Capital based on is greater than the Closing Balance Sheet Net Working Capital Target (the “Closing Net Working Capital StatementExcess”), each Converted Share shall entitle the holder thereof (iiias of immediately prior to the Effective Time) the Purchaser’s calculation to receive an additional number of Closing Net Cash based on the Closing Balance Sheet shares of fully paid and nonassessable shares of ▇▇▇▇ Common Stock (the “Closing Net Cash StatementWorking Capital Excess Shares”) and equal to (ivx) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and Excess, divided by (y) the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare ▇▇▇▇ Share Price, further divided by (z) the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g)Capitalization; or
(ii) dispute If the Adjustment Calculation Closing Net Working Capital is less than the Net Working Capital Target (the “Closing Net Working Capital Deficit”), each Shareholder shall pay to ▇▇▇▇ by delivering surrendering and forfeiting, in respect of each Converted Share held by such Shareholder immediately prior to the Purchaser Effective Time, a written notice number of shares of ▇▇▇▇ Common Stock consisting of Restricted Securities (a the “Dispute NoticeWorking Capital Deficit Shares”) which shall specify which items are being disputed and set forth in reasonable detail equal to (x) the basis for each disputed item therein.
Closing Net Working Capital Deficit, divided by (dy) If the Seller fails to take either of Closing ▇▇▇▇ Share Price, further divided by (z) the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g)Company Capitalization.
(e) If Upon (i) acceptance or deemed acceptance by Company Representative of the Seller timely delivers a Dispute Notice Preliminary Closing Cash, (ii) revision by mutual agreement of Company Representative and ▇▇▇▇ in accordance with Section 2.2(b) above, or (iii) adjustment as determined by the Accountant in accordance with Section 2.2(c) above, the Preliminary Closing Cash, as accepted, revised or adjusted, will be deemed the “Final Closing Cash.” In addition to any ▇▇▇▇ Common Stock issued or forfeited pursuant to Section 2.2(d) above, each Converted Share shall entitle the holder thereof (as of immediately prior to the Purchaser, then the Purchaser Effective Time) to receive an additional number of shares of fully paid and the Seller will attempt in good faith, for a period nonassessable shares of 30 days following the Purchaser’s receipt of such Dispute Notice ▇▇▇▇ Common Stock (the “Resolution PeriodClosing Cash Shares”)) equal to (i) the difference of (x) the Final Closing Cash, to agree on minus (y) the Adjustment Calculation for purposes of Section 2.4(g). Accrued Dividends Payable, divided by (ii) the Closing ▇▇▇▇ Share Price, further divided by (iii) the Company Capitalization.
(f) Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether additional ▇▇▇▇ Common Stock issued pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will 2.2 shall not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities Lock-Up Period described in favor of the Independent Accounting FirmSection 7.12.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Merger Agreement (Bridger Aerospace Group Holdings, Inc.)
Post-Closing Adjustment. (a) The Merger Consideration shall be subject to adjustment after the Closing Date as specified in this Section 3.1.
(b) Within 45 one hundred twenty (120) days after following the Effective Time, USFloral shall cause Price Waterhouse LLP ("USFloral's Accountant") to audit the Surviving Company's books at USFloral's expense to determine the accuracy of the information set forth on the Closing Financial Certificate (the "Post-Closing Audit"). The parties acknowledge and agree that for purposes of determining the net worth of the Company as of the Closing Date, the Purchaser will prepare value of the assets of the Company shall, except with the prior written consent of USFloral, be calculated as provided in the last paragraph of Section 8.9. The Stockholders shall cooperate and shall use their reasonable efforts to cause the officers and employees of the Company to cooperate with USFloral and USFloral's Accountant after the Closing Date in furnishing information, documents, evidence and other assistance to USFloral's Accountant to facilitate the completion of the Post-Closing Audit within the aforementioned time period. In the event that USFloral's Accountant determines that the actual Company net worth as of the Closing Date was less than the Certified Closing Net Worth, USFloral shall deliver to the Seller a written notice (the “"Financial Adjustment Notice”") containing to the Stockholders' Representative, as defined in Section 3.3, setting forth (i) an unaudited consolidated balance sheet the determination made by USFloral's Accountant of the Acquired Companies as at immediately prior to the Closing actual Company net worth (the “Closing Balance Sheet”"Actual Company Net Worth"), (ii) the Purchaser’s calculation amount of the Merger Consideration that would have been payable at Closing pursuant to Section 2.2(c) had the Actual Company Net Working Capital based Worth been reflected on the Closing Balance Sheet (Financial Certificate instead of the “Certified Closing Net Working Capital Statement”)Worth, and (iii) the Purchaser’s calculation amount by which the number of shares issued as the Merger Consideration would have been reduced at Closing had the Actual Company Net Cash based on Worth been used in the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required calculations pursuant to Section 2.4(g2.2(c) (the “Adjustment Calculation”"Merger Consideration Adjustment"). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation Merger Consideration Adjustment shall take account of the Adjustment Noticereduction, at the Purchaser’s requestif any, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies Merger Consideration already taken pursuant to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themSection 2.2(c)(i).
(c) Within 30 The Stockholders' Representative shall have thirty (30) days after delivery from the receipt of the Financial Adjustment Notice to notify USFloral if the Stockholders dispute such Financial Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written . If USFloral has not received notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in a dispute within such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 1030-day period, then USFloral shall be entitled to receive from the parties agree that Stockholders (which may, at USFloral's sole discretion, be from the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Pledged Assets as defined in Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”3.2).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Agreement and Plan of Reorganization (U S a Floral Products Inc)
Post-Closing Adjustment. Within forty-five (a45) Within 45 days after following the Closing DateClosing, the Purchaser will Seller shall prepare and deliver to Buyer a balance sheet for the Seller a written notice Division dated as of the Closing Date (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “"Closing Balance Sheet”"), (ii) a profit and loss statement for the Purchaser’s calculation of Division for the Closing Net Working Capital based period commencing August 1, 1999 and ending on the Closing Balance Sheet Date (the “"Closing Net Working Capital Profit and Loss Statement”"), (iii) a detailed accounting of all prepaid expenses and accounts payable of the Purchaser’s calculation Business and all unbilled costs and expenses paid by Seller prior to Closing for Buyer's account with respect to importation of Closing Net Cash based on the Closing Balance Sheet AEO Merchandise by Seller (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g"Detailed Accounting") (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Profit and Loss Statement and Detailed Accounting being collectively called the "Closing Net Cash Statement will Financial Statements"), each of which shall be prepared in accordance with GAAP applied in a manner consistent with the methods Financial Statements and practices used in accordance with generally accepted accounting principles. Following the Closing, Buyer's Accountants and Seller's Accountants shall have the right to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, review and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of audit the Closing Date, (ii) provide the Purchaser, within ten Business Days after Financial Statements. Buyer's Accountants shall notify Seller of their disagreement with any amount shown on or underlying the Closing DateFinancial Statements within ninety (90) days following delivery thereof. In the event that Buyer's Accountants deliver notice of any disagreement, with normal month-end closing financial information for the period ending as Buyer's Accountants and Seller and/or Seller's Accountants shall meet and attempt to resolve such disagreement and to agree upon a mutually acceptable presentation of the close of business on the Closing Date such statements and/or schedule. Should Buyer's Accountants and Seller and/or Seller's Accountants be unable to reach such an agreement within thirty (iii30) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery by Buyer's Accountants of the Adjustment Noticea notice of disagreement, the Seller will either:
matter shall be submitted within five (i5) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 business days following the Purchaser’s receipt expiry of such Dispute Notice thirty (the “Resolution Period”), 30) day period to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent a "Big Five" accounting firm of recognized international standingselected by Seller and Buyer or, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser if Buyer and the Seller are unable to jointly select agree on such independent accounting firm within 10 days after the Resolution Periodsuch five (5) business day period, the Purchaser, matter shall be submitted by the parties to Price Waterhouse Coopers on the one handfirst business day following expiry of such five (5) business day period, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable best efforts to cause the Independent Accounting Firm decision of such third accounting firm to render its determination be rendered within 30 thirty (30) days after referral of the disputed items on a timely delivered Dispute Notice to following such firm or as soon thereafter as reasonably practicablesubmission. The decision of the Independent Accounting Firm will such third accounting firm shall be final, conclusive and binding on the Parties and will not be subject to appeal or further reviewparties. The parties agree to effect appropriate adjustments between them based upon the Closing Financial Statements as they exist following resolution of any disagreement in accordance with the foregoing. Seller shall bear the costs and expenses of Seller's Accountants, Buyer shall bear the Independent Accounting Firm will be allocated between cost and expenses of Buyer's Accountants and, in the Parties based upon event of any referral of a dispute to a third accounting firm in accordance with the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such partyforegoing, as determined by the Independent Accounting Firm. The Seller and Buyer and the Representative agree to execute, if requested by share equally the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor costs and expenses of the Independent Accounting Firmsuch third accounting firm. Section 3.04.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Purchase and Sale Agreement (American Eagle Outfitters Inc)
Post-Closing Adjustment. (a) Within 45 For the purposes of finally determining Closing Date Indebtedness, Closing Date Cash and Closing Date Net Working Capital, the Purchaser shall, or shall cause the Purchaser’s accountants to, after the Closing, prepare a statement (the Proposed Closing Statement) showing the amounts, and calculations, of Closing Date Indebtedness, Closing Date Cash and Closing Date Net Working Capital, together with reasonable supporting detail with respect to the calculations included therein. The Purchaser shall deliver the Proposed Closing Statement to the Seller Representative within ninety (90) calendar days after the Closing Date, the Purchaser will prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Purchaser shall prepare the Proposed Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance SheetAccounting Principles.
(b) During The Proposed Closing Statement shall become binding upon the preparation of Parties at 5:00 P.M. New York time on the Adjustment Noticethirtieth (30th) calendar day following delivery thereof (and shall be deemed the Final Closing Statement, at and the Purchaser’s request, determination contained therein shall be binding) unless the Seller will, Representative gives written notice of Seller Representative’s disagreement with the Proposed Closing Statement (a Notice of Disagreement) to the Purchaser prior to the expiration of such thirty (30) calendar day period. Any Notice of Disagreement shall specify those items or amounts with which the Seller Representative disagrees in the Proposed Closing Statement and will cause each of the Acquired Companies to, contain (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees a reasonably detailed description of the Acquired Companies reasons for its objections to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary each such item or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice amount contained therein and (ii) shall provide the Seller and its Representatives Representative’s calculation of any amounts with any information reasonably requested by themwhich the Seller Representative disagrees in the Proposed Closing Statement, prepared in accordance with the Accounting Principles. Items not disputed in the Notice of Disagreement shall be binding upon the Parties.
(c) Within 30 days after delivery The objections set forth in the Notice of the Adjustment Notice, the Seller will eitherDisagreement shall be resolved as follows:
(i) agree During the ten (10) Business Day period following the delivery of a Notice of Disagreement (or such longer period as may be agreed in writing with by the Adjustment CalculationSeller Representative and the Purchaser) (such period, the Resolution Period) the Seller Representative and the Purchaser shall first seek in which case good faith to resolve such calculation will objections. If such objections are so resolved they shall be final and deemed binding on as so resolved and, at such time, the parties for purposes of Section 2.4(g); orProposed Closing Statement, as modified to reflect such resolution, shall be deemed the Final Closing Statement.
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final Representative and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of such objections during the Resolution Period, then the Purchaser Seller Representative, on the one hand, and the Seller will submit Purchaser, on the remaining items other hand, shall make a written submission to the Accounting Firm (and substantially simultaneously to the other) for determination of any and all matters that remain in dispute (the Unresolved Objections) (all matters previously resolved shall become part of the Final Closing Statement as resolved) and which were included in the Notice of Disagreement; provided that the scope of the Unresolved Objections to PricewaterhouseCoopers LLP for resolutionbe resolved by the Accounting Firm shall be limited to whether there were mathematical errors in the Proposed Closing Statement and whether the calculations of the Closing Date Indebtedness, or if that firm is unwilling or unable to serveClosing Date Cash and Closing Date Net Working Capital were accurate and performed in accordance with the applicable Accounting Principles, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is Accounting Firm shall not the regular auditing firm of the Purchaser or the Acquired Companiesmake any other determination. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days Within five (5) Business Days after the Resolution Periodexpiration of such ten (10) Business Day period, each of the Purchaser, on the one hand, and the SellerSeller Representative, on the other hand, will may deliver to the Accounting Firm its response to the other’s position on each select an independent accounting firm Unresolved Objection; provided that each delivers a copy thereof substantially simultaneously to the other. The Accounting Firm’s decision with respect to any Unresolved Objection must be within the range of recognized international standing values assigned to each such item in the Proposed Closing Statement and the Notice of Disagreement, respectively.
(iii) Except as set forth in Section 2.04(c)(ii), the Seller Representative and the Purchaser shall not be entitled to make submissions except as specifically requested by the Accounting Firm. The Seller Representative and the Purchaser shall provide, as soon as reasonably practicable, all the information and explanations that the Accounting Firm may reasonably require. The precise timetable shall be as agreed with the Accounting Firm, but the Accounting Firm shall be instructed to render its determination regarding only the Unresolved Objections in accordance with Section 2.04(c)(ii) within thirty (30) Business Days following the date of such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not submissions.
(iv) The resolution by the regular auditing firm Accounting Firm of the Purchaser or Unresolved Objections shall, absent manifest error, be binding and at such time, the Acquired Companies; providedProposed Closing Statement, howeveras modified to reflect such resolution (and any matters resolved in accordance with Section 2.04(c)(i)), shall be deemed the Final Closing Statement. The Parties agree that if either the Purchaserprocedure set forth in this Section 2.04 for resolving disputes with respect to the Proposed Closing Statement shall be the exclusive method for resolving any disputes with respect to Closing Date Indebtedness, Closing Date Cash and Closing Date Net Working Capital. The decision of the Accounting Firm shall constitute an arbitral award that is final, binding and non-appealable and upon which a judgment may be entered by a court having jurisdiction thereover.
(v) The fees and expenses of the Accounting Firm shall be borne by the Sellers, on the one hand, or and the SellerPurchaser, on the other hand, fails to select such independent accounting firm during this 10-day period, then based on the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).following formula:
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on The Sellers shall pay a timely delivered Dispute Notice that remain in dispute as portion of such time, fees and expenses equal to that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final fraction of such fees and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price expenses where (1) in excess the numerator is the absolute value of the applicable amount in difference between Sellers’ aggregate position with respect to the Adjustment Notice or (2) that is less than Closing Date Indebtedness, Closing Date Cash and Closing Date Net Working Capital and such amounts as recalculated based upon the applicable amount in the Dispute Notice and (D) render its Accounting Firm’s final determination with respect to the items in dispute in a written report that specifies Unresolved Objections and (2) the conclusions denominator is the absolute value of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination difference between Sellers’ aggregate position with respect to the specific remaining accounting differences submitted Closing Date Indebtedness, Closing Date Cash and Closing Date Net Working Capital and Purchaser’s aggregate position with respect to it such amounts; and
(B) The Purchaser shall pay the remainder of such fees and may rely only upon information submitted expenses.
(d) No later than five (5) Business Days after the Proposed Closing Statement is deemed the Final Closing Statement pursuant to it by or on behalf this Section 2.04:
(i) if Closing Date Indebtedness is: (A) less than Estimated Closing Date Indebtedness, the Purchaser shall deliver to the Sellers payment of the Purchaser amount of such deficit; or (B) greater than the Seller. The Purchaser and Estimated Closing Date Indebtedness, the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral payment of the disputed items on a timely delivered Dispute Notice to amount of such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will excess shall be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears made to the amount actually contested by such party, as determined by Purchaser from the Independent Accounting Firm. The Buyer and Escrow Amount in the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.Escrow Account;
(ii) For purposes if Closing Date Cash is: (A) less than Estimated Closing Date Cash, payment of complying with this Section 2.4the amount of such deficit shall be made to the Purchaser from the Escrow Amount in the Escrow Agreement; or (B) greater than Estimated Closing Date Cash, the Purchaser and shall deliver to the Sellers payment of the amount of such excess; and
(iii) if Closing Date Net Working Capital is: (A) less than Estimated Closing Date Net Working Capital, payment of the amount of such deficit shall be made to the Purchaser from the Escrow Amount in the Escrow Account; or (B) greater than Estimated Closing Date Net Working Capital, the Purchaser shall deliver to the Sellers payment of the amount of such excess. Any payments made by the Purchaser pursuant to this Section 2.04(d) shall be made by wire transfer from immediately available funds to a bank account designated in writing by the Sellers (such designation to be made at least three (3) Business Days prior to such payment). In respect of any payment required to be made from the Escrow Account pursuant to this Section 2.04(d), the Seller will furnish Representative shall, together with the Purchaser, jointly instruct the Escrow Agent to remit such payment to the Independent Accounting Firm such work papers and other documents and information relating Purchaser not later than five (5) Business Days after the Proposed Closing Statement is deemed the Final Closing Statement pursuant to this Section 2.04(d). To the extent that the amount required to be paid to the disputed items on a timely delivered Dispute Notice as Purchaser pursuant to this Section 2.04(d) exceeds the Independent Accounting Firm may reasonably request and are available Escrow Amount, the Sellers shall pay such excess to that party the Purchaser not later than five (or its Representatives5) Business Days after the Proposed Closing Statement is deemed the Final Closing Statement pursuant to this Section 2.04(d). A copy The Parties shall net the payments, if any, to be made pursuant to Section 2.04(d)(i), (ii) and (iii), such that only one Party is required to deliver or cause to be delivered amounts required to be paid under this Section 2.04(d). Notwithstanding the foregoing, no Party shall be required to make any payment pursuant to this Section 2.04(d) unless the amount of any such work papers and other documents and information provided the adjustment calculated hereunder be paid by a party to the Independent Accounting Firm will be provided concurrently one Party to the other party free of charge. Each party will Party exceeds $400,000.00.
(e) Until the date the Proposed Closing Statement is deemed the Final Closing Statement pursuant to this Section 2.04, the Parties agree that following the Closing, each shall provide and cause to be afforded the opportunity to present provided to the Independent Accounting Firm any material related other and its respective representatives reasonable access upon reasonable notice during normal business hours to such first Party’s books, records and accounting personnel (including books, records and accounting personnel of the disputed items on a timely delivered Dispute Notice Target Group Companies), and shall cause such personnel to discuss such items reasonably cooperate with the Independent Accounting Firm, with any other Party and respond to such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism Party’s reasonable requests for resolving any disputes regarding the Adjustment Calculationinformation reasonably promptly.
Appears in 1 contract
Sources: Unit Purchase Agreement (KLX Energy Services Holdings, Inc.)
Post-Closing Adjustment. (a) Within 45 60 days after following the Closing DateClosing, the Purchaser will TPI shall, at its expense and with cooperation from Newco's employees and access to Newco's books and records, prepare or cause to be prepared, and deliver to the Seller PCA and Newco a written notice statement (the “Adjustment Notice”"Closing Working Capital Statement") containing (i) an unaudited consolidated balance sheet of which shall set forth the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on of the Closing Balance Sheet Containerboard Business as of the Determination Date (the “"Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”Capital") and (iv) as of the Purchaser’s calculation date of the Most Recent Statement of Assets and Liabilities. The amounts so computed shall be used to determine the amount of any payments required pursuant to the payment between TPI and Newco in accordance with this Section 2.4(g) 2.5 (the “Adjustment Calculation”"Post Closing Adjustment"). The Closing Balance Sheet, the Closing Net Working Capital Statement shall be prepared using the same principles, practices and procedures that were used in preparing the Most Recent Statement of Assets and Liabilities. Notwithstanding the foregoing, the following paragraphs (i) through (viii) shall take precedence over such principles, practices and procedures in the preparation of the Closing Working Capital Statement:
(i) The Current Assets included in the Closing Working Capital Statement will be adjusted to exclude the Retained Assets, the LIFO reserve and any current assets related to Tenneco defined benefit pension plans and shall not be taken into account in computing the Post Closing Adjustment.
(ii) The Current Liabilities included in the Closing Working Capital Statement will be adjusted to exclude the Retained Liabilities. Any current liabilities related to Tenneco's defined benefit pension plans shall not be taken into account in computing the Post Closing Adjustment.
(iii) The Most Recent Statement of Assets and Liabilities does not, and the Closing Net Cash Working Capital Statement will be prepared not, include any accrual or deferral related to federal, state, local or foreign income Taxes.
(iv) The Closing Working Capital Statement shall not include any dollar amounts related to the Existing Financing Arrangements.
(v) The Closing Working Capital Statement shall not include any dollar amounts related to the New Financing Arrangements. No Post Closing Adjustment shall result from the purchase during the period from the date of the Most Recent Statement of Assets and Liabilities to the Determination Date of any assets which were leased at the date of the Most Recent Statement of Assets and Liabilities.
(vi) The Closing Working Capital Statement shall not include any liabilities related to bonuses or incentive compensation earned in accordance with GAAP applied 1998.
(vii) Any change in a manner consistent with accounting principles after the methods date of the Most Recent Statement of Assets and practices used to prepare Liabilities (including any changes required by GAAP) will not apply in determining the Company Interim Balance SheetClosing Working Capital Statement.
(viii) The Closing Working Capital Statement shall exclude any increase or decrease in Current Assets or Current Liabilities resulting directly from accounting for the Transaction.
(b) During PCA and PCA's accountants and Newco and Newco's accountants shall have 30 days after the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as delivery by TPI of the Closing Date, (ii) provide the Purchaser, within ten Business Days after Working Capital Statement to review the Closing DateWorking Capital Statement. In the event that PCA or Newco determines that the Closing Working Capital as derived from the Closing Working Capital Statement has not been determined on the basis set forth herein, with normal month-end closing financial information for PCA or Newco shall inform TPI in writing (the period ending as "Objection"), setting forth a specific description of the close basis of business on the Objection and the adjustments to the Closing Date and (iii) reasonably cooperate with Working Capital which PCA or Newco believes should be made, which Objection must be delivered to TPI on or before the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaserlast day of such 30-day period. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) TPI shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within then have 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final to review and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering respond to the Purchaser a written notice (a “Dispute Notice”) which Objection. TPI and PCA and Newco shall specify which items attempt in good faith to reach an agreement with respect to any matters in dispute. If TPI and PCA and Newco are being disputed and set forth in reasonable detail unable to resolve all of their disagreements with respect to the basis for each disputed item therein.
(d) If the Seller fails to take either determination of the foregoing actions items within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 45 days following the Purchaser’s receipt delivery of such Dispute Notice Objection, they shall refer their remaining differences to a "Big Five" firm of independent public accountants as to which TPI and PCA and Newco mutually agree (the “Resolution Period”"CPA Firm"), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period who shall, acting as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, experts and not as an arbitratorarbitrators, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination determine in accordance with this Agreement Agreement, and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination only with respect to the items in dispute in a written report that specifies remaining differences so submitted, whether and to what extent, if any, the conclusions of Closing Working Capital as derived from the Independent Accounting Closing Working Capital Statement requires adjustment. TPI and PCA and Newco shall direct the CPA Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render use its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable best efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicablesubmission. The decision of the Independent Accounting Firm will CPA Firm's determination shall be final, conclusive and binding on the Parties and will not be subject to appeal or further reviewupon ▇▇▇▇▇, ▇▇▇ ▇▇▇ TPI. The costs fees and expenses disbursements of the Independent Accounting CPA Firm will shall be allocated between paid by Newco. PCA, Newco and TPI shall make readily available to the Parties based upon the percentage which the portion CPA Firm all relevant books and records and any work papers (including those of the contested amount not awarded to each party bears parties' respective accountants) relating to the amount actually contested by such party, as determined Closing Working Capital Statement and all other items reasonably requested by the Independent Accounting CPA Firm. The Buyer and "Final Working Capital Statement" shall be (i) the Representative agree to executeClosing Working Capital Statement in the event that no Objection is delivered by PCA or Newco during the 30-day period specified above, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
or (ii) For purposes the Closing Working Capital Statement, as adjusted by either (x) the agreement of complying with this Section 2.4TPI, PCA and Newco or (y) the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting CPA Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 60 days after the Closing Date, the Purchaser will shall prepare and deliver to the Seller Sellers a written notice statement (the “Adjustment NoticeClosing Working Capital Statement”) containing (i) setting forth its calculation of the Closing Working Capital and Company Cash which statement shall contain an unaudited consolidated audited balance sheet of the Acquired Companies Company as at immediately of the Closing Date (without giving effect to the transactions contemplated herein) which audit shall be in accordance with GAAP, a calculation of Closing Working Capital and Company Cash, a reconciliation of the audited balance sheet to a balance sheet prepared using the Accounting Principles used prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation and a certificate of the Closing Net Working Capital based on Chief Financial Officer of the Purchaser that the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be reconciled balance sheet were prepared in accordance with GAAP the Accounting Principles applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at Audited Financial Statements for the Purchaser’s request, most recent fiscal year end as if such Closing Working Capital Statement was being prepared and audited as of a fiscal year end. For the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as purposes of the Closing DateWorking Capital Statement, (ii) provide the Purchaser, within ten Business Days payroll costs and invoices for expenses covering a period of time both prior to and after the Closing DateDate should be allocated based on a time basis during the month, with normal month-end closing financial information for such that payroll costs and expenses relating to the period ending as of prior to Closing are borne by the close of business on Sellers and payroll costs and expenses relating to the period post Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested are borne by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) The post-closing adjustment shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering an amount equal to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail Closing Working Capital minus the basis for each disputed item therein.
(d) If Target Closing Working Capital plus the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment NoticeExcess Cash, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice if any (the “Resolution PeriodPost-Closing Adjustment”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm Post-Closing Adjustment is unwilling or unable to servea positive number (an “Excess”), the Purchaser shall pay to the Sellers an amount equal to the Post-Closing Adjustment and if the Seller will engage another mutually agreeable independent accounting firm of recognized international standingPost-Closing Adjustment is a negative number (a “Shortfall”), which firm is not the regular auditing firm of Sellers shall pay to the Purchaser or an amount equal to the Acquired CompaniesPost- Closing Adjustment. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm Any payment of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10Post-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 Closing Adjustment (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination finally determined in accordance with this Agreement and otherwise Section 2.3(b)) shall be paid in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmSection 2.3(c).
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 sixty (60) days after the Closing Date, Purchaser shall, in its absolute discretion be entitled (but shall not, for the Purchaser will avoidance of doubt, be required) to prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet Holder Representative good faith calculation of the Acquired Companies Net Working Capital as at immediately prior to the Closing (the “Proposed Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the . The Proposed Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation shall include all of the amount of any payments required pursuant to Section 2.4(g) (balance sheet line items included in the “Adjustment Calculation”). The Estimated Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation thirty (30) days immediately following the Holder Representative’s receipt of the Adjustment Notice, at Proposed Closing Balance Sheet (the Purchaser’s request“Closing Balance Sheet Review Period”), the Seller will, and Holder Representative will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives be provided with reasonable access (including electronic access) to the books, records, facilities and Employees financial records of the Acquired Companies to Company, for purpose of reviewing the extent not otherwise already acquired as of the Proposed Closing Date, (ii) provide the Balance Sheet and Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date Company and (iii) their respective Representatives shall assist and reasonably cooperate in good faith with the Purchaser and the Purchaser’s RepresentativesHolder Representative, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause connection with its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themProposed Closing Balance Sheet.
(c) Within 30 days after delivery The Holder Representative shall notify Purchaser in writing (the “Notice of Disagreement”) prior to the expiration of the Adjustment Notice, Closing Balance Sheet Review Period if the Seller will either:
(i) agree in writing Holder Representative disagrees with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes Proposed Closing Balance Sheet. The Notice of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which Disagreement shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item thereinsuch dispute, the amounts involved and the Holder Representative’s determination of the amount of the Net Working Capital. If no Notice of Disagreement is given to Purchaser prior to the expiration of the Closing Balance Sheet Review Period, then the Proposed Closing Balance Sheet shall be deemed to have been accepted by the Holder Representative and shall become final, binding and conclusive upon the Parties.
(d) If a Notice of Disagreement is given to Purchaser prior to the Seller fails to take either expiration of the foregoing actions within 30 days after delivery of the Adjustment NoticeClosing Balance Sheet Review Period, then the Seller will be deemed Holder Representative and Purchaser shall meet (which meeting may take place via teleconference) shall confer in good faith for a period of up to thirty (30) calendar days of delivery of such Notice of Disagreement (or at such other time and place mutually agree between the parties) and use all reasonable efforts to resolve any differences that they may have irrevocably accepted with respect to the Adjustment Calculation, matters specified in which case, the Adjustment Calculation will be final and binding on the parties for purposes Notice of Section 2.4(g)Disagreement.
(e) If the Seller timely delivers Holder Representative and Purchaser have been unable to resolve all of the differences they may have with respect to the matters specified in the Notice of Disagreement the such thirty (30) days’ period (or such other period as may be mutually agreed by Purchaser and the Holder Representative), either the Holder Representative or Purchaser may submit any amounts remaining in dispute (the “Disputed Amounts”) for resolution to an Accounting Arbitrator who shall have the privileges, powers and immunities of an arbitrator. The Accounting Arbitrator shall only decide the specific items under dispute by the parties and their decision for each Disputed Amount must be within the range of values assigned to each such item in the Proposed Closing Balance Sheet and the Notice of Disagreement, respectively. Each of Purchaser and the Holder Representative shall submit a Dispute Notice statement of its position and supporting documentation within twenty (20) days of engagement of the Accounting Arbitrator. The Accounting Arbitrator shall be instructed to make a determination as soon as practicable, and in any event within sixty (60) calendar days after their engagement. The Accounting Arbitrator shall prepare a written statement setting forth their resolution of the Disputed Amounts and adjustments to the Proposed Closing Balance Sheet.
(f) The statement which is (i) the Estimated Closing Balance Sheet delivered by the Company to the Purchaser, then if the Purchaser fails to deliver the Proposed Closing Balance Sheet to the Company, (ii) the Proposed Closing Balance Sheet, if the Holder Representative fails to deliver through the expiration of the Closing Balance Sheet Review Period a Notice of Disagreement, or (iii) the closing balance sheet statement as adjusted through an agreement of Purchaser and the Seller will attempt Holder Representative after resolving the Disputed Amounts set forth in good faiththe Notice of Disagreement, for a period (iv) the closing balance sheet statement as adjusted through the determination of 30 days following the Purchaser’s receipt of such Dispute Notice Accounting Arbitrator pursuant to this Section 2.12 (the “Resolution PeriodFinal Closing Balance Sheet”). The Final Closing Balance Sheet shall be final, to agree binding and conclusive on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”)parties.
(ig) The Independent Accounting Firm will (A) act as an expert in accountingEstimated Closing Statement, the Proposed Closing Statement, the Final Closing Statement and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, all related calculations and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to documents shall be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise prepared in accordance with GAAP applied using the same accounting methods, policies, practices and procedures, with consistent classifications, judgments and estimation methodology, in a manner each case to the extent consistent with GAAP, as were used in the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess preparation of the applicable amount in Annual Financial Statements (as defined below); provided however, that the Adjustment Notice or (2) that is less than Net Working Capital, and the applicable amount in the Dispute Notice and (D) render its determination with respect Company’s Debt shall be adjusted as defined pursuant to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firmterms hereof).
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 days after Following the Closing Date, the Purchaser will prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) Parent shall immediately have an unaudited consolidated audited balance sheet of the Acquired Companies Company (on a consolidated and consolidating basis) as at immediately prior to of the Closing Date (the “Closing Date Balance Sheet”)) prepared by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, (ii) the Purchaser’s calculation of the which Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Date Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will : (i) shall be prepared in accordance with GAAP generally accepted accounting principles in effect from time to time (“GAAP”), applied in the same manner (unless manifest error can be shown) as applied by the accounting firm that prepared the Financial Statements, including the same adjustment for National Exchange Carriers Association “true-ups” referenced in Section 2.08(c), and (ii) shall contain a manner consistent with calculation of the methods and practices used Price Adjustments. Parent shall deliver a copy of the Closing Date Balance Sheet to prepare the Company Interim Selling Stockholder Representative (appointed pursuant to Section 10.13) as soon as practicable following the Closing Date, but in any event within sixty (60) days thereof. The parties shall have the right to dispute the Closing Date Balance SheetSheet as provided in subsections (c) through (f) of this Section.
(b) During [Intentionally omitted]
(c) The Selling Stockholder Representative shall have the preparation opportunity to review the Closing Date Balance Sheet and propose any adjustments thereto. In connection with such review, Surviving Corporation shall provide the Selling Stockholder Representative access to inspect the books and records of the Adjustment NoticeCompany, at and to consult with the PurchaserCompany’s requestaccounting personnel, the Seller willindependent accounting firm that prepared the Closing Date Balance Sheet, and will cause each of the Acquired Companies toCompany’s independent auditors, and Parent and Surviving Corporation shall cooperate fully with the Selling Stockholder Representative in connection with such review. Within fifteen (i15) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as Business Days after delivery of the Closing DateDate Balance Sheet to the Selling Stockholder Representative, (ii) provide the Purchaser, within ten Business Days after Selling Stockholder Representative shall notify Parent in writing whether the Selling Stockholder Representative agrees with the Closing DateDate Balance Sheet, or proposes any adjustments to the Closing Date Balance Sheet. If the Selling Stockholder Representative states in such notice that it agrees with normal monththe Closing Date Balance Sheet, or if the Selling Stockholder Representative fails to deliver such notice (and the Adjustment Statement provided for in subsection (d), below) to Parent within the time set forth in this subsection (c), the post-end closing financial information for the period ending as of the close of business adjustment shall be based on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties Balance Sheet prepared for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item thereinParent.
(d) If the Seller fails Selling Stockholder Representative proposes any adjustments to take either of the foregoing actions within 30 days Closing Date Balance Sheet, the notice under subsection (c), above, shall be accompanied by a written statement setting forth such proposed adjustments in detail (an “Adjustment Statement”). Parent shall have the opportunity to review the Adjustment Statement and object to any such proposed adjustment. Within fifteen (15) Business Days after delivery of the Adjustment NoticeStatement (if any) to Parent, then Parent shall notify the Seller will be deemed to have irrevocably accepted Selling Stockholder Representative in writing whether Parent (i) agrees with the Adjustment CalculationStatement, or (ii) contests any such proposed adjustments. If Parent elects to contest any such adjustments, such notice shall be accompanied by a written statement setting forth the basis for contesting such proposed adjustment or adjustments (the proposed adjustment or adjustments to which Parent objects are hereinafter referred to as the “Contested Adjustments” and Parent’s notice is hereinafter referred to as the “Contested Adjustment Notice”). If (i) Parent states in which casesuch notice that it agrees with the Adjustment Statement, or (ii) Parent fails to deliver such notice to the Selling Stockholder Representative within the time set forth in this subsection (d), the Adjustment Calculation will post-closing adjustment shall be final and binding based on the parties for purposes Closing Date Balance Sheet incorporating all of Section 2.4(g).
the adjustments proposed in the Adjustment Notice. (e) If the Seller Parent timely delivers a Dispute Contested Adjustment Notice to the PurchaserSelling Stockholder Representative, then the Purchaser Parent and the Seller will attempt in good faithSelling Stockholder Representative shall use reasonable efforts to resolve their dispute regarding the Contested Adjustments, for but if a period final resolution thereof is not obtained within thirty (30) Business Days after Parent delivers the Contested Adjustment Notice to the Selling Stockholder Representative, the Selling Stockholder Representative and Parent shall promptly retain the Boston office of 30 days following the Purchaser’s receipt of such Dispute Notice KPMG Peat Marwick or its successor (the “Resolution PeriodIndependent Accountant”)) to resolve any remaining disputes concerning the Contested Adjustments; and each of the Company, to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by Larger Stockholders, the Purchaser Parent and the Seller memorialized in writing Acquisition Sub hereby represent and signed by both warrant that they have no recent, current or contemplated relationship with KPMG Peat Marwick, and that if such a relationship arises between the Purchaser date hereof and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end completion of the Resolution Period, then process described in this Section 2.12 that they will immediately inform the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one handopposing party, and the Seller, on opposing party shall then have the other hand, will each option to select an independent accounting firm of recognized international standing and alternative Independent Accountant, provided that such selected accounting firms will select a third independent accounting firm of recognized international standingIndependent Accountant shall have had no recent, which firm is not the regular auditing firm current or contemplated relationship with any of the Purchaser or Company, the Acquired Companies; providedLarger Stockholders, howeverthe Parent and the Acquisition Sub. The Surviving Corporation shall provide the Independent Accountant access to inspect the books and records of the Company, that if either and to consult with the PurchaserCompany’s accounting personnel, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by that prepared the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Closing Date Balance Sheet, and the Company’s independent auditors, and Parent and Surviving Corporation shall cooperate fully with the Independent Accountant in connection with such review. Within ten (C10) not determine an Adjustment Calculation that would result Business Days after the Independent Accountant is retained, Parent and the Selling Stockholder Representative shall each submit to the Independent Accountant in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination writing their respective positions with respect to the items in dispute in a written report that specifies the conclusions of Contested Adjustments, together with such supporting documentation as they deem necessary or as the Independent Accounting Firm as to each item in dispute Accountant requests, and Parent and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to Selling Stockholder Representative shall cause the Independent Accounting Firm to Accountant to, within thirty (30) Business Days after the Independent Accountant is retained, render its determination within 30 days after referral of decision based on the disputed items on a timely delivered Dispute Notice positions and supplementary supporting documentation submitted to such firm or the Independent Accountant by Parent and the Selling Stockholder Representative as soon thereafter as reasonably practicableto the Contested Adjustments. The decision of the Independent Accounting Firm will Accountant shall be finalin the form of a certificate (the “Settlement Amount Certificate”) setting forth the final amount of the Price Adjustments and any other adjustments to the amount of the Estimated Merger Consideration as of the date of the Closing Date, and the amount, if any, which the Selling Stockholder Representative shall cause to be paid to Parent or Parent shall cause to be paid to the Payment Agent, as the case may be (the “Settlement Amount”), in respect thereof pursuant to the provisions of subsection (f), below. The determination of the Independent Accountant and the amounts specified in the Settlement Amount Certificate shall be conclusive and binding on the Parties upon all parties and will shall not be subject to appeal the dispute resolution provisions of Section 10.16 (except in the case of a bona fide allegation of fraud or further reviewgross negligence on the part of the Independent Accountant in the discharge of its duties hereunder). The costs Closing Date Balance Sheet shall be deemed to include all proposed adjustments not disputed by the Selling Stockholder Representative and those adjustments accepted or made by the decision of the Independent Accountant in resolving the Contested Adjustments. One-half (½) of the fees and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities Accountant incurred in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items connection with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained procedures set forth in this Section 2.4(e2.12 shall be borne by Parent and one-half (½) will shall be deducted from and paid out of the exclusive mechanism for resolving any disputes regarding the Adjustment CalculationExpense Fund.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 one hundred five (105) calendar days after the Closing Date, the Purchaser will prepare and shall deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”)report, (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the certified by Purchaser, within ten Business Days after which report shall set forth the Closing Date, Deposits assumed by Purchaser that remain with normal month-end closing financial information for the period ending Purchaser as of the close of business on the date that is ninety (90) calendar days after the Closing Date (the "Updated Deposit Payment Amount") and the adjusted Premium Amount based on the Updated Deposit Payment Amount, calculated as eight percent (iii8.0%) reasonably of the Updated Deposit Payment Amount (the "Updated Premium Amount"), which Updated Premium Amount shall not be less than $1,250,000.
