Post-Closing Merger Consideration Adjustment. (a) As promptly as practicable, but in any case no later than sixty (60) calendar days after the Closing Date, Buyer shall cause to be prepared and delivered to the Stockholders’ Representative a statement (the “Closing Statement”) setting forth the Net Working Capital, the Net Funded Indebtedness, the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) and the components thereof. The Closing Statement shall include the amount calculated in good faith by Buyer, if any, of the Merger Consideration Escrow Amount that need not be retained by the Escrow Agent pending resolution of payments to be made pursuant to Section 2.11(d) (the “Merger Consideration Escrow Release Amount”). The Merger Consideration Escrow Release Amount, to the extent there is such an amount, shall be released two (2) Business Days following Buyer’s delivery of the Closing Statement. The Closing Statement and the Net Working Capital, the Net Funded Indebtedness and the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) calculations shall be prepared and calculated in good faith, and in the manner and on a basis consistent with the Accounting Principles (to the extent applicable) and shall be in the same form and include the same line items as the Estimated Net Working Capital calculation, the Estimated Net Funded Indebtedness calculation and the Estimated Transaction Related Expenses calculation. If the Closing Statement is not so timely delivered, the Estimated Net Working Capital, the Estimated Net Funded Indebtedness and the Estimated Transaction Related Expenses will be deemed Final Net Working Capital, Final Net Funded Indebtedness and Final Transaction Related Expenses, respectively. (b) After receipt of the Closing Statement, the Stockholders’ Representative will have forty five (45) calendar days to review the Closing Statement. Unless the Stockholders’ Representative delivers written notice (which notice shall include the items and amounts in dispute and supporting documentation related thereto; such notice, a “Seller Dispute Notice”) to Buyer setting forth the items disputed by the Stockholders’ Representative with respect thereto on or prior to the forty-fifth (45th) calendar day after the Stockholders’ Representative’s receipt of the Closing Statement, the Stockholders’ Representative will be deemed to have accepted and agreed to the Closing Statement and such statement (and the calculations contained therein) will be final, binding and conclusive, absent manifest error or fraud. If the Stockholders’ Representative notifies Buyer of its objections to items contained in the Closing Statement (or calculations contained therein) within such forty five (45) calendar day period, Buyer and the Stockholders’ Representative shall, during the thirty (30) calendar days following delivery of such notice by the Stockholders’ Representative to Buyer (or such longer period as they may mutually agree in writing) (the “Resolution Period”), attempt in good faith to resolve their differences with respect to the disputed items (or calculations) such notice (the “Disputed Items”), and all other items (and all calculations relating thereto) will be final, binding and conclusive, absent manifest error or fraud. Any resolution by Buyer and the Stockholders’ Representative during the Resolution Period as to any Disputed Item shall be set forth in writing and will be final, binding and conclusive, absent manifest error or fraud. (c) If Buyer and the Stockholders’ Representative do not resolve all Disputed Items by the end of the Resolution Period, then all Disputed Items remaining in dispute will be submitted to the Neutral Arbitrator. The Neutral Arbitrator shall act as an arbitrator to determine only those Disputed Items remaining in dispute, consistent with this Section 2.11, and shall request a statement from Buyer and the Stockholders’ Representative regarding such Disputed Items. The scope of the disputes to be arbitrated by the Neutral Arbitrator is limited to those items or calculations specifically in dispute between Buyer and the Stockholders’ Representative; and the Neutral Arbitrator is not to make any other determination. In resolving each Disputed Item, the Neutral Arbitrator shall be bound by the principles set forth in this Section 2.11 and may not assign a value to any Disputed Item greater than the greatest value for such Disputed Item claimed by any party or less than the lowest value for such Disputed Item claimed by any party. The parties further agree that the adjustment contemplated by this Section 2.11 is intended to show the change between the Estimated Net Working Capital and the Final Net Working Capital, the change between the Estimated Net Funded Indebtedness and the Final Net Funded Indebtedness and the change between Estimated Transaction Related Expenses and Final Transaction Related Expenses, and that such changes can only be measured if each calculation is done in a manner consistent with the Accounting Principles and the definitions thereof. All fees and expenses relating to the work, if any, to be performed by the Neutral Arbitrator will be allocated between Buyer and the Stockholders’ Representative (which, in the case of the Stockholders’ Representative, shall be payable by the Stockholders’ Representative solely out of the Reserve Amount) in the same proportion that the aggregate amount of the Disputed Items so submitted to the Neutral Arbitrator that is unsuccessfully disputed by each such party (as finally determined by the Neutral Arbitrator) bears to the total amount of such Disputed Items so submitted. The Neutral Arbitrator will deliver to Buyer and the Stockholders’ Representative a written determination (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided to the Neutral Arbitrator by the Stockholders’ Representative and Buyer) of the Disputed Items submitted to the Neutral Arbitrator within thirty (30) calendar days of receipt of such Disputed Items, which determination will be final, binding and conclusive, absent manifest error or fraud. The final, binding and conclusive Closing Statement based either upon agreement by the parties, or deemed agreement by Buyer and the Stockholders’ Representative in accordance with this Section 2.11, or the written determination delivered by the Neutral Arbitrator in accordance with this Section 2.11(c) will be the “Conclusive Closing Statement.” If any party fails to submit a statement regarding any Disputed Item submitted to the Neutral Arbitrator within the time determined by the Neutral Arbitrator or otherwise fails to give the Neutral Arbitrator access as reasonably requested, then the Neutral Arbitrator shall render a decision based solely on the evidence timely submitted and the access afforded to the Neutral Arbitrator by the other party. Except in instances involving fraud or except as may arise out of the representations and warranties under Article III and Article IV and in such instances only to the extent set forth in this Agreement, neither any Stockholder, holder of Company Stock Options or the Stockholder Representative shall have any liability with respect to Funded Indebtedness, Closing Date Funded Indebtedness, Transactions Related Expenses, or current assets or current liabilities (including as to accounts receivable and the collectability thereof) or any other component of Net Working Capital except as determined in this Section 2.11. (d) Within two (2) Business Days after the Final Amounts have been determined in accordance with this Section 2.11: (i) if the Aggregate Common Equity Amount is greater than the Final Payment Amount, then the Stockholders’ Representative and Buyer shall instruct the Escrow Agent to pay to the Surviving Corporation, using first the funds in the Merger Consideration Escrow Account and, to the extent the funds in the Merger Consideration Escrow Account are not sufficient to satisfy such payment in full, then out of the funds in the General Escrow Account, an amount in cash equal to the amount by which the Aggregate Common Equity Amount is greater than the Final Payment Amount (as defined below); and (ii) if the Aggregate Common Equity Amount is less than the Final Payment Amount (as defined below), Buyer shall pay, or cause the Surviving Corporation to pay, to the Stockholders’ Representative (for further pro rata distribution to the Fully Diluted Common Holders) an amount in cash equal to the amount by which the Aggregate Common Equity Amount is less than the Final Payment Amount by wire transfer of immediately available funds (the amount payable to Buyer pursuant to Section 2.11(d)(i) and the amount payable to the Stockholders’ Representative pursuant to this Section 2.11(d)(ii) are referred to herein as the “Merger Consideration Adjustment Amount”); provided that any portion of any amount payable under this Section 2.11(d)(ii) that is a Compensatory Payment shall not be paid to the Stockholders’ Representative but shall instead be paid by the Surviving Corporation (or a Subsidiary of the Surviving Corporation) through its payroll system and in accordance with the Surviving Corporation’s (or such Subsidiary’s) standard withholding and payroll practices and procedures to the Person identified in writing by the Stockholders’ Representative as the Person to whom such Compensatory Payment is to be made. Any payment by Buyer, the Surviving Corporation or the Stockholders’ Representative (pursuant to the distribution of funds from the Merger Consideration Escrow Account or the General Escrow Account), as the case may be, pursuant to this Section 2.11 will be treated as an adjustment to the Merger Consideration for tax purposes. For purposes of this Section 2.11:
