Post-Closing Adjustments to Purchase Price. (a) Within 60 days after the Closing Date, Buyer shall cause to be prepared and delivered to Sellers (i) a written statement (the “Working Capital Statement”), setting forth the calculation of the Net Working Capital as of the close of business on the day prior to the Closing Date (the “Closing Working Capital”) and (ii) an unaudited consolidated balance sheet of the Company (the “Closing Balance Sheet”) as of the close of business on the day prior to the Closing Date. The Closing Balance Sheet will be computed in accordance with GAAP and without regard to Schedule 2.2(a). The Closing Balance Sheet shall not contain any adjustments which Buyer believes may be necessary or appropriate as a result of Buyer’s purchase of the Shares (including changes based on Buyer’s intended method of conducting the Company’s business). The Closing Working Capital will be prepared based on the Closing Balance Sheet except that it shall be prepared in a manner consistent with the definition of Net Working Capital and Schedule 2.2(a). (b) During the 30-day period following the receipt by Sellers of the Working Capital Statement, Sellers and their respective Representatives shall be permitted to review the working papers with respect to the Working Capital Statement and related financial statements, the Books and Records, and to have access to Company accounting and other personnel for the purpose of reviewing the Working Capital Statement. The Working Capital Statement shall become final and binding upon the parties on the 30th day following the receipt thereof by Sellers, unless Sellers give written notice to Buyer prior to such date of its disagreement with the Working Capital Statement or that Sellers have not been provided such access to requisite working papers, books and records, or personnel (“Notice of Disagreement”). Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement or lack of access, and include only disagreements based on mathematical errors, the Working Capital Statement not being prepared in accordance with this Section 2.2, or the determination of amounts involving discretion or judgment (including the amounts of reserves). If the Notice of Disagreement specifies lack of access, the period to specify disagreements shall be extended until 30 days after access has been granted. Further adjustments may not be proposed by any party thereafter. The Working Capital Statement (as it may be revised pursuant to the procedures described below) shall become final and binding upon Sellers and Buyer on the “Final Resolution Date,” which shall be the earliest of (a) the date on which Sellers’ right to specify disagreements to the Working Capital Statement terminates as provided above so long as Sellers have not delivered a Notice of Disagreement, (b) the date Sellers and Buyer resolve in writing any disagreements with respect to the matters specified in the Notice of Disagreement, (c) the date any disagreements are finally resolved in writing by the Independent Auditors (as defined below), or (d) the date of a final judgment with respect to the disputed matter by a New York Court pursuant to Section 2.2(d). (c) During the 15-day period following the delivery of a Notice of Disagreement, Sellers and Buyer shall seek in good faith to resolve in writing any differences which they may have with respect to the matters specified in the Notice of Disagreement. At the end of such 15-day period, Sellers and Buyer shall submit to an independent accounting firm (the “Independent Auditors”) for review and resolution any and all disagreements as to accounting matters which were properly included in the Notice of Disagreement and any other matters which the parties agree to submit to the Independent Auditors for resolution. Other disagreements (including any assertion with respect to a breach of this Agreement with respect to access or the preparation or content of the Closing Balance Sheet) shall be promptly submitted to a New York Court pursuant to Section 2.2(d). (d) The Independent Auditors shall be any “big four” national accounting firm not employed (currently or within the preceding 24 months) by the Company, any Seller or Buyer, as shall be agreed upon by Sellers and Buyer in writing. If Sellers and Buyer do not so agree in writing by the end of the 15-day period, KPMG will be selected as the Independent Auditors. The Independent Auditors so selected shall notify the parties of its determination concerning the matter(s) included in the Notice of Disagreement within 30 days of its appointment. Sellers and Buyer agree that judgment may be entered upon the determination of the Independent Auditors in a New York Court or in any other court having jurisdiction over the party against which such determination is to be enforced. The cost of resolution of any Notices of Disagreement (including the fees and expenses of the Independent Auditors and reasonable attorney fees and expenses of the parties) pursuant to this Section 