(b) Seller shall have a period of ten (10) Business Days following receipt of Purchaser's report described in Section 2.6 hereof to examine such report and Purchaser shall cooperate with the Purchaser Seller, its employees, representatives and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful agents in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery their examination of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themsuch report.
(c) Within 30 days after delivery The Business Day immediately following the conclusion of the Adjustment Notice, tenth (10th) Business Day period set forth in Section 2.6 hereof shall be called the Seller will either"Settlement Date." On the Settlement Date the following settlements shall be made:
(i) agree in writing with the Adjustment Calculationevent that the Updated Premium Amount exceeds the Paid Premium Amount, in which case Purchaser shall pay to Seller, by wire transfer and to such calculation will account as may be final specified by Seller, an amount equal to (x) the difference obtained by subtracting the Paid Premium Amount from the Updated Premium Amount plus (y) the interest on such difference for the number of calendar days from and binding on including the parties for purposes of Section 2.4(g)Closing Date to but excluding the Settlement Date (the "Interest Period") at the Federal Funds Rate; orand
(ii) dispute in the Adjustment Calculation event that the Paid Premium Amount exceeds the Updated Premium Amount, Seller shall pay to Purchaser, by delivering wire transfer and to such account as may be specified by Purchaser, an amount equal to (x) the Purchaser a written notice difference obtained by subtracting the Updated Premium Amount from the Paid Premium Amount plus (a “Dispute Notice”y) which shall specify which items are being disputed and set forth in reasonable detail the basis interest on such difference for each disputed item thereinthe Interest Period at the Federal Funds Rate.
(d) If Resolution of Disputed Payment Amount. Seller and Purchaser agree that if they fail to reach agreement as to the Seller fails to take either calculation of any of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items payments set forth in such Dispute Notice will this Section 2.6, the matter shall be final and binding on the parties for purposes referred to an independent firm of Section 2.4(g). If the certified public accountants of national standing reasonably acceptable to Purchaser and the Seller, and Purchaser and Seller do not resolve all disputed items agree to be bound by the end determination of the Resolution Period, then the such firm with respect to any such matter referred to it for settlement. Purchaser and Seller agree to share equally the Seller will submit fees and charges of such firm for services rendered by it in resolving the remaining items in dispute disputed matters referred to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected it by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”)hereto.
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Purchase and Assumption Agreement (First Ipswich Bancorp /Ma)
Post-Closing Adjustment. (ai) Within 45 120 days after the Closing Date, the Purchaser will Parent shall prepare and deliver to the Seller Stockholder Representative a written notice (the “Adjustment Notice”) containing (i) statement setting forth its calculation of Closing Cash and Closing Working Capital, which statement shall contain an unaudited consolidated balance sheet of the Acquired Companies Company as at immediately prior of the Closing Date (without giving effect to the Closing Contemplated Transactions), (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation a certificate of the amount Chief Financial Officer of any payments required pursuant to Section 2.4(gParent that the Closing Statement was prepared in accordance with the Company Accounting Methodologies.
(ii) After receipt of the Closing Statement, Stockholder Representative shall have 30 days (the “Adjustment CalculationReview Period”) to review the Closing Statement. During the Review Period, Stockholder Representative and its accountants and other representatives shall have full access to the books and records of the Surviving Corporation, the personnel of, and work papers prepared by, Parent and/or its accountants to the extent that they relate to the Closing Statement and to such historical financial information (to the extent in the Surviving Corporation’s or Parent’s possession) relating to the Closing Statement as Stockholder Representative may reasonably request for the purpose of reviewing the Closing Statement, provided, that such access shall be during normal business hours. Prior to the expiration of the Review Period, Stockholder Representative may object to the Closing Statement by delivering to Parent a written statement setting forth its objections in reasonable detail, indicating each disputed item or amount and the basis for its disagreement therewith (the “Statement of Objections”). The Closing Balance SheetIf Stockholder Representative fails to deliver the Statement of Objections before the expiration of the Review Period, the Closing Net Working Capital Statement and the Closing Net Cash and Closing Working Capital reflected therein shall be deemed to have been accepted by Stockholder Representative. If Stockholder Representative delivers the Statement will be prepared in accordance with GAAP applied in a manner consistent with of Objections before the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation expiration of the Adjustment NoticeReview Period, at the Purchaser’s request, the Seller will, Parent and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access Stockholder Representative shall negotiate in good faith to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case resolve such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions objections within 30 days after the delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes Statement of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice Objections (the “Resolution Period”), to agree on and, if the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by same are so resolved within the Purchaser Resolution Period, the Closing Statement and the Seller memorialized Closing Cash and Closing Working Capital reflected therein with such changes as may have been previously agreed in writing by Parent and signed by both Stockholder Representative, shall be final and binding.
(iii) If Stockholder Representative and Parent fail to reach an agreement with respect to all of the Purchaser and the Seller during the Resolution Period as to any disputed items matters set forth in such Dispute Notice will be final and binding on the parties for purposes Statement of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end Objections before expiration of the Resolution Period, then the Purchaser and the Seller will submit the any amounts remaining items in dispute (“Disputed Amounts”) shall be submitted for resolution to PricewaterhouseCoopers RSM US LLP for resolutionor, or if that firm RSM US LLP is unwilling or unable to serve, Parent and Stockholder Representative shall appoint by mutual agreement an impartial nationally recognized firm of independent certified public accountants (the Purchaser “Independent Accountant”) who, acting as experts and not arbitrators, shall resolve the Disputed Amounts only and make any adjustments to the Closing Statement and the Seller will engage another mutually agreeable independent accounting firm Closing Cash and Closing Working Capital reflected therein. The parties hereto agree that all adjustments shall be made without regard to materiality. The Independent Accountant shall only decide the specific items under dispute by the parties and their decision for each Disputed Amount must be within the range of recognized international standingvalues assigned to each such item in the Closing Statement and the Statement of Objections, which firm is not respectively. The Independent Accountant shall make a determination as soon as practicable within 30 days (or such other time as the regular auditing firm parties hereto shall agree in writing) after the Independent Accountant’s engagement, and their resolution of the Purchaser or Disputed Amounts and their adjustments to the Acquired Companies. If the Purchaser Closing Statement and the Seller are unable to jointly select such independent accounting firm within 10 days after Closing Cash and Closing Working Capital reflected therein shall be conclusive and binding upon the Resolution Period, parties hereto. The fees and expenses of the PurchaserIndependent Accountant shall be paid by the Stockholder Representative, on the one hand, and the Sellerby Parent, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not based upon the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree percentage that the independent accounting firm selected amount actually contested but not awarded to the Stockholder Representative or Parent, respectively, bears to the aggregate amount actually contested by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”)Stockholder Representative and Parent.
(iiv) The Independent Accounting Firm will Upon final determination of the Closing Statement and the Closing Cash (the “Final Closing Cash”) and Closing Working Capital (the “Final Closing Working Capital”) reflected therein, the Note Amount shall be (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice increased by the amount that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the PartiesFinal Closing Cash exceeds the Estimated Closing Cash, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with decreased by the methods and practices used to prepare amount that the Company Interim Balance SheetEstimated Closing Cash exceeds the Final Closing Cash, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice increased by any Final Closing Working Capital Overage, and (D) render its determination with respect decreased by any Final Closing Working Capital Underage. In each such case, the principal amount of each Note issued pursuant to Section 1.8(a)(ii) shall be automatically increased or decreased without any action on the items in dispute in a written report that specifies part of Parent, the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser Surviving Corporation or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts holder thereof to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to reflect such firm increase or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held decrease in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein Note Amount (as applied pursuant to the contrary, the dispute resolution mechanism contained in this Section 2.4(e9.7(c) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculationthrough (f)).
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 As soon as practicable (and in no event later than 60 days after the Closing DateClosing), the Purchaser Parent will prepare and deliver or cause to be prepared and delivered to the Seller Stockholders' Representative a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date (the "CLOSING DATE BALANCE SHEET") without giving effect to the transactions described in this Agreement to be consummated at the Closing and a proposed statement of net working capital of the Company as of the Closing Date (the "CLOSING WORKING CAPITAL BALANCE STATEMENT"). The Closing Date Balance Sheet and the Closing Working Capital Balance Statement (i) will reflect, respectively, the financial position of the Company and the components and calculation of net working capital of the Company in each case as of the Closing Date; (ii) will be prepared and determined in accordance with GAAP, on a basis consistent with the policies, principles and methodology used in connection with the preparation of the Audited Balance Sheet (the "1997 BALANCE SHEET PRINCIPLES"); and (iii) reasonably cooperate will be adjusted in accordance with the Purchaser methodology set forth in EXHIBIT E attached hereto (the "REFERENCE WORKING CAPITAL STATEMENT"). The net working capital of the Company as of the Closing Date determined in accordance with this Section 2.16, including the adjustments set forth in the Reference Working Capital Statement, is referred to herein as the "CLOSING WORKING CAPITAL BALANCE." To the extent of any inconsistency between the methodology disclosed in the Reference Working Capital Statement and the Purchaser’s Representatives1997 Balance Sheet Principles, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by terms of the Purchaser. Following Reference Working Capital Statement will govern.
(b) If, within 30 days after the date of Parent's delivery of the Adjustment Notice, at Closing Date Balance Sheet and the Seller’s requestClosing Working Capital Balance Statement, the Purchaser Stockholders' Representative determines in good faith that the Closing Date Balance Sheet and the Closing Working Capital Balance Statement have not been prepared and determined in accordance with this Agreement, the Stockholders' Representative will give written notice to Parent within such 30 day period (i) shall reasonably cooperate setting forth the Stockholders' Representative's proposed changes to the Closing Date Balance Sheet as prepared by Parent and assist, and shall cause its Representatives to assist, the Seller and its Representatives in determination by the review Stockholders' Representative of the Adjustment Notice Closing Working Capital Balance and (ii) shall specifying in detail the Stockholders' Representative's basis for disagreement with Parent's preparation and determination of the Closing Date Balance Sheet and the Closing Working Capital Balance. The failure by the Stockholders' Representative to so express disagreement and provide such specification within such 30 day period will constitute the Seller acceptance of Parent's preparation of the Closing Date Balance Sheet and its Representatives the computation of the Closing Working Capital Balance. If Parent and the Stockholders' Representative are unable to resolve any disagreement between them with respect to the preparation of the Closing Date Balance Sheet and the determination of the Closing Working Capital Balance within 30 days after the giving of notice by the Stockholders' Representative to Parent of such disagreement, the items in dispute will be referred for determination to Price Waterhouse Coopers, L.L.P. (the "ACCOUNTANTS") as promptly as practicable, but not later than five days after the expiration of such 30 day period. Parent and the Stockholders' Representative will use reasonable efforts to cause the Accountants to render their decision as soon as practicable thereafter (but in no event later than 30 days after the submission to the Accountants of the notice of disagreement referred to in the immediately preceding sentence), including without limitation by promptly complying with all reasonable requests by the Accountants for information, books, records and similar items. The Accountants will make a determination as to each of the items in dispute (but only those items in dispute), which determination will be (A) in writing, (B) furnished to each of the parties hereto as promptly as practicable after the items in dispute have been referred to the Accountants (but in no event later than 30 days thereafter), (C) made in accordance with this Agreement (including the Reference Working Capital Statement), and (D) conclusive and binding upon each of the parties hereto. Nothing herein will be construed to authorize or permit the Accountants to determine (i) any information reasonably requested question or matter whatsoever under or in connection with this Agreement, except the determination of what adjustments, if any, must be made in one or more disputed items reflected in the Closing Date Balance Sheet and the Closing Working Capital Balance Statement delivered by themParent in order for the Closing Working Capital Balance to be determined in accordance with the provisions of this Agreement (including the Reference Working Capital Statement), or (ii) a Closing Working Capital Balance that is not equal to one of, or between, the Closing Working Capital Balance as determined by the Stockholders' Representative and as determined by Parent. The fees and expenses of the Accountants will be paid by the party whose last written settlement offer related to all items in dispute, in the aggregate, submitted to the Accountants upon the referral of the matter to the Accountants in accordance with this Section 2.16(b) (each, a "LAST OFFER") varies by the greatest absolute amount from the determination by the Accountants of all such disputed items. No party will disclose to the Accountants, and the Accountants will not consider for any purpose, any settlement discussions or settlement offer (other than the Last Offer) made by any party.
(c) Within 30 days after delivery During the period that the Stockholders' Representative's advisors and personnel are conducting their review of Parent's preparation of the Adjustment NoticeClosing Date Balance Sheet and determination of the Closing Working Capital Balance, the Seller Stockholders' Representative and his representatives will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering have reasonable access during normal business hours to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Noticework papers, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it prepared by or on behalf of the Purchaser or the Seller. The Purchaser Parent and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral representatives in connection with Parent's preparation of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision Closing Working Capital Balance Statement and determination of the Independent Accounting Firm Closing Working Capital Balance; PROVIDED, HOWEVER, that the Stockholders' Representative will be final, conclusive and binding on conduct such review in a manner that does not unreasonably interfere with the Parties and will not be subject to appeal or further review. The costs and expenses conduct of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion business of the contested amount not awarded Company or result in substantial out-of-pocket costs to each party bears to Parent. To the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of extent any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held are in the presence control of both the Purchaser Stockholders' Representative after the Closing, the Stockholders' Representative will grant Parent and its representatives reciprocal access rights for the purpose of finalizing the preparation of the Closing Date Balance Sheet and the Seller and/or their respective Representativesdetermination of the Closing Working Capital Balance. Notwithstanding anything herein The Stockholders' Representative and Parent agree in good faith to the contrary, the dispute resolution mechanism contained use all reasonable efforts to provide such information and access described in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation2.16(c).
Appears in 1 contract
Sources: Redemption and Merger Agreement (General Automation Inc/Il)
Post-Closing Adjustment. (aA) Within 45 Purchaser shall cause to be prepared and, as soon as practical, but in no event later than ninety (90) days after the Closing Date, the Purchaser will prepare and deliver shall cause to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior be delivered to the Closing (the “Closing Balance Sheet”)S▇▇▇▇▇▇, (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Date Balance Sheet (the “Purchaser Closing Net Working Capital StatementDate Balance Sheet”), (iii) the Purchaser’s together with a calculation of the following adjustment to the S▇▇▇▇▇▇ Closing Net Cash based Payment, as applicable (1) increasing the amount thereof by the excess, if any, of the Total Capital shown on the Purchaser Closing Date Balance Sheet over the Base Total Capital (such excess, the “Closing Date Balance Sheet Positive Adjustment”), or (2) decreasing the amount thereof by the excess, if any, of the Base Total Capital over the Total Capital shown on the Purchaser Closing Date Balance Sheet (such excess, the “Closing Date Balance Sheet Negative Adjustment”). Within five (5) Business Days of its delivery of the Purchaser Closing Date Balance Sheet, Purchaser shall pay to S▇▇▇▇▇▇ the amount of the Closing Date Balance Sheet Positive Adjustment, if any, as determined by the Purchaser Closing Date Balance Sheet (the “Estimated Closing Net Cash StatementAdjustment Payment”) in accordance with such payment instructions as S▇▇▇▇▇▇ shall designate. In the event that Purchaser does not deliver the Purchaser Closing Date Balance Sheet within such ninety (90)-day period, S▇▇▇▇▇▇ shall have the right to prepare the Closing Date Balance Sheet and Purchaser shall be deemed to have accepted in full the Closing Date Balance Sheet as prepared by S▇▇▇▇▇▇, and, for purposes of determining the Closing Date Balance Sheet Positive Adjustment or Closing Date Balance Sheet Negative Adjustment, as applicable, such Closing Date Balance Sheet shall be deemed final, binding and conclusive upon Purchaser and S▇▇▇▇▇▇.
(B) The Purchaser shall promptly furnish to S▇▇▇▇▇▇ such work papers, documents, general ledger records and other documents and information relating to the Purchaser Closing Date Balance Sheet, and promptly provide access to personnel and answer questions, as S▇▇▇▇▇▇ may reasonably request for the purpose of evaluating and verifying data in the Purchaser Closing Date Balance Sheet and/or for preparing the Closing Date Balance Sheet, as applicable.
(C) If S▇▇▇▇▇▇ disagrees in whole or in part with the Purchaser Closing Date Balance Sheet, then within thirty (30) days after his receipt thereof, S▇▇▇▇▇▇ shall notify Purchaser of such disagreement in writing (the “Closing Notice of Disagreement”), setting forth in reasonable detail the particulars of any such disagreement. To be effective, any such Closing Notice of Disagreement shall include a copy of Purchaser Closing Date Balance Sheet marked to indicate the specific line items of the Purchaser Closing Date Balance Sheet that are in dispute (the “Disputed Closing Date Balance Sheet Line Items”) and (iv) the Purchasershall be accompanied by Stephan’s calculation of each of the amount Disputed Closing Date Balance Sheet Line Items and Stephan’s determination of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement Date Balance Sheet and the Closing Net Cash Statement will Date Balance Sheet Positive Adjustment or Closing Date Balance Sheet Negative Adjustment, as applicable. All items that are not Disputed Closing Date Balance Sheet Line Items shall be prepared in accordance with GAAP applied in a manner consistent with the methods final, binding and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation conclusive for purposes of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on determining the Closing Date and (iii) reasonably cooperate with Balance Sheet Positive Adjustment or Closing Date Balance Sheet Negative Adjustment, as applicable, hereunder unless the Purchaser and the Purchaser’s Representatives, including by providing on resolution of a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment CalculationDisputed Closing Date Balance Sheet Line Item affects an undisputed item, in which case such calculation will undisputed item shall remain open and be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering considered a Disputed Closing Date Balance Sheet Line Item to the Purchaser extent of such corresponding effect. In the event that S▇▇▇▇▇▇ does not provide a written notice Closing Notice of Disagreement within such thirty (a “Dispute Notice”) which 30)-day period, S▇▇▇▇▇▇ shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted in full the Adjustment CalculationPurchaser Closing Date Balance Sheet, in which caseand, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If determining the Seller timely delivers a Dispute Notice to the PurchaserClosing Date Balance Sheet Positive Adjustment or Closing Date Balance Sheet Negative Adjustment, then the as applicable, such Purchaser Closing Date Balance Sheet shall become final, binding and conclusive upon Purchaser and S▇▇▇▇▇▇. In the Seller will attempt in good faithevent any Closing Notice of Disagreement is properly and timely provided, Purchaser and S▇▇▇▇▇▇ shall use their respective commercially reasonable efforts for a period of 30 fifteen (15) days following (or such longer period as they may mutually agree) to resolve any Disputed Closing Date Balance Sheet Line Items. During Stephan’s aforesaid thirty (30) day period and until the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”)Closing Date Balance Sheet shall be finally determined as provided herein, to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and S▇▇▇▇▇▇ shall cooperate with each other and shall have reasonable access to the Seller memorialized books and records, working papers, schedules and calculations of the other in writing and signed by both order to prepare, or used in the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g)preparation of, their respective Closing Date Balance Sheet. If the Purchaser and the Seller do not resolve all disputed items by If, at the end of the Resolution Periodsuch period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller S▇▇▇▇▇▇ are unable to jointly select resolve all Disputed Closing Date Balance Sheet Line Items, then any such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select remaining Disputed Closing Date Balance Sheet Line Items shall be referred to an independent accounting firm of recognized international standing jointly designated by Purchaser and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 S▇▇▇▇▇▇ (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”); provided, that in the event the Purchaser and S▇▇▇▇▇▇ cannot mutually agree as to the designation of the Accounting Firm, each such Party will designate an accounting firm, and the two accounting firms will designate a third accounting firm to act as the Accounting Firm, except that G▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP shall not be selected as the Accounting Firm, unless the Purchaser and S▇▇▇▇▇▇ mutually agree.
(iD) The Independent Purchaser and S▇▇▇▇▇▇ will enter into reasonable and customary arrangements for the services to be rendered by the Accounting Firm will (A) act under this Section 2.2(b)(ii), such services to be provided in the Accounting Firm’s capacity as an accounting expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent . The Accounting Firm shall be directed to determine as to each item in dispute promptly as practicable (and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each S▇▇▇▇▇▇ shall use their commercially reasonable efforts to cause such determination to occur within thirty (30) days) the Independent resolution of the Disputed Closing Date Balance Sheet Line Items. In making any determination of the Disputed Closing Date Balance Sheet Line Items, the Accounting Firm to render its determination within 30 days after referral of may not assign a value greater than the disputed items on a timely delivered Dispute Notice to greatest value for such firm item claimed by either Party or as soon thereafter as reasonably practicable. The decision of smaller than the Independent smallest value for such item claimed by either Party, and the Accounting Firm will be final, conclusive and binding on may only make a determination regarding the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated matters in dispute between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will S▇▇▇▇▇▇. Purchaser and S▇▇▇▇▇▇ shall each furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice Disputed Closing Date Balance Sheet Line Items, and shall provide access to personnel and answer questions, as the Independent such Accounting Firm may reasonably request and are available to that party (or its Representatives)request. A copy The determination of any such work papers and other documents and information provided the Disputed Closing Date Balance Sheet Line Items by a party to the Independent Accounting Firm will shall be provided concurrently to the other party free of charge. Each party will set forth in writing and shall be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items final, conclusive and binding on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and S▇▇▇▇▇▇ for purposes of determining the Seller and/or their respective RepresentativesClosing Date Balance Sheet absent fraud or manifest error and shall be based solely on the terms of this Agreement and the written submissions by Purchaser and S▇▇▇▇▇▇ and not by independent review or investigation. Notwithstanding anything herein The Parties agree that judgment may be entered upon the award of the Accounting Firm in any court having jurisdiction pursuant to Section 12.13 hereof.
(E) Subject to the contrarynext sentence, each Party shall be responsible for its own fees and expenses incurred in connection with this Section 2.2(b). The Purchaser and S▇▇▇▇▇▇ shall each pay one half of the fees and expenses payable to the Accounting Firm in connection with resolving any dispute under this Section 2.2(b), except that, subject to Purchaser’s compliance with its obligations under Section 2.2(b)(ii)(B), in the event that one Party’s determination of the Disputed Closing Date Balance Sheet Line Items as a whole varies by 20% or more from the determination of the Disputed Closing Date Balance Sheet Line Items as a whole by the Accounting Firm hereunder, then such Party shall be solely responsible for the fees and expenses of the Accounting Firm.
(F) Promptly following (x) the Disputed Closing Date Balance Sheet Line Items have been finally determined or (y) the Closing Date Balance Sheet has been finally determined pursuant to clause (A) of Section 2.2(b)(ii), Purchaser shall prepare, and deliver to S▇▇▇▇▇▇ (or S▇▇▇▇▇▇ shall prepare and deliver to Purchaser if the last sentence of Section 2.2(b)(ii)(A) is applicable), the dispute resolution mechanism contained Closing Date Balance Sheet and the calculation of the Closing Date Balance Sheet Positive Adjustment or Closing Date Balance Sheet Negative Adjustment, as applicable, whereupon the following payment shall be made:
(1) If the Closing Date Balance Sheet Positive Adjustment, as finally determined, exceeds the Estimated Closing Adjustment Payment, then Purchaser shall pay an amount in this cash equal to such excess to S▇▇▇▇▇▇ in accordance with such payment instructions as S▇▇▇▇▇▇ shall designate; or
(2) If (x) the Estimated Closing Adjustment Payment exceeds the Closing Date Balance Sheet Positive Adjustment, as finally determined, or (y) there is a Closing Date Balance Sheet Negative Adjustment, then S▇▇▇▇▇▇ shall pay an amount in cash equal to such excess or the Closing Date Balance Sheet Negative Adjustment, as applicable, to Purchaser in accordance with such payment instructions as Purchaser shall designate.
(G) Any amount payable pursuant to Section 2.4(e2.2(b)(ii)(F) will shall be paid within five (5) Business Days after the exclusive mechanism delivery of the Closing Date Balance Sheet via wire transfer of immediately available funds to the account designated herein by the recipient thereof.
(H) Payments pursuant to Section 2.2(b)(ii)(F) shall be treated for resolving any disputes regarding all purposes as adjustments to the Adjustment CalculationConsideration.
Appears in 1 contract
Post-Closing Adjustment. (aA) Within 45 Purchaser shall cause to be prepared and, as soon as practical, but in no event later than ninety (90) days after the Closing Date, the Purchaser will prepare and deliver shall cause to be delivered to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”)Sellers, (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Date Balance Sheet (the “Purchaser Closing Net Working Capital StatementDate Balance Sheet”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s together with a calculation of the amount of any payments required pursuant adjustment to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Payment by, as applicable (1) increasing the amount thereof by the excess, if any, of the Total Capital Statement and shown on the Purchaser Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with Date Balance Sheet over the methods and practices used to prepare Base Total Capital, or (2) decreasing the Company Interim amount thereof by the excess, if any, of the Base Total Capital over the Total Capital shown on the Purchaser Closing Date Balance Sheet.
(bB) During If the preparation Sellers disagree in whole or in part with the Purchaser Closing Date Balance Sheet, then within thirty (30) days after their receipt thereof, the Sellers shall notify Purchaser of such disagreement in writing (the “Closing Notice of Disagreement”), setting forth in reasonable detail the particulars of any such disagreement. To be effective, any such Closing Notice of Disagreement shall include a copy of Purchaser Closing Date Balance Sheet marked to indicate the specific line items of the Adjustment Notice, at Purchaser Closing Date Balance Sheet that are in dispute (the Purchaser’s request, “Disputed Closing Date Balance Sheet Line Items”) and shall be accompanied by the Seller will, and will cause Sellers’ calculation of each of the Acquired Companies to, (i) provide the Purchaser Disputed Closing Date Balance Sheet Line Items and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as Sellers’ calculation of the Closing Date, (ii) provide the Purchaser, within ten Business Days after Date Balance Sheet and their determination of the Closing DatePayment, as adjusted in accordance with normal month-end closing financial information the preceding clause (i). All items that are not Disputed Closing Date Balance Sheet Line Items shall be final, binding and conclusive for the period ending as purposes of the close of business on determining the Closing Payment hereunder unless the resolution of a Disputed Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment CalculationBalance Sheet Line Item affects an undisputed item, in which case such calculation will undisputed item shall remain open and be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering considered a Disputed Closing Date Balance Sheet Line Item to the Purchaser extent of such corresponding effect. In the event that the Sellers do not provide a written notice Closing Notice of Disagreement within such thirty (a “Dispute Notice”) which 30)-day period, the Sellers shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted in full the Adjustment CalculationPurchaser Closing Date Balance Sheet, in which caseand, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If determining the Seller timely delivers a Dispute Notice to the PurchaserClosing Payment, then the such Purchaser Closing Date Balance Sheet shall become final, binding and conclusive upon Purchaser and the Seller will attempt in good faithSellers. In the event any Closing Notice of Disagreement is properly and timely provided, Purchaser and the Sellers shall use their respective commercially reasonable efforts for a period of 30 fifteen (15) days following (or such longer period as they may mutually agree) to resolve any Disputed Closing Date Balance Sheet Line Items. During the Purchaser’s receipt of such Dispute Notice aforesaid thirty (30) day period and until the “Resolution Period”)Closing Date Balance Sheet shall be finally determined as provided herein, to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized Sellers shall cooperate with each other and shall have reasonable access to the books and records, working papers, schedules and calculations of the other, in writing and signed by both order to prepare, or used in the preparation of, their respective Closing Date Balance Sheet. If, at the end of such period, Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller Sellers are unable to jointly select resolve all Disputed Closing Date Balance Sheet Line Items, then any such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select remaining Disputed Closing Date Balance Sheet Line Items shall be referred to an independent accounting firm of recognized international standing jointly designated by Purchaser and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 Sellers (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”); provided, that in the event Purchaser and the Sellers cannot mutually agree as to the designation of the Accounting Firm, each such Party will designate an accounting firm, and the two accounting firms will designate a third accounting firm to act as the Accounting Firm, except that G▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP shall not be selected as the Accounting Firm, unless Purchaser and the Sellers mutually agree.
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller Sellers will each enter into reasonable and customary arrangements for the services to be rendered by the Accounting Firm under this Section 2.2(b)(ii), such services to be provided in the Accounting Firm’s capacity as an accounting expert and not an arbitrator. The Accounting Firm shall be directed to determine as promptly as practicable (and Purchaser and the Sellers shall use their commercially reasonable efforts to cause such determination to occur within thirty (30) days) the Independent resolution of the Disputed Closing Date Balance Sheet Line Items. In making any determination of the Disputed Closing Date Balance Sheet Line Items, the Accounting Firm to render its determination within 30 days after referral of may not assign a value greater than the disputed items on a timely delivered Dispute Notice to greatest value for such firm item claimed by either Party or as soon thereafter as reasonably practicable. The decision of smaller than the Independent smallest value for such item claimed by either Party, and the Accounting Firm will be final, conclusive and binding on may only make a determination regarding the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated matters in dispute between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will Sellers. Purchaser and the Sellers shall each furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice Disputed Closing Date Balance Sheet Line Items, and shall provide access to personnel and answer questions, as the Independent such Accounting Firm may reasonably request and are available to that party (or its Representatives)request. A copy The determination of any such work papers and other documents and information provided the Disputed Closing Date Balance Sheet Line Items by a party to the Independent Accounting Firm will shall be provided concurrently to the other party free of charge. Each party will set forth in writing and shall be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items final, conclusive and binding on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective RepresentativesSellers for purposes of determining the Closing Date Balance Sheet, absent fraud or manifest error, and shall be based solely on the terms of this Agreement and the written submissions by Purchaser and the Sellers and not by independent review or investigation. Notwithstanding anything herein The Parties agree that judgment may be entered upon the award of the Accounting Firm in any court having jurisdiction pursuant to Section 11.13 hereof.
(D) Subject to the contrarynext sentence, each Party shall be responsible for its own fees and expenses incurred in connection with this Section 2.2(b). The Purchaser and the Sellers shall each pay one half of the fees and expenses payable to the Accounting Firm in connection with resolving any dispute under this Section 2.2(b), except that in the event that one Party’s determination of the Disputed Closing Date Balance Sheet Line Items as a whole varies by 20% or more from the determination of the Disputed Closing Date Balance Sheet Line Items as a whole by the Accounting Firm hereunder, then such Party shall be solely responsible for the fees and expenses of the Accounting Firm.
(E) Promptly following (x) the Disputed Closing Date Balance Sheet Line Items have been finally determined or (y) the Closing Date Balance Sheet has been finally determined pursuant to Section 2.2(b)(ii)(B), Purchaser shall prepare, and deliver to the Sellers, the dispute resolution mechanism contained Closing Date Balance Sheet and the calculation of the Closing Payment, as adjusted by, as applicable (1) increasing the amount thereof by the excess, if any, of the Total Capital shown on the Closing Date Balance Sheet over the Base Total Capital, or (2) decreasing the amount thereof by the excess, if any, of the Base Total Capital over the Total Capital shown on the Closing Date Balance Sheet (the Closing Payment, as so adjusted, being hereinafter referred to as the “Final Closing Payment”), whereupon the following payment shall be made as hereinafter provided:
(1) If the Final Closing Payment exceeds the Closing Payment by $50,000 or more, then Purchaser shall pay to the Sellers an amount in cash equal to such excess in accordance with such payment instructions as the Sellers shall designate; or
(2) If the Closing Payment exceeds the Final Closing Payment by $50,000 or more, then the Sellers shall pay to Purchaser an amount in cash equal to such excess in accordance with such payment instructions as the Purchaser shall designate.
(3) For the avoidance of doubt, no payment shall be required under this Section 2.4(e2.2(b) will if the difference between the Base Total Capital and Total Capital shown on the Closing Date Balance Sheet, as finally determined, is less than $50,000.00.
(F) Any amount payable pursuant to Section 2.2(b)(ii)(E) shall be paid within five (5) Business Days after the exclusive mechanism delivery of the Closing Date Balance Sheet via wire transfer of immediately available funds to the account designated by the recipient thereof.
(G) Payments pursuant to Section 2.2(b)(ii)(E) shall be treated for resolving any disputes regarding all purposes as adjustments to the Adjustment CalculationConsideration.
Appears in 1 contract
Post-Closing Adjustment. (ai) Within 45 sixty days after the Closing Date, the Purchaser will Seller shall prepare and deliver to the Seller Buyer a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated statement setting forth its calculation of Closing Working Capital, which statement shall contain a balance sheet of the Acquired Companies Business as at immediately prior of the Closing Date (without giving effect to the transactions contemplated herein except that the $56,000 of inventory discussed in Section 2(g) below shall be reduced from Closing Working Capital) (the “Closing Balance Sheet”), (ii) the Purchaser’s a calculation of the Closing Net Working Capital based on (the “Closing Working Capital Statement”) and a certificate of the Seller that the Closing Balance Sheet (the “and Closing Net Working Capital Statement”)Statement were prepared in accordance with the same accounting methods, (iii) practices, principles, policies and procedures used by the Purchaser’s calculation Seller, including consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Most Recent Financial Statements for the most recent fiscal year end as if such Closing Net Cash based on Balance Sheet and Closing Working Capital Statement were being prepared as of a fiscal year end. Upon receipt, the Buyer shall have twenty days to review the Closing Balance Sheet (the “and Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and either approve or dispute the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with Seller’s calculations. In the methods and practices used to prepare event the Company Interim Balance Sheet.
(b) During Buyer approves the preparation of the Adjustment Notice, at the Purchaser’s requestcalculations, the Seller willBuyer shall determine the Post-Closing Adjustment and deliver to the Seller. In the event the Buyer disputes the calculations, and will cause each of the Acquired Companies to, (i) provide the Purchaser Buyer and the Purchaser’s Representatives with reasonable access Seller shall have up to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after from the Closing Date, with normal month-end closing financial information for the period ending as date Buyer notifies Seller of the close of business on dispute to cooperate to mutually determine an acceptable Closing Balance Sheet and Closing Working Capital Statement calculation. Upon such determination, the Buyer shall determine the Post-Closing Date Adjustment and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at deliver to the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4If the Post-Closing Adjustment is a positive number, the Purchaser Buyer shall pay to the Seller an amount equal to the Post-Closing Adjustment. If the Post-Closing Adjustment is a negative number, the Seller shall pay to Buyer an amount equal to the Post-Closing Adjustment.
(iii) Any payment of the Post-Closing Adjustment, together with interest calculated as set forth below, shall be due within ten Business Days of the delivery of the Post-Closing Adjustment and shall be paid by wire transfer of immediately available funds to such account as is directed by B▇▇▇▇. The amount of any Post-Closing Adjustment shall bear interest from and including the Closing Date to but excluding the date of payment at a rate per annum equal to 8%. Such interest shall be calculated daily on the basis of a 365-day year and the Seller will furnish to actual number of days elapsed. In the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and event the Seller and/or their respective Representatives. Notwithstanding anything herein to does not make a required Post-Closing Adjustment payment, such amount (including any accrued but unpaid interest) shall be reduced from the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment CalculationEscrow Amount.
Appears in 1 contract
Post-Closing Adjustment. Within forty five (a45) Within 45 days after the Closing Date, the Purchaser will Chateau OP shall prepare and deliver to Housing a new Closing Date Balance Sheet setting forth the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies Working Capital Amount as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet Date (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing "Chateau Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”Sheet"). The Closing Chateau Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will Sheet shall be prepared at Chateau's expense in accordance with GAAP applied and in a manner consistent with CWS's past practices (using GAAP and consistently applied adjustments). If Chateau OP fails to deliver the methods and practices used Chateau Balance Sheet or the Working Capital Amount as set forth on the Chateau Balance Sheet does not vary by more than $50,000 from the Working Capital Amount set forth on the original Closing Date Balance Sheet prepared by CWS, then there shall be no adjustment to prepare the Company Interim Cash Amount Per Share. If the difference is greater than $50,000 then within thirty (30) days after receipt of the Chateau Balance Sheet.