Appears in 1 contract
Sources: Agreement and Plan of Merger (Endo International PLC)
Post-Closing Merger Consideration Adjustment. (a) As promptly as practicable, Promptly following the Closing Date (but in any case no later than sixty event within ninety (6090) calendar days after the Closing Date), Buyer I RET, at its expense, shall cause to be prepared and delivered to the Stockholders’ Representative Shareholders a statement certification (the “"Closing Statement”Certificate") setting forth the Net Working Capital, the Net Funded Indebtedness, the Transaction Related Expenses (to the extent not paid prepared by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) and the components thereofAuditor. The Closing Statement Certificate shall include the amount calculated in good faith by Buyer, if any, of the Merger Consideration Escrow Amount that need not be retained by the Escrow Agent pending resolution of payments to be made pursuant to Section 2.11(d) (the “Merger Consideration Escrow Release Amount”). The Merger Consideration Escrow Release Amount, to the extent there is such an amount, shall be released two (2) Business Days following Buyer’s delivery of the Closing Statement. The Closing Statement and the Net Working Capital, the Net Funded Indebtedness and the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) calculations shall be prepared and calculated in good faith, and in the manner and on a basis consistent with the Accounting Principles (to the extent applicable) and shall be in the same form and include the same line items as the Estimated Net Working Capital calculation, the Estimated Net Funded Indebtedness calculation and the Estimated Transaction Related Expenses calculation. If the Closing Statement is not so timely delivered, the Estimated Net Working Capital, the Estimated Net Funded Indebtedness and the Estimated Transaction Related Expenses will be deemed Final Net Working Capital, Final Net Funded Indebtedness and Final Transaction Related Expenses, respectively.
(b) After receipt of the Closing Statement, the Stockholders’ Representative will have forty five (45) calendar days to review the Closing Statement. Unless the Stockholders’ Representative delivers written notice (which notice shall include the items and amounts in dispute and supporting documentation related thereto; such notice, a “Seller Dispute Notice”) to Buyer setting forth the items disputed by the Stockholders’ Representative with respect thereto on or prior to the forty-fifth (45th) calendar day after the Stockholders’ Representative’s receipt of the Closing Statement, the Stockholders’ Representative will be deemed to have accepted and agreed to the Closing Statement and such statement (and the calculations contained therein) will be final, binding and conclusive, absent manifest error or fraud. If the Stockholders’ Representative notifies Buyer of its objections to items contained in the Closing Statement (or calculations contained therein) within such forty five (45) calendar day period, Buyer and the Stockholders’ Representative shall, during the thirty (30) calendar days following delivery of such notice by the Stockholders’ Representative to Buyer (or such longer period as they may mutually agree in writing) (the “Resolution Period”), attempt in good faith to resolve their differences with respect to the disputed items (or calculations) such notice (the “Disputed Items”), and all other items (and all calculations relating thereto) will be final, binding and conclusive, absent manifest error or fraud. Any resolution by Buyer and the Stockholders’ Representative during the Resolution Period as to any Disputed Item shall be set forth in writing and will be final, binding and conclusive, absent manifest error or fraud.
(c) If Buyer and the Stockholders’ Representative do not resolve all Disputed Items by the end of the Resolution Period, then all Disputed Items remaining in dispute will be submitted to the Neutral Arbitrator. The Neutral Arbitrator shall act as an arbitrator to determine only those Disputed Items remaining in dispute, consistent with this Section 2.11, and shall request a statement from Buyer and the Stockholders’ Representative regarding such Disputed Items. The scope of the disputes to be arbitrated by the Neutral Arbitrator is limited to those items or calculations specifically in dispute between Buyer and the Stockholders’ Representative; and the Neutral Arbitrator is not to make any other determination. In resolving each Disputed Item, the Neutral Arbitrator shall be bound by the principles set forth in this Section 2.11 and may not assign a value to any Disputed Item greater than the greatest value for such Disputed Item claimed by any party or less than the lowest value for such Disputed Item claimed by any party. The parties further agree that the adjustment contemplated by this Section 2.11 is intended to show the change between the Estimated Net Working Capital and the Final Net Working Capital, the change between the Estimated Net Funded Indebtedness and the Final Net Funded Indebtedness and the change between Estimated Transaction Related Expenses and Final Transaction Related Expenses, and that such changes can only be measured if each calculation is done in a manner consistent with the Accounting Principles and the definitions thereof. All fees and expenses relating to the work, if any, to be performed by the Neutral Arbitrator will be allocated between Buyer and the Stockholders’ Representative (which, in the case of the Stockholders’ Representative, shall be payable by the Stockholders’ Representative solely out of the Reserve Amount) in the same proportion that the aggregate amount of the Disputed Items so submitted to the Neutral Arbitrator that is unsuccessfully disputed by each such party (as finally determined by the Neutral Arbitrator) bears to the total amount of such Disputed Items so submitted. The Neutral Arbitrator will deliver to Buyer and the Stockholders’ Representative a written determination (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided to the Neutral Arbitrator by the Stockholders’ Representative and Buyer) of the Disputed Items submitted to the Neutral Arbitrator within thirty (30) calendar days of receipt of such Disputed Items, which determination will be final, binding and conclusive, absent manifest error or fraud. The final, binding and conclusive Closing Statement based either upon agreement by the parties, or deemed agreement by Buyer and the Stockholders’ Representative in accordance with this Section 2.11, or the written determination delivered by the Neutral Arbitrator in accordance with this Section 2.11(c) will be the “Conclusive Closing Statement.” If any party fails to submit a statement regarding any Disputed Item submitted to the Neutral Arbitrator within the time determined by the Neutral Arbitrator or otherwise fails to give the Neutral Arbitrator access as reasonably requested, then the Neutral Arbitrator shall render a decision based solely on the evidence timely submitted and the access afforded to the Neutral Arbitrator by the other party. Except in instances involving fraud or except as may arise out of the representations and warranties under Article III and Article IV and in such instances only to the extent set forth in this Agreement, neither any Stockholder, holder of Company Stock Options or the Stockholder Representative shall have any liability with respect to Funded Indebtedness, Closing Date Funded Indebtedness, Transactions Related Expenses, or current assets or current liabilities (including as to accounts receivable and the collectability thereof) or any other component of Net Working Capital except as determined in this Section 2.11.