2.2 shall be borne by Buyer and Sellers in inverse proportion as they may prevail, with proportionate allocations determined by the Independent Auditors or the court, as the case may be. As among Sellers, amounts charged shall be allocated in the proportion in which they own the Shares as set forth on Exhibit A hereto. (e) Within two business days after the Final Resolution Date, Sellers and Buyer shall jointly determine the amount by which the Initial Purchase Price would have been adjusted pursuant to Section 2.1(d) had Closing Working Capital been substituted for estimated Net Working Capital. (i) If such substitutions would have resulted in a Purchase Price that is less than the Initial Purchase Price, then the amount of such shortfall plus accrued interest from the Closing Date at the Prime Rate in effect on the Closing Date shall be paid to Buyer out of the Escrow Account in accordance with the Escrow Agreement. To the extent such shortfall plus accrued interest exceeds the amount then held in the Escrow Account, Sellers, on a several basis, shall pay their pro rata share of such shortfall, plus accrued interest on such shortfall from the Closing Date at the Prime Rate in effect on the Closing Date, in the proportion in which they own the Shares as set forth on Exhibit A hereto, by bank wire transfer of immediately available funds to an account designated in writing by Buyer. (ii) If such substitutions would have resulted in a Purchase Price that is greater than the Initial Purchase Price, then within five business days from the date on which Closing Working Capital is finally determined pursuant to Section 2.2(a), Buyer shall pay or cause to be paid to Sellers, in the proportion in which they own the Shares as set forth on Exhibit A hereto, by bank wire transfer of immediately available funds to the accounts designated in writing by Sellers, an amount in cash equal to such excess plus accrued interest from the Closing Date at the Prime Rate in effect on the Closing Date. (iii) Any post-closing adjustment payments made under this Section 2.2 shall be treated as adjustments to the Purchase Price for all tax purposes.
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Sources: Stock Purchase Agreement (Ameron International Corp)
Post-Closing Adjustments to Purchase Price. (a) Within 60 days after At the Closing DateClosing, Buyer the Sellers shall cause to be prepared and delivered to Sellers (i) provide the Purchaser with a written statement draft closing balance sheet (the “Working Capital StatementDraft Closing Balance Sheet”), setting forth the calculation ) of the Company prepared as of the Closing Date together with an estimate of Net Working Capital as of the close of business on the day prior to the Closing Date (the “Estimated Closing Net Working Capital”). The Draft Closing Balance Sheet shall be prepared in accordance with ASPE applied on a basis consistent with the preparation of the Annual Financial Statements.
(b) Within 90 days following the Closing Date (or such other date as is mutually agreed to by the Sellers’ Representative and (ii) an unaudited consolidated the Purchaser in writing), the Purchaser shall prepare and deliver, or cause to be prepared and delivered, to the Sellers’ Representative a closing balance sheet of the Company (the “Closing Balance Sheet”) of the Company prepared as of the close of business on the day prior to the Closing Date. The Closing Balance Sheet will shall be computed prepared in accordance with US GAAP applied on a basis consistent with the preparation of the Annual Financial Statements.
(c) The Purchaser shall provide sufficient access, upon every reasonable request, to the Sellers’ Representative and without regard its representatives to Schedule 2.2(a)all work papers of the Purchaser, accounting books and Records relating to the Company and the MediaMiser Business and the appropriate personnel to verify the accuracy, presentation and other matters relating to the preparation of the Closing Balance Sheet and the Sellers’ Representative and the Purchaser shall otherwise fully cooperate with each other in the preparation of the Closing Balance Sheet. The Sellers’ Representative and the Purchaser shall each bear the fees and expenses of their respective personnel and representatives in preparing or reviewing, as applicable, the Closing Balance Sheet.
(d) In preparing the Closing Balance Sheet it is understood that the Purchaser may, with notice to the Sellers’ Representative, choose to undertake certain specified procedures to verify the accuracy and completeness of the accounts of the Company and the Sellers’ Representative may choose to review or, to the extent practical, participate in this process, including: (i) an analysis of the Accounts Receivable and the sufficiency of the provisions for Doubtful Accounts; and (ii) an analysis of the invoices and claims received following the Closing Date to assess the adequacy of accounts payables and accruals made as at the Closing Date.