, Housing shall deliver to Chateau (bat Housing's expense) During a written statement describing its objections, if any, thereto. Unless Housing so objects within such period, the preparation Chateau Balance Sheet shall become final and binding upon all parties. If Housing objects within such period and the parties cannot agree on how to amend the Chateau Balance Sheet and make it final and binding within another fifteen (15) days, such objections shall be resolved by a "Big Five" accounting firm other than PricewaterhouseCoopers or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ which shall be instructed to resolve such dispute within thirty (30) days and prepare a final Closing Date Balance Sheet (the "Final Balance Sheet"). The resolution of disputes by the arbitrating accounting firm so selected shall be set forth in writing and shall be conclusive and binding upon the parties and the Final Balance Sheet shall become final and binding upon the date of such resolution. The fees and expenses of such accounting firm shall be paid one-half by Chateau and one-half by Housing. At the earlier of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, time that (i) provide the Purchaser Chateau Balance Sheet becomes final and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, binding or (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering Final Balance Sheet is delivered to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth parties, any positive difference in reasonable detail excess of $50,000 between the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period Working Capital Amount as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, the original Closing Date Balance Sheet prepared by CWS and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding the Working Capital Amount on the PartiesFinal Balance Sheet shall be paid by Chateau to Housing and any negative difference in excess of $50,000 shall be paid by Housing to Chateau, (B) render its determination in each case in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a CWS Share Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmAgreement.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 days after Following the Closing Date, the Purchaser will prepare and deliver Parent shall prepare, or cause to the Seller be prepared, a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Selling Companies and their Subsidiaries as at immediately prior of the Closing Date (the "Closing Balance Sheet") prepared in accordance with GAAP using the Working Capital Accounting Principles and a calculation based upon such Closing Balance Sheet setting forth in reasonable detail the amount of Net Working Capital as of the Closing Date (the "Closing Net Working Capital"). Within 60 days of the Closing Date, Parent shall deliver, or cause to be delivered, to the Stockholders' Representative (i) the Closing Balance Sheet, together with worksheets and data that support the Closing Balance Sheet and the Closing Net Working Capital and (ii) a certificate of an executive officer of each of the Surviving Companies certifying that the Closing Balance Sheet and the Closing Net Working Capital were prepared in accordance with Section 3.7(b) and this Section 3.8. Each of the Surviving Companies shall give, and shall cause its advisers to give, the Stockholders' Representative and its advisers reasonable access to such books, records and personnel of each of the Surviving Companies (including the work papers of each of the Surviving Companies and their accountants relating to the preparation of the Closing Balance Sheet and the Closing Net Working Capital) as may be necessary to enable the Stockholders' Representative and its advisers to review the Closing Balance Sheet and the Closing Net Working Capital. The preparation of the Closing Balance Sheet shall be for the sole purpose of determining the Closing Net Working Capital. The Stockholders' Representative shall have 30 days following its receipt of the Closing Balance Sheet to review the same (the "Closing Review Period"). On or before the expiration of the Closing Review Period, the Stockholders' Representative may deliver to Parent a written statement ("Stockholders' Representative Notice") accepting or objecting in good faith to the Closing (Balance Sheet and/or the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on (or any portion thereof). In the event that the Stockholders' Representative shall object to the Closing Balance Sheet (and/or the “Closing Net Working Capital Statement”)Capital, (iii) the Purchaser’s calculation Stockholders' Representative Notice shall include a detailed itemization of Closing Net Cash based on the Closing Balance Sheet (Stockholders' Representative's objections, the “Closing Net Cash Statement”) reasons therefor and (iv) the Purchaser’s a revised calculation of the amount Net Working Capital based thereon. If the Stockholders' Representative does not deliver such Stockholders' Representative Notice to Parent within the Closing Review Period, the Stockholders' Representative shall be deemed to have accepted the calculation of any payments required pursuant the Closing Net Working Capital.
(b) In the event that the Stockholders' Representative shall timely object to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement pursuant to Section 3.8(a), Parent and the Stockholders' Representative shall promptly meet and in good faith attempt to resolve such objections. In the event that the Stockholders' Representative and Parent are not able to resolve such objections as may be raised with respect to the Closing Net Cash Statement will Working Capital, within the ten (10) day period following the Closing Review Period, the matter shall be prepared submitted to BDO ▇▇▇▇▇▇▇ (the "Accounting Referee") immediately following the expiration of such ten-day period for review and resolution, with instructions to complete the same as promptly as practicable but in any event within 60 days of the expiration of such ten (10) day period. In making such determination, the Accounting Referee may only consider those items and amounts as to which Parent and the Stockholders' Representative have disagreed within the time period and on the terms specified above and must resolve the matter in accordance with GAAP applied in a manner consistent with the methods terms and practices used to prepare provisions of this Agreement; provided that the Company Interim Balance Sheet.
(b) During the preparation determination of the Adjustment Accounting Referee will neither be more favorable to Parent than the Closing Net Working Capital set forth in the Closing Balance Sheet nor more favorable to the Stockholders' Representative than the revised Net Working Capital set forth in the Stockholders' Representative Notice, at . Such Accounting Referee shall deliver a written report setting forth the Purchaser’s request, resolution of each disputed item and the Seller will, and will cause each calculation of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired Net Working Capital as of the Closing Date, Date (iithe "Final Net Working Capital") provide as determined in accordance with the Purchaser, within ten Business Days after terms of this Agreement as soon as practicable following the Closing Date, with normal month-end closing financial information for the period ending as submission of the close of business matter to such firm but in any event within the 60 day period referred to above, which calculation, absent manifest error, shall be binding and conclusive on the Closing Date parties and (iii) reasonably cooperate with the Purchaser not subject to appeal and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful may be enforced in preparing the Adjustment Notice any court having jurisdiction. The fees and any other information reasonably requested by the Purchaser. Following delivery costs of the Adjustment NoticeAccounting Referee, at the Seller’s requestif one is required, the Purchaser shall be borne proportionally by (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice Stockholders on one hand and (ii) Parent and Fluent (on a pro rata basis based on the Holding Working Capital Escrow Amount and the Fluent Working Capital Escrow Amount, respectively) on the other hand, on the basis, for each such party, of the ratio of (A) the difference between the amount of Net Working Capital submitted by each of Parent and the Stockholders' Representative to the Accounting Referee and the Final Net Working Capital determined by the Accounting Referee to (B) the difference between the Net Working Capital amounts submitted by each of Parent and the Stockholders' Representative to the Accounting Referee. In the event that the Stockholders are obligated to pay any amounts pursuant to the immediately foregoing sentence, such amounts shall provide be deducted from the Seller Working Capital Escrow Amounts on a pro rata basis based on the Holding Working Capital Escrow Amount and its Representatives with any information reasonably requested by themthe Fluent Working Capital Escrow Amount.
(c) Within 30 days after delivery two (2) Business Days following the determination of the Adjustment NoticeFinal Net Working Capital as calculated in accordance with Section 3.8(b) or the deemed acceptance of the Closing Net Working Capital in accordance with Section 3.8(a) (for the purpose of this Section 3.8(c), the Seller will either:
Final Net Working Capital), Parent shall deliver to the Stockholders' Representative a notice (the "Parent Payment Notice") setting forth (i) agree in writing with the Adjustment Calculation, in which case such calculation will be final amount of the Final Net Working Capital; and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering difference between the amount of the Final Net Working Capital and the Base Net Working Capital ("Final Amount"). To the extent that the Final Net Working Capital is greater than the Base Net Working Capital, Parent and Fluent shall each pay to the Purchaser a written notice Working Capital Escrow Agent an amount equal to such entity's pro rata share (a “Dispute Notice”based on the Holding Working Capital Escrow Amount and the Fluent Working Capital Escrow Amount) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days Final Amount, after delivery making appropriate adjustment to reflect any payments previously made or benefits received at the Closing pursuant to Section 3.7(a)(ii) ("Net Working Capital Overage") for inclusion in the Holding Working Capital Escrow Amount and the Fluent Working Capital Escrow Amount, respectively. Notwithstanding any other provision of this Agreement, no entity that owns, directly or indirectly, any interest in Fluent shall be liable for the obligation of Fluent in the immediately preceding sentence. To the extent the Base Net Working Capital is greater than the Final Net Working Capital, the Working Capital Escrow Agent shall pay to Parent and Fluent, from the Holding Working Capital Escrow Amount and the Fluent Working Capital Escrow Amount, respectively, such entity's pro rata share (based on the Holding Working Capital Escrow Amount and the Fluent Working Capital Escrow Amount) of the Adjustment NoticeFinal Amount, then after making appropriate adjustment to reflect any payments previously made or benefits received at the Seller will Closing pursuant to Section 3.7(a)(ii) ("Net Working Capital Shortfall"). To the extent the Final Net Working Capital is the same as the amount of the Base Net Working Capital, no payments shall be deemed made except that if the Adjusted Cash Consideration was adjusted at Closing pursuant to have irrevocably accepted Section 3.7(a)(ii) and (A) the Adjustment Calculation, in which caseStockholders received the benefit of such adjustment, the Adjustment Calculation will be final Working Capital Escrow Agent shall pay to Parent and binding Fluent an amount equal to such entities' respective shares (on a pro rata basis based on the parties for purposes Holding Working Capital Escrow Amount and the Fluent Working Capital Escrow Amount) of Section 2.4(g).
the benefit amount paid at Closing from the Holding Working Capital Escrow Amount and the Fluent Working Capital Escrow Amount, or (eB) If Parent and Fluent received the Seller timely delivers a Dispute Notice benefit of such adjustment, Parent and Fluent shall pay to the Purchaser, then Working Capital Escrow Agent an amount equal to each entity's benefit amount received at Closing for inclusion in the Purchaser Holding Working Capital Escrow Amount and the Seller will attempt Fluent Working Capital Escrow Amount. Notwithstanding any other provision of this Agreement, no entity that owns, directly or indirectly, any interest in good faith, Fluent shall be liable for a period the obligation of 30 days following Fluent in the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g)immediately preceding sentence. Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether payment made pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(iSection 3.8(c) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as shall be made via wire transfer of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price immediately available funds within one (1) in excess Business Day of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions date of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmParent Payment Notice.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Post-Closing Adjustment. (ai) Within 45 thirty (30) days after the Closing Date, the Purchaser will Buyer shall prepare and deliver to the Seller Representative a written notice (the “Adjustment Notice”) containing (i) statement setting forth its calculation of Closing Working Capital, which statement shall contain an unaudited consolidated balance sheet of the Acquired Companies Company as at immediately prior of the Closing Date (without giving effect to the transactions contemplated herein and excluding any audit adjustments), a calculation of Closing Working Capital (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) and a certificate of the Purchaser’s calculation Chief Financial Officer of Closing Net Cash based on Buyer that the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and was prepared using the Closing Net Cash Statement will be prepared same Accounting Methods that were used in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at Financial Statements for the Purchaser’s request, the Seller will, most recent fiscal year end as if such Closing Working Capital Statement was being prepared and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired audited as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firmfiscal year end.
(ii) For purposes The post-closing adjustment shall be an amount equal to the Closing Working Capital minus the Estimated Closing Working Capital (the “Post-Closing Adjustment”). If the Post-Closing Adjustment is a positive number, Buyer shall pay to Sellers an amount equal to the Post-Closing Adjustment. If the Post-Closing Adjustment is a negative number, Sellers shall pay to Buyer an amount equal to the Post-Closing Adjustment (provided that any Seller who received Common Stock shall have its shares of complying such Common Stock ratably reduced in accordance with this Section 2.4such Seller’s Pro Rata Share of the Post-Closing Adjustment). Such Post-Closing Adjustment shall be applied between Sher and ▇▇▇▇▇▇▇ with 79.1625% to Sher and 20.8375% to ▇▇▇▇▇▇▇ of such Post-Closing Adjustment. In furtherance of the foregoing sentence, any Post-Closing Adjustment shall increase or decrease, as applicable, the Purchaser and amount of cash, in the Seller will furnish case of Sher, or Common Stock, in the case of ▇▇▇▇▇▇▇. In addition to the Independent Accounting Firm such work papers Post-Closing Adjustment made with respect to Sher and other documents ▇▇▇▇▇▇▇ as set forth above, if a Post-Closing Adjustment adjusts the Purchase Price, Buyer shall, in the case of a positive Post-Closing Adjustment, and information relating may, in the case of a negative Post-Closing Adjustment, adjust the the number of shares of Common Stock issued to Valentin hereunder in an amount (based upon the agreed value of the shares on the Closing Date) equal to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party adjustment made with respect to the Independent Accounting Firm will be provided concurrently number of shares of Common Stock issued to ▇▇▇▇▇▇▇ hereunder. Any adjustment to the other party free number of charge. Each party will shares of Common Stock issued to Valentin shall be afforded the opportunity to present in addition to the Independent Accounting Firm Post-Closing Adjustment provided to Sher and ▇▇▇▇▇▇▇ and shall not reduce any material related adjustment applicable to the disputed items on a timely delivered Dispute Notice Sher and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation▇▇▇▇▇▇▇.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Legend Oil & Gas, Ltd.)
Post-Closing Adjustment. (a) Within 45 As promptly as practicable, but not more than seventy five (75) days after the Closing Date (the date on which the Closing Date Balance Sheet is delivered, the “Closing Financial Statements Delivery Date”), the Purchaser will shall cause the Company to prepare and deliver to the Seller Selling Shareholders a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing Company (the “Closing Date Balance Sheet”), (ii) the Purchaser’s calculation as of the Closing Date and a calculation of Closing Date Net Working Capital based on and the Closing Balance Sheet Date Fixed Assets and the resulting adjustments to the Purchase Price specified in this Section 2.3(a) and proration of any rents, prepaid items (including client fees) and other applicable items as of the Closing Date (the “Post-Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment CalculationAdjustment”). The Closing Date Balance SheetSheet and such calculations shall be accompanied by a certificate of the Purchaser’s Chief Financial Officer to the effect that (x) the Closing Date Balance Sheet presents fairly, in all material respects in accordance with GAAP, the financial condition of the Company as of the Closing Date and (y) the Closing Date Fixed Assets and Closing Date Net Working Capital Statement and the Closing Net Cash Statement will be prepared were calculated in accordance with GAAP applied in a manner consistent with and the methods provisions of this Agreement. The Selling Shareholders and practices used their Representatives shall be entitled to prepare reasonable access during normal business hours to the relevant records, personnel and working papers, and shall be entitled to copies of such records and working papers, of the Company Interim to aid in the review of the Closing Date Balance SheetSheet and the calculations of the Closing Date Fixed Assets and Closing Date Net Working Capital. The Closing Date Balance Sheet and the calculation of the Closing Date Fixed Assets and Closing Date Net Working Capital shall be deemed to be accepted by the Selling Shareholders and shall be conclusive for the purposes of the adjustment described in Section 2.3(b) except in the event that the Selling Shareholders shall have delivered, within thirty (30) days after the Closing Financial Statements Delivery Date (the “Objection Period”), a written notice to the Purchaser setting forth objections thereto. If a change proposed by the Selling Shareholders is disputed by Purchaser then the Selling Shareholders and Purchaser shall negotiate in good faith to resolve such dispute. If, after a period of thirty (30) days following the date on which the Selling Shareholders deliver to Purchaser notice of proposed changes (the “Discussion Period”), any such proposed change still remains disputed, then Purchaser and the Selling Shareholders hereby agree that both parties will make presentations to a mutually agreed upon independent accounting firm (the “Accounting Arbitrator”), which shall resolve any remaining disputes. The Accounting Arbitrator shall act as an arbitrator to make a determination with respect to the issues that are disputed by the parties, based on the presentations by both the Selling Shareholders and the Purchaser, and by independent review by the Accounting Arbitrator if deemed necessary in the sole discretion of the Accounting Arbitrator, which determination shall be limited to only those issues that remain in dispute. The decision of the Accounting Arbitrator shall be made within thirty (30) days following submission of the dispute to the Accounting Arbitrator and shall be final and binding. The fees and expenses of the Accounting Arbitrator, if any, shall be split between the Purchaser and the Selling Shareholders. The date (the “Determination Date”) on which Closing Date Net Working Capital is finally determined pursuant to this Section 2.3(a) shall be deemed to be the earliest of the following dates: (i) the date of expiration of the Objection Period if the Selling Shareholders have not delivered written notice of objection thereto prior to such date; (ii) the date of expiration of the Discussion Period if Purchaser and the Selling Shareholders have resolved all disputed amounts prior to such date; or (iii) the date on which the Accounting Arbitrator determines the disputed amounts.
(b) During In the preparation of event that the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on Target Net Working Capital exceeds the Closing Date and Net Working Capital (iii) reasonably cooperate with such excess being the “Net Negative Working Capital Payment”), then the Selling Shareholders shall pay to Purchaser and an amount equal to the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themNet Negative Working Capital Payment.
(c) Within 30 days after delivery In the event that the Closing Date Net Working Capital exceeds the Target Net Working Capital (such excess being the “Net Positive Working Capital Payment”), then Purchaser shall pay to the Shareholder’s Representative an amount equal to the Net Positive Working Capital Payment, and the Shareholder’s Representative shall pay each of the Adjustment NoticeSelling Shareholders his or her share of the Net Positive Working Capital Payment, the Seller will either:
on a pro rata basis (i) agree in writing accordance with the Adjustment Calculation, ratios described in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g2.2(a); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein).
(d) If the Seller fails Any payments required to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution made by the Selling Shareholders or Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or Section 2.3 shall be made within seven (7) Business Days following the preceding sentence, Determination Date by wire transfer of immediately available funds to an account designated by the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as recipient of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firmpayment.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Post-Closing Adjustment. (ai) Within 45 sixty (60) days after the Closing Date, the Purchaser will OpCo Buyer shall prepare and deliver to the Seller ▇▇▇▇ Ohio Finance a written notice statement (the “Adjustment NoticeJCC Closing Statement”) containing setting forth its calculation of (iA) the JCC Closing Working Capital, (B) the Indebtedness of JCC as of the Reference Time (the “JCC Closing Date Indebtedness”), (C) the JCC Closing Date Cash, (D) all unpaid Transaction Expenses of JCC as of the Closing (excluding the R&W Insurance Cost Seller Portion) (the “JCC Closing Transaction Expenses”), (E) OpCo Buyer’s calculation of the JCC Membership Interests Purchase Price and (F) an unaudited consolidated balance sheet of JCC as of the Acquired Companies as at immediately prior Reference Time (without giving effect to the Closing Transactions) (the “JCC Closing Balance Sheet”), (ii) the Purchaser’s . The calculation of the JCC Closing Net Working Capital based on and the JCC Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will shall be prepared and calculated in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied the JCC Sample Statement and the JCC Closing Date Indebtedness, the JCC Closing Date Cash, and the JCC Closing Transaction Expenses shall be calculated in a manner consistent accordance with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmJCC Sample Statement.
(ii) For purposes of complying The post-closing adjustment (the “JCC Post-Closing Adjustment”) shall be an amount equal to the sum of:
(A) The difference between the JCC Closing Date Cash and the JCC Estimated Closing Date Cash (where the difference will be positive, if the JCC Closing Date Cash exceeds the JCC Estimated Closing Date Cash, or negative, if the JCC Estimated Closing Date Cash exceeds the JCC Closing Date Cash); plus
(B) The difference between the JCC Closing Working Capital and the JCC Estimated Closing Working Capital (where the difference will be positive, if the JCC Closing Working Capital exceeds the JCC Estimated Closing Working Capital, or negative, if the JCC Estimated Closing Working Capital exceeds the JCC Closing Working Capital); plus
(C) The difference between the JCC Closing Transaction Expenses and the JCC Estimated Transaction Expenses (where the difference will be negative, if the JCC Closing Transaction Expenses exceeds the JCC Estimated Transaction Expenses, or positive, if the JCC Estimated Transaction Expenses exceeds the JCC Closing Transaction Expenses); minus
(D) The amount, if any, by which the JCC Closing Date Indebtedness exceeds the JCC Estimated Indebtedness. If the JCC Post-Closing Adjustment as finally determined in accordance with this Section 2.42.06(b)(ii) (the “JCC Net Adjustment Amount”) is a positive number, the Purchaser and the Seller will furnish OpCo Buyer shall pay to ▇▇▇▇ Ohio Finance an amount equal to the Independent Accounting Firm such work papers and other documents and information relating Net Adjustment Amount in accordance with Section 2.06(d). If the JCC Net Adjustment Amount is a negative number, the Parties shall cause the Escrow Agent to pay, or shall pay, to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party OpCo Buyer an amount equal to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items JCC Net Adjustment Amount, in each case in accordance with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation2.06(d).
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 During the period between the date hereof and the Closing, Wabtec and GETS will periodically discuss when, and on what day of the month, the Closing is likely to occur. If the Parties determine that the Closing will occur between the first and the fifteenth day of a month, which determination will be made no later than two weeks prior to the end of the month preceding the month in which the Parties believe the Closing will occur (the "Preceding Month"), Wabtec shall perform a physical inventory as of the first day after the end of the Preceding Month (the "Preceding Month Inventory"). If the Parties determine that the Closing will occur after the fifteenth day of a month, or if a Preceding Month Inventory is not taken, (i) the Closing shall take place on the last day of the month in which the conditions set forth in Article X are satisfied or waived and (ii) Wabtec shall perform a physical inventory as of the first day after the end of such month (the "Closing Month Inventory"). GETS and its public accountants shall be entitled to observe the taking of the Preceding Month Inventory or Closing Month Inventory, as the case may be.
(b) If the Closing occurs prior to 12:00 a.m. on the sixteenth day of a month, the date of the Closing Date Balance Sheets shall be the last day of month preceding the month during which the Closing occurs. Otherwise, the date of the Closing Date Balance Sheets shall be the Closing Date. At the Closing (or within ten (10) business days after the date of the Closing Date Balance Sheets, if later than the Closing Date), the Purchaser will prepare and Wabtec (or its independent public accountant) shall deliver to GETS: (x) a balance sheet for each Division of the Seller a written notice Business as of the date determined above (the “Adjustment Notice”"Closing Date Balance Sheets"), (y) containing an accompanying closing statement (the "Closing Statement") reasonably detailing Sellers' determination of the Closing Date Net Worth and (z) if the Closing occurs on or prior to 12:00 a.m. on the sixteenth day of a month, a statement of daily cash flow of each Division of the Business for the period commencing on the first day of such month and ending on the Closing Date (the "Cash Flow Statement"). The Cash Flow Statement, if any, shall be subject to verification and audit by GETS and its independent public accountant for a period of ten (10) business days after its delivery. The Closing Date Balance Sheets shall be: (i) an unaudited consolidated prepared as if they were year-end balance sheet of the Acquired Companies as at immediately prior sheets (including typical year-end adjustments customarily made by Seller Relating to the Closing (the “Closing Balance Sheet”Business), ; (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP GAAP, applied on a basis consistent with that used to prepare the Business Balance Sheets and the Interim Balance Sheets; and (iii) in a format identical to and in a manner consistent with the methods Business Balance Sheets and practices the Interim Balance Sheets. The accounting procedures used to prepare the Company Interim Closing Date Balance Sheet.
Sheets shall include the results of the Preceding Month Inventory or the Closing Month Inventory, as the case may be. Any shortages or shrinkages resulting from such physical inventory shall be applied first to any shrinkage reserve previously recorded in the financial statements immediately preceding the prior reporting period. The results of such physical inventory shall be used to determine the inventory balances, and in valuing the inventory, Wabtec costs shall be used. Prior to delivery of the Closing Date Balance Sheets, GETS and its accountants shall be permitted to discuss with Wabtec and its accountants the proposed Closing Date Balance Sheets and the Cash Flow Statement (b) During if any), and GETS and its accountants shall have full access upon reasonable notice at all reasonable times during normal business hours to the work papers and supporting records of Wabtec relating to the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser Closing Date Balance Sheets and the Purchaser’s Representatives with reasonable access Cash Flow Statement (if any), so as to permit GETS and its accountants to make copies of such work papers and supporting records and to allow GETS to become informed concerning all matters relating to such preparation and the booksaccounting procedures, recordsmethods, facilities tests and Employees of the Acquired Companies to the extent not otherwise already acquired as approaches being utilized in connection therewith. GETS must, within thirty (30) days after its receipt of the Closing DateDate Balance Sheets, (ii) provide the Purchaser, within ten Business Days after the Closing DateStatement, and the Cash Flow Statement (if its delivery is required), give written notice (the "Notice") to Wabtec specifying in reasonable detail GETS' objections, if any, with normal month-end closing financial information for respect thereto. If GETS does not timely deliver the period ending as Notice, Wabtec's determination of the close of business on the Closing Date and Balance Sheets, the Cash Flow Statement (iiiif any) reasonably cooperate with the Purchaser and the Purchaser’s RepresentativesClosing Date Net Worth shall be final, including by providing binding and conclusive on a timely basis all information reasonably necessary or useful the Parties. With respect to any disputed amounts, GETS and Wabtec shall negotiate in preparing good faith during the Adjustment Notice and any other information reasonably requested by ten (10) business day period (the Purchaser. Following delivery "Resolution Period") after the date of Wabtec's receipt of the Adjustment NoticeNotice to resolve any such disputes. If GETS and Wabtec are unable to resolve any such dispute within the Resolution Period, at then within five (5) business days after the Seller’s requestexpiration of the Resolution Period, all unresolved disputes shall be submitted to the Purchaser New York, New York office of PricewaterhouseCoopers LLP (ithe "Independent Accountant"), who shall be engaged to provide a final and conclusive resolution of all unresolved disputes within fifteen (15) business days after such engagement. The determination of the Independent Accountant shall reasonably cooperate be final, binding and assistconclusive on GETS and Wabtec, and shall cause its Representatives to assist, the Seller fees and its Representatives in the review expenses of the Adjustment Notice Independent Accountant shall be borne equally by GETS and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themWabtec.
(c) Within 30 days after delivery of If the Adjustment NoticeClosing Date Net Worth as finally determined pursuant to Section 3.2(b) is less than the Benchmark Net Worth by more than $5,000,000, Wabtec shall pay to GETS the Seller will either:
amount by which the difference between the Closing Date Net Worth and the Benchmark Net Worth exceeds $5,000,000. If the Cash Flow Statement is required to be delivered pursuant to Section 3.2(b), then (i) agree in writing with if the Adjustment Calculation, in which case such calculation will be final and binding Cash Flow Statement reflects that the cash receipts of the Business exceeded the cash disbursements for the period beginning on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days first day following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution PeriodPreceding Month and ending on the Closing, then Wabtec shall remit to GETS the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolutionamount of such excess, or (ii) if the Cash Flow Statement reflects that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm cash disbursements of the Purchaser or Business exceeded the Acquired Companies. If cash receipts for the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, period beginning on the one hand, first day following the end of the Preceding Month and the Seller, ending on the other handClosing, will each select an independent accounting firm GETS shall remit to Wabtec the amount of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether deficit. All payments required pursuant to this sentence or Section 3.2(c) shall be made within five (5) business days after final determination of the preceding sentence, Closing Date Balance Sheets and the “Independent Accounting Firm”).
Cash Flow Statements (iif required to be delivered) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c3.2(b), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Purchase Agreement (Westinghouse Air Brake Technologies Corp)
Post-Closing Adjustment. The Purchase Price set forth in Section 2.2 shall be subject to adjustment after the Closing Date as follows:
(a) Within 45 forty-five (45) days after the Closing Date, the Purchaser will Buyer shall prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “Preliminary Closing Balance Sheet”), (ii) . The Buyer shall prepare the Purchaser’s calculation of the Closing Net Working Capital based on the Preliminary Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP Tax Accounting applied in on a manner basis consistent with the methods and practices used application of Tax Accounting to prepare the Company Interim Balance Sheetpreparation of the Financial Statements, which shall set forth the Net Book Value.
(b) During The Seller may request in writing all additional supporting Information as reasonably may be necessary to verify the preparation Preliminary Closing Balance Sheet, and the Buyer shall promptly (but in no event more than three (3) business days following such request) provide to the Seller any such Information that is in the possession or control of the Adjustment NoticeBuyer, at provided that any delay in providing such Information shall extend the Purchaser’s requestObjection Deadline Date by the number of days any such delivery of Information by the Buyer is delayed beyond such three (3) business day period. The Seller shall deliver to the Buyer, by the Objection Deadline Date, either a notice indicating that the Seller will, and will cause each of accepts the Acquired Companies to, Preliminary Closing Balance Sheet or a reasonably detailed statement describing its objections (iif any) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of Preliminary Closing Balance Sheet. If the Acquired Companies Seller delivers to the extent Buyer a notice accepting the Preliminary Closing Balance Sheet, or the Seller does not otherwise already acquired deliver a written objection to the Preliminary Closing Balance Sheet by the Objection Deadline Date, then, effective as of either the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending date of delivery of such notice of acceptance or as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s requestObjection Deadline Date, the Purchaser (i) Preliminary Closing Balance Sheet shall reasonably cooperate and assist, be deemed to be the Final Closing Balance Sheet and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); orParties. If the Seller timely objects to the Preliminary Closing Balance Sheet, such objections shall be resolved as follows:
(i) The Buyer and the Seller shall first use Reasonable Best Efforts to resolve such objections.
(ii) dispute If the Adjustment Calculation Buyer and the Seller do not reach a resolution of all objections set forth on the Seller’s statement of objections within thirty (30) days after delivery of such statement of objections, the Buyer and the Seller shall, promptly, but in no event more than thirty (30) days following the expiration of such thirty (30) day period, engage the Accountant, pursuant to an engagement agreement executed by delivering the Buyer, the Seller and the Accountant, to resolve any remaining objections set forth on the Seller’s statement of objections (the “Unresolved Objections”).
(iii) The Buyer and the Seller shall jointly submit to the Purchaser Accountant, within ten (10) days after the date of the engagement of the Accountant (as evidenced by the date of the engagement agreement), a written notice copy of the Preliminary Closing Balance Sheet, a copy of the statement of objections delivered by the Seller to the Buyer, and a statement setting forth the resolution of any objections agreed to by the Buyer and the Seller. Each of the Buyer and the Seller shall submit to the Accountant (with a “Dispute Notice”copy delivered to the other Party on the same day), within fifteen (15) days after the date of the engagement of the Accountant, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of the Buyer and the Seller may (but shall not be required to) submit to the Accountant (with a copy delivered to the other Party on the same day), within thirty (30) days after the date of the engagement of the Accountant, a memorandum responding to the initial memorandum submitted to the Accountant by the other Party. Unless requested by the Accountant in writing, neither Party may present any additional information or arguments to the Accountant, either orally or in writing.
(iv) The Buyer and the Seller shall jointly instruct the Accountant that (A) within forty-five (45) days after the date of its engagement hereunder, the Accountant shall determine whether the objections raised by the Seller are appropriate and shall issue a ruling which shall specify which items are being disputed include a balance sheet, comprised of the Preliminary Closing Balance Sheet as adjusted pursuant to any resolutions to objections agreed upon by the Buyer and the Seller and pursuant to the Accountant’s resolution of the Unresolved Objections, (B) in resolving any Unresolved Objection, the Accountant shall select a value for such item that is equal to or between the value for such item proposed by the Buyer in the Preliminary Balance Sheet or by the Seller in its statement of objections, and (C) the scope of the Accountant’s review shall be limited to resolving the Unresolved Objections. The balance sheet issued by the Accountant pursuant to the foregoing sentence shall be deemed to be the Final Closing Balance Sheet and shall be final and binding on the Parties.
(v) The resolution by the Accountant of the Unresolved Objections shall be final and binding upon the Buyer and the Seller. The Buyer and the Seller agree that the procedure set forth in reasonable detail this Section 2.5(b) for resolving disputes with respect to the basis Preliminary Closing Balance Sheet shall be the sole and exclusive method for each disputed item thereinresolving any such disputes; provided that this provision shall not prohibit either Party from instituting litigation to enforce the ruling of the Accountant.
(vi) The Buyer and the Seller shall share the fees and expenses of the Accountant equally.
(c) If the Net Book Value as shown on the Final Closing Balance Sheet is less than the Target Amount, the Purchase Price shall be reduced by such deficiency and the Seller shall pay to the Buyer, by wire transfer or other delivery of immediately available funds, within three (3) business days after the date on which the Final Closing Balance Sheet is finally determined pursuant to this Section 2.5, an amount equal to such deficiency.
(d) If the Seller fails Net Book Value as shown on the Final Closing Balance Sheet exceeds the Target Amount, the Purchase Price shall be increased by such excess amount and the Buyer shall pay to take either of the foregoing actions within 30 days after Seller, by wire transfer or other delivery of the Adjustment Noticeimmediately available funds, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
within three (e3) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 business days after the Resolution Period, date on which the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm Final Closing Balance Sheet is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether finally determined pursuant to this sentence or the preceding sentenceSection 2.5, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice equal to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firmexcess.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 days As promptly as possible after the Closing DateClosing, but in no event later than sixty (60) days following the Closing, the Purchaser will shall prepare and deliver to the Seller Sellers a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing report (the “Closing Balance SheetDate Financial Report”), ) setting forth (iii) the Purchaser’s calculation a statement of the Closing Date Net Working Capital based on the Closing Balance Sheet (the “Final Closing Date Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash StatementCapital”) and (ivii) the Purchaser’s a calculation of the amount of any payments required pursuant to Section 2.4(g) Working Capital Adjustment based on such report (the “Adjustment CalculationNet Working Capital Adjustment”). The Closing Balance Sheet, Purchaser shall bear any third-party expenses or fees incurred in preparing the Closing Net Working Capital Statement Date Financial Report. The Purchaser shall deliver or make available to the Sellers promptly, and in any event within five (5) Business Days after any written request, any work papers or other information used by the Closing Net Cash Statement will be prepared Purchasers in accordance connection with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at Closing Date Financial Report requested by the Purchaser’s request, Sellers. If the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access Sellers do not object in writing to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date Financial Report within thirty (30) days after its delivery to the Sellers, such Closing Date Financial Report will automatically become final and (iii) reasonably cooperate with the Purchaser conclusive and the Purchaser’s RepresentativesClosing Date Net Working Capital and the Net Working Capital Adjustment therein shall be the Final Closing Date Net Working Capital and the Final Net Working Capital Adjustment, including by providing on a timely basis all information reasonably necessary respectively; provided that such 30-day period shall be tolled while Sellers are waiting to receive any work papers or useful in preparing the Adjustment Notice and any other information reasonably requested by Sellers that were used by the PurchaserPurchaser in connection with its preparation of the Closing Date Financial Report. Following In the event that the Sellers object in writing to the Closing Date Financial Report within such 30-day period, as extended, the Sellers and the Purchaser shall promptly meet and endeavor to reach agreement as to the content of the Closing Date Financial Report. If the Sellers and the Purchaser agree on the content of the Closing Date Financial Report, such Closing Date Financial Report will become final and conclusive. If the Sellers and the Purchaser are unable to reach agreement within fifteen (15) days after the delivery of such objection by the Adjustment NoticeSellers to the Closing Date Financial Report, at then the Seller’s requestIndependent Accountants will promptly be retained to undertake a determination of the Closing Date Financial Report, which determination will be made as quickly as possible. Only disputed items (plus any items deemed by the Independent Accountants to be reasonably necessary to a determination of the disputed items) will be submitted to the Independent Accountants for review. In resolving any disputed item, the Purchaser (i) shall reasonably cooperate and assistIndependent Accountants may not assign a value to such item greater than the greatest value for such item claimed by either Party or less than the lowest value for such item claimed by either Party, and shall cause its Representatives in each case as presented to assist, the Seller and its Representatives in the review Independent Accountants. The determination of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation Independent Accountants will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed Sellers and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller Closing Date Net Working Capital and the Net Working Capital Adjustment determined by the Independent Accountants shall be the Final Closing Date Net Working Capital and the Final Net Working Capital Adjustment, respectively. The fees and expenses of the Independent Accountants will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution be paid by the Purchaser and the Seller memorialized Sellers in writing and signed by both the Purchaser same proportion as the dollar amount of the determination in such party’s favor reflected in the Closing Date Financial Report bears to the total dollar amount of all disputed items.
(b) The Purchase Price and the Seller during payments required to be made after the Resolution Period as Closing pursuant to any disputed items set forth in such Dispute Notice Section 2.6(c) will be final and binding finally determined on the parties for purposes basis of Section 2.4(g). If the Purchaser Closing Date Financial Report and the Seller do not resolve all disputed items by the end Final Net Working Capital Adjustment after any determinations described in this Section 2.6(a).
(c) Within five (5) Business Days after determination of the Resolution PeriodFinal Net Working Capital Adjustment, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If Sellers, as the Purchaser and the Seller are unable case may be, shall pay to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other handthe amount by which the Purchase Price, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected as adjusted by the other party will be Final Net Working Capital Adjustment, is greater or less than the independent accounting firm selected by the parties for purposes of this Section 2.4 Purchase Price (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, difference being the “Independent Accounting FirmClosing Purchase Price Reconciliation”).