(d) Within two (2) Business Days after the Final Amounts have been determined in accordance with this Section 2.11include:
(i) if a special purpose report of the Aggregate Common Equity Amount is greater than Auditor setting forth the Final Payment Amount, then scope and procedures used to prepare and present the Stockholders’ Representative and Buyer shall instruct the Escrow Agent to pay to the Surviving Corporation, using first the funds financial matters set forth in the Merger Consideration Escrow Account and, to the extent the funds in the Merger Consideration Escrow Account are not sufficient to satisfy such payment in full, then out of the funds in the General Escrow Account, an amount in cash equal to the amount by which the Aggregate Common Equity Amount is greater than the Final Payment Amount (as defined below)Closing Certificate; and
(ii) if a calculation and comparison of (A) the Aggregate Common Equity Amount Estimated Merger Consideration as set forth in the calculation prepared and agreed to by IRET and the Company as of the Closing Date, and (B) the Merger Consideration calculated by the Auditor in accordance with this Section 2.16 and Schedule 2.16 , including the Parties' methodology in calculating the Estimated Merger Consideration set forth therein or therewith (the "Merger Consideration Calculation"). Any difference between the Estimated Merger Consideration and the Merger Consideration shall be deemed the "Merger Consideration Adjustment ." In the event that:
(1) the Estimated Merger Consideration is greater than the Merger Consideration, the Shareholders, on a pro-rata basis in accordance with their respective pre-Closing ownership interest(s) in the Company, hereby authorize IRET to deduct their pro-rata share of the Merger Consideration Adjustment from future dividend payments to such Shareholder until the Merger Consideration Adjustment amount is satisfied. IRET shall not have the right or authorization to deduct any amount from a dividend due to a Shareholder in excess of the Shareholder's pro-rata amount of the Merger Consideration Adjustment; or
(2) the Estimated Merger Consideration is less than the Final Payment Amount (as defined below)Merger Consideration, Buyer IRET shall pay, or cause the Surviving Corporation to pay, remit in cash to the Stockholders’ Representative (for further pro Shareholders, on a pro-rata distribution basis in accordance with their respective pre-Merger ownership interest(s) in the Company, the amount of the Merger Consideration Adjustment. All amounts owed by IRET to the Fully Diluted Common Holders) an amount in cash equal to the amount Shareholders shall be paid by which the Aggregate Common Equity Amount is less than the Final Payment Amount certified or bank cashier's check or by wire transfer of immediately available funds within five (5) business days of the amount payable to Buyer pursuant to Section 2.11(d)(i(i) and end of the amount payable Response Period, in the event none of the Shareholders object to the Stockholders’ Representative pursuant Closing Certificate within the Response Period, or (ii) receipt of the Independent Accountant's decision with respect to this Section 2.11(d)(ii) are referred to herein as and in the “event of a dispute. The Auditor's calculation and comparison shall indicate whether the Merger Consideration Adjustment Amount”is due (i) to the Shareholders, or (ii) IRET; and
(iii) copies of all supplementary documents, work papers and other data relating to the Closing Certificate; and
(iv) such other supplementary evidence as the Shareholders may require either prior to or after delivery of the Closing Certificate.
(b) In connection with the preparation of the Merger Consideration Calculation and all other matters arising under the Closing Certificate, IRET and the Merger Subsidiary shall afford the Shareholders and their representatives complete access to the books, records, personnel and facilities of or pertaining to the Company and permit the Auditor review of such information as is necessary or desirable to review the Merger Consideration Calculation and all other statements arising under the Closing Certificate.
(c) The calculation and form of the Estimated Merger Consideration and the Merger Consideration Calculation shall be in the form set forth in Schedule 2.16, with supporting schedules attached. The Merger Consideration Calculation shall be prepared by the Auditor from the consolidated audited financial statements of the Company and its subsidiary dated January 31, 2003 (resulting from the post-Closing Audit described in Section 11.7 of this Agreement); provided that any portion . The Estimated Merger Consideration and the Merger Consideration Calculation made, respectively, by the Parties and the Auditor shall depart from the GAAP presentation of any and all consolidated financial statements of the company in the following manner(s):
(i) The historical cost GAAP calculation of Rental Real Estate, Real Estate Development in Progress, and the associated Accumulated Depreciation thereto, shall be eliminated. In its place Rental Real Estate shall be given a value of $67,135,000, and Real Estate Development in Progress shall be given a value of $2,760,000.
(ii) An asset entitled "Ripley, Tennessee Property" shall be an addition to Merger Consideration and valued at $250,000.
(iii) An asset entitled "Pre-Closing Lakeville Property Improvements" shall be an addition to Merger Consideration and valued at $52,945.
(iv) The GAAP calculation of the asset for Unbilled Real Estate Taxes shall be eliminated. In its place, an addition to Merger Consideration shall be calculated for Unbilled Real Estate Taxes for all such Taxes not yet billed for the actual amounts that have accrued, but have not been paid by the tenants, for the month of January, 2003 and any month in the calendar year 2002. For purposes of this calculation, the month of January shall be the amount payable under this Section 2.11(d)(ii) of Real Estate Taxes that is a Compensatory Payment shall not be paid to the Stockholders’ Representative but shall instead would be paid by the Surviving Corporation tenant for the month of January, 2003 and the unpaid months of 2002 under the applicable Leased Real Estate lease.
(or a Subsidiary v) The historical cost GAAP calculation of furniture, fixtures and equipment (excluding transportation equipment), and associated depreciation, for the Surviving CorporationCompany (excluding Westlake Liquors, Inc.) through shall be eliminated. In its payroll system place, such furniture, fixtures and in accordance with the Surviving Corporation’s equipment shall be an addition to Merger Consideration and valued at $300,000.
(or vi) The historical cost GAAP calculation of transportation equipment (autos), and associated depreciation, shall be eliminated. In its place, such Subsidiary’stransportation equipment shall be an addition to Merger Consideration and valued at $50,175.
(vii) standard withholding The historical cost GAAP calculation of furniture, fixtures and payroll practices equipment and procedures associated accumulated depreciation, for Westlake Liquors, Inc. shall be eliminated. In its place such furniture, fixtures and equipment shall be an addition to the Person identified in writing Merger Consideration and valued at $50,000.
(viii) A non-GAAP accrual of mortgage interest that will be payable by the Stockholders’ Representative as the Person to whom such Compensatory Payment is to be made. Any payment by Buyer, the Surviving Corporation or in February, 2003, with respect to mortgages on the Stockholders’ Representative Owned Real Estate shall be a subtraction from Merger Consideration.
(pursuant ix) The GAAP amounts computed for Accrued Real Property Taxes shall be eliminated. In its place, an accrual of one-twelfth (1/12th) of the aggregate Real Estate Taxes that will be payable by the Surviving Corporation in May and October, 2003 shall be a subtraction from Merger Consideration.
(x) The amount of $138,000 for broker fees (described in Section 3.25), to the distribution extent not accrued under GAAP in the January 31, 2003, consolidated audited financial statements of funds the Company, shall be subtracted from Merger Consideration. Notwithstanding the foregoing, if such amount is or has been paid on or before January 31, 2003, no subtraction shall be made from Merger Consideration.