(e) The Closing Balance Sheet shall not contain any adjustments which Buyer believes may be necessary or appropriate prepared and delivered as a result of Buyer’s purchase of the Shares (including changes based on Buyer’s intended method of conducting the Company’s business). The Closing Working Capital will be prepared based on the Closing Balance Sheet except that it aforesaid shall be prepared in a manner consistent with the definition of Net Working Capital and Schedule 2.2(a).
(b) During the 30-day period following the receipt by Sellers of the Working Capital Statement, Sellers and their respective Representatives shall be permitted to review the working papers with respect to the Working Capital Statement and related financial statements, the Books and Records, and to have access to Company accounting and other personnel for the purpose of reviewing the Working Capital Statement. The Working Capital Statement shall become final and binding upon the parties on the 30th day following the receipt thereof by SellersParties for all purposes hereof, absent manifest error, unless Sellers give written the Sellers’ Representative notifies the Purchaser in writing that it in good faith disputes the Closing Balance Sheet within fifteen (15) Business Days after receipt thereof. Such notice to Buyer prior to such date of its disagreement with the Working Capital Statement or that Sellers have not been provided such access to requisite working papers, books and records, or personnel (“Notice of Disagreement”). Any Notice of Disagreement dispute shall specify set out in reasonable detail the nature basis for the Sellers’ Representative’s dispute as well as the amount in dispute and reasonable details of any disagreement or lack the calculation of access, and include only disagreements based on mathematical errorssuch amount.
(f) In the event that the Sellers’ Representative disputes the Closing Balance Sheet, the Working Capital Statement not being prepared Purchaser and the Sellers’ Representative will work expeditiously and in accordance with this Section 2.2good faith in an attempt to resolve any such dispute within a further period of twenty (20) Business Days after the date of notification by the Sellers’ Representative to the Purchaser of such dispute, or failing which such dispute shall be submitted for determination to an independent firm of chartered accountants mutually agreed to by the Sellers’ Representative and the Purchaser (and, failing such agreement between the Sellers’ Representative and the Purchaser within a further period of five (5) Business Days, such independent firm of chartered accountants shall be Ernst & Young LLP). The determination of amounts involving discretion or judgment (including the amounts independent firm of reserves). If chartered accountants shall set out in reasonable detail the Notice of Disagreement specifies lack of access, the period to specify disagreements calculations and factors considered in reaching its determination and shall be extended until 30 days after access has been granted. Further adjustments may not be proposed by any party thereafter. The Working Capital Statement (as it may be revised pursuant to the procedures described below) shall become final and binding upon Sellers the Parties and Buyer on the “Final Resolution Date,” which not subject to appeal. The independent firm of chartered accountants shall be deemed to be acting as experts and not as arbitrators and shall only consider the earliest issues in dispute placed before it. The costs and expenses of (a) such independent firm of chartered accountants shall be borne equally by the date on which Sellers’ right Representative and the Purchaser. The Sellers’ Representative and the Purchaser shall each bear their own costs and expenses in presenting their cases to specify disagreements to the Working Capital Statement terminates as provided above so long as Sellers have not delivered a Notice such independent firm of Disagreement, (b) the date Sellers and Buyer resolve in writing any disagreements with respect to the matters specified in the Notice of Disagreement, (c) the date any disagreements are finally resolved in writing by the Independent Auditors (as defined below), or (d) the date of a final judgment with respect to the disputed matter by a New York Court pursuant to Section 2.2(d)chartered accountants.
(cg) During Following the fifteen (15-day ) Business Day period following the delivery of a Notice of Disagreement, Sellers and Buyer shall seek referred to in good faith to resolve in writing any differences which they may have with respect to the matters specified in the Notice of Disagreement. At the end of such 15-day period, Sellers and Buyer shall submit to an independent accounting firm (the “Independent Auditors”Subsection 2.4(e) for review and resolution any and all disagreements as to accounting matters which were properly included in the Notice of Disagreement and any other matters which the parties agree to submit to the Independent Auditors for resolution. Other disagreements (including any assertion with respect to a breach of this Agreement with respect to access or the preparation or content of the Closing Balance Sheet) shall be promptly submitted to a New York Court pursuant to Section 2.2(d).