) as follows: (i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on if the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Closing Purchase Price (1) in excess of Reconciliation is positive, the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect Purchaser shall promptly pay such difference to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute Sellers; and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4if the Closing Purchase Price Reconciliation is negative, the amount of such difference shall be paid to the Purchaser out of the Escrow Amount pursuant to the terms of the Escrow Agreement and the Seller will furnish Sellers shall authorize and direct the Escrow Agent to release such amount to the Independent Accounting Firm such work papers and other documents and information relating to Purchaser from the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment CalculationEscrow Account.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 days As soon as practicable after the Closing Date(but in any event within ten (10) business days thereof), Purchaser shall cause its accountants to calculate the Purchaser will prepare actual Net Working Capital Amount and to deliver such calculation to the Seller. Seller a written notice must within five (5) business days of receipt of same (the “Adjustment Notice”"Receipt Date") containing confirm whether or not it agrees with the calculation of such actual Net Working Capital Amount and, if it does not, it will cause accountants selected by Seller, at Seller's cost, to review the same and to confirm to Purchaser's accountants within ten (i10) an unaudited consolidated balance sheet business days of the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s Receipt Date whether or not they agree with such calculation of the Closing actual Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”)Amount and if they do not, (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth specifying in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either points of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller disagreement. Purchaser and its accountants will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final provide Seller's accountants with full and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice complete access to the Purchasernecessary books, then the records and working papers. Purchaser and Seller shall then instruct their respective accountants to seek to resolve the Seller will attempt in good faith, for a period points of 30 days following disagreement and agree upon the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g)actual Net Working Capital Amount. If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will Seller agrees with Purchaser's accountants' calculation of the actual Net Working Capital Amount or (Aii) Purchaser's accountants and Seller's accountants agree upon the same (with such further adjustments as they may agree upon) within twenty (20) business days of the Receipt Date, the amount so agreed upon shall be the actual Net Working Capital Amount. If Purchaser's and Seller's accountants do not agree upon the actual Net Working Capital Amount pursuant to the procedures set forth above, Purchaser's and Seller's accountants shall jointly select from the "Big Five" accounting firms a firm of independent public accountants which has not performed any services since January 1, 1996 for either Purchaser or Seller or their respective affiliates, to act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(earbitrator (the "Arbitrator") to be final and binding on determine the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with actual Net Working Capital Amount. All determinations made by the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will Arbitrator shall be final, conclusive and binding on with respect to the Parties and will not be subject to appeal or further reviewactual Net Working Capital Amount. The costs Fees and expenses of the Independent Accounting Firm will Arbitrator shall be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested shared equally by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and Seller. To the Seller will furnish to extent that the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party actual Net Working Capital Amount (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items determined in accordance with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained procedure set forth in this Section 2.4(e1.4 ), is greater than the Estimated Net Working Capital Amount, Purchaser shall pay to Seller within one (1) will be business day of the exclusive mechanism date of such determination the amount of such excess, together with interest thereon at the rate of 8% per annum from the Closing Date to the date of payment, by wire transfer of immediately available funds to an account designated in writing for resolving any disputes regarding such purpose by Seller within two (2) business days prior to the Adjustment CalculationClosing Date. To the extent that the Estimated Net Working Capital Amount is greater than the actual Net Working Capital Amount (determined in accordance with the procedure set forth in this Section 1.4), Seller shall pay to Purchaser within one (1) business day of the date of such determination the amount of such excess, together with interest thereon at the rate of 8% per annum from the Closing Date to the date of payment, by wire transfer of immediately available funds to an account designated in writing for such purpose by Purchaser within two (2) business days prior to the Closing Date.
Appears in 1 contract
Sources: Stock Purchase Agreement (Supreme International Corp)
Post-Closing Adjustment. The Preliminary U.S. Purchase Price shall be subject to adjustment after the Closing Date as follows:
(a) Within 45 forty-five (45) days after the Closing Date, the Purchaser will Buyer shall prepare and deliver to the Seller a written notice statement (the “Closing Adjustment NoticeStatement”) containing (i) an unaudited consolidated balance sheet calculating the Designated Intercompany Accounts Amount as of the Acquired Companies as at date immediately prior to the Closing Date (the “Closing Balance SheetDesignated Intercompany Accounts Amount”), (ii) the Purchaser’s calculation Indebtedness of the Company as of the Closing Net Working Capital based on the Closing Balance Sheet Date (the “Closing Net Working Capital StatementIndebtedness”), (iii) and the Purchaser’s calculation unpaid Company Transaction Expenses as of Closing Net Cash based on the Closing Balance Sheet Date (the “Closing Net Cash Statement”) Unpaid Company Transaction Expenses” and (iv) collectively with the Purchaser’s calculation of Closing Designated Intercompany Accounts Amount and the amount of any payments required pursuant to Section 2.4(g) (Closing Indebtedness, the “Adjustment CalculationComponents”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During If Seller in good faith disputes any Adjustment Component as shown on the preparation of the Closing Adjustment NoticeStatement prepared by Buyer, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, shall deliver to Buyer within thirty (i30) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as days after receipt of the Closing DateAdjustment Statement a statement (the “Dispute Notice”) setting forth Seller’s calculation of such Adjustment Component and describing in reasonable detail the basis for the determination of such different Adjustment Component. The Parties shall use commercially reasonable efforts to resolve such differences regarding the determination of such Adjustment Component for a period of thirty (30) days after Buyer’s receipt of the Dispute Notice. If Seller and Buyer resolve such differences, the Adjustment Component agreed to by the Parties shall be deemed to be the “Final Closing Designated Intercompany Accounts Amount,” “Final Closing Indebtedness” or “Final Closing Unpaid Company Transaction Expenses,” as applicable, and the Closing Adjustment Statement agreed to by the Parties shall be deemed to be the “Final Closing Adjustment Statement.”
(iic) provide If Seller and Buyer do not reach a final resolution on any Adjustment Component within thirty (30) days after Buyer’s receipt of the PurchaserDispute Notice, unless Seller and Buyer mutually agree to continue their efforts to resolve such differences, KPMG International or another “Big 4” accounting firm mutually agreed upon by Buyer and Seller (the “Neutral Accountant”) shall resolve such differences, pursuant to an engagement agreement executed by Seller and Buyer and the Neutral Accountant, in the manner provided below. The Parties shall each be entitled to make a presentation to the Neutral Accountant, pursuant to procedures to be agreed to among Seller, Buyer and the Neutral Accountant (or, if they cannot agree on such procedures, pursuant to procedures determined by the Neutral Accountant), regarding such Party’s calculation of such Adjustment Component; and the Neutral Accountant shall be required to resolve the differences between Seller and Buyer and determine such Adjustment Component within ten twenty (20) Business Days after the completion of such presentations to the Neutral Accountant. The Closing DateDesignated Intercompany Accounts Amount, Closing Indebtedness or Closing Unpaid Company Transaction Expenses, as applicable, determined by the Neutral Accountant shall be deemed to be the Final Closing Designated Intercompany Accounts Amount, Final Closing Indebtedness or Final Closing Unpaid Transaction Expenses, as applicable, and the Closing Adjustment Statement, as adjusted by the Neutral Accountant to reflect such determination, shall be deemed to be the Final Closing Adjustment Statement. Such determination by the Neutral Accountant shall be conclusive and binding upon the Parties, absent fraud or manifest error.
(d) The Neutral Accountant shall not be authorized or permitted to:
(i) determine any questions or matters whatsoever under or in connection with normal month-end closing financial information this Agreement except for the period ending as resolution of differences between Seller and Buyer regarding the determination of any Adjustment Component in accordance with this Section 1.7;
(ii) resolve any such differences by making an adjustment to the Closing Adjustment Statement that is outside of the close of business on the Closing Date range defined by amounts as finally proposed by Seller and Buyer; or
(iii) reasonably cooperate with the Purchaser apply any accounting methods, treatments, principles or procedures other than as described in Section 1.7.
(e) Seller and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery Buyer shall each pay one half of the fees and expenses of the Neutral Accountant; provided, that if the Neutral Accountant determines that one Party has adopted a position or positions with respect to the Closing Adjustment Notice, at the Seller’s requestStatement that is frivolous or clearly without merit, the Purchaser Neutral Accountant (i) shall reasonably cooperate may, in its discretion, assign a greater portion of any such fees and assist, and shall cause its Representatives expenses to assist, the Seller and its Representatives in the review of the Adjustment Notice such Party and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser Parties a written notice (explanation of its reasons for making such a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing determination and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will determination shall be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final conclusive and binding on the Parties, absent fraud or manifest error.
(Bf) render its determination The Parties agree that the procedure set forth in accordance this Section 1.7 for resolving disputes with respect to any Adjustment Component shall be the sole and exclusive method for resolving any such disputes; provided, that this Agreement provision shall not prohibit any Party from instituting litigation to enforce the ruling of the Neutral Accountant.
(g) Failure of Seller to deliver a Dispute Notice within thirty (30) days after receiving the Closing Adjustment Statement shall constitute acceptance of each Adjustment Component set forth on the Closing Adjustment Statement, whereupon such Adjustment Component shall be deemed to be the Final Closing Designated Intercompany Accounts Amount, Final Closing Indebtedness or Final Closing Unpaid Company Transaction Expenses, as applicable, and otherwise the Closing Adjustment Statement shall be deemed to be the Final Closing Adjustment Statement. Delivery by Seller of a Dispute Notice shall constitute final and binding acceptance by Seller of all portions of the Closing Adjustment Statement other than those specifically identified in accordance with GAAP applied in the Dispute Notice as being subject to a manner consistent with good faith dispute.
(h) If the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Final U.S. Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable Preliminary U.S. Purchase Price by more than $25,000, then Seller shall pay to Buyer an amount in the Dispute Notice and (D) render its determination with respect equal to the items in dispute in a written report that specifies difference between the conclusions of the Independent Accounting Firm as to each item in dispute Preliminary U.S. Purchase Price and the resulting Adjustment CalculationFinal U.S. Purchase Price. The Independent Accounting Firm will only render its determination with respect If the Final U.S. Purchase Price is more than the Preliminary U.S. Purchase Price by more than $25,000, then Buyer shall pay to Seller an amount equal to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of difference between the Purchaser or the Seller. The Purchaser Final U.S. Purchase Price and the Seller will each use their commercially reasonable efforts Preliminary U.S. Purchase Price. Any payment pursuant to cause this Section 1.7(h) shall be made in cash, by wire transfer of immediately available funds, into one or more accounts designated by Buyer or Seller, as the Independent Accounting Firm to render its determination case may be, within 30 days five (5) Business Days after referral of the disputed items date on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded Final U.S. Purchase Price is determined pursuant to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation1.7.
Appears in 1 contract
Sources: Stock Purchase and Sale Agreement (Microstrategy Inc)
Post-Closing Adjustment. (a) Within 45 days after Closing Balance Sheet. On or before the Closing Date60th day following the --------------------- Closing, the Purchaser will Seller shall prepare and deliver to Buyer (x) a balance sheet for the Seller a written notice Business dated the Closing Date which shall be audited by the Rochester, New York office of Deloitte & Touche LLP and the related unqualified report of such firm (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “"Closing Balance Sheet”"), (iiy) the Purchaser’s a detailed calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) Purchase Price and (ivz) the Purchaser’s a detailed calculation of the amount Adjustment Amount. Buyer shall have full access to the workpapers of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”)Deloitte & Touche LLP. The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will Sheet shall be prepared by Seller in accordance with GAAP applied generally accepted accounting principles, consistently applied, used in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment NoticeBalance Sheet except that the Closing Balance sheet shall reflect appropriate reserves for the following items: warranty claims, at the Purchaser’s request, the Seller willdeposits for special orders and incomplete transactions, and will cause each of gift certificates issued and not redeemed. The Closing Balance Sheet shall also set forth accrued rent under Leases; accrued real and personal property taxes; accrued water, gas, electricity and other utilities; accrued common area maintenance reimbursements to lessors; accrued local business or other license fees or taxes; and accrued merchants' association dues. The Closing Balance Sheet shall also set forth Parent's net investment for the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired Business as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the . The Closing Date, with normal month-end closing financial information for the period ending as Balance Sheet shall be accompanied by reasonably detailed schedules indicating which assets of the close of business on the Closing Date Business are Assets or Excluded Assets and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery which Liabilities of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, Business are Assumed Liabilities and shall cause its Representatives to assist, the Seller and its Representatives in the review include a calculation of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment CalculationParent's net investment. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs fees and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion Deloitte & Touche, LLP and of the contested amount not awarded independent inventory service utilized to each party bears to conduct physical inventories in connection with and in preparation of the amount actually contested Closing Balance Sheet shall be borne by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmSeller equally.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Asset Purchase Agreement (Fays Inc)
Post-Closing Adjustment. (a) Within 45 The Purchase Price shall be increased or decreased (the "Purchase Price Adjustment") on a dollar-for-dollar basis by an amount equal to the amount by which the Closing Date Net Working Capital (as hereinafter defined) is in excess of or is less than the Target Net Working Capital (as hereinafter defined). The payment of the Purchase Price Adjustment shall occur within three (3) days after the final determination of the Closing Date Net Working Capital, or on such other date as shall be mutually agreed to in writing by the parties (the "Settlement Date"). If the Closing Date Net Working Capital is greater than the Target Net Working Capital, the Purchaser will prepare and deliver shall pay to the Seller a written notice (the “Adjustment Notice”) containing (i) Shareholders, in accordance with their Respective Ownership Percentages, an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior amount equal to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of Purchase Price Adjustment. If the Closing Date Net Working Capital based is less than the Target Net Working Capital, the Shareholders shall pay to the Purchaser, in accordance with their Respective Ownership Percentages, an amount equal to the Purchase Price Adjustment. The term "Closing Date Net Working Capital" means the difference between the current assets and current liabilities of the Company, both computed in accordance with generally accepted accounting principles and both as disclosed on the Final Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”as hereinafter defined). The Closing Balance SheetFor the avoidance of doubt, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to Shareholders acknowledge and agree that the books, records, facilities and Employees current liabilities of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending Company as of the close of business on the Closing Date shall include the accrued federal, state and (iii) reasonably cooperate local income taxes with respect to the Purchaser and Company's operations for the Purchaser’s Representativesportion of the tax year of the Company ending on the Closing Date, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering accrued taxes attributable to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either Company's sale or distribution of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice its marketable securities prior to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g)Closing Date. Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serveFurthermore, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties Shareholders agree that the independent accounting firm selected by current liabilities of the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute Company as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding the close of business on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with Closing Date shall include the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess amount of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination $254,000 with respect to the items in dispute in a written report that specifies the conclusions uninsured liability of the Independent Accounting Firm as Company for claims made after the Closing Date for acts, occurrences or events that occurred prior to each item in dispute and the resulting Adjustment CalculationClosing Date. The Independent Accounting Firm will only render its determination with respect term Target Net Working Capital means an amount equal to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm$0.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Stock Purchase Agreement (America Service Group Inc /De)
Post-Closing Adjustment. (a) Within 45 90 days after the Closing Date, the Purchaser will Parent shall prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) Shareholder Representative an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing Company (the “Closing Draft Balance Sheet”)) as of 11:59 p.m. Austin, (ii) Texas time on the Purchaser’s calculation of business day preceding the Closing Net Date, and prepared in accordance with GAAP, consistently applied, and this Agreement, and a schedule computing Closing Working Capital Capital, based on the Closing Draft Balance Sheet and calculated in accordance with Exhibit A attached hereto, Cash on Hand and Indebtedness (the “Closing Net Working Capital Statement”)assuming repayment of all Indebtedness in full after giving effect to any fees, (iii) the Purchaser’s calculation premiums, penalties and other amounts to be incurred as a result of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”such payment). The Closing Shareholder Representative shall have the right to review the Draft Balance Sheet, the determination of Closing Net Working Capital Statement Capital, Cash on Hand and the Closing Net Cash Statement will be prepared Indebtedness, and all material back up or supporting data used in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment NoticeDraft Balance Sheet and determination of Closing Working Capital, at Cash on Hand and Indebtedness. The Shareholder Representative will, within 30 days of receipt of the Purchaser’s requestDraft Balance Sheet and such back up or supporting data, notify Parent of the Company Shareholders’ acceptance of the Draft Balance Sheet or non-acceptance of the Draft Balance Sheet. If the Shareholder Representative does not give notice of any disagreement with the Draft Balance Sheet within such 30 day period, then the Company Shareholders shall be deemed to have accepted the Draft Balance Sheet. If the Shareholder Representative gives notice to Parent that the Company Shareholders do not agree with or accept the Draft Balance Sheet, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful Shareholder Representative shall describe in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each such disagreement. Parent and the Shareholder Representative will endeavor to resolve any disagreement within 30 days of the receipt by Parent of such notice. If the parties are unable to resolve such disagreement within the 30 day period, they shall refer any unresolved issues to the Austin office of PricewaterhouseCoopers International Limited, or such other accounting firm which is mutually agreed to by Parent and the Shareholder Representative (the “Independent Accountants”), which shall be instructed to resolve such issues within 30 days of the referral, acting as an expert and not as an arbitrator. The Independent Accountants shall address only those issues in dispute, and may not assign a value to any item that is (i) greater than the greatest value for such item claimed by either the Shareholder Representative or Parent or (ii) lower than the lowest value claimed by the Shareholder Representative or Parent. The Independent Accountants’ determination shall be based only upon written submissions by the Shareholder Representative and Parent, and not upon an independent review by the Independent Accountants. Neither the Shareholder Representative nor Parent will have any ex parte conversations or meetings with the Independent Accountants without the prior written consent of the other.
(b) The determination of the Independent Accountants retained pursuant to this Section 2.4 will be conclusive and binding upon Parent, the Shareholder Representative and the Company Shareholders and shall be reflected in a final balance sheet with respect to the Company as of 11:59 p.m. Austin, Texas time on the business day preceding the Closing Date approved or prepared by such Independent Accountants in accordance with the principles and assumptions (with respect to Indebtedness) set forth in this Section 2.4. The balance sheet setting forth the final determination of Closing Working Capital, Cash on Hand and Indebtedness pursuant to this Section 2.4, whether the Draft Balance Sheet (if the Shareholder Representative and Parent reach agreement), any other such balance sheet mutually agreed to by the parties, or the balance sheet approved or prepared by the Independent Accountants, as the case may be, shall be referred to herein as the “Closing Balance Sheet.”
(c) The fees and expenses of the Independent Accountants (i) shall be borne by the Shareholder Representative, on behalf of the Company Shareholders (on an Adjusted Pro Rata Basis), in the proportion that the aggregate dollar amount of disputed item thereinitems submitted thereto for resolution that are unsuccessfully disputed by the Shareholder Representative (as finally determined by the Independent Accountants) bears to the aggregate dollar amount of such submitted disputed items and (ii) shall be borne by the Company in the proportion that the aggregate dollar amount of disputed items submitted thereto for resolution that are successfully disputed by the Shareholder Representative (as finally determined by the Independent Accountants) bears to the aggregate dollar amount of such submitted disputed items.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 Within 7 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm final determination of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).Closing Balance Sheet:
(i) The Independent Accounting Firm will If the Adjusted Merger Consideration is greater than the Merger Consideration, (A) act the Company shall pay to the Shareholder Representative (for the benefit of the Company Shareholders (and allocated among the Company Shareholders on an Adjusted Pro Rata Basis) and by wire transfer of immediately available funds to such bank account as designated by the Shareholder Representative) cash in an expert in accountingamount equal to such excess, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination the Escrow Agent shall pay to the Shareholder Representative (for the benefit of the Company Shareholders (allocated among the Company Shareholders on an Adjusted Pro Rata Basis)) the Working Capital Escrow Amount, together with any interest thereon from the Closing Date to the date of such payment in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess terms of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmEscrow Agreement.
(ii) For purposes of complying with this Section 2.4If the Adjusted Merger Consideration is equal to the Merger Consideration, the Purchaser Escrow Agent shall pay to the Shareholder Representative (for the benefit of the Company Shareholders (and allocated among the Company Shareholders on an Adjusted Pro Rata Basis)) the Working Capital Escrow Amount, together with any interest thereon from the Closing Date to the date of such payment in accordance with the terms of the Escrow Agreement.
(iii) If the Adjusted Merger Consideration is less than the Merger Consideration by an amount which is less than the Working Capital Escrow Amount, then (A) the Escrow Agent shall pay to Parent a portion of the Working Capital Escrow Amount equal to such shortfall (the “Shortfall Amount”), together with any interest thereon from the Closing Date to the date of such payment in accordance with the terms of the Escrow Agreement and (B) immediately thereafter the Escrow Agent shall pay to the Shareholder Representative (for the benefit of the Company Shareholders (and allocated among the Company Shareholders on an Adjusted Pro Rata Basis)) the remaining portion of the Working Capital Escrow Amount, together with any interest thereon from the Closing Date to the date of such payment in accordance with the terms of the Escrow Agreement.
(iv) If the Shortfall Amount is greater than the Working Capital Escrow Amount, (A) the Escrow Agent shall pay Parent the Working Capital Escrow Amount, together with any interest thereon from the Closing Date to the date of such payment in accordance with the terms of the Escrow Agreement, (B) if the Working Capital Escrow Amount is insufficient to satisfy such Shortfall Amount, the Shareholder Representative (on behalf of the Company Shareholders (allocated among the Company Shareholders on an Adjusted Pro Rata Basis)) shall pay Parent all or a portion of the Shareholder Rep Holdback Amount equal to the amount by which the Shortfall Amount is greater than the Working Capital Escrow Amount, together with any interest thereon from the Closing Date to the date of such payment in accordance with the terms hereof, and (C) if the Shareholder Rep Holdback Amount is insufficient to satisfy such remaining Shortfall Amount, the Shareholder Representative (on behalf of the Company Shareholders (allocated among the Company Shareholders on an Adjusted Pro Rata Basis)) shall cause to be paid to Parent cash in an amount equal to the amount by which the Shortfall Amount is greater than the Working Capital Escrow Amount and the Seller will furnish Shareholder Rep Holdback Amount by distributing such amount to Parent out of the Indemnity Escrow Funds, together with interest thereon from the Closing Date to the Independent Accounting Firm date of such work papers and other documents and information relating payment, pursuant to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request terms and are available to that party (or its Representatives). A copy conditions of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser this Agreement and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment CalculationEscrow Agreement.
Appears in 1 contract
Post-Closing Adjustment. (ai) Within 45 ninety (90) days after the Closing DateClosing, Buyer shall, in good faith, cause to be prepared and delivered to Nexus Health Systems, as agent for the Purchaser will prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing Sellers (i) an unaudited consolidated a balance sheet of the Acquired Companies Company and the Company Subsidiaries as at immediately prior to of the Closing (the “Closing Date Balance Sheet”) which Closing Date Balance Sheet will reflect the actual Net Working Capital of the Company and the Company Subsidiaries as of the Closing (“Closing Working Capital”), (ii) a statement of actual Cash held by the Purchaser’s calculation Company and the Company Subsidiaries as of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash StatementCash”) and (iviii) the Purchaser’s calculation a statement of the amount actual aggregate Indebtedness of any payments required pursuant to Section 2.4(g) the Company and the Company Subsidiaries outstanding as of the Closing (the “Adjustment CalculationClosing Indebtedness”). The Closing Date Balance Sheet, the Closing Net Working Capital Statement Sheet and the statements of Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used Closing Indebtedness are collectively referred to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution PeriodClosing Statement”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will The Closing Statement shall be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination calculated in accordance with this Agreement and otherwise in accordance GAAP, with GAAP to be applied consistently in the manner in which GAAP was applied in a manner consistent with the methods and practices used to prepare preparation of the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to Closing Statement shall be prepared as if the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf Closing Date was the last day of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmNexus Health Systems’ fiscal year.
(ii) For purposes If Nexus Health Systems disputes the accuracy of complying the Closing Statement, Nexus Health Systems shall timely provide written notice to Buyer no later than thirty (30) days following Nexus Health Systems’ receipt of the Closing Statement (the “Dispute Notice”), setting forth in reasonable detail those items that Nexus Health Systems disputes and the amounts of any adjustments that are necessary in Nexus Health Systems’ judgment for the computations contained in the Closing Statement to conform to the requirements of this Agreement and the basis for the Nexus Health Systems’ suggested changes. During such thirty (30) day period, Buyer shall, and shall cause the Company and the Company Subsidiaries to, provide Nexus Health Systems and its agents any information reasonably requested and reasonable access to the personnel, properties, books and records of the Company and the Company Subsidiaries for the purpose of their review of the Closing Statement. If Nexus Health Systems accepts the calculations of Closing Cash, Closing Indebtedness and/or Closing Working Capital as set forth in the Closing Statement or if Nexus Health Systems fails within such thirty (30) day period to deliver the Dispute Notice, then, the Closing Statement shall be deemed final and conclusive and binding upon all parties. During the thirty (30) day period following delivery of a Dispute Notice, Buyer and Nexus Health Systems shall meet and negotiate in good faith with a view to resolving their disagreements over the disputed items. During such thirty (30) day period and until the final determination of Closing Cash, Closing Indebtedness and Closing Working Capital in accordance with this Section 2.42.4(b)(ii) (as so finally determined, “Final Closing Cash”, “Final Closing Indebtedness” and “Final Closing Working Capital”, respectively), Nexus Health Systems and its agent shall be provided with such access to the Purchaser financial books and records of the Company and the Seller will furnish Company Subsidiaries as it may reasonably request in connection with its review of the Closing Statement. If the parties resolve their differences over the disputed items in accordance with the foregoing procedure, Final Closing Cash, Final Closing Indebtedness and Final Closing Working Capital shall be the amount agreed upon by them and the Closing Statement shall reflect the same. If the parties fail to resolve their differences over the disputed items within such thirty (30) day period, then Buyer and Nexus Health Systems shall forthwith jointly request that the Independent Accounting Firm such work papers and other documents and information relating make a binding determination as to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items in accordance with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment CalculationAgreement.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 days after the Closing DateDate (as defined in Section 1.7), the Purchaser will prepare and Buyer shall deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies Corporation as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based opening of business on the Closing Balance Sheet Date (the “"Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Date Balance Sheet, ") prepared by the Closing Net Working Capital Statement and the Closing Net Cash Statement will Buyer. Such balance sheet shall be prepared in accordance with GAAP applied generally accepted accounting principles consistently applied, with the inventory value determined in a manner consistent with the methods and practices used to prepare the Company Interim Latest Balance Sheet. The inventory reflected on the Closing Date Balance Sheet shall be determined by a physical inventory taken as of the start of business on the first business day following the Closing Date and observed by the representatives of the Buyer and Seller. The inventory will be valued at the lower of cost or market. The only inventory set forth on the Closing Date Balance Sheet shall be raw materials, work-in-progress and finished goods inventory for which there are current or forecasted orders from customers.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, If the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access has any objections to the booksClosing Date Balance Sheet, records, facilities and Employees of the Acquired Companies he shall deliver to the extent not otherwise already acquired as Buyer a statement describing such objections within 15 days after Seller's receipt of the Closing DateDate Balance Sheet. If no objections are received within such 15 day period, (ii) provide the PurchaserClosing Date Balance Sheet shall be deemed accepted by Seller. Buyer and Seller shall use reasonable efforts to resolve any objections received during such 15 day period. In the event Buyer and Seller are unable to resolve such objections within a 15-day period following receipt by Buyer of Seller's objections, the Buyer and Seller shall, within ten Business Days days after the Closing Datesuch 15-day period, with normal month-end closing financial information for the period ending as select a mutually acceptable nationally recognized accounting firm to resolve any remaining objections. The determination of such accounting firm shall be made within 30 days of the close selection of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, such accounting firm and shall cause its Representatives to assist, be conclusive and binding upon the Seller parties hereto. The fees and its Representatives in the review expenses of the Adjustment Notice such accounting firm shall be shared equally by Buyer and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themSeller.
(c) Within 30 days after delivery If the aggregate book value of the Adjustment NoticeCorporation, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding as reflected on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Closing Date Balance Sheet, (C) not determine an Adjustment Calculation that would result in a as finally determined, is greater than the aggregate book value of the Corporation as reflected on the Latest Balance Sheet, the Purchase Price (1) shall be adjusted upward by such amount and a corresponding adjustment to the Note shall be made as of the Closing. In the event the aggregate book value of the Corporation, as reflected on the Closing Date Balance Sheet, as finally determined, is less than the aggregate book value of the Corporation as reflected on the Latest Balance Sheet, the Purchase Price shall be adjusted downward by such amount and a corresponding adjustment to the Note shall be made as of the Closing. The finalization of the Closing Date Balance Sheet shall not affect any rights or remedies of Buyer under this Agreement. In the event a downward adjustment is in excess of the applicable principal amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as Note, such excess shall be paid by Seller to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its Buyer within five (5) days of final determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firmadjustment.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 As soon as practicable, but in any event no later than one hundred twenty (120) days after following the Closing Date, the Purchaser will prepare Buyer shall cause to be prepared and deliver delivered to the Seller the Audited Closing Date Balance Sheet and a written notice (statement setting forth the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date (such statement, as it may be adjusted pursuant to Section 2.8(b), the "Closing Date Statement"). The Closing Date Statement shall be prepared in accordance with GAAP and (iii) reasonably cooperate consistent with the Purchaser methodologies set forth in Schedule 1.1 of Exhibit B. Upon receipt of the Audited Closing Date Balance Sheet and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assistClosing Date Statement, the Seller and its Representatives the Seller's independent accountants shall be permitted during the succeeding thirty (30) day period to examine the Audited Closing Date Balance Sheet, the Closing Date Statement and the work papers used or generated in connection with the review preparation of the Adjustment Notice such documents and (ii) shall provide such other documents as the Seller and may reasonably request in connection with its Representatives with any information reasonably requested by them.
review. If, within thirty (c30) Within 30 days after following delivery of the Adjustment NoticeAudited Closing Date Balance Sheet and the Closing Date Statement, the Seller will either:
shall not have given the Buyer notice of the Seller's objection to the Audited Closing Date Balance Sheet or any of the computations in the Closing Date Statement (i) agree in writing with which notice shall contain a statement of the Adjustment CalculationBasis of such objection), in which case such calculation then the Audited Closing Date Balance Sheet and the Closing Date Statement will be final and binding on upon the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) Parties, absent manifest error. If the Seller fails gives notice to take either the Buyer of the foregoing actions within 30 days after delivery of the Adjustment NoticeSeller's objection, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser Buyer and the Seller are unable to jointly select such independent accounting firm resolve the issues in dispute within 10 thirty (30) days after delivery of such notice of objection, each of the Resolution Period, the Purchaser, on the one hand, Buyer's and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination 's positions with respect to the items in dispute in a written report that specifies Audited Closing Date Balance Sheet and the conclusions computation of the Independent Accounting Firm as Working Capital Adjustment in the Closing Date Statement will be submitted to each item in dispute Deloitte Touche LLP, independent certified public accountants, or such other firm of independent certified public accountants mutually selected by the Parties (the "Accountants") for resolution. If the Audited Closing Date Balance Sheet and the resulting computation of Working Capital Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect are submitted to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will Accountants for resolution, (x) each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller Party will furnish to the Independent Accounting Firm Accountants such work papers workpapers and other documents and information relating to the disputed items on a timely delivered Dispute Notice issues as the Independent Accounting Firm Accountants may reasonably request and are available to that party Party (or its Representativesindependent public accountants). A copy of any such work papers , and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm Accountants any material related relating to the disputed items on a timely delivered Dispute Notice such issues and to discuss such items the same with the Independent Accounting Firm, with any Accountants; (y) the Accountant's shall select either the Buyer's or the Seller's position on each disputed matter in the Audited Closing Date Balance Sheet and the Working Capital Adjustment in its entirety and such presentation or discussion selection shall be binding and conclusive on the Parties and will be deemed to be held the Audited Closing Date Balance Sheet and the final Working Capital Adjustment for the Closing Date Statement; and (z) the fees of the Accountants for such determination will be borne by the Party whose positions have a net negative economic adjustment, taking into account all disputed matters.
(b) Within five (5) Business Days of the completion of the computations required by Section 2.8(a), (i) if the Working Capital Balance in the presence Audited Closing Date Balance Sheet is less than $19 Million, then the Seller shall pay to the Buyer an amount equal to the Working Capital Adjustment and (ii) if the Working Capital Balance in the Audited Closing Date Balance Sheet is greater than $19 Million, then the Buyer shall pay to the Seller an amount equal to the Working Capital Adjustment. In either case, such amounts shall be paid by wire transfer of both immediately available funds to such account or accounts of the Purchaser Buyer or the Seller, as the case may be, as may be designated by the Buyer or the Seller, as the case may be; provided, however, that amounts owed by the Seller to the Buyer may be netted against amounts owed by the Buyer to the Seller, and vise versa. If payment is being made after the fifth business day referred to in this Section 2.8(b), the amount of the payment to be made pursuant to this Section 2.8 shall bear interest from and including such fifth business day to, but excluding, the date of payment at a rate per annum equal to seven percent (7%) for the first thirty days such payment is past due and at a rate per annum equal to fifteen percent (15%) for all subsequent periods such payment is past due, in either event not to exceed the maximum rate permitted by Law. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated on the basis of a year of 365 days and the actual number of days for which due.
(c) After the Closing Date, the Seller will furnish, or cause to be furnished to the Buyer, its accountants and auditors, upon request of the Buyer and as promptly as practicable, such information and assistance as is reasonably necessary for the Buyer to cause to be prepared the Audited Closing Date Balance Sheet and the Closing Date Statement.
(d) Except as set forth in Section 2.8(a), the Buyer and the Seller and/or their respective Representatives. Notwithstanding anything herein to shall each bear its own expenses incurred in connection with the contrary, preparation and review of the dispute resolution mechanism contained in this Section 2.4(e) will be Audited Closing Date Balance Sheet and the exclusive mechanism for resolving any disputes regarding the Adjustment CalculationClosing Date Statement.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Alpha Natural Resources, Inc.)
Post-Closing Adjustment. (a) Within 45 On or prior to the Closing Date, Sellers shall deliver to Buyer a statement setting forth Sellers’ estimate of the aggregate value of the Scheduled Liabilities (the “Estimated Scheduled Liabilities Valuation”), including an itemized list showing Sellers’ estimate of each of the Scheduled Liabilities. The Estimated Scheduled Liabilities Valuation shall be prepared (i) in accordance with GAAP, and (ii) on a basis consistent with the preparation of the Financial Statements of the Business. The Estimated Scheduled Liabilities Valuation shall be used to calculate the Closing Payment absent manifest error.
(b) No later than sixty (60) days after the Closing Date, the Purchaser will Buyer shall prepare and deliver to Sellers a statement setting forth the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet aggregate value of the Acquired Companies Scheduled Liabilities as at immediately prior to of the Closing Date (the “Closing Balance SheetDate Liabilities Valuation”), including an itemized list showing Buyer’s determination of the value of each of the Scheduled Liabilities. The Closing Date Liabilities Valuation shall be prepared (i) in accordance with GAAP, and (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner basis consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each Financial Statements of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themBusiness.
(c) Within 30 days after delivery After receipt of the Adjustment NoticeClosing Date Liabilities Valuation, Sellers shall have thirty (30) days (the Seller will either:
(i“Sellers’ Review Period”) agree to review it. If, within Sellers’ Review Period, Sellers notify Buyer in writing with the Adjustment Calculation, in which case such calculation will be final and binding that they object to any item(s) on the parties for purposes of Section 2.4(g); or
(iiClosing Date Liabilities Valuation and specify the item(s) and amount(s) in dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each such dispute (the “Sellers’ Amendment Notice”), the parties shall use their best efforts to reach agreement in respect of the disputed items within the fifteen (15) day-period (the “Resolution Period”) following the delivery of Sellers’ Amendment Notice. Any item(s) on the Closing Date Liabilities Valuation not identified in writing as a disputed item thereinwithin Sellers’ Review Period shall be deemed to have been accepted by Sellers and not subject to any further review or change. If no Sellers’ Amendment Notice is received by Buyer during Sellers’ Review Period, the Closing Date Liabilities Valuation shall be deemed accepted by Sellers.
(d) If at the Seller fails to take either conclusion of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do have not resolve all disputed items by the end of the Resolution Periodreached an agreement on Sellers’ objections, then the Purchaser all amounts and the Seller will submit the issues remaining items in dispute shall be submitted by Sellers and Buyer to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment CalculationNeutral Accountant. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be finalfees, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will Neutral Accountant shall be allocated between borne proportionately by Buyer and Sellers to the Parties based upon the percentage which the portion extent that each party’s calculation of the contested amount not awarded to each party bears to aggregate value of the amount actually contested by such party, Scheduled Liabilities differs from the final Scheduled Liabilities Valuation as finally determined by the Independent Accounting FirmNeutral Accountant. All costs and expenses incurred by the parties in connection with resolving any dispute under this Section 1.7 before the Neutral Accountant shall be borne by the party incurring such cost and expense. The Neutral Accountant shall act as an arbitrator to determine only those issues still in dispute at the end of the Sellers’ Review Period. The Neutral Accountant’s determination shall be made within forty-five (45) days after its engagement, shall be set forth in a written statement delivered to the Sellers and Buyer and shall be final, binding, conclusive and nonappealable for all purposes hereunder. The term “Final Scheduled Liabilities Valuation” shall mean the Representative agree aggregate value of the Scheduled Liabilities as agreed to execute, if requested by Sellers and Buyer in accordance with Section 1.7(c) or the aggregate value of the Scheduled Liabilities resulting from the determination made by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities Neutral Accountant in favor of the Independent Accounting Firm.
(ii) For purposes of complying accordance with this Section 2.4, 1.7(d) (in addition to those items theretofore agreed to by Sellers and Buyer during the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (Resolution Period or its Representativesotherwise in accordance with Section 1.7(c). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation).