(xi) No accrual shall be made for the Auditor's January 31, 2003, Audit of the Company.
(d) If any Shareholder concludes that any matter reported in the Closing Certificate, including the Merger Consideration Escrow Account Calculation and/or the Merger Consideration Adjustment, is not accurate, such Shareholder shall, within thirty (30) days after its receipt of the Closing Certificate (the "Response Period"), deliver to IRET a written statement setting forth a specific description of each of its objections and each of any discrepancies believed to exist. If no notice of any objections or discrepancies is given within the Response Period, then the calculations set forth in the Closing Certificate shall be controlling for all purposes of this Agreement, and IRET or the General Escrow Account)Shareholders, as the case may be, pursuant shall be obligated to this Section 2.11 will be treated as an adjustment to the other Party in the amount of the Merger Consideration for tax purposesAdjustment set forth in the Closing Certificate.
(e) IRET and the Shareholders shall use good faith efforts to jointly resolve the properly noticed objections and discrepancies within fifteen (15) days of the receipt of the written statement of objections and discrepancies, which resolution, if achieved, shall be fully and completely binding upon all Parties to this Agreement and not subject to further review, appeal, or dispute. For purposes If IRET and the Shareholders are unable to resolve the objections and discrepancies to their mutual satisfaction within such fifteen (15) day period, then the matter shall be submitted to a mutually acceptable accounting firm of this Section 2.11:national reputation (the "Independent Accountants "). In submitting a dispute to the Independent Accountants, each of the Parties shall concurrently furnish, at its own expense, to the Independent Accountants and the other Party such documents and information as the Independent Accountants may request. Each Party may also furnish to the Independent Accountants such other information and documents as it deems relevant, with copies of such submission and all such documents and information being concurrently given to the other Party. Neither Party shall have or conduct any communication, either written or oral, with the Independent Accountants without the other Party either being present or receiving a concurrent copy of any written communication. The Independent Accountants may conduct a conference concerning the objections and disagreements between the IRET and the Shareholders, at which conference each Party shall have the right to (i) present its documents, materials and other evidence (previously provided to the Independent Accountants and the other Party), and (ii) have present its or their advisors, accountants and/or counsel. The Independent
Appears in 1 contract
Post-Closing Merger Consideration Adjustment. Following the Closing Date, the Merger Consideration will be adjusted, if at all, dollar-for-dollar as set forth below:
(a) As promptly as practicable, but in any case no later than sixty Buyer will prepare and deliver to the Representative within ninety (6090) calendar days after the Closing Date, Buyer shall cause to be prepared Date (i) an unaudited balance sheet of the Company and delivered to its Subsidiaries as of the Stockholders’ Representative Adjustment Calculation Time (the “Closing Balance Sheet”) and (ii) a statement (the “Closing Statement”) setting forth the a calculation of (1) Closing Net Working Capital, the Net Funded Indebtedness, the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) and the components thereof. The Closing Statement shall include the amount calculated in good faith by Buyer, if any, of the Merger Consideration Escrow Amount that need not be retained by the Escrow Agent pending resolution of payments to be made pursuant to Section 2.11(d) (the “Merger Consideration Escrow Release Amount”). The Merger Consideration Escrow Release Amount, to the extent there is such an amount, shall be released two (2) Business Days following Closing Cash, (3) Closing Indebtedness, (4) the Transaction Expenses, (5) Buyer’s delivery calculation of the Adjusted Merger Consideration derived from the foregoing, and (6) with respect to each of the foregoing, the changes in such amounts from the corresponding amounts on the Estimated Closing Statement. The Closing Balance Sheet and Closing Statement will be prepared, and the Closing Net Working Capital, the Net Funded Closing Cash, Closing Indebtedness and the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) calculations shall will be prepared and calculated determined, in each case, in good faith, and in the manner and on a consolidated basis consistent in accordance with the Accounting Principles (definitions set forth in this Agreement, and, with respect to the extent applicable) Closing Balance Sheet and shall be in the same form and include the same line items as the Estimated Net Working Capital calculation, the Estimated Net Funded Indebtedness calculation and the Estimated Transaction Related Expenses calculation. If the Closing Statement is not so timely delivered, the Estimated Net Working Capital, using the Estimated Net Funded Indebtedness same accounting methods, assumptions, policies, principles, practices and procedures, with consistent classifications, judgments and estimation methodology, as were used in the Estimated Transaction Related Expenses will be deemed Final preparation of the Latest Audited Balance Sheet, except, in the case of Net Working Capital, as adjusted in the manner set forth (including with reference to the accounts and contractual adjustments specified) on Exhibit E. The Closing Balance Sheet and Closing Statement will not include any changes in assets or liabilities as a result of purchase or other accounting adjustments arising from or resulting as a consequence of the Transactions. The parties agree that the purpose of preparing the Closing Balance Sheet and the Closing Statement and calculating Final Adjusted Merger Consideration is to (x) accurately measure the amount of Closing Net Funded Indebtedness Working Capital, Closing Cash, Closing Indebtedness, and Transaction Expenses and (y) measure the difference in Closing Net Working Capital from Target Net Working Capital, and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, reserves classifications or estimation methodologies for the purpose of calculating Final Transaction Related Expenses, respectivelyAdjusted Merger Consideration than were used in the calculation of Estimated Merger Consideration.
(b) After receipt of the Closing Statement, the Stockholders’ Representative will have forty five (45) calendar days to review the Closing Statement. Unless the Stockholders’ Representative delivers written notice (which notice shall include the items and amounts in dispute and supporting documentation related thereto; such notice, a “Seller Dispute Notice”) to Buyer setting forth the items disputed by the Stockholders’ Representative with respect thereto on On or prior to the forty-fifth (45th) calendar day after following Buyer’s delivery of the Stockholders’ Representative’s receipt of Closing Balance Sheet and the Closing Statement, the Stockholders’ Representative may give Buyer a written notice stating in reasonable detail the Representative’s proposed adjustments, if any, to the Closing Balance Sheet and the Closing Statement (a “Notice of Disagreement”). During such 45-day period and any period of dispute thereafter with respect to such Closing Balance Sheet and/or Closing Statement, Buyer will, and will cause the Company and its Subsidiaries to, (i) provide the Representative and its Advisors reasonable access to the relevant books, records (including work papers, schedules, memoranda and other documents), supporting data, and personnel of the Company and its Subsidiaries (including Company personnel responsible for accounting and finance and the Company’s senior management) in connection with the Representative’s review of the Closing Balance Sheet and Closing Statement, and (ii) otherwise reasonably cooperate with the Representative and its Advisors in connection with such review. Any determination set forth on the Closing Statement (including the resulting Closing Net Working Capital, Closing Cash, Closing Indebtedness and Transaction Expenses) that is not specifically objected to in the Notice of Disagreement will be deemed acceptable to have accepted the Representative, and agreed will be final and binding upon all parties upon delivery of the Notice of Disagreement. If the Representative does not deliver to Buyer a Notice of Disagreement within such 45-day period, then the Closing Balance Sheet and the Closing Statement (including the resulting Closing Net Working Capital, Closing Cash, Closing Indebtedness and such statement (and the calculations contained thereinTransaction Expenses) will be finalfinal and binding upon the parties as of the expiration of such 45-day period, binding and conclusive, absent manifest error or fraud. If the Stockholders’ Representative notifies Buyer of its objections to items contained Adjusted Merger Consideration set forth in the Closing Statement (or calculations contained therein) within such forty five (45) calendar day period, Buyer and will constitute the Stockholders’ Representative shall, during the thirty (30) calendar days following delivery Adjusted Merger Consideration for all purposes of such notice by the Stockholders’ Representative to Buyer (or such longer period as they may mutually agree in writing) (the “Resolution Period”), attempt in good faith to resolve their differences with respect to the disputed items (or calculations) such notice (the “Disputed Items”), and all other items (and all calculations relating thereto) will be final, binding and conclusive, absent manifest error or fraud. Any resolution by Buyer and the Stockholders’ Representative during the Resolution Period as to any Disputed Item shall be set forth in writing and will be final, binding and conclusive, absent manifest error or fraudthis Section 1.07.