(d) The Independent Auditors shall be any “big four” national accounting firm not employed (currently or within the preceding 24 months) by the Company, any Seller or Buyer, as shall be agreed upon by Sellers and Buyer in writing. If Sellers and Buyer do not so agree in writing by the end of the 15-day period, KPMG will be selected as the Independent Auditors. The Independent Auditors so selected shall notify the parties of its determination concerning the matter(s) included in the Notice of Disagreement within 30 days of its appointment. Sellers and Buyer agree that judgment may be entered upon the determination of the Independent Auditors in a New York Court or in any other court having jurisdiction over the party against which such determination is to be enforced. The cost of resolution of any Notices of Disagreement (including the fees and expenses of the Independent Auditors and reasonable attorney fees and expenses of the parties) pursuant to this dispute in accordance with Section 2.2 shall be borne by Buyer and Sellers in inverse proportion as they may prevail, with proportionate allocations determined by the Independent Auditors or the court2.4(f), as the case may be. As among , the Purchaser shall forthwith deliver to the Sellers, amounts charged ’ Representative the final closing balance sheet (the “Final Closing Balance Sheet”) and such Final Closing Balance Sheet shall be allocated in final and binding upon the proportion in which they own the Shares as set forth on Exhibit A heretoParties, absent manifest error.
(eh) Within two business days after Based on the Final Resolution DateClosing Balance Sheet: (a) if Net Working Capital on the Closing Date is greater than the Estimated Closing Net Working Capital, Sellers the Purchaser shall pay to the Sellers’ Representative, by bank draft, certified cheque or other means of immediately available funds within five (5) Business Days after receipt of the Final Closing Balance Sheet, the Adjustment Amount (such payment amount to be apportioned by the Sellers’ Representative as between the Preferred Share Holders according to their respective Pro Rata Portion) and Buyer such payment by the Purchaser shall jointly determine constitute an increase in the Purchase Price and shall be deemed to be an increase in the Upfront Payment; or (b) if Net Working Capital on the Closing Date is less than the Estimated Closing Net Working Capital, the First Anniversary Payment shall be reduced by an amount equal to the Adjustment Amount (such reduction to be apportioned among the Preferred Share Holders according to their respective Pro Rata Portion). For the purposes hereof, “Adjustment Amount” means the amount by which the Initial Purchase Price would have been adjusted pursuant to Section 2.1(d) had Closing Net Working Capital been substituted for estimated as determined from the Final Closing Balance Sheet is greater than or less than, as applicable, the Estimated Closing Net Working Capital.
(i) If such substitutions would have resulted in a Purchase Price that is less than the Initial Purchase Price, then the amount of such shortfall plus accrued interest from the Closing Date at the Prime Rate in effect on the Closing Date shall be paid to Buyer out of the Escrow Account in accordance with the Escrow Agreement. To the extent such shortfall plus accrued interest exceeds the amount then held in the Escrow Account, Sellers, on a several basis, shall pay their pro rata share of such shortfall, plus accrued interest on such shortfall from the Closing Date at the Prime Rate in effect on the Closing Date, in the proportion in which they own the Shares as set forth on Exhibit A hereto, by bank wire transfer of immediately available funds to an account designated in writing by Buyer.
(ii) If such substitutions would have resulted in a Purchase Price that is greater than the Initial Purchase Price, then within five business days from the date on which Closing Working Capital is finally determined pursuant to Section 2.2(a), Buyer shall pay or cause to be paid to Sellers, in the proportion in which they own the Shares as set forth on Exhibit A hereto, by bank wire transfer of immediately available funds to the accounts designated in writing by Sellers, an amount in cash equal to such excess plus accrued interest from the Closing Date at the Prime Rate in effect on the Closing Date.
(iii) Any post-closing adjustment payments made under this Section 2.2 shall be treated as adjustments to the Purchase Price for all tax purposes.
Appears in 1 contract