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 days after the Closing Date, the Purchaser will prepare and deliver The Base Merger Consideration shall be subject to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies adjustment as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to specified in this Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet3.1.
(b) During Within ninety (90) days following the preparation Effective Time, CCC shall cause CCC's Accountant to audit (the "Post-Closing Audit") the books of the Adjustment Notice, at ------------------ Company to determine the Purchaser’s request, the Seller will, and will cause each accuracy of the Acquired Companies to, (i) provide information relating to the Purchaser Company's Closing Net Worth and the Purchaser’s Representatives with reasonable access to Company's 1997 Adjusted EBIT as set forth on the books, records, facilities Financial Certificates (as defined in Section 7.20) and Employees on the financial certificates of the Acquired Companies Other Group Companies. In determining the accuracy of such information reflected on the Financial Certificates in the course of the Post- Closing Audit, CCC's Accountant shall apply the same accounting methodology used by the Company or the Shareholders, as applicable, in preparing such information; provided that CCC's Accountant shall not be obligated to apply such methodology to the extent not otherwise already acquired inconsistent with GAAP (as of the Closing Date, (iimodified by Section 2.2(b) provide the Purchaser, within ten Business Days above). The Shareholders shall cooperate with CCC and CCC's Accountant after the Closing DateDate in furnishing information, with normal month-end closing financial information for documents, evidence and other assistance to CCC's Accountant to facilitate the period ending as completion of the close Post-Closing Audit within the aforementioned time period. Without limiting the generality of business on the Closing Date and (iii) reasonably cooperate foregoing, within two weeks after the Closing, the Shareholders shall provide CCC's Accountant with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information and/or documents reasonably requested by them. CCC's Accountant will test the Company's Closing Net Worth, the Group Closing Net Worth, the Company's 1997 Adjusted EBIT and the Group 1997 Adjusted EBIT based upon the Post-Closing Audit and the post-closing audits of the Other Group Companies. In the event that CCC's Accountant determines (i) a different amount than the Group Closing Net Worth (the "Actual Closing Net Worth") or (ii) ------------------------ a different amount than the Group 1997 Adjusted EBIT (the "Actual 1997 Adjusted -------------------- EBIT" ), CCC shall promptly deliver a written notice with supporting ---- documentation (the "Financial Adjustment Notice") to the shareholders of the Group Companies, including the Shareholders, setting forth (A) the determination made by CCC's Accountant of the Actual Closing Net Worth and the Actual 1997 Adjusted EBIT, (B) the amount of the cash portion of the Base Merger Consideration that would have been payable at Closing pursuant to Section 2.2(c) had the Actual Closing Net Worth and the Actual 1997 Adjusted EBIT been used instead of the Group Closing Net Worth and the Group 1997 Adjusted EBIT to determine the need for any adjustments to the Base Merger Consideration pursuant to Sections 2.2(c) and 2.2(d), respectively, and (C) the number of shares issued as part of the Base Merger Consideration that would have been issuable at Closing had the Actual Closing Net Worth and the Actual Adjusted EBIT been used to determine the need for any adjustments to the Base Merger Consideration as set forth in (B) above. The differences between the respective amounts set forth in (B) and (C) and the amounts of the cash and the CCC Common Stock components of the Base Merger Consideration paid pursuant to Section 2.2 (a), as adjusted pursuant to Sections 2.2(c) or 2.2(d), is referred to hereafter as the "Merger ------ Consideration Adjustment." Any increase in the Base Merger Consideration ------------------------ resulting from such Merger Consideration Adjustment shall be owed by CCC to the Shareholders. Any decrease in such Base Merger Consideration resulting from such Merger Consideration Adjustment shall be owed by the Shareholders to CCC. If, on or prior to the payment of the Merger Consideration Adjustment, CCC should split or combine the CCC Common Stock, or pay a stock dividend or other stock distribution in CCC Common Stock, or otherwise change the CCC Common Stock into any other securities, or make any other dividend or distribution on the CCC Common Stock (other than normal quarterly dividends, as the same may be adjusted from time to time and in the ordinary course), then the number of shares of CCC Common Stock issuable as part of the Merger Consideration Adjustment will be appropriately adjusted to reflect such split, combination, dividend or other distribution or change. The shares of CCC Common Stock, if any, to be issued in respect of the Merger Consideration Adjustment shall be registered under the 1933 Act and approved for quotation on the Nasdaq National Market.
(c) Within 30 days after delivery The shareholders of the Group Companies, including the Shareholders, through the Group Representative, shall have thirty (30) days from the receipt of the Financial Adjustment Notice to notify CCC if they dispute such Financial Adjustment Notice. If CCC has not received notice of any such dispute within such 30-day period, the Seller will either:
(i) agree in writing with CCC shall be entitled to receive promptly pro rata from the Shareholders (which may, at CCC's sole discretion, be from the Pledged Assets as defined in, and subject to the provisions of, Section 3.2 and/or the Contingent Merger Consideration) any Merger Consideration Adjustment Calculation, in which case such calculation will be final owed to CCC and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Shareholders shall be entitled to receive promptly from CCC any Merger Consideration Adjustment Calculation by delivering owed to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g)Shareholders. Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; providedIf, however, that if either the Purchaser, on Shareholders (through the one hand, or the Seller, on the other hand, fails Group Representative) have delivered notice of such a dispute to select CCC within such independent accounting firm during this 1030-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on CCC's Accountant shall select a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent New Accounting Firm to render its determination within 30 days after referral review the books of the disputed items on a timely delivered Dispute Group Companies including, the Surviving Corporation, the Financial Certificates and the Financial Adjustment Notice (and related information) to such firm or as soon thereafter as reasonably practicable. The decision determine the amount, if any, of the Independent Accounting Firm will be final, conclusive and binding on revised Merger Consideration Adjustment (the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation."Actual Merger ------------- Consideration Adjustment"
Appears in 1 contract
Sources: Agreement and Plan of Reorganization (Consolidation Capital Corp)
Post-Closing Adjustment. (ai) Within 45 No earlier than 30 days after and no later than 75 days following the Closing Date, the Purchaser Buyer will prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies Company at and as at immediately prior to of 12:01 A.M. Central time on the Closing Date (the “"Closing Balance Sheet”)") and a statement setting forth its good faith determination of the amount of (i) the Closing Cash, (ii) the Purchaser’s calculation final amount of Transaction Expenses, (iii) any Closing Working Capital Surplus, (iv) any Closing Working Capital Deficiency, (v) the Closing Net Working Capital based on Indebtedness and (vi) the Post-Closing Adjustment Amount resulting therefrom (such statement, the "Closing Statement"). After receipt of the Closing Balance Sheet and the Closing Statement, Seller shall have 30 days (the “Closing Net Working Capital Statement”), (iii"Review Period") the Purchaser’s calculation of Closing Net Cash based on to review the Closing Balance Sheet and the Closing Statement. During the Review Period, Seller and its Representatives, including Seller's independent accountants, will be entitled to review, during normal business hours and upon reasonable advance notice, the books and records of the Company used in the preparation of the Closing Balance Sheet and the Closing Statement as Seller may reasonably request, and to discuss such books and records with senior management of the Company for the purpose of reviewing the Closing Balance Sheet and the Closing Statement.
(ii) On or prior to the last day of the Review Period, Seller may object to the Closing Balance Sheet and the Closing Statement by delivering to Buyer a written statement setting forth Seller's objections in reasonable detail, indicating each disputed item, amount in dispute and the basis for Seller's disagreement therewith (the “Closing Net Cash Statement”) and (iv) "Statement of Objections"). If Seller fails to deliver the Purchaser’s calculation Statement of Objections prior to the expiration of the amount of any payments required pursuant to Section 2.4(g) (Review Period, the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Post-Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including Amount proposed by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) Buyer shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably been accepted by Seller. If Seller delivers the Adjustment CalculationStatement of Objections prior to the expiration of the Review Period, Seller and Buyer shall negotiate in which casegood faith to resolve such objections for 30 days after the delivery of the Statement of Objections (the "Resolution Period"), and, if the same are so resolved within the Resolution Period, the Closing Balance Sheet, the Closing Statement and the resulting Post-Closing Adjustment Calculation will Amount with such changes as may have been previously agreed in writing by Seller and Buyer, shall be final and binding on the parties for purposes of Section 2.4(g)binding.
(eiii) If Seller and Buyer fail to reach an agreement with respect to all of the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items matters set forth in such Dispute Notice will be final and binding on the parties for purposes Statement of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end Objections before expiration of the Resolution Period, then any amounts remaining in dispute (the Purchaser "Disputed Amounts") shall be submitted for resolution to the office of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. (the "Independent Valuation Firm") who, acting as experts and not arbitrators, shall resolve the Disputed Amounts only and adjust the Closing Balance Sheet, the Closing Statement and the Seller will submit resulting Post-Closing Adjustment Amount accordingly, if necessary, based on the remaining Independent Valuation Firm's resolution of the Disputed Amounts. The Independent Valuation Firm shall only decide the specific items under dispute by the parties. The Independent Valuation Firm shall make a determination as promptly as reasonably practicable within 30 days (or such other time period as the parties hereto shall agree in dispute writing) after their engagement, and their resolution of the Disputed Amounts and any adjustments to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to servethe Closing Balance Sheet, the Purchaser Closing Statement and the Seller will engage another mutually agreeable resulting Post-Closing Adjustment Amount shall be based solely upon the memoranda and supporting material provided by the parties hereto, and not pursuant to any independent accounting firm review, and shall be conclusive and binding upon the parties hereto (absent fraud or manifest error). In resolving any Disputed Amount, the Independent Valuation Firm shall be bound by the Working Capital Adjustment Principles, the applicable definitions set forth in this Agreement and the other requirements of recognized international standing, which firm is this Section 1.2(c) and shall not assign a value to any item greater than the regular auditing firm greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. The fees and expenses of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the PurchaserIndependent Valuation Firm shall be paid by Seller, on the one hand, and the Sellerby Buyer, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the Disputed Amounts contested amount but not awarded to each party bears to the amount actually contested by such partySeller or Buyer, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firmrespectively.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Natural Resource Partners Lp)
Post-Closing Adjustment. (a) The Base Merger Consideration shall be subject to adjustment after the Closing Date as specified in this Section 1.11.
(b) Within 45 ninety (90) days after following the Effective Time, the Buyer shall cause KPMG LLP (the "Buyer's Accountant") to audit the Surviving Company's books to determine whether an adjustment to the Base Merger Consideration is appropriate (the "Post-Closing Audit"). If, on the Closing Date, (x) the Purchaser will prepare Company has any liability (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated, and deliver whether due or to become due), other than (1) liabilities shown on the balance sheet dated December 31, 2000 (the "Most Recent Balance Sheet"), (2) liabilities which have arisen since December 31, 2000 (the "Most Recent Balance Sheet Date") in the Ordinary Course of Business and which are similar in nature and amount to the Seller liabilities which arose during the comparable period of time in the immediately preceding fiscal period, and (3) liabilities reflected on Section 2.8 of the Disclosure Schedule that have not been discharged prior to Closing (such liabilities, the "Unscheduled Liabilities"), or (y) the Company has any liabilities or obligations that are more than 45 days past due (such liabilities, the "Unpaid Liabilities"), the Base Merger Consideration shall be reduced by one dollar for every dollar of Unscheduled Liabilities and by one dollar for every dollar of Unpaid Liabilities. The amount of such reduction is referred to below as the "Merger Adjustment Amount." The Company Stockholders shall cooperate and shall use their reasonable efforts to cause the officers and employees of the Company to cooperate with the Buyer and the Buyer's Accountant after the Closing Date in furnishing information, documents, evidence, and other assistance to the Buyer's Accountant to facilitate the completion of the Post-Closing Audit within the aforementioned time period. Without limiting the generality of the foregoing, within two (2) weeks after the Closing the Company Stockholders shall provide the Buyer's Accountants with the information and/or documents requested in order to facilitate the completion of the Post-Closing Audit by the Buyer's Accountant within the aforementioned time period. In the event that the Buyer's Accountant determines that an adjustment to the Base Merger Consideration is appropriate, then (i) the Buyer shall deliver a written notice (the “"Financial Adjustment Notice”") containing (i) an unaudited consolidated balance sheet to the Indemnification Representative setting forth the determination made by the Buyer's Accountant of the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”)Merger Adjustment Amount, and (ii) the Purchaser’s calculation Buyer Common Stock component of the Closing Net Working Capital based on Base Merger Consideration shall be reduced by the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Merger Adjustment Calculation”). The Closing Balance SheetAmount, the Closing Net Working Capital Statement Company Stockholders shall owe the Merger Adjustment Amount to the Buyer, and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with Buyer and the methods and practices used Indemnification Representative shall direct the Escrow Agent to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller willdeliver, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access Escrow Agent shall deliver to the booksBuyer, records, facilities and Employees of the Acquired Companies Escrow Shares with a Value (as such term is defined below) equal to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Merger Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themAmount.
(c) Within 30 The Indemnification Representative shall have thirty (30) days after delivery from the receipt of the Financial Adjustment Notice to notify the Buyer if the Company Stockholders dispute such Financial Adjustment Notice. If the Buyer has not received notice of such a dispute within such 30-day period, the Seller will either:
Buyer shall be entitled to receive Escrow Shares with a Value equal to the Merger Adjustment Amount. If, however, the Indemnification Representative has delivered notice of such a dispute to the Buyer within such 30-day period, then the Buyer's Accountant shall select an independent accounting firm that has not represented any of the parties hereto within the preceding two (2) years and is one of the five largest accounting firms in the United States to review the Surviving Company's books and Financial Adjustment Notice (and related information) to determine the amount, if any, of the Merger Adjustment Amount. Such independent accounting firm shall be confirmed by the Indemnification Representative and the Buyer within five (5) days of its selection, unless there is an actual conflict of interest. The independent accounting firm shall be directed to consider only those agreements, contracts, commitments, or other documents (or summaries thereof) that were either (i) agree delivered or made available to the Buyer's Accountant in writing connection with the transactions contemplated hereby, or (ii) reviewed by the Buyer's Accountant during the course of the Post-Closing Audit. The independent accounting firm shall make its determination of the Merger Adjustment CalculationAmount, in which case such calculation will if any, within thirty (30) days of its selection. The determination of the independent accounting firm shall be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute hereto, and upon such determination, the Adjustment Calculation by delivering Buyer shall be entitled to receive Escrow Shares with a value equal to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either Merger Adjustment Amount. The costs of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not shall be split equally between the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the PurchaserBuyer, on the one hand, and the SellerCompany Stockholders, on the other hand, will and each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm shall pay one-half of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that estimated cost of the independent accounting firm selected by in advance.
(d) The Buyer shall not be permitted to assert a claim for breach of the other party will be representation set forth in Section 2.8 for any amount for which the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether Base Merger Consideration has been adjusted pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”)Section 1.11.
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Merger Agreement (Udate Com Inc)
Post-Closing Adjustment. (ai) Within 45 ninety (90) days after the Closing Date, the Purchaser will Buyer, with reasonable input and review by Holdings, shall prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) Holdings an unaudited consolidated draft balance sheet of the Acquired Companies Company as at immediately prior to of the time of Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s and a calculation of the Closing Net Working Capital based on the Closing Balance Sheet Asset Value (the “Closing Actual Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash StatementAsset Value”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, Accounting Policies and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired Estimated Calculations as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail Schedule 3, including the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Noticeadjustments set forth thereon, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting FirmActual Net Asset Value Statement”).
(iii) The Independent Accounting Firm will post-closing adjustment shall be an amount equal to the Closing Net Asset Value minus the Estimated Net Asset Value, with a dollar for dollar adjustment (Awhether positive or negative) act as equal to the difference between the Closing Net Asset Value and the Estimated Net Asset Value (the “Post-Closing Adjustment”). If the Post-Closing Adjustment is a positive number, Buyer shall pay to Holdings an expert in accountingamount equal to the Post-Closing Adjustment, and not as an arbitratorplus the Closing Adjustment Holdback. If the Post-Closing Adjustment is a negative number, the Buyer shall retain the amount of the Post-Closing Adjustment from the Closing Adjustment Holdback, and, to resolve only those items specifically set forth on a timely delivered Dispute Notice the extent that remain in dispute as the Closing Adjustment Holdback is insufficient to cover the entire Post-Closing Adjustment, from the Holdback to the extent of such timeinsufficiency.
(iii) From the Closing Date through the date of the determination of the final Purchase Price Adjustment provided for in this Section 1.8, Buyer shall give Holdings and its advisors reasonable access during normal business hours to the books and records, the accounting and other appropriate personnel and the accountants for the Company and Buyer in order to review the Post-Closing Adjustment, Closing Balance Sheet and Closing Net Asset Value Statement; provided, that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to such access shall be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent that does not interfere with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess normal business operations of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser Buyer or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmCompany.
(iiiv) For purposes of complying with this Section 2.4subsection (b), the Purchaser Parties agree to allocate expenses for utilities, water, internet, phone and sewer charges incurred in the Seller will furnish operation of the business of the Company based on the number of days occurring period to the Independent Accounting Firm such work papers Closing Date and other documents beginning on and information relating to following the disputed items on a timely delivered Dispute Notice as Closing Date during the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculationbilling period.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Rollins Inc)
Post-Closing Adjustment. (a) Within 45 As promptly as practicable, but in any event, within 60 days after following the Closing DateClosing, the Purchaser will prepare Sellers shall, at their expense, prepare, or cause to be prepared, and deliver to the Seller Purchaser a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated combined balance sheet of the Acquired Grove Companies as at immediately prior to of the Closing Determination Date (the “"Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”"). The Closing Balance SheetSheet shall be audited by Ernst & Young LLP, the Sellers' independent accountants. The Closing Net Working Capital Statement and the Closing Net Cash Statement will Balance Sheet shall be prepared in accordance with GAAP applied the principles, methods and examples set forth in Section 1.1(a) of the Disclosure Schedule, and shall reflect the taking of a physical inventory, which shall occur with reasonable advance notice to Purchaser and its accountants, who shall have the opportunity to review and observe the taking of such inventory count. The physical inventory shall be taken in a manner consistent with the methods and practices used past practice of the Grove Operations; provided, however, that at Purchaser's election, more extensive inventory procedures not inconsistent with GAAS shall be employed.
(b) Within two Business Days following issuance of the Closing Balance Sheet, the following adjustment payment, if any, shall be made:
(i) If the amount of the Closing Net Worth as set forth on the Closing Balance Sheet is less than the Base Net Worth, the Sellers shall make an adjustment payment in an amount equal to prepare the Company Interim excess of (x) the Base Net Worth over (y) the Closing Net Worth as set forth on the Closing Balance Sheet.
(bii) During If the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as amount of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending Net Worth as of the close of business set forth on the Closing Date and (iii) reasonably cooperate with Balance Sheet is greater than the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s requestBase Net Worth, the Purchaser shall make an adjustment payment in an amount equal to the excess of (ix) the Closing Net Worth as set forth on the Closing Balance Sheet over (y) the Base Net Worth; provided, however, that the Purchaser's adjustment payment shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themno event exceed $17,000,000.
(c) Within 30 days after delivery During the 90-day period referred to in Section 2.8(d), Purchaser or its representatives may request from Sellers, and Sellers shall deliver promptly, any additional information reasonably required by Purchaser for its review of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item thereinClosing Balance Sheet.
(d) If Purchaser and Purchaser's accountants shall, within 90 days after the Seller fails to take either delivery by the Sellers of the foregoing actions within 30 days after delivery Closing Balance Sheet, complete their review of the Adjustment NoticeClosing Balance Sheet. In the event that Purchaser does not agree with Sellers' Closing Balance Sheet and the calculation of Closing Net Worth therein, then Purchaser shall inform Sellers in writing (the Seller will "Purchaser's Objection"), setting forth a specific description of the basis of Purchaser's Objection and the adjustments to such Closing Net Worth which Purchaser believes should be deemed to have irrevocably accepted made, on or before the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes last day of Section 2.4(g)such 90-day period.
(e) If Sellers shall have 30 days to review and respond to Purchaser's Objection. Any further adjustment resulting from the Seller timely delivers a Dispute Notice resolution of any aspects of Purchaser's Objection by the parties within such 30-day period shall be paid promptly by the party required to make such payment to the party entitled to receive it on or prior to the end of such 30-day period.
(f) If Sellers and Purchaser are unable to resolve any of their remaining disagreements with respect to Purchaser's Objection within 10 days following Sellers' response to Purchaser's Objection, then they shall refer their remaining disagreements to Deloitte & Touche LLP, or another internationally recognized firm of independent public accountants as to which the Sellers and Purchaser mutually agree (the "CPA Firm"), who shall determine on the basis of the standards set forth in Section 1.1(a) of the Disclosure Schedule, and only with respect to the remaining disagreements so submitted, whether and to what extent, if any, Closing Net Worth as derived from the Closing Balance Sheet, requires adjustment. Sellers and Purchaser shall direct the CPA Firm to use its best efforts to render its determination within 45 days. The CPA Firm's determination shall be conclusive and binding upon Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g)Sellers. Any resolution by the Purchaser The fees and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end disbursements of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the CPA Firm shall be shared equally by Purchaser, on the one hand, and the SellerSellers, on the other hand, will . Purchaser and the Sellers shall make readily available to the CPA Firm and to each select an independent accounting firm of recognized international standing other all relevant books and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm records and any work papers (including those of the Purchaser parties' respective accountants) relating to the Closing Balance Sheet and all other items reasonably requested by the CPA Firm or a party hereto.
(g) In the Acquired Companiesevent the CPA firm makes a determination in the favor of one party, the other party shall promptly make an adjustment payment to the party in whose favor the determination was made in accordance with such determination.
(h) All payments required to be made by this Section 2.8 shall include interest thereon from the Closing Date through the date of payment at the LIBOR rate; provided, however, that, with respect to any amount paid after the date of delivery of Purchaser's Objection (the "Objection Date"), the interest rate shall be increased to the LIBOR rate plus 2.75% from the Objection Date through the date of payment; and further provided that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of any payment under this Section 2.4 (2.8 is not made within 10 days of the date payable, the applicable rate of interest shall be increased by 2% per annum for the period from the day following such selected independent accounting firm, whether date through the date such payment is made. All adjustment payments payable pursuant to this sentence or Section 2.8 shall be paid in dollars by wire transfer of immediately available funds to an account designated by the preceding sentence, party entitled to receive the “Independent Accounting Firm”)adjustment payment.
(i) The Independent Accounting Firm will (A) act as an expert in accountingparties shall provide each other and their accountants and their representatives reasonable access during normal business hours to the books and records of the Grove Companies, other relevant information, including work papers of their accountants, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant any employees to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with extent necessary for the methods and practices used Sellers to prepare the Company Interim Closing Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice Sheet and (D) render its determination with respect for Purchaser to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firmrespond thereto.
(iij) For purposes of complying with Any adjustment payment made pursuant to this Section 2.4, 2.8 shall be allocated among the Purchaser Specified Grove Corporations and the Seller will furnish Specified Grove Assets (as an entirety) other than Grove France and Delta Manlift SAS in proportion to the Independent Accounting Firm such work papers amounts set forth in Section 2.2 of the Disclosure Schedule other than amounts allocated to Grove France and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment CalculationDelta Manlift SAS.
Appears in 1 contract
Sources: Stock and Asset Purchase Agreement (Grove Holdings Capital Inc)
Post-Closing Adjustment. (a) Within 45 days after As soon as practicable, the Company, in consultation with CPA Firm, shall deliver to Buyer and Sellers a calculation of the Closing Date, the Purchaser will prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing Adjusted Working Capital (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Adjusted Working Capital Statement”), (iii) the Purchaser’s calculation . The Closing Adjusted Working Capital Statement shall be set forth in sufficient detail to permit Buyer or Sellers’ Agent acting on behalf of Closing Net Cash based on Sellers to make any objections they may seek to have. The Company shall provide the Closing Balance Sheet Adjusted Working Capital Statement to Buyer and Sellers together with reasonable back-up documentation reasonably necessary to evaluate or understand the Closing Adjusted Working Capital Statement at the time of its delivery (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Adjusted Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance SheetDate”).
(b) During the preparation period of the Adjustment Noticeany review or dispute as provided in this Section 2.3, at the Purchaser’s request, the Seller willBuyer and Sellers shall, and will shall cause each of the Acquired Companies their Affiliates to, : (i) provide the Purchaser each other Party and the Purchaser’s Representatives its representatives with reasonable access to the its and its Affiliates’ relevant books, records, facilities records and Employees of the Acquired Companies employees (to the extent not otherwise already acquired as any of such books, records or employees relate to the Closing Adjusted Working Capital Statement) and relevant work papers of accountants or auditors and permit copies to be made of any of the Closing Date, foregoing documentation; and (ii) provide the Purchaser, within ten Business Days after the Closing Date, cooperate fully with normal month-end closing financial information for the period ending as of the close of business on the Closing Date each other Party and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representativesits authorized representatives, including by providing the provision on a timely basis of all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery relevant for purposes of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themClosing Adjusted Working Capital Statement.
(c) Within 30 days after delivery After receipt of the Adjustment NoticeClosing Adjusted Working Capital Statement, Buyer and Sellers shall have twenty (20) days to review such Closing Adjusted Working Capital Statement and resolve any differences, and any written resolution by Buyer and Sellers’ Agent acting on behalf of Sellers as to any disputed amounts shall be final, binding and conclusive. Unless Buyer or Sellers’ Agent acting on behalf of Sellers delivers written notice to CPA Firm on or prior to the twentieth (20th) day after the Closing Adjusted Working Capital Statement Date stating that Buyer or Sellers, as the case may be, have objections to any amounts in the Closing Adjusted Working Capital Statement (“Unresolved Items”), Buyer and Sellers shall be deemed to have accepted and agreed to the Closing Adjusted Working Capital Statement. If Buyer or Sellers’ Agent acting on behalf of Sellers, as the case may be, notifies CPA Firm in writing of Unresolved Items, the Seller will eitherCompany shall request that CPA Firm give such Unresolved Items due consideration and provide its determination of any Unresolved Items as soon as practicable. CPA Firm’s determination shall be set forth in a written statement delivered to Buyer and Sellers by CPA Firm and shall be final, binding and conclusive on Buyer and Sellers.
(d) All fees and expenses relating to the work, if any, to be performed by CPA Firm shall be borne by the Company. CPA Firm shall act as an arbitrator and not as an expert, to determine, based on the provisions of this Section 2.3, only the Unresolved Items; provided that CPA Firm shall have authority to determine, and the term “Unresolved Items” as used in this Section 2.3 shall mean, only the amount(s) of the Closing Adjusted Working Capital and no other matter whatsoever, absent an express written agreement to the contrary by Buyer and Sellers’ Agent acting on behalf of Sellers.
(e) Within five (5) Business Days following either an agreement or deemed agreement by Buyer and Sellers’ Agent acting on behalf of Sellers as to the Closing Adjusted Working Capital, or CPA Firm’s determination of all Unresolved Items relating to the Closing Adjusted Working Capital, Sellers and the Company shall undertake the following actions and make the following payments:
(i) agree if the Closing Adjusted Working Capital Differential is positive and if the Closing Adjusted Working Capital Differential is greater than the Closing Holdback Balance: (A) each Seller set forth in writing Annex 2.1(t) shall pay to the Company an amount equal to: (x) the amount by which the Closing Adjusted Working Capital Differential exceeds the greater of: (i) 0 and (ii) the Closing Holdback Balance times (y) such Seller’s Closing Holdback Percentage; (B) the Company shall cause SBA to release the Closing Holdback Balance (if positive) retained in accordance with Section 2.1 to the Adjustment CalculationCompany; and (C) the Closing Holdback Balance shall be reduced by the Closing Adjusted Working Capital Differential, in which case such calculation will be final and binding on then subsequently increased by any amounts actually received by the parties for purposes of Section 2.4(gCompany pursuant to clause (A); or
(ii) dispute if the Adjustment Calculation by delivering Closing Adjusted Working Capital Differential is positive and if the Closing Adjusted Working Capital Differential is less than the Closing Holdback Balance, the Company shall cause SBA to release to the Purchaser a written notice Company from the funds held by SBA in accordance with Section 2.1(t) an amount equal to the Closing Adjusted Working Capital Differential, and the Closing Holdback Balance shall be reduced by the Closing Adjusted Working Capital Differential.
(a “Dispute Notice”f) which Within five (5) Business Days following the later to occur of: (x) receipt by the Company or any of its Subsidiaries of all Designated Insurance Proceeds; and (y) either an agreement or deemed agreement by Buyer and Sellers’ Agent acting on behalf of Sellers as to the Closing Adjusted Working Capital, or CPA Firm’s determination of all Unresolved Items relating to the Closing Adjusted Working Capital, Sellers and the Company shall specify which items are being disputed undertake the following actions and make the following payments:
(i) if the Designated Insurance Proceeds Differential is positive and if the Designated Insurance Proceeds Differential is greater than the Closing Holdback Balance: (A) each Seller set forth in reasonable detail Annex 2.1(t) shall pay to the basis for each disputed item thereinCompany an amount equal to: (x) the amount by which the Designated Insurance Proceeds Differential exceeds the greater of: (i) 0 and (ii) the Closing Holdback Balance times (y) such Seller’s Closing Holdback Percentage; (B) the Company shall cause SBA to release the Closing Holdback Balance (if positive) retained in accordance with Section 2.1 to the Company; and (C) the Closing Holdback Balance shall be reduced by the Designated Insurance Proceeds Differential, and then subsequently increased by any amounts actually received by the Company pursuant to clause (A); or
(ii) if the Designated Insurance Proceeds Differential is positive and if the Designated Insurance Proceeds Differential is less than the Closing Holdback Balance, the Company shall cause SBA to release to the Company from the funds held by SBA in accordance with Section 2.1(t) an amount equal to the Designated Insurance Proceeds Differential, and the Closing Holdback Balance shall be reduced by the Designated Insurance Proceeds Differential.
(dg) If after final determination of Closing Adjusted Working Capital pursuant to this Section 2.3, the receipt of all Designated Insurance Proceeds, and the payment of all amounts due pursuant to Section 2.3(e) and Section 2.3(f), the Closing Holdback Balance is positive, the Company shall cause SBA promptly to release and pay to each Seller fails set forth in Annex 2.1(t) an amount equal to: (A) such Seller’s Closing Holdback Percentage times (B) the Closing Holdback Balance. Notwithstanding the foregoing, if, after final determination of Closing Adjusted Working Capital pursuant to take either this Section 2.3 and the payment of all amounts due pursuant to Section 2.3(e), (i) the foregoing actions within 30 days after delivery of Company and its Subsidiaries have not received all Designated Insurance Proceeds and (ii) the Adjustment NoticeClosing Holdback Balance exceeds $1,905,000, then the Company shall cause SBA promptly to release and pay to each Seller will set forth in Annex 2.1(t) an amount equal to: (A) such Seller’s Closing Holdback Percentage times (B) the difference between the Closing Holdback Balance and $1,905,000, and the Closing Holdback Balance shall be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g)reduced by such difference.
(eh) If the Seller timely delivers a Dispute Notice Any payments made pursuant to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”Section 2.3(e), Section 2.3(f) and Section 2.3(g) shall be made by wire transfer of immediately available United States Dollar funds to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution an account or accounts indicated by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as Party or Parties to any disputed items set forth in receive such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing funds and such selected accounting firms will select a third independent accounting firm payments shall be accompanied by interest at the Applicable Rate accrued from the Closing Date up to and including the date of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”)payment.
(i) The Independent Accounting Firm will (A) act Any releases of retained amounts made in respect of the Post-Closing Adjustment shall be treated, for all tax purposes, as an expert in accounting, and not as an arbitrator, adjustment to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess purchase price of the applicable amount in the Adjustment Notice shares of Common Stock acquired or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect subscribed to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it hereby by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmSellers.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 days Not later than the third Business Day after the Closing Datedate on which the Final Net Working Capital, the Purchaser will prepare Final Closing Cash Balance, the Final Company Debt and deliver the Final Selling Expenses are finally determined pursuant to Section 2.3(d), Seller Representative and Buyer shall jointly determine the Seller a written notice amount by which the Closing Date Consideration would have been adjusted (the “Adjustment NoticeAdjusted Closing Date Consideration”) containing (ipursuant to Section 2.3(d) an unaudited consolidated balance sheet of had the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Final Net Working Capital based on (and corresponding Final Working Capital Deficiency or Final Working Capital Overage), the Final Closing Balance Sheet (Cash Balance, the “Closing Final Company Debt and the Final Selling Expenses been substituted for the Estimated Net Working Capital Statement”(and corresponding Working Capital Overage or Working Capital Deficiency), (iii) the Purchaser’s calculation of Estimated Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance SheetBalance, the Closing Net Working Capital Statement Estimated Company Debt and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired Estimated Selling Expenses as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themClosing.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree If the Adjusted Closing Date Consideration is greater than the Closing Date Consideration (any such increase, the “Price Increase”), then, within two (2) Business Days from the date on which the adjustment to the Closing Date Consideration is determined in accordance with this Section 2.3(f), Buyer shall pay or cause to be paid to the Paying Agent for further distribution (or if directed by Seller Representative, to the Beneficial Owners in accordance with each such Beneficial Owner’s Pro Rata Share), by wire transfer of immediately available funds, an amount in cash equal to the Price Increase. Seller Representative and Buyer shall also deliver a joint written authorization to the Escrow Agent within two (2) Business Days from the date on which the adjustment to the Closing Date Consideration is determined in accordance with this Section 2.3(f), instructing the Escrow Agent to release the entire Working Capital Escrow Fund to the Paying Agent for further distribution (or if directed by Seller Representative, directly to the Beneficial Owners in accordance with each such Beneficial Owner’s Pro Rata Share), by wire transfer of immediately available funds, to the account(s) designated in writing with by Seller Representative to the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); orEscrow Agent.
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of Adjusted Closing Date Consideration is less than the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which caseClosing Date Consideration (such decrease, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution PeriodPrice Decrease”), then Seller Representative and Buyer shall deliver a joint written authorization to agree the Escrow Agent within two (2) Business Days from the date on which the Adjustment Calculation for purposes adjustment to the Closing Date Consideration is determined in accordance with this Section 2.3(f), instructing the Escrow Agent to release (A) an amount of Section 2.4(g). Any resolution cash equal to the Price Decrease from the Working Capital Escrow Fund to Buyer, by the Purchaser and the Seller memorialized wire transfer of immediately available funds, to an account designated in writing by Buyer to the Escrow Agent, and signed (B) the remaining amount of cash in the Working Capital Escrow Fund, if any, to the Paying Agent for further distribution (or if directed by both Seller Representative, directly to the Purchaser and Beneficial Owners in accordance with each such Beneficial Owner’s Pro Rata Share), by wire transfer of immediately available funds, to the account(s) designated in writing by Seller during Representative to the Resolution Period as to Escrow Agent. Notwithstanding any disputed items set forth in such Dispute Notice will other term of this Agreement, the Working Capital Escrow Fund shall be final and binding on Buyer’s sole source of recovery for any Price Decrease resulting from a Working Capital Deficiency, even if the parties for purposes of Section 2.4(g). If Price Decrease is greater than the Purchaser and the Seller do not resolve all disputed items by the end amount of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired CompaniesWorking Capital Escrow Fund; provided, however, that if either in the Purchaserevent that the Price Decrease is greater than the amount of the Working Capital Escrow Fund, on the one hand, then Seller (or the SellerBeneficial Owners in accordance with each such Beneficial Owner’s Pro Rata Share) shall pay to Buyer by wire transfer of immediately available funds, on to an account designated in writing by Buyer to Seller Representative, the other handportion of such excess Price Decrease that is attributable to changes in the amount of Closing Cash Balance, fails Company Debt and Selling Expenses.
(iii) If the Adjusted Closing Date Consideration is equal to select such independent accounting firm during this 10-day periodthe Closing Date Consideration, then no adjustment shall be made to the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether consideration payable hereunder pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”Section 2.3(f).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, Seller Representative and Buyer shall deliver a joint written authorization to resolve only those items specifically set forth the Escrow Agent within two (2) Business Days from the date on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant which the adjustment to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination Closing Date Consideration is determined in accordance with this Agreement and otherwise Section 2.3(f), instructing the Escrow Agent to release the entire Working Capital Escrow Fund to the Paying Agent for further distribution (or if directed by Seller Representative, directly to the Beneficial Owners in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheeteach such Beneficial Owner’s Pro Rata Share), (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess by wire transfer of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect immediately available funds, to the items account(s) designated in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect writing by Seller Representative to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmEscrow Agent.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Post-Closing Adjustment. (aA) Within 45 Buyer shall cause to be prepared and, as soon as practical, but in no event later than one-hundred twenty (120) days after the Closing Date, the Purchaser will prepare and deliver shall cause to be delivered to the Seller a written notice Company, Buyer’s calculation of the Closing Date Balance Sheet (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Buyer Closing (the “Closing Date Balance Sheet”), together with a calculation of the adjustment to the Closing Payment by, as applicable (ii1) increasing the Purchaseramount thereof by the excess, if any, of the Closing Working Capital shown on the Buyer Closing Date Balance Sheet over the Target Working Capital, or (2) decreasing the amount thereof by the excess, if any, of the Target Working Capital over the Closing Working Capital shown on the Buyer Closing Date Balance Sheet.