(c) If Following Buyer’s receipt of any Notice of Disagreement, the Representative and Buyer will attempt to resolve disputed matters set forth therein, and all such discussions and negotiations related thereto shall (unless otherwise agreed by Buyer and the Stockholders’ Representative) be governed by Rule 408 of the Federal Rules of Evidence (as in effect as of the date of this Agreement) and any applicable similar state rule. In the event that the Representative do and Buyer fail to agree on any of the Representative’s proposed adjustments set forth in the Notice of Disagreement within thirty (30) days after Buyer receives the Notice of Disagreement, the Representative and Buyer agree to use their respective reasonable best efforts to cause KPMG LLP (the “Firm”) to make the final written determination of all matters included in the Notice of Disagreement that remain in dispute; provided, however, that if KPMG LLP is unable or unwilling to serve in such capacity, the Representative and Buyer shall jointly select an alternative Firm that is an independent and impartial, nationally-recognized independent accounting or valuation firm, within forty-five (45) days immediately following such first 30-day period; further, provided, however, that if the Representative and Buyer are unable or unwilling to jointly select an alternative Firm within that timeframe (including if the Representative resigns 8 and is not resolve all Disputed Items timely replaced) then the Firm shall be an independent and impartial, nationally-recognized independent accounting or valuation firm selected by the end American Arbitration Association. Buyer and the Representative will instruct the Firm to, and the Firm will, make a final determination of the Resolution Perioditems included in the Closing Balance Sheet and the Closing Statement (including the resulting Closing Net Working Capital, then all Disputed Items remaining in dispute will be submitted Closing Cash, Closing Indebtedness and Transaction Expenses), to the Neutral Arbitrator. The Neutral Arbitrator shall act as an arbitrator to determine only those Disputed Items remaining extent any such amounts are in dispute, consistent solely in accordance with this Section 2.11, and shall request a statement from Agreement. Buyer and the Stockholders’ Representative regarding such Disputed Itemswill execute a customary engagement letter, and will cooperate, with the Firm during the term of its engagement. The scope of the disputes to be arbitrated by the Neutral Arbitrator is limited to those items or calculations specifically in dispute between Buyer and the Stockholders’ Representative; Representative will instruct the Firm not to, and the Neutral Arbitrator is not to make any other determination. In resolving each Disputed ItemFirm will not, the Neutral Arbitrator shall be bound by the principles set forth in this Section 2.11 and may not assign a value to any Disputed Item item in dispute greater than the greatest value for such Disputed Item claimed item assigned by any party Buyer, on the one hand, or the Representative, on the other hand, or less than the lowest smallest value for such Disputed Item claimed item assigned by any partyBuyer, on the one hand, or the Representative, on the other hand. Buyer and the Representative will also instruct the Firm to, and the Firm will, make its determination based solely on written submissions by Buyer and the Representative that are in accordance with this Agreement (i.e., not on the basis of an independent review). The parties further agree that the adjustment contemplated by this Section 2.11 is intended to show the change between the Estimated Net Working Capital Closing Balance Sheet and the Final Closing Statement (including the resulting Closing Net Working Capital, the change between the Estimated Net Funded Closing Cash, Closing Indebtedness and Transaction Expenses), in each case, as determined by the Final Firm in accordance with this Section 1.07(c), will be final and binding on the parties on the date the Firm delivers its final determination in writing to Buyer and the Representative. The latest date on which the Closing Balance Sheet and the Closing Statement (including the resulting Closing Net Funded Working Capital, Closing Cash, Closing Indebtedness and the change between Estimated Transaction Related Expenses and Final Transaction Related Expenses) are deemed final pursuant to Section 1.07(b), and that such changes can only be measured if each calculation is done in a manner consistent with the Accounting Principles are agreed upon by Buyer and the definitions thereof. All fees Representative pursuant to this Section 1.07(c) or are determined by the Firm in accordance with this Section 1.07(c) is referred to as the “Settlement Date.” The fees, costs and expenses relating to of the work, if any, to be performed by the Neutral Arbitrator Firm will be allocated between Buyer Buyer, on the one hand, and the Stockholders’ Representative (which, in the case of the Stockholders’ Representative, shall be payable by on the Stockholders’ Representative solely out of the Reserve Amount) other hand, in the same proportion that the aggregate amount of the Disputed Items disputed items so submitted to the Neutral Arbitrator Firm that is unsuccessfully disputed by each such party (as finally determined by the Neutral ArbitratorFirm) bears to the total amount of such Disputed Items so disputed items submitted. The Neutral Arbitrator For example, if the Representative submits a Notice of Disagreement for $1,000, and if Buyer contests only $500 of the amount claimed by the Representative, and if the Firm ultimately resolves the dispute by awarding the Representative $300 of the $500 contested, then the costs and expenses of the Firm will deliver be allocated sixty percent (60%) (i.e., 300/500) to Buyer and the Stockholders’ Representative a written determination forty percent (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided 40%) (i.e., 200/500) to the Neutral Arbitrator by the Stockholders’ Representative and Buyer) of the Disputed Items submitted to the Neutral Arbitrator within thirty (30) calendar days of receipt of such Disputed Items, which determination will be final, binding and conclusive, absent manifest error or fraud. The final, binding and conclusive Closing Statement based either upon agreement by the parties, or deemed agreement by Buyer and the Stockholders’ Representative in accordance with this Section 2.11, or the written determination delivered by the Neutral Arbitrator in accordance with this Section 2.11(c) will be the “Conclusive Closing Statement.” If any party fails to submit a statement regarding any Disputed Item submitted to the Neutral Arbitrator within the time determined by the Neutral Arbitrator or otherwise fails to give the Neutral Arbitrator access as reasonably requested, then the Neutral Arbitrator shall render a decision based solely on the evidence timely submitted and the access afforded to the Neutral Arbitrator by the other party. Except in instances involving fraud or except as may arise out of the representations and warranties under Article III and Article IV and in such instances only to the extent set forth in this Agreement, neither any Stockholder, holder of Company Stock Options or the Stockholder Representative shall have any liability with respect to Funded Indebtedness, Closing Date Funded Indebtedness, Transactions Related Expenses, or current assets or current liabilities (including as to accounts receivable and the collectability thereof) or any other component of Net Working Capital except as determined in this Section 2.11Representative.
(d) Within two If the Estimated Merger Consideration exceeds the Adjusted Merger Consideration (2) Business Days after such excess, the Final Amounts have been determined in accordance with this Section 2.11:
(i) if “Excess Amount”), Buyer and the Aggregate Common Equity Amount is greater than Representative will deliver joint written instructions to the Final Payment Amount, then the Stockholders’ Representative and Buyer shall instruct Escrow Agent to cause the Escrow Agent to pay to the Surviving Corporation, using first the funds in the Merger Consideration Escrow Account and, to the extent the funds in the Merger Consideration Escrow Account are not sufficient to satisfy such payment in full, then out of the funds in the General Escrow Account, an amount in cash equal to the amount by which the Aggregate Common Equity Amount is greater than the Final Payment Amount Buyer (as defined below); and
(ii) if the Aggregate Common Equity Amount is less than the Final Payment Amount (as defined belowor its designee), Buyer shall pay, or cause within five (5) Business Days after the Surviving Corporation to pay, to the Stockholders’ Representative (for further pro rata distribution to the Fully Diluted Common Holders) an amount in cash equal to the amount by which the Aggregate Common Equity Amount is less than the Final Payment Amount Settlement Date by wire transfer of immediately available funds funds, the Excess Amount from the Escrow Fund. Notwithstanding anything to the contrary contained herein, Buyer may elect to exclude any “Indebtedness” pursuant to clause (m) of the definition of “Indebtedness” from the Excess Amount and pursue recovery of any amount payable to Buyer so excluded pursuant to Section 2.11(d)(i6.08(p) and or Section 10.02(vii).
(e) If the amount payable Adjusted Merger Consideration exceeds the Estimated Merger Consideration (such excess, the “Adjustment Amount”), then Buyer will, within five (5) Business Days after the Settlement Date, make payment of the Adjustment Amount by wire transfer in immediately available funds, to the Stockholders’ Representative Paying Agent, with such amounts received pursuant to this Section 2.11(d)(ii) are referred 1.07(e), subject to herein as the “Merger Consideration Adjustment Amount”Section 11.19(b); provided that any portion of any amount payable under this Section 2.11(d)(ii) that is a Compensatory Payment shall not , to be paid to the Stockholders’ Representative but shall instead be paid by the Surviving Corporation (Stockholders or a Subsidiary of the Surviving Corporation) through its payroll system and Optionholders in accordance with the Surviving Corporation’s Section 1.08.
(or such Subsidiary’sf) standard withholding and payroll practices and procedures to the Person identified in writing by the Stockholders’ Representative as the Person to whom such Compensatory Payment is to be made. Any The parties hereto agree that any payment by Buyer, the Surviving Corporation or the Stockholders’ Representative (pursuant to the distribution of funds from the Merger Consideration Escrow Account or the General Escrow Account), as the case may be, made pursuant to this Section 2.11 will 1.07 shall be treated as an adjustment to the Merger Consideration aggregate consideration for tax Tax purposes. For purposes of this Section 2.11:, unless otherwise required by applicable Law.
Appears in 1 contract
Sources: Merger Agreement (Stryker Corp)
Post-Closing Merger Consideration Adjustment. Following the Closing Date, the Merger Consideration will be adjusted as set forth below:
(a) As promptly as practicable, but in any case no later than sixty Buyer will prepare and deliver to the Representative within ninety (6090) calendar days after the Closing Date, Buyer shall cause to be prepared Date (i) an unaudited balance sheet of the Company as of the Adjustment Calculation Time (the “Closing Balance Sheet”) and delivered to the Stockholders’ Representative (ii) a statement (the “Closing Statement”) setting forth the a calculation of (1) Closing Net Working Capital, the Net Funded Indebtedness, the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) and the components thereof. The Closing Statement shall include the amount calculated in good faith by Buyer, if any, of the Merger Consideration Escrow Amount that need not be retained by the Escrow Agent pending resolution of payments to be made pursuant to Section 2.11(d) (the “Merger Consideration Escrow Release Amount”). The Merger Consideration Escrow Release Amount, to the extent there is such an amount, shall be released two (2) Business Days following Closing Cash, (3) Closing Indebtedness, (4) the Transaction Expenses, (5) Buyer’s delivery calculation of the Final Merger Consideration derived from the foregoing, and (6) with respect to each of the foregoing, the changes in such amounts from the corresponding amounts on the Estimated Closing Statement. The Closing Balance Sheet and Closing Statement will be prepared, and the Closing Net Working Capital, the Net Funded Indebtedness Closing Cash, Closing Indebtedness, and the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) calculations shall will be prepared and calculated determined, in each case, in good faith, and in the manner and on a basis consistent accordance with the Accounting Principles Principles. The Closing Balance Sheet and Closing Statement (to i) will not include any changes in assets or liabilities as a result of purchase or other accounting adjustments arising from or resulting as a consequence of the extent applicableTransactions, and (ii) will be based on facts and shall be in circumstances as they exist as of the same form applicable Adjustment Calculation Time and include will exclude the same line items as effect of any act, decision or event occurring at or after the Estimated Net Working Capital calculation, Closing. The parties agree that the Estimated Net Funded Indebtedness calculation purpose of preparing the Closing Balance Sheet and the Estimated Transaction Related Expenses calculation. If the Closing Statement and calculating Final Merger Consideration is not so timely delivered, solely to (x) accurately measure the Estimated Closing Net Working Capital, Closing Cash, Closing Indebtedness, and Transaction Expenses and (y) measure the Estimated difference in Closing Net Funded Indebtedness and the Estimated Transaction Related Expenses will be deemed Final Working Capital from Target Net Working Capital, and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies than those set forth in the Accounting Principles for the purpose of calculating Final Net Funded Indebtedness and Final Transaction Related Expenses, respectivelyMerger Consideration or Estimated Merger Consideration.
(b) After receipt of the Closing Statement, the Stockholders’ Representative will have forty five (45) calendar days to review the Closing Statement. Unless the Stockholders’ Representative delivers written notice (which notice shall include the items and amounts in dispute and supporting documentation related thereto; such notice, a “Seller Dispute Notice”) to Buyer setting forth the items disputed by the Stockholders’ Representative with respect thereto on On or prior to the forty-fifth thirtieth (45th30th) calendar day after the Stockholders’ following Representative’s receipt of the Closing Balance Sheet and the Closing Statement, the Stockholders’ Representative will give Buyer a written notice stating in reasonable detail the Representative’s objections (a “Notice of Disagreement”) to the Closing Balance Sheet and the Closing Statement, if any. During such thirty (30)-day period, and any period of dispute thereafter with respect to such Closing Balance Sheet and/or Closing Statement, Buyer will, and will cause the Company to, (i) provide the Representative and its Advisors reasonable access to the books, records (including work papers, schedules, memoranda and other documents), supporting data, facilities, and personnel of the Company (including Company personnel responsible for accounting and finance and senior management) and, subject to execution of any customary work paper access letters required by them, the Company’s Advisors and their work papers, and (ii) otherwise reasonably cooperate with and assist the Representative and its Advisors in connection with such review. Any determination set forth on the Closing Statement which is not objected to in the Notice of Disagreement will be deemed acceptable to have accepted the Representative, and agreed will be final and binding upon all parties upon delivery of the Notice of Disagreement. If the Representative does not deliver to Buyer a Notice of Disagreement within such thirty (30)-day period, then the Closing Balance Sheet, the Closing Statement and the Closing Net Working Capital, Closing Cash, Closing Indebtedness and Transaction Expenses will be final and binding upon the parties as of the expiration of such statement thirty (30)-day period, and the calculations contained therein) will be final, binding and conclusive, absent manifest error or fraud. If the Stockholders’ Representative notifies Buyer of its objections to items contained Final Merger Consideration set forth in the Closing Statement will constitute the Final Merger Consideration for all purposes of this Section 1.07.