(B) If the Company disagrees in whole or in part with the Buyer Closing Date Balance Sheet, then within thirty (30) days after its receipt thereof, the Company shall notify Buyer of such disagreement in writing (the “Closing Notice of Disagreement”), setting forth in reasonable detail the particulars of any such disagreement. To be effective, any such Closing Notice of Disagreement shall include a copy of the Buyer Closing Date Balance Sheet marked to indicate the specific line items of the Buyer Closing Date Balance Sheet that are in dispute (the “Disputed Closing Date Balance Sheet Line Items”) and shall be accompanied by the Company’s calculation of each of the Disputed Closing Date Balance Sheet Line Items and the Company’s calculation of the Closing Net Working Capital based on Date Balance Sheet and its determination of the Closing Balance Sheet (the “Closing Net Working Capital Statement”)Payment, (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared as adjusted in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, preceding clause (i) provide the Purchaser ). All items that are not Disputed Closing Date Balance Sheet Line Items shall be final, binding and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees conclusive for purposes of the Acquired Companies to the extent not otherwise already acquired as of determining the Closing Date, (ii) provide Payment hereunder unless the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as resolution of the close of business on the a Disputed Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment CalculationBalance Sheet Line Item affects an undisputed item, in which case such calculation will undisputed item shall remain open and be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering considered a Disputed Closing Date Balance Sheet Line Item to the Purchaser extent of such corresponding effect. In the event that the Company does not provide a written notice Closing Notice of Disagreement within such thirty (a “Dispute Notice”) which 30)-day period, the Company shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted in full the Adjustment CalculationBuyer Closing Date Balance Sheet, in which caseand, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If determining the Seller timely delivers a Dispute Notice to the PurchaserClosing Payment, then the Purchaser such Buyer Closing Date Balance Sheet shall become final, binding and conclusive upon Buyer and the Seller will attempt in good faithCompany. In the event any Closing Notice of Disagreement is properly and timely provided, Buyer and the Company shall use their respective commercially reasonable efforts for a period of 30 fifteen (15) days following (or such longer period as they may mutually agree) to resolve any Disputed Closing Date Balance Sheet Line Items. During the Purchaser’s receipt of such Dispute Notice aforesaid thirty (30) day period and until the “Resolution Period”)Closing Date Balance Sheet shall be finally determined as provided herein, to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser Buyer and the Seller memorialized Company shall cooperate with each other and shall have reasonable access to the books and records, working papers, schedules and calculations of the other, in writing and signed by both order to prepare, or used in the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g)preparation of, their respective Closing Date Balance Sheet. If the Purchaser and the Seller do not resolve all disputed items by If, at the end of the Resolution Periodsuch period, then the Purchaser Buyer and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller Company are unable to jointly select resolve all Disputed Closing Date Balance Sheet Line Items, then any such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select remaining Disputed Closing Date Balance Sheet Line Items shall be referred to an independent accounting firm of recognized international standing jointly designated by Buyer and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of Company (the Purchaser or the Acquired Companies“Accounting Firm”); provided, however, that if either in the Purchaserevent Buyer and the Company cannot mutually agree as to the designation of the Accounting Firm, on the one hand, or the Seller, on the other hand, fails to select each such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party Party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent designate an accounting firm, whether pursuant and the two accounting firms will designate a third accounting firm to this sentence or act as the preceding sentence, the “Independent Accounting Firm”).
(iC) The Independent Buyer and the Company will enter into reasonable and customary arrangements for the services to be rendered by the Accounting Firm will (A) act under this Section 1.4(c), such services to be provided in the Accounting Firm’s capacity as an accounting expert in accounting, and not as an arbitrator, . The Accounting Firm shall be directed to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute determine as of such time, promptly as practicable (and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final Buyer and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each shall use their commercially reasonable efforts to cause such determination to occur within thirty (30) days) the Independent resolution of the Disputed Closing Date Balance Sheet Line Items. In making any determination of the Disputed Closing Date Balance Sheet Line Items, the Accounting Firm to render its determination within 30 days after referral of may not assign a value greater than the disputed items on a timely delivered Dispute Notice to greatest value for such firm item claimed by either Party or as soon thereafter as reasonably practicable. The decision of smaller than the Independent smallest value for such item claimed by either Party, and the Accounting Firm will be final, conclusive and binding on may only make a determination regarding the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated matters in dispute between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser Company. Buyer and the Seller will Company shall each furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice Disputed Closing Date Balance Sheet Line Items, and shall provide access to personnel and answer questions, as the Independent such Accounting Firm may reasonably request request. The determination of the Disputed Closing Date Balance Sheet Line Items by the Accounting Firm shall be set forth in writing and are available shall be final, conclusive and binding on Buyer and the Company for purposes of determining the Closing Date Balance Sheet, absent fraud or manifest error, and shall be based solely on the terms of this Agreement and the written submissions by Buyer and the Company and not by independent review or investigation. The Parties agree that judgment may be entered upon the award of the Accounting Firm in any court having jurisdiction pursuant to that party Section 8.15 hereof.
(or D) Subject to the next sentence, each Party shall be responsible for its Representativesown fees and expenses incurred in connection with this Section 1.4(c). A copy Buyer and the Company shall each pay one half of any such work papers the fees and other documents and information provided by a party expenses payable to the Independent Accounting Firm will in connection with resolving any dispute under this Section 1.4(c), except that in the event that one Party’s determination of the Disputed Closing Date Balance Sheet Line Items as a whole varies by 20% or more from the determination of the Disputed Closing Date Balance Sheet Line Items as a whole by the Accounting Firm hereunder, then such Party shall be provided concurrently solely responsible for the fees and expenses of the Accounting Firm.
(E) Promptly following (x) the Disputed Closing Date Balance Sheet Line Items have been finally determined or (y) the Closing Date Balance Sheet has been finally determined pursuant to Section 1.4(c)(ii)(B), Buyer shall prepare, and deliver to the other party free Company, the Closing Date Balance Sheet and the calculation of charge. Each party will the Closing Payment, as adjusted by, as applicable (1) increasing the amount thereof by the excess, if any, of the Closing Working Capital shown on the Closing Date Balance Sheet over the Target Working Capital, or (2) decreasing the amount thereof by the excess, if any, of the Target Working Capital over the Closing Working Capital shown on the Closing Date Balance Sheet (the Closing Payment, as so adjusted, being hereinafter referred to as the “Final Closing Payment”), whereupon the following payment shall be afforded made as hereinafter provided:
(1) if the opportunity to present Final Closing Payment exceeds the Closing Payment by $50,000 or more, then Buyer shall pay to the Independent Accounting Firm any material related Company an amount in cash equal to such excess, in accordance with such payment instructions as the Company shall designate; or
(2) if the Closing Payment exceeds the Final Closing Payment by $50,000 or more, then the Company shall pay to Buyer an amount in cash equal to such excess, in accordance with such payment instructions as Buyer shall designate; provided that,
(3) for the avoidance of doubt, no payment shall be required under this Section 1.4(c) if the difference between the Target Working Capital and the Closing Working Capital shown on the Closing Date Balance Sheet, as finally determined, is less than $50,000.00.
(F) Any amount payable pursuant to Section 1.4(c) shall be paid within five (5) Business Days after the delivery of the Closing Date Balance Sheet via wire transfer of immediately available funds to the disputed items on a timely delivered Dispute Notice and account designated by the recipient thereof.
(G) Payments pursuant to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to Section 1.4(c) shall be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein treated for all purposes as adjustments to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment CalculationPurchase Price.
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Post-Closing Adjustment. (ai) Within 45 thirty days after the Closing Date, the Purchaser will Seller shall prepare and deliver to the Seller Buyer a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated statement setting forth its calculation of Closing Working Capital, which statement shall contain a balance sheet of the Acquired Companies Business as at immediately prior to of the Closing Date (excluding all inventory of the Business described in Section 2(g) below) (the “Closing Balance Sheet”), (ii) the Purchaser’s a calculation of the Closing Net Working Capital based on (the “Closing Working Capital Statement”) and a certificate of the Seller that the Closing Balance Sheet (the “and Closing Net Working Capital Statement”)Statement were prepared in accordance with the same accounting methods, (iii) practices, principles, policies and procedures used by the Purchaser’s calculation Seller, including consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Most Recent Financial Statements for the most recent fiscal year end as if such Closing Net Cash based on Balance Sheet and Closing Working Capital Statement were being prepared as of a fiscal year end. Upon receipt, the Buyer shall have seven days to review the Closing Balance Sheet (the “and Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary either approve or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at dispute the Seller’s requestcalculations. In the event the Buyer approves the calculations, the Purchaser (i) Buyer shall reasonably cooperate determine the Post-Closing Adjustment and assist, and shall cause its Representatives deliver to assistthe Seller. In the event the Buyer disputes the calculations, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser Buyer and the Seller will attempt in good faith, for a period of 30 days following shall have up to seven (7) Business Days from the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the date Buyer notifies Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable cooperate to servemutually determine an acceptable Closing Balance Sheet and Closing Working Capital Statement calculation. Upon such determination, the Purchaser Buyer shall determine the Post-Closing Adjustment and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable deliver to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4If the Post-Closing Adjustment is a positive number, the Purchaser Buyer shall pay to the Seller an amount equal to the Post-Closing Adjustment. If the Post-Closing Adjustment is a negative number, the Seller shall pay to Buyer an amount equal to the Post-Closing Adjustment.
(iii) Any payment of the Post-Closing Adjustment, together with interest calculated as set forth below, shall be due within ten (10) Business Days of the delivery of the Post-Closing Adjustment and shall be paid by wire transfer of immediately available funds to such account as is directed by B▇▇▇▇. The amount of any Post-Closing Adjustment shall bear interest from and including the Closing Date to but excluding the date of payment at a rate per annum equal to 8%. Such interest shall be calculated daily on the basis of a 365-day year and the Seller will furnish to actual number of days elapsed. In the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and event the Seller and/or their respective Representatives. Notwithstanding anything herein to does not make a required Post-Closing Adjustment payment, such amount (including any accrued but unpaid interest) shall be reduced from the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.Earn-Out Payments
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Post-Closing Adjustment. (a) Within 45 ninety (90) days after the Closing Date, the Purchaser will prepare Sellers shall prepare, or cause to be prepared, and deliver to the Seller Buyer a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide which statement shall be prepared in accordance with GAAP, consistently applied by Sellers, except as otherwise required by this Agreement, and shall set forth the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending Current Assets and Current Liabilities of Sellers as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery Average Eight Month EBUs as of the Closing Date (the "Preliminary Closing Adjustment NoticeStatement"), at together with a copy of any working papers relating to such Preliminary Closing Adjustment Statement and such other supporting evidence as Buyer may reasonably request either prior to or after the Seller’s requestdelivery thereof. Buyer shall cooperate in providing to Sellers all relevant books, records and personnel of the Purchaser (i) shall reasonably cooperate and assist, CATV Business in order to facilitate the preparation of the Preliminary Closing Adjustment Statement and shall cause its Representatives have the right to assistexamine all records used to prepare the Preliminary Closing Adjustment Statement.
(b) In the event that Sellers fail to deliver to Buyer the Preliminary Closing Adjustment Statement within such 90-day period, then Buyer shall be entitled to deliver to Sellers the Seller and its Representatives Preliminary Closing Adjustment Statement, in which case the provisions of this Section 2.05 relating to the parties' roles in the preparation and review of the Adjustment Notice and (ii) process shall provide the Seller and its Representatives with any information reasonably requested by thembe deemed reversed.
(c) Within 30 days after delivery In the event Buyer determines that the Preliminary Closing Adjustment Statement does not accurately reflect the final calculation of the Adjustment Notice, Purchase Price or the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will adjustments and prorations to be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering made to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination Base Price in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance SheetAgreement, Buyer shall, within forty-five (C45) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess days after receipt of the applicable amount Preliminary Closing Adjustment Statement, so inform Sellers in writing (the Adjustment Notice "Buyer's Objection"), setting forth the basis of the Buyer's Objection. In the event of the Buyer's Objection, Buyer and Sellers shall attempt to resolve the differences underlying the Buyer's Objection within thirty (30) days of Sellers' receipt thereof. If Sellers and Buyer are unable to resolve all their differences within such thirty (30) day period, they shall refer their remaining differences to Ernst & Young, certified public accountants, or such other nationally recognized firm of independent public accountants as to which Buyer and Sellers may mutually agree (2the "CPA Firm"), who shall, acting as experts and not as arbitrators, determine on the basis of the standard set forth in Section 2.04(a) that is less than the applicable amount in the Dispute Notice hereof and (D) render its determination only with respect to the items in dispute in a written report that specifies remaining differences so submitted, whether and to what extent, if any, the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Preliminary Closing Adjustment CalculationStatement requires adjustment. The Independent Accounting CPA Firm will only render base its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted on evidence brought to it by or the parties and shall not conduct an audit, but may conduct such testing procedures as it determines are appropriate to make such determination on behalf of the Purchaser or the Sellerevidence brought to it. The Purchaser CPA Firm shall deliver its written determination to Buyer and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 Sellers no later than 60 days after referral of the disputed items on a timely delivered Dispute Notice remaining differences underlying the Buyer's Objection are referred to such firm or as soon thereafter as reasonably practicablethe CPA Firm. The decision of the Independent Accounting Firm will CPA Firm's determination shall be final, conclusive and binding on upon the Parties and will not be subject to appeal or further reviewparties. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.fees
Appears in 1 contract
Sources: Asset Purchase Agreement (Frontiervision Capital Corp)
Post-Closing Adjustment. (a) Delivery of Closing Date Schedule. Within 45 ninety (90) days after following the Closing Date, the Purchaser will Purchaser, at its expense, shall prepare and deliver to the Seller Sellers’ Representative a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing schedule (the “Closing Balance SheetDate Schedule”)) setting forth a statement of (i) the Closing Date Net Working Capital and reflecting all components (and the amounts thereof) necessary to compute the Closing Date Net Working Capital, (ii) the Purchaser’s calculation Cash as of the Closing Net Working Capital based on the Closing Balance Sheet Effective Time (the “Closing Net Working Capital StatementDate Cash Amount”), (iii) the Purchaser’s calculation amount of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and Company Transaction Expenses, (iv) the Purchaser’s calculation amount of the amount Closing Date Debt, and (v) the computation of any payments required pursuant the Final Base Purchase Price based on the foregoing. The Closing Date Net Working Capital reflected on the Closing Date Schedule will be determined in good faith on the same basis as used in the preparation of the Sample Working Capital. The Closing Date Cash Amount reflected on the Closing Date Schedule will be determined in good faith and in accordance with this Agreement. The Sellers’ Representative shall have the right to Section 2.4(greview the Closing Date Schedule for a period of forty-five (45) days following the delivery of the Closing Date Schedule by Purchaser to the Sellers’ Representative (the “Adjustment CalculationReview Period”). The Closing Balance SheetPurchaser shall make the work papers, back-up materials and books and records used in preparing the Closing Date Schedule available to the Sellers’ Representative and its accountants at reasonable times and upon reasonable notice following the delivery of the Closing Date Schedule by Purchaser to the Sellers’ Representative hereunder. The Purchaser Parties and Sellers agree that the purpose of preparing the Closing Date Schedule and determining the Closing Date Net Working Capital Statement and the related purchase price adjustment contemplated by this Section 2.4 is to measure changes in the Closing Date Net Cash Statement will be prepared Working Capital against the Target Net Working Capital in accordance with GAAP applied in a manner consistent with on the methods and practices same basis as that used to prepare by the Company Interim Balance Sheet.
(b) During in the preparation of the Adjustment Notice, at Sample Working Capital and the Purchaser’s request, the Seller willprinciples set forth on Exhibit B, and will cause each of the Acquired Companies tonot to introduce any inconsistent accounting methods, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the bookspolicies, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary principles or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm practices of the Purchaser Parties (or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”otherwise).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Post-Closing Adjustment. The Closing Date Payment shall be adjusted in accordance with the following procedure:
(aA) Within 45 Not later than 20 days after the Closing Date, the Purchaser Buyer will prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies updated schedules as at immediately prior to the Closing (the “Closing Balance Sheet”)follows, (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending case as of the close of business on the Closing Date (collectively, the “Updated Schedules”): Schedule 1.1 Contract Trial Balance Schedule 1.2 FF&E Schedule 1.3 Other Receivables Schedule 1.4 Past Due Leases Schedule 1.5 Pending Leases Schedule 1.7 Pre-Funded Leases Schedule 1.8 Prepaid Expenses Schedule 1.9 Reserve Listing Schedule 1.12 UNL Leases Schedule 1.13 Vehicle Leases Schedule 1.14 VenCore Receivables Schedule 5 Recourse Pool The Updated Schedules will be accompanied by a revised Settlement Statement, computing the Purchase Price as of close of business on the Closing Date (the “Revised Settlement Statement”).
(B) After receipt of the Updated Schedules and (iii) reasonably cooperate with Revised Settlement Statement, the Purchaser Seller will have 15 days to review the Updated Schedules and the Purchaser’s RepresentativesRevised Settlement Statement. During such 15 day period, including by providing Buyer will, and will cause its representatives to, make available to Seller and its representatives on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice books, records and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives appropriate personnel to assist, the provide Seller and its Representatives in representatives with such information regarding the review of the Adjustment Notice Updated Schedules and (ii) shall provide the Revised Settlement Statement as Seller and its Representatives with any information representatives may reasonably requested request. Unless Seller delivers written notice to Buyer setting forth the specific items disputed by them.
(c) Within 30 days Seller on or prior to the 15th day after delivery its receipt of the Adjustment NoticeUpdated Schedules and Revised Settlement Statement, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted and agreed to the Adjustment Calculation, in which case, the Adjustment Calculation Updated Schedules and Revised Settlement Statement and such agreement will be final and binding on the parties for purposes binding. If Seller so notifies Buyer of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice its objections to the PurchaserUpdated Schedules and Revised Settlement Statement, then the Purchaser Buyer and the Seller will attempt in good faithwill, for a period of within 30 days following the Purchaser’s receipt of such Dispute Notice notice (the “Resolution Period”), attempt to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser resolve their differences.
(C) If Buyer and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items set forth in the Updated Schedules and Revised Settlement Statement by the end of the Resolution Period, then Buyer and Seller shall mutually select a public accounting firm that is independent of each of Seller and Buyer (the Purchaser “Accounting Arbitrator”) as expeditiously as practicable, and the Seller will submit the all items remaining items in dispute will be submitted to PricewaterhouseCoopers LLP for resolutionthe Accounting Arbitrator by the parties, or if that firm is unwilling or unable to servein writing, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 30 days after the Resolution Periodselection of the Accounting Arbitrator. The failure by either Seller or Buyer to submit a statement regarding any items remaining in dispute within such 30 day period shall be deemed a waiver by such party of its right to do so. The Accounting Arbitrator shall act as an arbitrator to determine only those items in dispute. All fees and expenses relating to the work, if any, to be performed by the Purchaser, on Accounting Arbitrator will be allocated between Buyer and Seller in the one hand, same proportion that the aggregate amount of the disputed items so submitted to the Accounting Arbitrator that is unsuccessfully disputed by each such party (as finally determined by the Accounting Arbitrator) bears to the total amount of such disputed items so submitted. The Accounting Arbitrator will deliver to Buyer and Seller a written determination (such determination to include a work sheet setting forth all material calculations used in arriving at such determination) of the Seller, on disputed items within 30 days of receipt of the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standingdisputed items, which firm is not the regular auditing firm of the Purchaser determination will be final, binding and conclusive. The final, binding and conclusive Updated Schedules and Revised Settlement Statement, which either are agreed upon by Seller and Buyer or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected are delivered by the other party Accounting Arbitrator in accordance with this Section 2(c)(3), will be the independent accounting firm selected by “Conclusive Statement.”
(D) If the Purchase Price as of close of business on the Closing Date as indicated on the Conclusive Statement exceeds the Closing Date Payment, then within three Business Days after the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or obtain the preceding sentenceConclusive Statement, the “Independent Accounting Firm”Buyer shall pay such excess to the Seller by (i) executing and delivering to the Seller an additional Term Note with a principal amount equal to ninety-five percent (95%) of the amount by which the Net Book Value of the Acquired Receivables on the Conclusive Statement exceeds such Net Book Value on the Settlement Statement, and (ii) paying the remainder of such excess to the Seller in cash. At the same time, the Buyer shall also pay to the Seller the interest required by Section 2(e).
(E) If the Closing Date Payment exceeds the Purchase Price as of close of business on the Closing Date as indicated on the Conclusive Statement, then within three Business Days after the parties obtain the Conclusive Statement, the Seller shall pay such excess to the Buyer by (i) The Independent Accounting Firm will accepting from the Buyer an additional Term Note with a principal amount equal to ninety-five percent (A95%) act as an expert in accountingof the amount by which the Net Book Value of the Acquired Receivables on the Settlement Statement exceeds such Net Book Value on the Conclusive Statement, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as (ii) paying the remainder of such excess to the Buyer in cash. At the same time, and that have not been deemed pursuant the Seller shall also pay to the Buyer the interest required by Section 2.4(c2(e), Section 2.4(d.
(F) Any excess amount paid by the Buyer or Section 2.4(e) to be final and binding on the Parties, (B) render its determination Seller in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with Section 2(c)(3)(D) or 2(C)(3)(E) shall be treated as an adjustment to the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of for all Tax purposes by the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute Seller and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmBuyer.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Asset Purchase Agreement (Alfa Corp)
Post-Closing Adjustment. (a) Within 45 60 days after following the Closing DateClosing, the Purchaser will TPI shall, at its expense and with cooperation from Newco's employees and access to Newco's books and records, prepare or cause to be prepared, and deliver to the Seller PCA and Newco a written notice statement (the “Adjustment Notice”"Closing Working Capital Statement") containing (i) an unaudited consolidated balance sheet of which shall set forth the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on of the Closing Balance Sheet Containerboard Business as of the Determination Date (the “"Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”Capital") and (iv) as of the Purchaser’s calculation date of the Most Recent Statement of Assets and Liabilities. The amounts so computed shall be used to determine the amount of any payments required pursuant to the payment between TPI and Newco in accordance with this Section 2.4(g) 2.5 (the “Adjustment Calculation”"Post Closing Adjustment"). The Closing Balance Sheet, the Closing Net Working Capital Statement shall be prepared using the same principles, practices and procedures that were used in preparing the Most Recent Statement of Assets and Liabilities. Notwithstanding the foregoing, the following paragraphs (i) through (viii) shall take precedence over such principles, practices and procedures in the preparation of the Closing Working Capital Statement:
(i) The Current Assets included in the Closing Working Capital Statement will be adjusted to exclude the Retained Assets, the LIFO reserve and any current assets related to Tenneco defined benefit pension plans and shall not be taken into account in computing the Post Closing Adjustment.
(ii) The Current Liabilities included in the Closing Working Capital Statement will be adjusted to exclude the Retained Liabilities. Any current liabilities related to Tenneco's defined benefit pension plans shall not be taken into account in computing the Post Closing Adjustment.
(iii) The Most Recent Statement of Assets and Liabilities does not, and the Closing Net Cash Working Capital Statement will be prepared not, include any accrual or deferral related to federal, state, local or foreign income Taxes.
(iv) The Closing Working Capital Statement shall not include any dollar amounts related to the Existing Financing Arrangements.
(v) The Closing Working Capital Statement shall not include any dollar amounts related to the New Financing Arrangements. No Post Closing Adjustment shall result from the purchase during the period from the date of the Most Recent Statement of Assets and Liabilities to the Determination Date of any assets which were leased at the date of the Most Recent Statement of Assets and Liabilities.
(vi) The Closing Working Capital Statement shall not include any liabilities related to bonuses or incentive compensation earned in accordance with GAAP applied 1998.
(vii) Any change in a manner consistent with accounting principles after the methods date of the Most Recent Statement of Assets and practices used to prepare Liabilities (including any changes required by GAAP) will not apply in determining the Company Interim Balance SheetClosing Working Capital Statement.
(viii) The Closing Working Capital Statement shall exclude any increase or decrease in Current Assets or Current Liabilities resulting directly from accounting for the Transaction.
(b) During PCA and PCA's accountants and Newco and Newco's accountants shall have 30 days after the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as delivery by TPI of the Closing Date, (ii) provide the Purchaser, within ten Business Days after Working Capital Statement to review the Closing DateWorking Capital Statement. In the event that PCA or Newco determines that the Closing Working Capital as derived from the Closing Working Capital Statement has not been determined on the basis set forth herein, with normal month-end closing financial information for PCA or Newco shall inform TPI in writing (the period ending as "Objection"), setting forth a specific description of the close basis of business on the Objection and the adjustments to the Closing Date and (iii) reasonably cooperate with Working Capital which PCA or Newco believes should be made, which Objection must be delivered to TPI on or before the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt last day of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 1030-day period, . TPI shall then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant have 30 days to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, review and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect respond to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute Objection. TPI and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it PCA and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.Newco shall
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 forty-five (45) days after following the Closing DateClosing, the Purchaser will Parent shall prepare and deliver to the Seller Escrow Representative (i) a written notice statement (the “Adjustment NoticeClosing Net Debt Statement”) containing (i) an unaudited consolidated balance sheet ), setting forth a calculation of the Acquired Companies Net Debt as at immediately prior to of the Closing (the “Closing Balance SheetNet Debt”), ) and (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet a schedule (the “Closing Net Working Capital StatementSchedule”), (iii) the Purchaser’s setting forth a calculation of Closing the Net Cash based on Working Capital as of the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment CalculationWorking Capital”). The Closing Balance Sheet, Net Debt Statement and the Closing Net Working Capital Statement and the Closing Net Cash Statement will Schedule shall be prepared in accordance with GAAP applied in a manner on the same form and basis using accounting principles, practices and methods consistent with the methods those used in preparing Schedules 2.8(d)(i) and practices used to prepare the Company Interim Balance Sheet(ii).
(b) During The Escrow Representative shall have thirty (30) days after the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access delivery by Parent to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of review the Closing DateNet Debt Statement and Closing Net Working Capital Schedule. Parent shall, (ii) provide the Purchaser, within ten Business Days from and after the Closing Date, provide the Escrow Representative and its accountants with normal month-end closing all data and financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information statements reasonably requested by the PurchaserEscrow Representative, and full access to the books and records, any other information, including work of its accountants, and to any employees to the extent necessary for the Escrow Representative to review the Closing Net Debt Statement and Closing Net Working Capital Schedule. Following delivery In the event that the Escrow Representative believes in good faith that the Closing Net Debt Statement or Closing Net Working Capital Schedule is not accurate or has not been determined on the basis set forth in Section 2.8(a), the Escrow Representative shall inform Parent in writing (the “Escrow Representative’s Objection”), setting forth a specific description of the Adjustment Noticebasis of the Escrow Representative’s Objection and the adjustments to the Closing Net Debt or Closing Net Working Capital which the Escrow Representative believes should be made, at on or before the Sellerlast day of such thirty (30) day period. Failure to notify Parent within such thirty (30) day period shall constitute acceptance and approval by the Escrow Representative of Parent’s requestClosing Net Debt Statement and Closing Net Working Capital Schedule. If the Escrow Representative objects to the Closing Net Debt Statement or Closing Net Working Capital Schedule, Parent shall then have fifteen (15) days to review and respond to the Escrow Representative’s Objection. If any proposed change set forth in the Escrow Representative’s Objection is not accepted by Parent, then Parent shall within fifteen (15) days after receipt of the Escrow Representative’s Objection give written notice to the Escrow Representative of Parent’s objection to such change (the “Parent’s Objection”). Failure to so notify the Escrow Representative within such fifteen (15) day period shall constitute acceptance and approval by Parent of the Escrow Representative’s Objection. Parent’s Closing Net Debt Statement and Closing Net Working Capital Schedule, as adjusted for any matter included in the Escrow Representative’s Objection that is not disputed in Parent’s Objection, shall be deemed conclusively accepted by the Escrow Representative and Parent, except in respect of those matters still in dispute in accordance herewith. For a period of fifteen (15) days after Parent’s Objection (the “Negotiation Period”), the Purchaser (i) Escrow Representative and Parent shall reasonably cooperate and assist, and shall cause its Representatives negotiate in good faith to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with resolve any information reasonably requested by themremaining disputes as expeditiously as possible.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser Parent and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller Escrow Representative are unable to jointly select such independent accounting firm within 10 days resolve all of their disagreements with respect to the determination of Closing Net Debt or Closing Net Working Capital after the Resolution expiration of the Negotiation Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting they shall refer their remaining differences to a mutually agreeable nationally recognized firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 public accountants (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i, which shall determine solely on the basis of the standard set forth in Section 2.8(a) The Independent Accounting Firm will (A) act as an expert in accountinghereof, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies remaining differences and objections so submitted, whether and to what extent, if any, the conclusions Closing Net Debt or Closing Net Working Capital requires adjustment. Each of Parent and the Escrow Representative shall make complete submissions to the Independent Accounting Firm within ten (10) days following the engagement of the Independent Accounting Firm as Firm. Failure by either party to each item in dispute and make a complete submission prior to the resulting Adjustment Calculationten (10) day period will be deemed to be a waiver of such party’s right to make a submission. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause parties shall instruct the Independent Accounting Firm to render deliver its written determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by Escrow Representative and Parent no later than the twentieth (20th) day after the remaining differences underlying the Escrow Representative’s Objection and Parent’s Objection are referred to the Independent Accounting Firm. The Buyer Independent Accounting Firm shall resolve the dispute and determine the Closing Net Debt and Closing Net Working Capital, not on the basis of an independent review, but only within the disputed range and based on the standard set forth in this Agreement. Such resolution shall be set forth in a written statement delivered to Parent and the Representative agree to execute, if requested by the Escrow Representative. The Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor ’s determination shall be conclusive and binding upon the Escrow Representative and Parent. The fees and disbursements of the Independent Accounting FirmFirm shall be shared equally by Parent and the Escrow Representative.
(d) Within ten (10) Business Days following determination of the Closing Net Debt and the Closing Net Working Capital (as finally determined pursuant to this Section 2.8) Parent shall make an adjustment to, and publicly disclose in a Form 8-K filed with the SEC its determination of, the maximum number of Earnout Shares issuable pursuant to Section 2.9(b), (c), (d) or (e), as follows: (i) for every dollar by which (a) the net debt included in Schedule 2.8(d)(i) exceeds the Closing Net Debt and/or (b) the Closing Net Working Capital exceeds the net working capital included in Schedule 2.8(d)(ii), the Earnout Shares issuable upon the achievement of the First Target, or, if the First Target is not achieved, the Second Target, under Section 2.9(b), (c), (d) or (e), as the case may be, shall be increased (without duplication) by an amount equal to (x) $1 divided by (y) the Trust Value Per Share, and (ii) For purposes for every dollar by which (a) the Closing Net Debt exceeds the net debt included in Schedule 2.8(d)(i) and/or (b) the net working capital included in Schedule 2.8(d)(ii) exceeds the Closing Net Working Capital, the Earnout Shares issuable upon the achievement of complying with the First Target, or, if the First Target is not achieved, the Second Target, under Section 2.9(b), (c), (d) or (e), as the case may be, shall be decreased (without duplication) by an amount equal to (x) $1 divided by (y) the Trust Value Per Share (the amount of the increase or decrease pursuant to clause (i) or clause (ii) of this Section 2.42.8 being referred to as the “Earnout Adjustment”), in either case, together with interest on the Earnout Adjustment at the rate designated by JPMorgan Chase Bank, N.A. as its prime rate in effect on the Closing Date for the period from and including the Closing Date to, but excluding, the Purchaser and the Seller will furnish date of such issuance of such Earnout Shares. The adjustment to the Independent Accounting Firm such work papers and other documents and information relating maximum number of Earnout Shares issuable shall be treated for all Tax purposes as an adjustment to the disputed items on Merger Consideration. No fraction of a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request share of Parent Common Stock will be issued by virtue of Section 2.8(d), and are available each holder of shares of Company Common Stock and Company Preferred Stock who would otherwise be entitled to a fraction of a share of Parent Common Stock (after aggregating all fractional shares of Parent Common Stock which such holder would otherwise receive) shall, subject to compliance with Section 2.10 hereof, receive from Parent, in lieu of such fractional share, a number of shares that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party is rounded up to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculationnext whole number.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 As soon as practicable, but no later than ninety (90) days after following the Closing Date, the Purchaser will shall prepare and deliver to the Seller Company, a written notice statement (the “Adjustment NoticePreliminary Closing Statement”) containing setting forth a balance sheet of Company as of the Closing Date and including its good faith calculation of the (i) an unaudited consolidated balance sheet of the Acquired Companies as Closing Indebtedness, (ii) Working Capital at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital StatementCapital”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet Final Working Capital Adjustment (the “Closing Net Cash Statement”) as determined in accordance with Section 2.9(f)), and (iv) the Final Closing Consideration (defined in Section 2.9(e)), which statement will include reasonable supporting documentation of Purchaser’s calculation of each of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”)foregoing amounts. The worksheets and data used by Purchaser to prepare the Preliminary Closing Balance Sheet, Statement shall be made available to Company concurrent with the delivery of the Preliminary Closing Net Working Capital Statement and the Statement. The Preliminary Closing Net Cash Statement will be prepared in accordance with GAAP applied the Working Capital Principles and in a manner consistent with the methods and practices used to prepare the Company Interim Balance SheetEstimated Closing Statement.
(b) Company shall have sixty (60) days to review the Preliminary Closing Statement from the date of delivery thereof by Purchaser to Company (the “Review Period”). During the preparation of the Adjustment NoticeReview Period, at the Purchaser’s request, the Seller will, Purchaser shall provide Company and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s its Representatives with reasonable access during normal business hours and after reasonable advance notice to the books, recordsrecords and other documents (including work papers, facilities schedules, financial statements and Employees memoranda) of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery Company for purposes of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the their review of the Adjustment Preliminary Closing Statement. If Company objects to any aspect of the Preliminary Closing Statement, Company must deliver a written notice of objection (the “Objection Notice”) to Purchaser on or prior to the expiration of the Review Period. The Objection Notice shall specify any adjustment to the Preliminary Closing Statement that is objected to in reasonable detail the nature and (ii) shall provide amount of any disagreement so asserted and attach documentation supporting the Seller and its Representatives with any information reasonably requested by themcalculations.
(c) Within 30 days after delivery If Company delivers an Objection Notice to Purchaser prior to the expiration of the Adjustment NoticeReview Period, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faithCompany shall, for a period of 30 thirty (30) days following the Purchaser’s receipt of such Dispute Notice thereafter (the “Resolution Period”), attempt to agree on resolve the Adjustment Calculation for purposes of Section 2.4(g). Any resolution matters contained in such Objection Notice, all such discussions and communications related thereto shall (unless otherwise agreed to in writing by the Purchaser and Company) be governed by Rule 408 of the Seller memorialized in writing Federal Rules of Evidence and any applicable similar state rule, and any written resolution, signed by both the Purchaser ▇▇▇▇▇▇▇▇▇ and the Seller during the Resolution Period Company, as to any disputed items set forth such matter shall be final, binding, conclusive and non-appealable for all purposes hereunder. Except to the extent properly challenged in such Dispute an Objection Notice, or in the event Company does not, prior to the expiration of the Review Period, deliver an Objection Notice will to Purchaser, Company shall be final deemed to have agreed to the Preliminary Closing Statement in its entirety, which Preliminary Closing Statement or undisputed portions thereof (as the case may be) shall be final, binding, conclusive and binding on non-appealable for all purposes hereunder.
(d) If, at the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end conclusion of the Resolution Period, then the Purchaser and Company have not reached an agreement with respect to all disputed matters contained in the Seller will Objection Notice, then as soon as practical but within ten (10) Business Days thereafter, Purchaser and Company shall submit the for resolution those matters remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentencematters, the “Independent Accounting FirmDisputed Matters”).
(i) to the Neutral Accountant. The Independent Accounting Firm will (A) Neutral Accountant shall act as an expert in accounting, and not as an arbitrator, arbiter to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding (based solely on the Partieswritten presentations of Purchaser and Company and not by independent review) only the Disputed Matters. Purchaser and Company shall request the Neutral Accountant to render a resolution of all such Disputed Matters within thirty (30) days after its engagement or such other period agreed upon in writing by Purchaser and Company. In deciding any matter, (Bthe Neutral Accountant shall be bound by the provisions of this Section 2.9(d) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in may not assign a manner consistent with value to any item greater than the methods and practices used to prepare the greatest value for such item claimed by Purchaser or Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect smallest value for such item claimed by Purchaser or Company. If issues are submitted to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as Neutral Accountant for resolution: (i) Company and Purchaser shall furnish or cause to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect be furnished to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm Neutral Accountant such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice Disputed Matters as the Independent Accounting Firm Neutral Accountant may reasonably request and are available to that party (or its Representatives). A copy of any such work papers agents and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will shall be afforded the opportunity to present to the Independent Accounting Firm any material related Neutral Accountant relating to the disputed items on a timely delivered Dispute Notice Disputed Matters and to discuss such items the issues with the Independent Accounting FirmNeutral Accountant (including explicitly providing such party’s calculations of the Disputed Matters); and (ii) the determination by the Neutral Accountant shall be final, with any such presentation or discussion to binding and conclusive on the parties and shall be held used in the presence calculations of both the Disputed Matters. Purchaser shall pay a portion of the fees and expenses of the Neutral Accountant equal to one hundred percent (100%) multiplied by a fraction, (i) the numerator of which is the dollar amount of the Disputed Matters that are resolved in favor of Company, and (ii) the denominator of which is the total dollar amount of the Disputed Matters. Company shall pay that portion of the fees and expenses of the Neutral Accountant that Purchaser is not required to pay hereunder. For example, should the items in dispute total in amount to $1,000 and the Neutral Accountant awards $600 in favor of Company’s position, sixty percent (60%) of the costs of its review would be borne by Purchaser and forty percent (40%) of the Seller costs would be borne by Company. The Neutral Accountant shall, as part of its final determination, specify the allocation of fees in accordance with the immediately preceding sentence. The resolution of the Neutral Accountant shall be set forth in a written statement delivered to Purchaser and Company and, absent manifest error, shall be final, binding, conclusive and non-appealable for all purposes hereunder. Once modified and/or their respective Representatives. Notwithstanding anything herein agreed to the contraryin accordance with Section 2.9(c) or this Section 2.9(d), the dispute resolution mechanism contained Preliminary Closing Statement shall become the “Final Closing Statement”.