(or calculations contained thereinc) within such forty five (45) calendar day periodFollowing ▇▇▇▇▇’s receipt of any Notice of Disagreement, Buyer the Representative and the Stockholders’ Representative shall, during the thirty (30) calendar days following delivery of such notice by the Stockholders’ Representative to Buyer (or such longer period as they may mutually agree in writing) (the “Resolution Period”), attempt ▇▇▇▇▇ will discuss in good faith to resolve the disputed matters set forth therein. In the event that the Representative and ▇▇▇▇▇ fail to agree on any of the Representative’s proposed adjustments set forth in the Notice of Disagreement within thirty (30) days after Buyer receives the Notice of Disagreement, the Representative and Buyer agree use their differences with respect respective reasonable best efforts to cause a nationally recognized independent accounting or valuation firm mutually acceptable to the disputed items (or calculations) such notice Representative and Buyer (the “Disputed ItemsFirm”), and within forty-five (45) days immediately following such first thirty (30)-day period, to make the final written determination of all other items (and all calculations relating thereto) will be final, binding and conclusive, absent manifest error or fraudmatters which remain in dispute that were included in the Notice of Disagreement. Any resolution by Buyer and the Stockholders’ Representative will instruct the Firm to, and the Firm will, make a final determination of the items included in the Closing Balance Sheet and the Closing Statement (to the extent such amounts are in dispute) solely in accordance with this Agreement (including the Accounting Principles). ▇▇▇▇▇ and the Representative will execute a customary engagement letter and will cooperate with the Firm during the Resolution Period as to any Disputed Item shall be set forth in writing and will be final, binding and conclusive, absent manifest error or fraud.
(c) If term of its engagement. Buyer and the Stockholders’ Representative do will instruct the Firm not resolve all Disputed Items by the end of the Resolution Period, then all Disputed Items remaining in dispute will be submitted to the Neutral Arbitrator. The Neutral Arbitrator shall act as an arbitrator to determine only those Disputed Items remaining in dispute, consistent with this Section 2.11to, and shall request a statement from Buyer and the Stockholders’ Representative regarding such Disputed Items. The scope of the disputes to be arbitrated by the Neutral Arbitrator is limited to those items or calculations specifically in dispute between Buyer and the Stockholders’ Representative; and the Neutral Arbitrator is not to make any other determination. In resolving each Disputed ItemFirm will not, the Neutral Arbitrator shall be bound by the principles set forth in this Section 2.11 and may not assign a value to any Disputed Item item in dispute greater than the greatest value for such Disputed Item claimed item assigned by any party Buyer, on the one hand, or the Representative, on the other hand, or less than the lowest smallest value for such Disputed Item claimed item assigned by any partyBuyer, on the one hand, or the Representative, on the other hand. Buyer and the Representative will also instruct the Firm to, and the Firm will, make its determination based solely on written submissions by ▇▇▇▇▇ and the Representative that are in accordance with this Agreement (i.e., not on the basis of an independent review). The parties further agree that Closing Balance Sheet, the adjustment contemplated by this Section 2.11 is intended to show the change between the Estimated Net Working Capital Closing Statement and the Final resulting Closing Net Working Capital, Closing Cash, Closing Indebtedness, and Transaction Expenses, in each case, as determined by the change between Firm in accordance with this Section 1.07(c), will be final and binding on the Estimated Net Funded Indebtedness parties on the date the Firm delivers its final determination in writing to Buyer and the Final Net Funded Indebtedness and the change between Estimated Transaction Related Expenses and Final Transaction Related ExpensesRepresentative. The fees, and that such changes can only be measured if each calculation is done in a manner consistent with the Accounting Principles and the definitions thereof. All fees costs and expenses relating to of the work, if any, to be performed by the Neutral Arbitrator Firm will be allocated between Buyer Buyer, on the one hand, and the Stockholders’ Representative (which, in the case of the Stockholders’ Representative, shall be payable by on the Stockholders’ Representative solely out of the Reserve Amount) other hand, in the same proportion that the aggregate amount of the Disputed Items disputed items so submitted to the Neutral Arbitrator Firm that is unsuccessfully disputed by each such party (as finally determined by the Neutral ArbitratorFirm) bears to the total amount of such Disputed Items so disputed items submitted. The Neutral Arbitrator For example, if the Representative submits a Notice of Disagreement for $1,000, and if Buyer contests only $500 of the amount claimed by the Representative, and if the Firm ultimately resolves the dispute by awarding the Representative $300 of the $500 contested, then the costs and expenses of the Firm will deliver be allocated 60% (i.e., 300/500) to Buyer and the Stockholders’ Representative a written determination 40% (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided i.e., 200/500) to the Neutral Arbitrator by the Stockholders’ Representative and Buyer) of the Disputed Items submitted to the Neutral Arbitrator within thirty (30) calendar days of receipt of such Disputed Items, which determination will be final, binding and conclusive, absent manifest error or fraud. The final, binding and conclusive Closing Statement based either upon agreement by the parties, or deemed agreement by Buyer and the Stockholders’ Representative in accordance with this Section 2.11, or the written determination delivered by the Neutral Arbitrator in accordance with this Section 2.11(c) will be the “Conclusive Closing Statement.” If any party fails to submit a statement regarding any Disputed Item submitted to the Neutral Arbitrator within the time determined by the Neutral Arbitrator or otherwise fails to give the Neutral Arbitrator access as reasonably requested, then the Neutral Arbitrator shall render a decision based solely on the evidence timely submitted and the access afforded to the Neutral Arbitrator by the other party. Except in instances involving fraud or except as may arise out of the representations and warranties under Article III and Article IV and in such instances only to the extent set forth in this Agreement, neither any Stockholder, holder of Company Stock Options or the Stockholder Representative shall have any liability with respect to Funded Indebtedness, Closing Date Funded Indebtedness, Transactions Related Expenses, or current assets or current liabilities (including as to accounts receivable and the collectability thereof) or any other component of Net Working Capital except as determined in this Section 2.11Representative.
(d) Within two If the Estimated Merger Consideration exceeds the Final Merger Consideration (2such excess, the “Excess Amount”), the number of Buyer Shares equal to (i) the Excess Amount divided by (ii) $6.19, shall, on a pro rata basis among the Stockholders, be automatically cancelled for no consideration.