(e) For purposes of this Agreement, the “Final Closing Consideration” shall mean, as fully and finally determined and set forth in the Final Closing Statement in accordance with this Section 2.4(e2.9, an amount equal to (i) will be the exclusive mechanism for resolving any disputes regarding Base Purchase Price, plus/minus (ii) the Adjustment CalculationFinal Working Capital Adjustment, minus (iii) the Closing Indebtedness.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 days 20 Business Days after the Closing Date, the Purchaser will prepare and Acquiror shall deliver to the Seller Stockholder Agent a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies Company and its Subsidiaries, dated as at immediately prior to of the Closing Date prepared in accordance with Schedule 1.1B and without reflecting the Closing (the “Closing Balance Sheet”)) reflecting the Closing Tangible Net Book Value, (ii) the Purchaser’s calculation provided, that no accounting adjustments in respect of the Closing Net Working Capital based on transactions contemplated by this Agreement shall be made except as may be provided in Schedule 2.11; provided further, that in the Closing Balance Sheet (the “Closing Net Working Capital Statement”)event of a conflict between GAAP and consistent application as contemplated in Schedule 1.1B, (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance SheetSchedule 1.1B shall prevail.
(b) During the preparation ten Business Days following delivery of the Adjustment NoticeClosing Balance Sheet to the Stockholder Agent, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) Acquiror shall use its commercially reasonable efforts to provide the Purchaser and the Purchaser’s Representatives Stockholder Agent with reasonable access to the books, records, facilities and Employees working papers of the Acquired Companies Acquiror relating to the extent not otherwise already acquired as of Closing Balance Sheet requested by the Stockholder Agent, and Acquiror shall cooperate with the Stockholder Agent to provide it with other information used in preparing the Closing Date, (ii) provide Balance Sheet reasonably requested by the Purchaser, within ten Business Days after the Stockholder Agent. The Closing Date, with normal month-end closing financial information for the period ending as of Balance Sheet and Closing Tangible Net Book Value shall become final and binding on the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives30th Business Day following delivery thereof, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s requestunless prior to such time, the Purchaser Stockholder Agent delivers to Acquiror written notice of its disagreement (ia “Notice of Disagreement”) specifying the nature and amount of any disputed item. The Stockholder Agent shall reasonably cooperate be deemed to have agreed with all items and assistamounts in the Closing Balance Sheet not specifically referenced in the Notice of Disagreement, and such items and amounts shall cause its Representatives not be subject to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themor claim.
(c) Within 30 days after delivery During the ten Business Days following receipt by Acquiror of a Notice of Disagreement, the parties in good faith shall seek to resolve any differences that they may have with respect to the matters therein. During such ten Business Day period, the Stockholder Agent shall use its commercially reasonable efforts to provide Acquiror with access to the working papers of the Adjustment NoticeStockholder Agent relating to such Notice of Disagreement, and the Seller will either:
(i) Stockholder Agent and its agents shall cooperate with Acquiror to provide it with any other information used to prepare such Notice of Disagreement reasonably requested by Acquiror. Any disputed items resolved between the Stockholder Agent and Acquiror within such ten Business Day period shall be recorded in writing signed by such parties and shall be final and binding, and if the Stockholder Agent and Acquiror agree in writing with on the Adjustment Calculationamount of the Closing Tangible Net Book Value, in which case such calculation will the amount so determined shall be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g)binding. If the Purchaser Stockholder Agent and the Seller do Acquiror have not resolve resolved all disputed items such differences by the end of such ten Business Day period, the Resolution PeriodStockholder Agent and Acquiror shall submit, then the Purchaser in writing, to an independent public accounting firm or accountant mutually acceptable to Acquiror and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 Stockholder Agent (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting FirmAccountant”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as the absence of such timeagreement shall be Ernst & Young LLP, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect their briefs detailing their positions as to the items in dispute in a written report that specifies the conclusions correct nature and amount of the Independent Accounting Firm as to each item remaining in dispute and the resulting Adjustment Calculationamount of the Closing Tangible Net Book Value, and the Independent Accountant shall make a written determination as to each such disputed item and the amount of the Closing Tangible Net Book Value, which determination shall be final and binding. The Independent Accounting Firm will Accountant shall resolve only render its determination items remaining in dispute between the parties within the range of the difference between Acquiror’s position and the Stockholder Agent’s position with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Sellerthereto. The Purchaser Stockholder Agent and the Seller will each Acquiror shall use their commercially reasonable efforts to cause the Independent Accounting Firm Accountant to render its determination a written decision resolving the matters submitted to it within 30 days after referral of 20 Business Days following the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further reviewsubmission thereof. The costs of any such dispute resolution, including the fees and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion Accountant and of any enforcement of the contested amount not awarded to each party bears to determination thereof, shall be borne by the amount actually contested Stockholder Agent and Acquiror in inverse proportion as they may prevail on the matters resolved by such partythe Independent Accountant, as which proportionate allocation shall be calculated on an aggregate basis based on the relative dollar values of the amounts in dispute and shall be determined by the Independent Accounting FirmAccountant at the time the determination of such firm is rendered on the matters submitted. The Buyer fees and disbursements of the agents of each party incurred in connection with their preparation or review of the Closing Balance Sheet and preparation or review of any Notice of Disagreement, as applicable, shall be borne by such party.
(d) The Merger Consideration shall be adjusted, upwards or downwards, as follows (with amounts for Dissenting Shares to be held by Acquiror):
(i) if the Closing Tangible Net Book Value as determined pursuant to Section 2.11 is greater than the Estimated Tangible Net Book Value, the Merger Consideration shall be adjusted upwards in an amount equal to the difference between the Closing Tangible Net Book Value and the Representative agree Estimated Tangible Net Book Value, and Acquiror shall include such amount in the Indemnity Holdback on the terms set forth in Article VII for distribution, without interest, to execute, if requested the Stockholders as contemplated by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.Sections 2.7 and 2.10 and Article VII; and
(ii) For purposes of complying with this if the Estimated Tangible Net Book Value is greater than the Closing Tangible Net Book Value as finally determined pursuant to Section 2.42.11, the Purchaser Merger Consideration shall be adjusted downwards in an amount equal to the difference between the Estimated Tangible Net Book Value and the Seller will furnish Closing Tangible Net Book Value. In such event, Acquiror shall cancel a number of shares of Stock Consideration in the Indemnity Holdback with an aggregate value equal to the Independent Accounting Firm such work papers and other documents and information relating amount of the deficiency (rounded to the disputed items on a timely delivered Dispute Notice as nearest whole share) determined based upon the Independent Accounting Firm may reasonably request Claim Stock Value. Cancellation of the Stock and are available to that party (or its Representatives). A copy of any forfeiture by the Stockholders shall be determined based upon such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment CalculationStockholders Proportionate Share.
Appears in 1 contract
Post-Closing Adjustment. The Closing Date Payment shall be adjusted in accordance with the following procedure:
(aA) Within 45 Not later than 20 days after the Closing Date, the Purchaser Buyer will prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies updated schedules as at immediately prior to the Closing (the “Closing Balance Sheet”)follows, (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending case as of the close of business on the Closing Date (collectively, the “Updated Schedules”):
Schedule 1.1 Contract Trial Balance Schedule 1.2 FF&E Schedule 1.3 Other Receivables Schedule 1.4 Past Due Leases Schedule 1.5 Pending Leases Schedule 1.7 Pre-Funded Leases Schedule 1.8 Prepaid Expenses Schedule 1.9 Reserve Listing Schedule 1.12 UNL Leases Schedule 1.13 Vehicle Leases Schedule 1.14 VenCore Receivables Schedule 5 Recourse Pool The Updated Schedules will be accompanied by a revised Settlement Statement, computing the Purchase Price as of close of business on the Closing Date (the “Revised Settlement Statement”).
(B) After receipt of the Updated Schedules and (iii) reasonably cooperate with Revised Settlement Statement, the Purchaser Seller will have 15 days to review the Updated Schedules and the Purchaser’s RepresentativesRevised Settlement Statement. During such 15 day period, including by providing Buyer will, and will cause its representatives to, make available to Seller and its representatives on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice books, records and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives appropriate personnel to assist, the provide Seller and its Representatives in representatives with such information regarding the review of the Adjustment Notice Updated Schedules and (ii) shall provide the Revised Settlement Statement as Seller and its Representatives with any information representatives may reasonably requested request. Unless Seller delivers written notice to Buyer setting forth the specific items disputed by them.
(c) Within 30 days Seller on or prior to the 15th day after delivery its receipt of the Adjustment NoticeUpdated Schedules and Revised Settlement Statement, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted and agreed to the Adjustment Calculation, in which case, the Adjustment Calculation Updated Schedules and Revised Settlement Statement and such agreement will be final and binding on the parties for purposes binding. If Seller so notifies Buyer of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice its objections to the PurchaserUpdated Schedules and Revised Settlement Statement, then the Purchaser Buyer and the Seller will attempt in good faithwill, for a period of within 30 days following the Purchaser’s receipt of such Dispute Notice notice (the “Resolution Period”), attempt to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser resolve their differences.
(C) If Buyer and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items set forth in the Updated Schedules and Revised Settlement Statement by the end of the Resolution Period, then Buyer and Seller shall mutually select a public accounting firm that is independent of each of Seller and Buyer (the Purchaser “Accounting Arbitrator”) as expeditiously as practicable, and the Seller will submit the all items remaining items in dispute will be submitted to PricewaterhouseCoopers LLP for resolutionthe Accounting Arbitrator by the parties, or if that firm is unwilling or unable to servein writing, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 30 days after the Resolution Periodselection of the Accounting Arbitrator. The failure by either Seller or Buyer to submit a statement regarding any items remaining in dispute within such 30 day period shall be deemed a waiver by such party of its right to do so. The Accounting Arbitrator shall act as an arbitrator to determine only those items in dispute. All fees and expenses relating to the work, if any, to be performed by the Purchaser, on Accounting Arbitrator will be allocated between Buyer and Seller in the one hand, same proportion that the aggregate amount of the disputed items so submitted to the Accounting Arbitrator that is unsuccessfully disputed by each such party (as finally determined by the Accounting Arbitrator) bears to the total amount of such disputed items so submitted. The Accounting Arbitrator will deliver to Buyer and Seller a written determination (such determination to include a work sheet setting forth all material calculations used in arriving at such determination) of the Seller, on disputed items within 30 days of receipt of the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standingdisputed items, which firm is not the regular auditing firm of the Purchaser determination will be final, binding and conclusive. The final, binding and conclusive Updated Schedules and Revised Settlement Statement, which either are agreed upon by Seller and Buyer or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected are delivered by the other party Accounting Arbitrator in accordance with this Section 2(c)(3), will be the independent accounting firm selected by “Conclusive Statement.”
(D) If the Purchase Price as of close of business on the Closing Date as indicated on the Conclusive Statement exceeds the Closing Date Payment, then within three Business Days after the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or obtain the preceding sentenceConclusive Statement, the “Independent Accounting Firm”Buyer shall pay such excess to the Seller by (i) executing and delivering to the Seller an additional Term Note with a principal amount equal to ninety-five percent (95%) of the amount by which the Net Book Value of the Acquired Receivables on the Conclusive Statement exceeds such Net Book Value on the Settlement Statement, and (ii) paying the remainder of such excess to the Seller in cash. At the same time, the Buyer shall also pay to the Seller the interest required by Section 2(e).
(E) If the Closing Date Payment exceeds the Purchase Price as of close of business on the Closing Date as indicated on the Conclusive Statement, then within three Business Days after the parties obtain the Conclusive Statement, the Seller shall pay such excess to the Buyer by (i) The Independent Accounting Firm will accepting from the Buyer an additional Term Note with a principal amount equal to ninety-five percent (A95%) act as an expert in accountingof the amount by which the Net Book Value of the Acquired Receivables on the Settlement Statement exceeds such Net Book Value on the Conclusive Statement, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as (ii) paying the remainder of such excess to the Buyer in cash. At the same time, and that have not been deemed pursuant the Seller shall also pay to the Buyer the interest required by Section 2.4(c2(e), Section 2.4(d.
(F) Any excess amount paid by the Buyer or Section 2.4(e) to be final and binding on the Parties, (B) render its determination Seller in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with Section 2(c)(3)(D) or 2(C)(3)(E) shall be treated as an adjustment to the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of for all Tax purposes by the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute Seller and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmBuyer.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Asset Purchase Agreement
Post-Closing Adjustment. (a) Within 45 days after Following the Closing Date, the Purchaser will prepare and deliver Parent shall prepare, or cause to the Seller be prepared, a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Selling Companies and their Subsidiaries as at immediately prior to of the Closing Date (the “Closing Balance Sheet”) prepared in accordance with GAAP using the Working Capital Accounting Principles and a calculation based upon such Closing Balance Sheet setting forth in reasonable detail the amount of Net Working Capital as of the Closing Date (the “Closing Net Working Capital”). Within 60 days of the Closing Date, Parent shall deliver, or cause to be delivered, to the Stockholders’ Representative (i) the Closing Balance Sheet, together with worksheets and data that support the Closing Balance Sheet and the Closing Net Working Capital and (ii) a certificate of an executive officer of each of the Purchaser’s Surviving Companies certifying that the Closing Balance Sheet and the Closing Net Working Capital were prepared in accordance with Section 3.7(b) and this Section 3.8. Each of the Surviving Companies shall give, and shall cause its advisers to give, the Stockholders’ Representative and its advisers reasonable access to such books, records and personnel of each of the Surviving Companies (including the work papers of each of the Surviving Companies and their accountants relating to the preparation of the Closing Balance Sheet and the Closing Net Working Capital) as may be necessary to enable the Stockholders’ Representative and its advisers to review the Closing Balance Sheet and the Closing Net Working Capital. The preparation of the Closing Balance Sheet shall be for the sole purpose of determining the Closing Net Working Capital. The Stockholders’ Representative shall have 30 days following its receipt of the Closing Balance Sheet to review the same (the “Closing Review Period”). On or before the expiration of the Closing Review Period, the Stockholders’ Representative may deliver to Parent a written statement (“Stockholders’ Representative Notice”) accepting or objecting in good faith to the Closing Balance Sheet and/or the calculation of the Closing Net Working Capital based on (or any portion thereof). In the event that the Stockholders’ Representative shall object to the Closing Balance Sheet (and/or the “Closing Net Working Capital Statement”)Capital, (iii) the PurchaserStockholders’ Representative Notice shall include a detailed itemization of the Stockholders’ Representative’s calculation of Closing Net Cash based on objections, the Closing Balance Sheet (the “Closing Net Cash Statement”) reasons therefor and (iv) the Purchaser’s a revised calculation of the amount Net Working Capital based thereon. If the Stockholders’ Representative does not deliver such Stockholders’ Representative Notice to Parent within the Closing Review Period, the Stockholders’ Representative shall be deemed to have accepted the calculation of any payments required pursuant the Closing Net Working Capital.
(b) In the event that the Stockholders’ Representative shall timely object to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement pursuant to Section 3.8(a), Parent and the Stockholders’ Representative shall promptly meet and in good faith attempt to resolve such objections. In the event that the Stockholders’ Representative and Parent are not able to resolve such objections as may be raised with respect to the Closing Net Cash Statement will Working Capital, within the ten (10) day period following the Closing Review Period, the matter shall be prepared submitted to BDO ▇▇▇▇▇▇▇ (the “Accounting Referee”) immediately following the expiration of such ten-day period for review and resolution, with instructions to complete the same as promptly as practicable but in any event within 60 days of the expiration of such ten (10) day period. In making such determination, the Accounting Referee may only consider those items and amounts as to which Parent and the Stockholders’ Representative have disagreed within the time period and on the terms specified above and must resolve the matter in accordance with GAAP applied in a manner consistent with the methods terms and practices used to prepare provisions of this Agreement; provided that the Company Interim Balance Sheet.
(b) During the preparation determination of the Adjustment Accounting Referee will neither be more favorable to Parent than the Closing Net Working Capital set forth in the Closing Balance Sheet nor more favorable to the Stockholders’ Representative than the revised Net Working Capital set forth in the Stockholders’ Representative Notice, at . Such Accounting Referee shall deliver a written report setting forth the Purchaser’s request, resolution of each disputed item and the Seller will, and will cause each calculation of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired Net Working Capital as of the Closing Date, Date (iithe “Final Net Working Capital”) provide as determined in accordance with the Purchaser, within ten Business Days after terms of this Agreement as soon as practicable following the Closing Date, with normal month-end closing financial information for the period ending as submission of the close of business matter to such firm but in any event within the 60 day period referred to above, which calculation, absent manifest error, shall be binding and conclusive on the Closing Date parties and (iii) reasonably cooperate with the Purchaser not subject to appeal and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful may be enforced in preparing the Adjustment Notice any court having jurisdiction. The fees and any other information reasonably requested by the Purchaser. Following delivery costs of the Adjustment NoticeAccounting Referee, at the Seller’s requestif one is required, the Purchaser shall be borne proportionally by (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice Stockholders on one hand and (ii) Parent and Fluent (on a pro rata basis based on the Holding Working Capital Escrow Amount and the Fluent Working Capital Escrow Amount, respectively) on the other hand, on the basis, for each such party, of the ratio of (A) the difference between the amount of Net Working Capital submitted by each of Parent and the Stockholders’ Representative to the Accounting Referee and the Final Net Working Capital determined by the Accounting Referee to (B) the difference between the Net Working Capital amounts submitted by each of Parent and the Stockholders’ Representative to the Accounting Referee. In the event that the Stockholders are obligated to pay any amounts pursuant to the immediately foregoing sentence, such amounts shall provide be deducted from the Seller Working Capital Escrow Amounts on a pro rata basis based on the Holding Working Capital Escrow Amount and its Representatives with any information reasonably requested by themthe Fluent Working Capital Escrow Amount.
(c) Within 30 days after delivery two (2) Business Days following the determination of the Adjustment NoticeFinal Net Working Capital as calculated in accordance with Section 3.8(b) or the deemed acceptance of the Closing Net Working Capital in accordance with Section 3.8(a) (for the purpose of this Section 3.8(c), the Seller will either:
Final Net Working Capital), Parent shall deliver to the Stockholders’ Representative a notice (the “Parent Payment Notice”) setting forth (i) agree in writing with the Adjustment Calculation, in which case such calculation will be final amount of the Final Net Working Capital; and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering difference between the amount of the Final Net Working Capital and the Base Net Working Capital (“Final Amount”). To the extent that the Final Net Working Capital is greater than the Base Net Working Capital, Parent and Fluent shall each pay to the Purchaser a written notice Working Capital Escrow Agent an amount equal to such entity’s pro rata share (a based on the Holding Working Capital Escrow Amount and the Fluent Working Capital Escrow Amount) of the Final Amount, after making appropriate adjustment to reflect any payments previously made or benefits received at the Closing pursuant to Section 3.7(a)(ii) (“Dispute NoticeNet Working Capital Overage”) which for inclusion in the Holding Working Capital Escrow Amount and the Fluent Working Capital Escrow Amount, respectively. Notwithstanding any other provision of this Agreement, no entity that owns, directly or indirectly, any interest in Fluent shall specify which items are being disputed be liable for the obligation of Fluent in the immediately preceding sentence. To the extent the Base Net Working Capital is greater than the Final Net Working Capital, the Working Capital Escrow Agent shall pay to Parent and set forth in reasonable detail Fluent, from the basis for each disputed item therein.
Holding Working Capital Escrow Amount and the Fluent Working Capital Escrow Amount, respectively, such entity’s pro rata share (dbased on the Holding Working Capital Escrow Amount and the Fluent Working Capital Escrow Amount) If the Seller fails to take either of the foregoing actions within 30 days Final Amount, after delivery making appropriate adjustment to reflect any payments previously made or benefits received at the Closing pursuant to Section 3.7(a)(ii) (“Net Working Capital Shortfall”). To the extent the Final Net Working Capital is the same as the amount of the Adjustment NoticeBase Net Working Capital, then no payments shall be made except that if the Seller will be deemed Adjusted Cash Consideration was adjusted at Closing pursuant to have irrevocably accepted Section 3.7(a)(ii) and (A) the Adjustment Calculation, in which caseStockholders received the benefit of such adjustment, the Adjustment Calculation will be final Working Capital Escrow Agent shall pay to Parent and binding Fluent an amount equal to such entities’ respective shares (on a pro rata basis based on the parties for purposes Holding Working Capital Escrow Amount and the Fluent Working Capital Escrow Amount) of Section 2.4(g).
the benefit amount paid at Closing from the Holding Working Capital Escrow Amount and the Fluent Working Capital Escrow Amount, or (eB) If Parent and Fluent received the Seller timely delivers a Dispute Notice benefit of such adjustment, Parent and Fluent shall pay to the Purchaser, then Working Capital Escrow Agent an amount equal to each entity’s benefit amount received at Closing for inclusion in the Purchaser Holding Working Capital Escrow Amount and the Seller will attempt Fluent Working Capital Escrow Amount. Notwithstanding any other provision of this Agreement, no entity that owns, directly or indirectly, any interest in good faith, Fluent shall be liable for a period the obligation of 30 days following Fluent in the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g)immediately preceding sentence. Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether payment made pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(iSection 3.8(c) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as shall be made via wire transfer of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price immediately available funds within one (1) in excess Business Day of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions date of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmParent Payment Notice.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Merger Agreement (Ansys Inc)
Post-Closing Adjustment. (a) Within 45 120 days after the Closing Date, the Purchaser will use its reasonable best efforts to prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) Representative an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to of the Closing Date (the “"Closing Balance Sheet”)") and a written statement (together with the Closing Balance Sheet, the "Closing Statement") setting forth the Purchaser's calculations (iithe "Purchaser's Proposed Calculations") of (i) the Purchaser’s calculation of Closing Working Capital, the Closing Net Working Capital Debt, the Closing Transaction Expenses and the resulting purchase price adjustment based on the Closing Balance Sheet Sheet, and (the “Closing Net Working Capital Statement”), (iiiii) the Purchaser’s calculation of Closing Net Cash Purchase Price based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Working Capital, the Closing Net Working Capital Statement Debt and the Closing Net Cash Statement Transaction Expenses calculated by reference thereto. The Closing Balance Sheet and the Purchaser's Proposed Calculations will be prepared in accordance with GAAP applied and the procedures, policies and methods set forth on, and used in a manner consistent with preparing, the methods and practices used to prepare the Company Interim Balance SheetExample Statement.
(b) During the preparation After receipt of the Adjustment Notice, at Closing Statement and the Purchaser’s request's Proposed Calculations, the Seller will, and Representative will cause each of have 30 days (the Acquired Companies to, (i"Review Period") provide to review the Purchaser Closing Statement and the Purchaser’s Representatives with 's Proposed Calculations. During the Review Period, the Seller Representative and Sellers' accountants will have reasonable access to the books, records, facilities books and Employees records of the Acquired Companies Companies, the personnel of, and work papers prepared by, the Purchaser and/or the Purchaser's accountants to the extent not otherwise already acquired as necessary for their evaluation of the Closing Date, (ii) provide the Purchaser, within ten Business Days after Statement and to such historical financial information relating to the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser Statement and the Purchaser’s Representatives, including by providing on a timely basis all information 's Proposed Calculations as the Seller Representative may reasonably necessary or useful in preparing request for the Adjustment Notice purpose of reviewing the Closing Statement and any other information reasonably requested by the Purchaser. Following delivery calculation of the Adjustment NoticePurchase Price and, at the Seller’s requestif necessary, the Purchaser to prepare an Objection Statement (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themas defined below).
(c) Within 30 days after delivery On or prior to the last day of the Adjustment NoticeReview Period, the Seller will either:
(i) agree in writing with Sellers may object to the Adjustment Calculation, in which case such calculation will be final Closing Statement and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation Purchaser's Proposed Calculations by delivering to the Purchaser a written notice (statement setting forth a “Dispute Notice”) which shall specify which items are being disputed and set forth description in reasonable detail of its objections thereto (an "Objection Statement"). If no Objection Statement is delivered to the basis Purchaser by the Seller Representative by the last day of the Review Period, the Closing Statement and the Purchaser's Proposed Calculations will be deemed to have been accepted by the Seller Representative, and thus the Sellers, and will be final and binding upon the parties for each disputed item thereinall purposes under this Agreement.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller Sellers timely delivers a Dispute Notice deliver an Objection Statement to the Purchaser, then the Purchaser and the Seller Sellers will attempt negotiate in good faith, for a period of faith to resolve any such objections set forth in the Objection Statement within 30 days following after the delivery of the Objection Statement (the "Resolution Period"), and, if the objections set forth in the Objection Statement are so resolved within the Resolution Period, the Closing Statement and the Purchaser’s receipt of 's Proposed Calculations with such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution changes as may have been previously agreed in writing by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice Sellers, will be final and binding on the parties for purposes of Section 2.4(g)binding. If the Purchaser Sellers and the Seller do not resolve Purchaser fail to reach an agreement with respect to all disputed items by of the end matters set forth in the Objection Statement before expiration of the Resolution Period, then the Purchaser and the Seller will submit the any amount remaining items in dispute will be submitted for resolution to PricewaterhouseCoopers LLP for resolutionPwC or, or if that firm PwC is unwilling or unable to serve, then ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or if neither PwC or ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is willing or able to serve, then the Purchaser and the Seller Sellers will engage another mutually agreeable independent accounting firm of recognized international national standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser any Seller or the any Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 Company (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “"Independent Accounting Firm”").
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only be required to render its a determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination applicable dispute within 30 days (or such other time as the Seller Representative and the Purchaser mutually agree in writing) after referral of the disputed items on a timely delivered Dispute Notice matter to such firm or as soon thereafter as reasonably practicablethe Independent Accounting Firm, which determination must be in writing in the English language and must set forth in reasonable detail the basis therefor. The decision Independent Accounting Firm may address only those items and amounts which are identified in the Objection Statement as being items which the Seller Representative and the Purchaser are unable to resolve. The parties hereto agree that all adjustments will be made without regard to materiality. The resolution of the dispute by the Independent Accounting Firm will be final, conclusive final and binding on and non-appealable by the Parties and will not be subject to appeal or further review. parties.
(e) The costs fees and expenses of the Independent Accounting Firm will be allocated between the Parties Purchaser, on the one hand, and the Sellers, on the other hand, based upon the percentage which that the portion of the contested amount actually disputed but not awarded to each party the Sellers or the Purchaser, respectively, bears to the aggregate amount actually contested by such party, as determined disputed by the Independent Accounting FirmSeller Representative and the Purchaser. The Buyer and the Representative agree to execute, if requested fee portion payable by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities Sellers will be split pro rata based on their Pro Rata Percentages set forth in favor of the Independent Accounting Firm.Schedule I.
(iif) For purposes of complying with this Section 2.41.3, the Purchaser and the each Seller will furnish to each other and to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party such Person (or its Representatives). A copy of any such work papers accountants) and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm.
(g) Upon the final determination, in accordance with any this Section 1.3, of the Closing Statement and the final calculation of the amounts of the Closing Working Capital, the Closing Net Debt and the Closing Transaction Expenses calculated by reference thereto, the Final Purchase Price Adjustment will be calculated using such presentation or discussion finally determined amounts. If the Final Purchase Price Adjustment is not equal to the Estimated Purchase Price Adjustment, then a payment will be held in the presence of both made by the Purchaser and to the Seller and/or their respective RepresentativesSellers, or by the Sellers to Purchaser, as follows:
(i) if the Purchase Price, as finally determined in accordance with this Section 1.3, is greater than the Closing Consideration, then the Purchaser will pay the amount of such difference to the Sellers (pro rata based on the Sellers' Pro Rata Percentages); or
(ii) if the Closing Consideration is greater than the Purchase Price, as finally determined in accordance with this Section 1.3, then the Sellers will pay the amount of such difference to the Purchaser (pro rata based on the Sellers' Pro Rata Percentages).
(h) Any payment to the Purchaser pursuant to Section 1.3(g)(ii) will be made by the Escrow Agent solely from the Adjustment Escrow Amount to the Purchaser's account specified on Schedule II pursuant to the terms of the Escrow Agreement. Notwithstanding the preceding sentence or anything herein in this Agreement to the contrary, any amounts payable by the dispute resolution mechanism contained in this Sellers to the Purchaser pursuant to Section 2.4(e1.3(g)(ii) will be the exclusive mechanism for resolving any disputes regarding satisfied solely from, and will be exclusively limited to, the Adjustment CalculationEscrow Amount. Any payment to the Sellers pursuant to Section 1.3(g) will be paid to the Sellers by the Purchaser by wire transfer of immediately available funds to the accounts specified on Schedule I. Any Adjustment Escrow Amount outstanding as of the expiration of the Adjustment Payment Period (as defined below) will be disbursed to the Sellers pursuant to the Escrow Agreement. Any payment made pursuant to this Section 1.3(h) will be (i) made within three Business Days of the date on which the Final Purchase Price Adjustment is determined (the "Adjustment Payment Period") and (ii) treated as an adjustment to the final purchase price by the parties for Tax purposes, unless otherwise required by Law.
(i) The purpose of this Section 1.3 is to determine the final Purchase Price to be paid by the Purchaser under this Agreement. Accordingly, any adjustment pursuant hereto will neither be deemed to be an indemnification pursuant to ARTICLE 8, nor preclude any party from exercising any indemnification rights pursuant to ARTICLE 8.
Appears in 1 contract
Sources: Share Purchase Agreement (EnerSys)
Post-Closing Adjustment. (a) Within 45 sixty (60) days after the Closing Date, the Purchaser will Buyer shall prepare and deliver to the Seller Representative a written notice (the “Adjustment Notice”) containing (i) an unaudited statement setting forth its calculation of Closing Working Capital, which statement shall contain a consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date (without giving effect to the transactions contemplated herein), a calculation of Closing Working Capital (the “Closing Working Capital Statement”) and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery certificate of the Chief Financial Officer of Buyer that the statement of Closing Working Capital was prepared in accordance with GAAP applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Financial Statements for the year ended December 31, 2016 as if such Closing Working Capital Statement was being prepared as of a fiscal year end.
(b) The post-closing adjustment shall be an amount equal to the Closing Working Capital (as finally determined pursuant to Section 2.A.3 below) minus the Estimated Closing Working Capital (the “Post-Closing Adjustment”). If the Post-Closing Adjustment Noticeis a positive number, at Buyer shall pay to the Seller’s requestCompanies (to an account or accounts designated by Seller Representative) an amount equal to the Post-Closing Adjustment. If the Post-Closing Adjustment is a negative number, the Purchaser (i) shall reasonably cooperate and assist, and Seller Representative shall cause its Representatives the Companies to assist, the Seller and its Representatives in the review pay (or pay on behalf of the Adjustment Notice and (iiCompanies) shall provide to Buyer an amount equal to the Seller and its Representatives with any information reasonably requested by themPost-Closing Adjustment.
(c) Within 30 days after delivery of Notwithstanding any provision to the Adjustment Noticecontrary herein, the if Buyer fails to provide Seller will either:
(i) agree in writing Representative with the Adjustment Calculation, in which case such calculation will be final and binding on Closing Working Capital Statement within the parties for purposes of Section 2.4(g); or
ninety (ii) dispute 90)-day time period after the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment NoticeClosing Date, then any Post-Closing Adjustment payment due Companies shall bear interest at the Seller will be deemed to have irrevocably accepted rate of one and half percent (1.5%) per month from and including the Adjustment Calculation, Closing Date through the date of payment in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g)full by Buyer.
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Asset Purchase Agreement (Cross Country Healthcare Inc)
Post-Closing Adjustment. (a) Within 45 days The Cash Purchase Price shall be subject to adjustment after the Closing Date, the Purchaser will prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies Date as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to specified in this Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet1.3.
(b) During Within one hundred twenty (120) days following the preparation Closing Date, Buyer, at its option, shall cause PriceWaterhouseCoopers ("Buyer's Accountant") to audit the Company's books to determine the accuracy of the Adjustment Notice, at information set forth on the Purchaser’s request, Closing Financial Certificate (the Seller will, "Post-Closing Audit"). The parties acknowledge and will cause each agree that for purposes of determining the net worth of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired Company as of the Closing Date, (iii) provide the Purchaservalue of the assets of the Company shall, within ten Business Days after except with the Closing Dateprior written consent of Buyer, with normal month-end closing financial information for be calculated as provided in the period ending last paragraph of Section 6.9 and(ii) no effect shall be given to the Contingent Litigation Liability. In the event that Buyer's Accountant determines that the actual Company net worth as of the close Closing Date was less than the Certified Closing Net Worth, Buyer shall deliver a written notice (the "Financial Adjustment Notice") to the Stockholders' Representative, as defined in Section 1.6, setting forth (i) the determination made by Buyer's Accountant of business the actual Company net worth (the "Actual Company Net Worth"), (ii) the amount of the Cash Purchase Price that would have been payable at Closing pursuant to Section 1.2(c) had the Actual Company Net Worth been reflected on the Closing Date Financial Certificate instead of the Certified Closing Net Worth, and (iii) reasonably cooperate with the Purchaser and amount by which the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful Cash Purchase Price would have been reduced at Closing had the Actual Company Net Worth been used in preparing the calculations pursuant to Section 1.2(c) (the "Purchase Price Adjustment"). The Purchase Price Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery shall take account of the Adjustment Noticereduction, at if any, to the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives Cash Purchase Price already taken pursuant to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themSection 1.2(c)(i).
(c) Within 30 The Stockholders' Representative shall have thirty (30) days after delivery from the receipt of the Financial Adjustment Notice to notify Buyer if the Stockholders dispute such Financial Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written . If Buyer has not received notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice a dispute within such thirty (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-30) day period, then Buyer shall be entitled to receive from the parties agree that Stockholders (which may, at Buyer's sole discretion, be from the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Pledged Assets as defined in Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”1.4).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 45 days after the Closing Date, the Purchaser will prepare and deliver The Base Merger Consideration shall be subject to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies adjustment as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to specified in this Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet3.1.
(b) During Within ninety (90) days following the preparation Effective Time, CCC shall cause CCC's Accountant to audit (the "Post-Closing Audit") the books of the Adjustment Notice, at ------------------ Company to determine the Purchaser’s request, the Seller will, and will cause each accuracy of the Acquired Companies to, (i) provide information relating to the Purchaser Company's Closing Net Worth and the Purchaser’s Representatives with reasonable access to Company's 1997 Adjusted EBIT as set forth on the books, records, facilities Financial Certificates (as defined in Section 7.20) and Employees on the financial certificates of the Acquired Companies Other Group Companies. In determining the accuracy of such information reflected on the Financial Certificates in the course of the Post- Closing Audit, CCC's Accountant shall apply the same accounting methodology used by the Company or the Shareholders, as applicable, in preparing such information; provided that CCC's Accountant shall not be obligated to apply such methodology to the extent not otherwise already acquired inconsistent with GAAP (as of the Closing Date, (iimodified by Section 2.2(b) provide the Purchaser, within ten Business Days above). The Shareholders shall cooperate with CCC and CCC's Accountant after the Closing DateDate in furnishing information, with normal month-end closing financial information for documents, evidence and other assistance to CCC's Accountant to facilitate the period ending as completion of the close Post-Closing Audit within the aforementioned time period. Without limiting the generality of business on the Closing Date and (iii) reasonably cooperate foregoing, within two weeks after the Closing, the Shareholders shall provide CCC's Accountant with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information and/or documents reasonably requested by them. CCC's Accountant will test the Company's Closing Net Worth, the Group Closing Net Worth, the Company's 1997 Adjusted EBIT and the Group 1997 Adjusted EBIT based upon the Post-Closing Audit and the post-closing audits of the Other Group Companies. In the event that CCC's Accountant determines (i) a different amount than the Group Closing Net Worth (the "Actual Closing Net Worth") or (ii) ------------------------ a different amount than the Group 1997 Adjusted EBIT (the "Actual 1997 Adjusted -------------------- EBIT" ), CCC shall promptly deliver a written notice with supporting ---- documentation (the "Financial Adjustment Notice") to the shareholders of the --------------------------- Group Companies, including the Shareholders, setting forth (A) the determination made by CCC's Accountant of the Actual Closing Net Worth and the Actual 1997 Adjusted EBIT, (B) the amount of the cash portion of the Base Merger Consideration that would have been payable at Closing pursuant to Section 2.2(c) had the Actual Closing Net Worth and the Actual 1997 Adjusted EBIT been used instead of the Group Closing Net Worth and the Group 1997 Adjusted EBIT to determine the need for any adjustments to the Base Merger Consideration pursuant to Sections 2.2(c) and 2.2(d), respectively, and (C) the number of shares issued as part of the Base Merger Consideration that would have been issuable at Closing had the Actual Closing Net Worth and the Actual Adjusted EBIT been used to determine the need for any adjustments to the Base Merger Consideration as set forth in (B) above. The differences between the respective amounts set forth in (B) and (C) and the amounts of the cash and the CCC Common Stock components of the Base Merger Consideration paid pursuant to Section 2.2 (a), as adjusted pursuant to Sections 2.2(c) or 2.2(d), is referred to hereafter as the "Merger Consideration Adjustment." Any increase in the Base ------------------------------- Merger Consideration resulting from such Merger Consideration Adjustment shall be owed by CCC to the Shareholders. Any decrease in such Base Merger Consideration resulting from such Merger Consideration Adjustment shall be owed by the Shareholders to CCC. If, on or prior to the payment of the Merger Consideration Adjustment, CCC should split or combine the CCC Common Stock, or pay a stock dividend or other stock distribution in CCC Common Stock, or otherwise change the CCC Common Stock into any other securities, or make any other dividend or distribution on the CCC Common Stock (other than normal quarterly dividends, as the same may be adjusted from time to time and in the ordinary course), then the number of shares of CCC Common Stock issuable as part of the Merger Consideration Adjustment will be appropriately adjusted to reflect such split, combination, dividend or other distribution or change. The shares of CCC Common Stock, if any, to be issued in respect of the Merger Consideration Adjustment shall be registered under the 1933 Act and approved for quotation on the Nasdaq National Market.
(c) Within 30 days after delivery The shareholders of the Group Companies, including the Shareholders, through the Group Representative, shall have thirty (30) days from the receipt of the Financial Adjustment Notice to notify CCC if they dispute such Financial Adjustment Notice. If CCC has not received notice of any such dispute within such 30-day period, the Seller will either:
(i) agree in writing with CCC shall be entitled to receive promptly pro rata from the Shareholders (which may, at CCC's sole discretion, be from the Pledged Assets as defined in, and subject to the provisions of, Section 3.2 and/or the Contingent Merger Consideration) any Merger Consideration Adjustment Calculation, in which case such calculation will be final owed to CCC and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Shareholders shall be entitled to receive promptly from CCC any Merger Consideration Adjustment Calculation by delivering owed to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g)Shareholders. Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; providedIf, however, that if either the Purchaser, on Shareholders (through the one hand, or the Seller, on the other hand, fails Group Representative) have delivered notice of such a dispute to select CCC within such independent accounting firm during this 1030-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on CCC's Accountant shall select a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent New Accounting Firm to render its determination within 30 days after referral review the books of the disputed items on a timely delivered Dispute Group Companies including, the Surviving Corporation, the Financial Certificates and the Financial Adjustment Notice (and related information) to such firm or as soon thereafter as reasonably practicable. The decision determine the amount, if any, of the Independent Accounting Firm will be final, conclusive and binding on revised Merger Consideration Adjustment (the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation."Actual Merger ------------- Consideration Adjustment"
Appears in 1 contract
Sources: Agreement and Plan of Reorganization (Consolidation Capital Corp)
Post-Closing Adjustment. (a) Within 45 For the purposes of finally determining Closing Date Indebtedness, Closing Date Cash and Closing Date Net Working Capital, the Purchaser shall, or shall cause the Purchaser’s accountants to, after the Closing, prepare a statement (the Proposed Closing Statement) showing the amounts, and calculations, of Closing Date Indebtedness, Closing Date Cash and Closing Date Net Working Capital, together with reasonable supporting detail with respect to the calculations included therein. The Purchaser shall deliver the Proposed Closing Statement to the Seller Representative within ninety (90) calendar days after the Closing Date, the Purchaser will prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Purchaser shall prepare the Proposed Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance SheetAccounting Principles.
(b) During The Proposed Closing Statement shall become binding upon the preparation of Parties at 5:00 P.M. New York time on the Adjustment Noticethirtieth (30th) calendar day following delivery thereof (and shall be deemed the Final Closing Statement, at and the Purchaser’s request, determination contained therein shall be binding) unless the Seller will, Representative gives written notice of Seller Representative’s disagreement with the Proposed Closing Statement (a Notice of Disagreement) to the Purchaser prior to the expiration of such thirty (30) calendar day period. Any Notice of Disagreement shall specify those items or amounts with which the Seller Representative disagrees in the Proposed Closing Statement and will cause each of the Acquired Companies to, contain (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees a reasonably detailed description of the Acquired Companies reasons for its objections to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary each such item or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice amount contained therein and (ii) shall provide the Seller and its Representatives Representative’s calculation of any amounts with any information reasonably requested by themwhich the Seller Representative disagrees in the Proposed Closing Statement, prepared in accordance with the Accounting Principles. Items not disputed in the Notice of Disagreement shall be binding upon the Parties.
(c) Within 30 days after delivery The objections set forth in the Notice of the Adjustment Notice, the Seller will eitherDisagreement shall be resolved as follows:
(i) agree During the ten (10) Business Day period following the delivery of a Notice of Disagreement (or such longer period as may be agreed in writing with by the Adjustment CalculationSeller Representative and the Purchaser) (such period, the Resolution Period) the Seller Representative and the Purchaser shall first seek in which case good faith to resolve such calculation will objections. If such objections are so resolved they shall be final and deemed binding on as so resolved and, at such time, the parties for purposes of Section 2.4(g); orProposed Closing Statement, as modified to reflect such resolution, shall be deemed the Final Closing Statement.
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final Representative and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of such objections during the Resolution Period, then the Purchaser Seller Representative, on the one hand, and the Seller will submit Purchaser, on the remaining items other hand, shall make a written submission to the Accounting Firm (and substantially simultaneously to the other) for determination of any and all matters that remain in dispute (the Unresolved Objections) (all matters previously resolved shall become part of the Final Closing Statement as resolved) and which were included in the Notice of Disagreement; provided that the scope of the Unresolved Objections to PricewaterhouseCoopers LLP for resolutionbe resolved by the Accounting Firm shall be limited to whether there were mathematical errors in the Proposed Closing Statement and whether the calculations of the Closing Date Indebtedness, or if that firm is unwilling or unable to serveClosing Date Cash and Closing Date Net Working Capital were accurate and performed in accordance with the applicable Accounting Principles, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is Accounting Firm shall not the regular auditing firm of the Purchaser or the Acquired Companiesmake any other determination. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days Within five (5) Business Days after the Resolution Periodexpiration of such ten (10) Business Day period, each of the Purchaser, on the one hand, and the SellerSeller Representative, on the other hand, will may deliver to the Accounting Firm its response to the other’s position on each select an independent accounting firm Unresolved Objection; provided that each delivers a copy thereof substantially simultaneously to the other. The Accounting Firm’s decision with respect to any Unresolved Objection must be within the range of recognized international standing values assigned to each such item in the Proposed Closing Statement and the Notice of Disagreement, respectively.
(iii) Except as set forth in Section 2.04(c)(ii), the Seller Representative and the Purchaser shall not be entitled to make submissions except as specifically 25 requested by the Accounting Firm. The Seller Representative and the Purchaser shall provide, as soon as reasonably practicable, all the information and explanations that the Accounting Firm may reasonably require. The precise timetable shall be as agreed with the Accounting Firm, but the Accounting Firm shall be instructed to render its determination regarding only the Unresolved Objections in accordance with Section 2.04(c)(ii) within thirty (30) Business Days following the date of such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not submissions.
(iv) The resolution by the regular auditing firm Accounting Firm of the Purchaser or Unresolved Objections shall, absent manifest error, be binding and at such time, the Acquired Companies; providedProposed Closing Statement, howeveras modified to reflect such resolution (and any matters resolved in accordance with Section 2.04(c)(i)), shall be deemed the Final Closing Statement. The Parties agree that if either the Purchaserprocedure set forth in this Section 2.04 for resolving disputes with respect to the Proposed Closing Statement shall be the exclusive method for resolving any disputes with respect to Closing Date Indebtedness, Closing Date Cash and Closing Date Net Working Capital. The decision of the Accounting Firm shall constitute an arbitral award that is final, binding and non-appealable and upon which a judgment may be entered by a court having jurisdiction thereover.
(v) The fees and expenses of the Accounting Firm shall be borne by the Sellers, on the one hand, or and the SellerPurchaser, on the other hand, fails to select such independent accounting firm during this 10-day period, then based on the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).following formula:
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on The Sellers shall pay a timely delivered Dispute Notice that remain in dispute as portion of such time, fees and expenses equal to that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final fraction of such fees and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price expenses where (1) in excess the numerator is the absolute value of the applicable amount in difference between Sellers’ aggregate position with respect to the Adjustment Notice or (2) that is less than Closing Date Indebtedness, Closing Date Cash and Closing Date Net Working Capital and such amounts as recalculated based upon the applicable amount in the Dispute Notice and (D) render its Accounting Firm’s final determination with respect to the items in dispute in a written report that specifies Unresolved Objections and (2) the conclusions denominator is the absolute value of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination difference between Sellers’ aggregate position with respect to the specific remaining accounting differences submitted Closing Date Indebtedness, Closing Date Cash and Closing Date Net Working Capital and Purchaser’s aggregate position with respect to it such amounts; and
(B) The Purchaser shall pay the remainder of such fees and may rely only upon information submitted expenses.
(d) No later than five (5) Business Days after the Proposed Closing Statement is deemed the Final Closing Statement pursuant to it by or on behalf this Section 2.04:
(i) if Closing Date Indebtedness is: (A) less than Estimated Closing Date Indebtedness, the Purchaser shall deliver to the Sellers payment of the Purchaser amount of such deficit; or (B) greater than the Seller. The Purchaser and Estimated Closing Date Indebtedness, the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral payment of the disputed items on a timely delivered Dispute Notice to amount of such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will excess shall be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears made to the amount actually contested by such party, as determined by Purchaser from the Independent Accounting Firm. The Buyer and Escrow Amount in the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.Escrow Account;
(ii) For purposes if Closing Date Cash is: (A) less than Estimated Closing Date Cash, payment of complying with this Section 2.4the amount of such deficit shall be made to the Purchaser from the Escrow Amount in the Escrow Agreement; or (B) greater than Estimated Closing Date Cash, the Purchaser and shall deliver to the Sellers payment of the amount of such excess; and
(iii) if Closing Date Net Working Capital is: (A) less than Estimated Closing Date Net Working Capital, payment of the amount of such deficit shall be made to the Purchaser from the Escrow Amount in the Escrow Account; or (B) greater than Estimated Closing Date Net Working Capital, the Purchaser shall deliver to the Sellers payment of the amount of such excess. Any payments made by the Purchaser pursuant to this Section 2.04(d) shall be made by wire transfer from immediately available funds to a bank account designated in writing by the Sellers (such designation to be made at least three (3) Business Days prior to such payment). In respect of any payment required to be made from the Escrow Account pursuant to this Section 2.04(d), the Seller will furnish Representative shall, together with the Purchaser, jointly instruct the Escrow Agent to remit such payment to the Independent Accounting Firm such work papers and other documents and information relating Purchaser not later than five (5) Business Days after the Proposed Closing Statement is deemed the Final Closing Statement pursuant to this Section 2.04(d). To the extent that the amount required to be paid to the disputed items on a timely delivered Dispute Notice as Purchaser pursuant to this Section 2.04(d) exceeds the Independent Accounting Firm may reasonably request and are available Escrow Amount, the Sellers shall pay such excess to that party the Purchaser not later than five (or its Representatives5) Business Days after the Proposed Closing Statement is deemed the Final Closing Statement pursuant to this Section 2.04(d). A copy The Parties shall net the payments, if any, to be made pursuant to Section 2.04(d)(i), (ii) and (iii), such that only one Party is required to deliver or cause to be delivered amounts required to be paid under this Section 2.04(d). Notwithstanding the foregoing, no Party shall be required to make any payment pursuant to this Section 2.04(d) unless the amount of any such work papers and other documents and information provided the adjustment calculated hereunder be paid by a party to the Independent Accounting Firm will be provided concurrently one Party to the other party free of charge. Each party will Party exceeds $400,000.00.
(e) Until the date the Proposed Closing Statement is deemed the Final Closing Statement pursuant to this Section 2.04, the Parties agree that following the Closing, each shall provide and cause to be afforded the opportunity to present provided to the Independent Accounting Firm any material related other and its respective representatives reasonable access upon reasonable notice during normal business hours to such first Party’s books, records and accounting personnel (including books, records and accounting personnel of the disputed items on a timely delivered Dispute Notice Target Group Companies), and shall cause such personnel to discuss such items reasonably cooperate with the Independent Accounting Firm, with any other Party and respond to such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism Party’s reasonable requests for resolving any disputes regarding the Adjustment Calculationinformation reasonably promptly.
Appears in 1 contract
Sources: Unit Purchase Agreement
Post-Closing Adjustment. (a) Within Promptly after the Closing Date, Seller shall cause to be prepared and delivered to Restoration statements of operations, changes in shareholder's equity and cash flow and a balance sheet of the Company as of and for the fiscal year ended January 31, 1998 (the "Year-End Financial Statements") and a balance sheet of the Company as of March 20, 1998 (the "Closing Balance Sheet"), in each case in accordance with GAAP applied on a basis consistent with the Financial Statements for the Company referred to in Section 3.04. The Year-End Financial Statements shall be audited and the Closing Balance Sheet shall be reviewed by Deloitte & Touche LLP ("Deloitte"), independent accountants for Restoration, to confirm that such Year-End Financial Statements and the Closing Balance Sheet have been prepared in accordance with GAAP and fairly present the financial position of the Company as of such dates and its results of operations and cash flows for such periods. Restoration shall deliver copies of the audited Year-End Financial Statements and the reviewed Closing Balance Sheet to Seller and Seller's independent accountants, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇ ("▇▇▇▇▇▇"), not later than 45 days after the Closing Date, the Purchaser will prepare . Seller shall cooperate and deliver cause its accountants to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) cooperate with Restoration and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement its auditors in connection with such audit and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheetreview.
(b) During the preparation Within 7 days after its receipt of the Adjustment Noticeaudited Year-End Financial Statements and the Closing Balance Sheet, at the Purchaser’s requestSeller shall advise Restoration whether Seller has any exceptions to such audited Year-End Financial Statements, the Seller will, and will cause each Closing Balance Sheet or the conduct of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with audit. Unless Seller shall deliver to Restoration within such 7-day period a letter of Seller specifying in reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and detail any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s requestsuch exceptions, the Purchaser (i) Net Worth shall reasonably cooperate be conclusive and assist, and shall cause its Representatives to assist, the binding on Seller and its Representatives in the review of the Adjustment Notice Restoration and (ii) shall provide the basis for the adjustment specified in subsection (c) below. If within such 7-day period Seller shall deliver to Restoration a letter of Seller setting forth any such exceptions which, in the aggregate, would result in a material adjustment in the Closing Balance Sheet, Seller -------- and Restoration shall promptly endeavor to resolve the matters set forth in such letter; and if Seller and Restoration shall fail to reach an agreement with respect to such matters on or before the 14th day after receipt by Restoration of such Seller letter, then Seller and Restoration shall engage a third firm of independent public accountants of recognized national standing who shall promptly make an independent determination of such matters as to which disagreement remains and shall deliver its Representatives written opinion thereon to Seller and Restoration. The opinion of such third firm shall be conclusive and binding on Seller and Restoration and shall provide the basis for the adjustment specified in subsection (c) below with respect to any information reasonably requested by themremaining disagreement between Seller and Restoration.
(c) Within 30 If the Net Worth shall be less than $1,450,000, Seller shall pay, within 5 days after delivery of the Adjustment Notice, date on which the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final Closing Balance Sheet shall become conclusive and binding on the parties for purposes of Section 2.4(g); or
in accordance with subsection (iib) dispute the Adjustment Calculation by delivering above, to Restoration an amount equal to the Purchaser a written notice (a “Dispute Notice”) which difference between $1,450,000 and such Net Worth. If the Net Worth shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item thereinbe greater than $1,450,000, there shall be no further action or payment by either party.
(d) If the Seller fails to take either One half of the foregoing actions within 30 days after delivery fees and disbursements of Deloitte incurred in connection with the audit described in Section 2.04(a) shall be paid by Restoration. The remaining half of the Adjustment NoticeDeloitte fees and disbursements to a maximum amount of $30,000 shall be paid by Seller. The fees incurred by ▇▇▇▇▇▇ as they relate to helping the Company maintain and close its books at February 1, then 1997, December 31, 1997, January 31, 1998 and as of the Seller will Closing Date shall be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution borne by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as Company up to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes maximum of Section 2.4(g)$30,000. If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) All additional costs in excess of the applicable amount in aforementioned $30,000 related to maintaining and closing the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice Company's books at February 1, 1997, December 31, 1997, January 31, 1997 and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions as of the Independent Accounting Firm as Closing Date and all costs relating to each item in dispute ▇▇▇▇▇▇'▇ review of the audited Year-End Financial Statements and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it Closing Balance Sheet shall be borne by or on behalf of the Purchaser or the Seller. The Purchaser fees and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral disbursements of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to executethird firm, if requested any, shall be equally shared by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmSeller and Restoration.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Stock Purchase Agreement (Restoration Hardware Inc)
Post-Closing Adjustment. (a) Within 45 60 days after the Closing Date, the Purchaser Moldflow will prepare and deliver to the Seller a Husky written notice (the “"Adjustment Notice”") containing (iA) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date (the "Closing Balance Sheet"), (B) Moldflow's calculation of the Net Working Capital as at the Closing Date (the "Closing Net Working Capital") determined based on the Closing Balance Sheet and (iiiC) reasonably cooperate Moldflow's calculation of the amount of any payment required pursuant to Section 2.6(i). Except as set forth in Section 3.4(b) of the Seller Disclosure Schedule, the Closing Balance Sheet will be prepared in a manner consistent with the Purchaser Interim Balance Sheet. For the purposes of valuing all non U.S. dollar denominated assets and liabilities on the Purchaser’s RepresentativesClosing Balance Sheet, including by providing the source of exchange rates will be those found on a timely basis all information reasonably necessary or useful in preparing ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ taken as of the Adjustment Notice and any other information reasonably requested by close of business on June 29, 2007.
(b) During the Purchaser. Following period from the Closing Date until the date of delivery of the Adjustment NoticeClosing Balance Sheet, at Husky shall give Moldflow such assistance and access to the Seller’s request, books and records relating to the Purchaser (i) shall reasonably cooperate Business and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review comprising part of the Adjustment Notice and (ii) shall provide Purchased Assets as Moldflow may reasonably request in order to enable it to prepare the Seller and its Representatives with any information reasonably requested by themClosing Balance Sheet.
(c) Forthwith after the Closing Date until the date of delivery of the Closing Balance Sheet, and in the event that such information is available in the sole discretion of Seller acting reasonably, Seller will use reasonable efforts to provide Buyer with preliminary drafts or portions of certain financial information (the "Preliminary Information") that will be used by Seller to prepare the Closing Balance Sheet. Any such Preliminary Information will be provided to Buyer as it becomes available on an as is basis, will not be audited, will not constitute the Closing Balance Sheet and will be in preliminary form, subject to material change. Buyer expressly agrees that Seller makes no representations and warranties about any such Preliminary Information, which shall be provided on an "as is" basis and that the use of such Preliminary Information by Buyer is at its sole risk.
(d) For the purpose of assisting and facilitating Buyer in confirming that the Closing Balance Sheet is being and will be prepared in a manner consistent with the Interim Balance Sheet (except as set forth in Section 3.4(b) of the Seller Disclosure Schedule) including the application of Seller's accounting principles, policies and practices, Moldflow will, at Buyer's request, use commercially reasonable efforts to assist Buyer and its independent accountant in carrying out the specified procedures listed in Exhibit D (the "Specified Procedures"), provided that:
(A) the covenant to assist Buyer and its independent accountant in Section 2.6(d) in no way changes the basis for the preparation of the Closing Balance Sheet set out in Sections 2.6 and 3.4(b) and does not expand or change the scope of the representation and warranty of Moldflow in Section 3.4;
(B) Moldflow shall only be obligated to provide such assistance if requests for assistance hereunder do not unduly interfere with the ordinary conduct of business by the Seller; and
(C) Moldflow shall not be responsible for the costs of Husky's independent accountant in carrying out the Specified Procedures. Notwithstanding the foregoing, nothing herein obligates Moldflow to disclose any information, records, files or other data to Buyer or its independent accountant to the extent such disclosure is prohibited by any applicable Laws or if the consent of any Person or Governmental Authority is required to permit Moldflow to release such information, records, files or data to Husky and such consent has not been obtained following commercially reasonable efforts diligently made by Moldflow to obtain it.
(e) Within 30 days after delivery of the Adjustment Notice, the Seller Husky will deliver to Moldflow a written response in which Husky will either:
(i) agree in writing with Moldflow's calculation of the Closing Net Working Capital as set forth in the Adjustment CalculationNotice, in which case such calculation of the Closing Net Working Capital will be final and binding on the parties for purposes of Section 2.4(g2.6(i); or
(ii) dispute Moldflow's calculation of the Closing Net Working Capital as set forth in the Adjustment Calculation Notice by delivering to the Purchaser Moldflow a written notice (a “"Dispute Notice”") which shall specify which items are being disputed and set setting forth in reasonable detail the basis for each such disputed item thereinand certifying that all such disputed items are being disputed in good faith.
(df) If the Seller Husky fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller Husky will be deemed to have irrevocably accepted Moldflow's calculation of the Closing Net Working Capital as set forth in the Adjustment CalculationNotice, in which case, such calculation of the Adjustment Calculation Closing Net Working Capital will be final and binding on the parties for purposes of Section 2.4(g2.6(i).
(eg) If the Seller timely Husky delivers a Dispute Notice to Moldflow within 30 days after delivery of the PurchaserAdjustment Notice, then the Purchaser Husky and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”)days, to agree in writing on the Adjustment Calculation calculation of the Closing Net Working Capital for purposes of Section 2.4(g2.6(i). Any resolution by the Purchaser Husky and the Seller memorialized in writing and signed by both the Purchaser and the Seller Moldflow during the Resolution Period such 30-day period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties Parties for purposes of Section 2.4(g2.6(i). If the Purchaser Husky and the Seller Moldflow do not resolve all disputed items by the end of 30 days after the Resolution Perioddate of delivery of the Dispute Notice, then the Purchaser Husky and the Seller Moldflow will submit the remaining items in dispute to PricewaterhouseCoopers Deloitte & Touche USA LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser Husky and the Seller Moldflow will engage another mutually agreeable independent accounting firm of recognized international national standing, which firm is not the regular auditing firm of, or adviser to, either Husky or Moldflow and is otherwise independent of each of the Purchaser or the Acquired CompaniesParties. If the Purchaser Husky and the Seller Moldflow are unable to jointly select such independent accounting firm within 10 days after the Resolution Periodsuch 30-day period, the PurchaserHusky, on the one hand, and the SellerMoldflow, on the other hand, will each select an independent accounting firm of recognized international national standing and each such selected accounting firms firm will select a third independent accounting firm of recognized international national standing, which firm is not the regular auditing firm of the Purchaser of, or the Acquired Companiesadviser to, either Husky or Moldflow; provided, however, that if either the PurchaserHusky, on the one hand, or the SellerMoldflow, on the other hand, fails fail to select such independent accounting firm during this 10-day period, then the parties Parties agree that the independent accounting firm selected by the other party will Party is deemed to be the independent accounting firm selected by the parties Parties for purposes of this Section 2.4 2.6 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “"Independent Accounting Firm”").
(i) The . Husky and Moldflow will instruct the Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute referred to in the Dispute Notice in a written report that specifies the conclusions of the Independent Accounting Firm as to each such item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf calculation of the Purchaser or the SellerClosing Net Working Capital. The Purchaser Husky and the Seller Moldflow will each use their commercially reasonable efforts to cause instruct the Independent Accounting Firm to render its determination within 30 days as soon as practicable after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicablebut in any event within 30 days following such referral. The decision determinations of the Independent Accounting Firm with respect to the Closing Net Working Capital as set forth in its report will be final, conclusive final and binding on the Parties for purposes of Section 2.6(i). Moldflow will revise the Closing Balance Sheet and will not be subject the calculation of the Closing Net Working Capital as appropriate to appeal or further reviewreflect the resolution of the issues in dispute pursuant to this Section 2.6(g). The costs fees and expenses of the Independent Accounting Firm will be allocated between shared by Husky and Moldflow in inverse proportion to the Parties based upon the percentage which the portion relative amounts of the contested disputed amount not awarded determined to each party bears to be for the amount actually contested by such partyaccount of Husky and Moldflow, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firmrespectively.
(iih) For purposes of complying with this Section 2.42.6, the Purchaser and the Seller Parties will furnish to each other and to the Independent Accounting Firm as soon as practicable such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice issues as the Independent Accounting Firm may reasonably request and are available to that party Party (or its Representatives). A copy of any such work papers independent public accountants) and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such the items with the Independent Accounting Firm, . Either Party may require that the Independent Accounting Firm enter into a customary form of confidentiality agreement with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein respect to the contrary, work papers and other documents and information regarding the dispute resolution mechanism contained in Party provided to the Independent Accounting Firm pursuant to this Section 2.4(e2.6.
(i) If the Closing Net Working Capital as finally determined pursuant to this Section 2.6 is less than the Interim Net Working Capital, then Moldflow will pay to Husky the amount of such difference in cash plus interest thereon (calculated based on the actual number of days elapsed in a year consisting of 365 days) from the Closing Date through and including the date of such payment at a rate of 5% per annum. If the Closing Net Working Capital as finally determined pursuant to this Section 2.6 is greater than the Interim Net Working Capital, then Husky will pay to Moldflow the amount of such difference in cash plus interest thereon (calculated based on the actual number of days elapsed in a year consisting of 365 days) from the Closing Date through and including the date of such payment at a rate of 5% per annum.
(j) Any payment to Husky pursuant Section 2.6(i) will be effected by wire transfer of immediately available funds from Moldflow to an account designated by Husky, and any payment to Moldflow pursuant to Section 2.6(i) will be effected by wire transfer of immediately available funds to an account designated by Moldflow. Such payments will be made within five Business Days following the exclusive mechanism for resolving any disputes regarding final determination of the Adjustment CalculationClosing Net Working Capital in accordance with this Section 2.6.
(k) The payment pursuant to Section 2.6(i) (other than the portion thereof that is attributable to the payment of interest pursuant to Section 2.6(i)) will be treated by the Parties as an adjustment to the Initial Purchase Price. The Initial Purchase Price as so adjusted is referred to in this Agreement as the "Purchase Price."
Appears in 1 contract
Post-Closing Adjustment. (a) Within As promptly as practicable after the Divestiture Date and in any event within 45 days after thereafter, Knewco shall prepare (with Sensormatic's cooperation, as appropriate) its final balance sheet at the Closing Date, the Purchaser will prepare and deliver to the Seller a written notice Divestiture Date (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as at immediately prior to the Closing (the “Closing "Divestiture Date Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to Section 2.4(g) (the “Adjustment Calculation”"). The Closing Divestiture Date Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will which shall be prepared in accordance with GAAP applied in a manner and the Allocation Principles, and consistent with the methods and practices used to prepare the Company Interim Estimated Balance Sheet, shall reflect, among other things, the net worth of Knewco at the Divestiture Date after giving effect to the Contribution (but without giving effect to any write-downs described in Section 1.5). If Sensormatic and Knewco are in agreement as to the net worth of Knewco, as reflected on the Divestiture Date Balance Sheet, such net worth shall have been finally determined in accordance with this Section 7.6 and, accordingly, either Sensormatic or Knewco shall promptly pay to the other the cash payment, if any, required pursuant to Section 7.6(e). If Sensormatic and Knewco are not in agreement on such net worth, they shall promptly thereafter jointly instruct Deloitte & Touche ("Deloitte") to conduct an audit or, if agreed to by the parties, a review of the Divestiture Date Balance Sheet (the "Examination"). The purpose of the Examination shall be to determine the net worth of Knewco at the Divestiture Date after giving effect to the Contribution and the amount of any adjustment in the amount of cash or cash equivalents contributed to Knewco pursuant to this Section 7.6.
(b) During Sensormatic and Knewco shall jointly instruct Deloitte to complete the preparation Examination within 30 days after the receipt of the Adjustment NoticeDivestiture Date Balance Sheet as prepared by Knewco and to render its report thereon (the "Report") to Knewco and Sensormatic within such period. The Report shall include, at the Purchaser’s requestamong other things, the Seller will, and will cause each Deloitte's calculation of the Acquired Companies to, (i) provide net worth of Knewco as reflected on the Purchaser Divestiture Date Balance Sheet. Sensormatic and Knewco shall jointly instruct Deloitte to make its work papers with respect to the Examination and the Purchaser’s Representatives with reasonable access Report available to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller Knewco and its Representatives in the review of the Adjustment Notice advisers and (ii) shall provide the Seller to Sensormatic, Ernst & Young and its Representatives with any information reasonably requested by themSensormatic's other advisers.
(c) Within 30 days after delivery The content and conclusions of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will Report shall be final conclusive and binding on Sensormatic and Knewco unless either one notifies the parties for purposes of Section 2.4(g); or
(ii) dispute other and Deloitte that it disputes the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions Report within 30 days after Deloitte's delivery of the Adjustment Notice, then the Seller will be deemed Report to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g)it. If either Sensormatic or Knewco timely disputes the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution PeriodReport, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, they shall promptly attempt to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination any differences between them with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as Report. If they are unable to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination do so within 30 days after referral the date of the disputed items on a timely delivered Dispute Notice notice of dispute, either Sensormatic or Knewco or both of them jointly may submit the dispute to Price Waterhouse or, if they are unable or unwilling to act, such other "Big Six" public accounting firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will may be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined selected by the Independent Accounting Firm. The Buyer and American Arbitration Association (the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives"Second Auditor"). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
Appears in 1 contract
Sources: Contribution and Divestiture Agreement (Sentry Technology Corp)
Post-Closing Adjustment. (a) Within 45 days after No later than the 60th day following the Closing Date, the Purchaser Parent will prepare cause to be prepared and deliver delivered to the Seller Stockholder Representative a written notice (statement setting forth its calculation of the “Adjustment Notice”) containing (i) an unaudited Closing Working Capital, which statement shall contain a consolidated balance sheet of the Acquired Companies Company as at immediately prior of the Closing Date (without giving effect to the transactions contemplated herein), a calculation of Closing Working Capital (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) and a certificate of the Purchaser’s calculation of Closing Net Cash based on Parent that the Closing Working Capital Statement was prepared in accordance with the Agreed Accounting Principles. The Closing Working Capital Statement shall also set forth the variance, if any, between the Estimated Cash Balance Sheet and the actual amount of the cash and cash equivalents at the Closing Time (the “Actual Cash Balance”), and the variance, if any, between the Estimated Closing Net Cash Statement”) Date Indebtedness and (iv) the Purchaser’s calculation actual Closing Date Indebtedness as of the amount of any payments required pursuant to Section 2.4(g) Closing Time (the “Adjustment CalculationActual Closing Date Indebtedness”). The Closing Balance Sheet, post-closing adjustment shall be an amount equal to the Closing Net Working Capital Statement minus the Estimated Closing Working Capital, reduced by any negative difference between the Actual Cash Balance and the Estimated Cash Balance and any positive difference between Actual Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods Date Indebtedness and practices used to prepare the Company Interim Balance Sheet.
(b) During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller willEstimated Closing Date Indebtedness, and will cause each of increased by any positive difference between the Acquired Companies to, (i) provide the Purchaser Actual Cash Balance and the Purchaser’s Representatives with reasonable access to the books, records, facilities Estimated Cash Balance and Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the any negative difference between Actual Closing Date Indebtedness and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by them.
(c) Within 30 days after delivery of the Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice Estimated Closing Date Indebtedness (the “Resolution PeriodPost-Closing Adjustment”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether adjusted pursuant to this sentence or the preceding sentenceSection 2.14(c)(iii), the “Independent Accounting Firm”)if applicable.
(i) The Independent Accounting Firm will If the Post-Closing Adjustment is a negative number, the Stockholder Representative and Parent shall within three (A3) act Business Days of the final determination of the Post-Closing Adjustment (including any Review Period and/or Resolution Period as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed may be required pursuant to Section 2.4(c), Section 2.4(d2.14(c) or Section 2.4(ebelow) issue joint written instructions directing the Escrow Agent to be final and binding on the Parties, pay to Parent an amount equal to such excess (Bwithout deduction) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess out of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect Escrow Account by wire transfer of immediately available funds to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it account specified by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting FirmParent.
(ii) For purposes If the Post-Closing Adjustment is a positive number, Parent will pay to the Paying Agent, on behalf of complying with the holders of Outstanding Common Shares (other than the Dissenting Shares), an amount equal to (A) such excess (without deduction) multiplied by (B) a fraction, (I) the numerator of which is the Outstanding Common Shares minus the total number of Outstanding Common Shares that are Dissenting Shares and (II) the denominator of which is the Outstanding Common Shares. Any amount payable by Parent to the Paying Agent pursuant to this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e2.14(b)(ii) will be paid within three (3) Business Days of the exclusive mechanism final determination of the Post-Closing Adjustment (including any Review Period and/or Resolution Period as may be required pursuant to Section 2.14(c) below) by wire transfer of immediately available funds to an account specified by the Paying Agent. The Paying Agent shall distribute to each holder of Outstanding Common Shares who has surrendered before such payment date his, her or its Certificate(s) and duly executed letter of transmittal (and to each holder of In-the-Money Options), such holder’s pro rata share of any payments pursuant to this Section 2.14(b)(ii) (based on the number of Outstanding Common Shares held by such holder (or underlying such holder’s In-the-Money Options) in relation to all Outstanding Common Shares). If and to the extent there are holders of Outstanding Common Shares who have not yet surrendered their Certificates, the Paying Agent shall distribute the remainder of the payment(s) pursuant to Section 2.9. Notwithstanding the foregoing, in the event any payments pursuant to this Section 2.14(b)(ii) are deemed to be compensation income to the recipient thereof, Parent and the Surviving Corporation shall use their best efforts to ensure that such payments are properly processed through the Surviving Corporation’s payroll system.
(iii) Any payments made pursuant to this Section 2.14(b) shall be treated as an adjustment to the Merger Consideration by the parties for resolving any disputes regarding the Adjustment CalculationTax purposes, unless otherwise required by Law.
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Post-Closing Adjustment. (a) Within 45 days The Cash Purchase Price shall be subject to adjustment after the Closing Date, the Purchaser will prepare and deliver to the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies Date as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to specified in this Section 2.4(g) (the “Adjustment Calculation”). The Closing Balance Sheet, the Closing Net Working Capital Statement and the Closing Net Cash Statement will be prepared in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet1.3.
(b) During Within one hundred twenty (120) days following the preparation Closing Date, Buyer, at its option, shall cause PriceWaterhouseCoopers ("Buyer's Accountant") to audit the Company's books to determine the accuracy of the Adjustment Notice, at information set forth on the Purchaser’s request, Closing Financial Certificate (the Seller will, "Post-Closing Audit"). The parties acknowledge and will cause each agree that for purposes of determining the net worth of the Acquired Companies to, (i) provide the Purchaser and the Purchaser’s Representatives with reasonable access to the books, records, facilities and Employees of the Acquired Companies to the extent not otherwise already acquired Company as of the Closing Date, (i) the value of the assets of the Company shall, except with the prior written consent of Buyer, be calculated as provided in the last paragraph of Section 6.9, (ii) provide the Purchaser, within ten Business Days after Buyer's Accountant shall give full effect to the Closing Date, with normal month-end closing financial information for Additional A/R Reserve. In the period ending event that Buyer's Accountant determines that the actual Company net worth as of the close Closing Date was less than the Certified Closing Net Worth, Buyer shall deliver a written notice (the "Financial Adjustment Notice") to the Stockholders' Representative, as defined in Section 1.6, setting forth (i) the determination made by Buyer's Accountant of business the actual Company net worth (the "Actual Company Net Worth"), (ii) the amount of the Cash Purchase Price that would have been payable at Closing pursuant to Section 1.2(c) had the Actual Company Net Worth been reflected on the Closing Date Financial Certificate instead of the Certified Closing Net Worth, and (iii) reasonably cooperate with the Purchaser and amount by which the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful Cash Purchase Price would have been reduced at Closing had the Actual Company Net Worth been used in preparing the calculations pursuant to Section 1.2(c) (the "Purchase Price Adjustment"). The Purchase Price Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery shall take account of the Adjustment Noticereduction, at if any, to the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives Cash Purchase Price already taken pursuant to assist, the Seller and its Representatives in the review of the Adjustment Notice and (ii) shall provide the Seller and its Representatives with any information reasonably requested by themSection 1.2(c)(i).
(c) Within 30 The Stockholders' Representative shall have thirty (30) days after delivery from the receipt of the Financial Adjustment Notice to notify Buyer if the Stockholders dispute such Financial Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by delivering to the Purchaser a written . If Buyer has not received notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the basis for each disputed item therein.
(d) If the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days following the Purchaser’s receipt of such Dispute Notice a dispute within such thirty (the “Resolution Period”), to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to any disputed items set forth in such Dispute Notice will be final and binding on the parties for purposes of Section 2.4(g). If the Purchaser and the Seller do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized international standing and such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-30) day period, then Buyer shall be entitled to receive from the parties agree that Stockholders (which may, at Buyer's sole discretion, be from the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Pledged Assets as defined in Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”1.4).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as reasonably practicable. The decision of the Independent Accounting Firm will be final, conclusive and binding on the Parties and will not be subject to appeal or further review. The costs and expenses of the Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Independent Accounting Firm. The Buyer and the Representative agree to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the Independent Accounting Firm.
(ii) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the presence of both the Purchaser and the Seller and/or their respective Representatives. Notwithstanding anything herein to the contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the Adjustment Calculation.
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