(e) If the Final Merger Consideration exceeds the Estimated Merger Consideration (such excess, the “Adjustment Amount”), within five (5) Business Days after the Final Amounts have been determined in accordance with this Section 2.11:
(i) if the Aggregate Common Equity Amount is greater than date on which the Final Payment Amount, then the Stockholders’ Representative and Buyer shall instruct the Escrow Agent to pay to the Surviving Corporation, using first the funds in the Merger Consideration Escrow Account and, is finally determined pursuant to the extent the funds in the Merger Consideration Escrow Account are not sufficient to satisfy such payment in full, then out of the funds in the General Escrow Account, an amount in cash equal to the amount by which the Aggregate Common Equity Amount is greater than the Final Payment Amount (as defined below); and
(iiSection 1.07(b) if the Aggregate Common Equity Amount is less than the Final Payment Amount (as defined belowor Section 1.07(c), Buyer shall payissue to each Stockholder, or cause the Surviving Corporation to pay, to on a pro rata basis among the Stockholders’ Representative (for further pro rata distribution to , the Fully Diluted Common Holders) an amount in cash number of Buyer Shares equal to (i) the amount Adjustment Amount divided by which (ii) $6.19.
(f) Buyer shall take all necessary actions, including updating its capitalization table to effect the Aggregate Common Equity Amount is less than the Final Payment Amount by wire transfer cancellation or issuance of immediately available funds Buyer Shares as set forth in Section 1.07(d) or Section 1.07(e).
(the amount payable to Buyer pursuant to Section 2.11(d)(ig) and the amount payable to the Stockholders’ Representative The parties hereto agree that any payment made pursuant to this Section 2.11(d)(ii) are referred to herein as the “Merger Consideration Adjustment Amount”); provided that any portion of any amount payable under this Section 2.11(d)(ii) that is a Compensatory Payment 1.07 shall not be paid to the Stockholders’ Representative but shall instead be paid by the Surviving Corporation (or a Subsidiary of the Surviving Corporation) through its payroll system and in accordance with the Surviving Corporation’s (or such Subsidiary’s) standard withholding and payroll practices and procedures to the Person identified in writing by the Stockholders’ Representative as the Person to whom such Compensatory Payment is to be made. Any payment by Buyer, the Surviving Corporation or the Stockholders’ Representative (pursuant to the distribution of funds from the Merger Consideration Escrow Account or the General Escrow Account), as the case may be, pursuant to this Section 2.11 will be treated as an adjustment to the Merger Consideration aggregate consideration for tax Tax purposes. For purposes of this Section 2.11:, unless otherwise required by applicable Law.
Appears in 1 contract
Sources: Merger Agreement (Sugarfina Corp)
Post-Closing Merger Consideration Adjustment. Following the Closing Date, the Estimated Merger Consideration will be adjusted as set forth below:
(a) As promptly as practicable, but in any case no later than sixty Buyer will prepare and deliver to the Representative within ninety (6090) calendar days after the Closing DateDate (i) an unaudited balance sheet of the Company and its Subsidiaries as of the Adjustment Calculation Time (for the avoidance of doubt, Buyer shall cause taking into account any actions taken pursuant to be prepared Section 5.01(d)) (the “Closing Balance Sheet”) and delivered to the Stockholders’ Representative (ii) a statement (the “Closing Statement”) setting forth the a calculation of (1) Closing Net Working Capital, the Net Funded (2) Closing Cash, (3) Closing Indebtedness, (4) the Transaction Related Expenses, (5) Buyer’s calculation of the Final Merger Consideration derived from the foregoing, and (6) with respect to each of the foregoing, the changes in such amounts from the corresponding amounts on the Estimated Closing Statement. The Closing Balance Sheet and Closing Statement will be prepared, and Closing Net Working Capital, Closing Cash, Closing Indebtedness, and Transaction Expenses will be determined, in each case, in good faith, in accordance with the Accounting Principles. The Closing Balance Sheet and Closing Statement (i) will not include any changes in assets or liabilities as a result of purchase or other accounting adjustments or other changes arising from or resulting as a consequence of the Transactions, and (ii) will be based on facts and circumstances as they exist as of the Adjustment Calculation Time and will exclude the effect of any act, decision or event occurring on or after the Closing. The parties agree that the purpose of preparing the Closing Balance Sheet and the Closing Statement and calculating Final Merger Consideration is solely to (x) accurately measure the extent Closing Net Working Capital, Closing Cash, Closing Indebtedness, and Transaction Expenses and (y) measure the difference in Closing Net Working Capital from Target Net Working Capital, and such processes are not paid by intended to permit the Company introduction of different judgments, accounting methods, policies, principles, practices, procedures, reserves classifications or any estimation methodologies for the purpose of its Affiliates calculating Final Merger Consideration than were used in the calculation of Estimated Merger Consideration.
(b) On or prior to the Closingthirtieth (30th) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) and the components thereof. The Closing Statement shall include the amount calculated in good faith by Buyer, if any, of the Merger Consideration Escrow Amount that need not be retained by the Escrow Agent pending resolution of payments to be made pursuant to Section 2.11(d) (the “Merger Consideration Escrow Release Amount”). The Merger Consideration Escrow Release Amount, to the extent there is such an amount, shall be released two (2) Business Days day following Buyer’s delivery of the Closing Statement. The Closing Statement Balance Sheet and the Net Working Capital, the Net Funded Indebtedness and the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) calculations shall be prepared and calculated in good faith, and in the manner and on a basis consistent with the Accounting Principles (to the extent applicable) and shall be in the same form and include the same line items as the Estimated Net Working Capital calculation, the Estimated Net Funded Indebtedness calculation and the Estimated Transaction Related Expenses calculation. If the Closing Statement is not so timely delivered, the Estimated Net Working Capital, the Estimated Net Funded Indebtedness and the Estimated Transaction Related Expenses will be deemed Final Net Working Capital, Final Net Funded Indebtedness and Final Transaction Related Expenses, respectively.
(b) After receipt of the Closing Statement, the Stockholders’ Representative will have forty five (45) calendar days to review the Closing Statement. Unless the Stockholders’ Representative delivers give Buyer a written notice stating in reasonable detail the Representative’s objections (which notice shall include the items and amounts in dispute and supporting documentation related thereto; such notice, a “Seller Dispute NoticeNotice of Disagreement”) to Buyer setting forth the items disputed by the Stockholders’ Representative with respect thereto on or prior to the forty-fifth (45th) calendar day after the Stockholders’ Representative’s receipt of Closing Balance Sheet and the Closing Statement, if any. During such 30-day period, and any period of dispute thereafter with respect to such Closing Balance Sheet and/or Closing Statement, subject to reasonable nondisclosure obligations, Buyer will, and will cause the Stockholders’ Company and its Subsidiaries to, (i) provide the Representative and its Advisors reasonable access during reasonable hours to the books, records (including work papers, schedules, memoranda and other documents), supporting data, facilities, and personnel of the Company and its Subsidiaries (including Company personnel responsible for accounting and finance and senior management) and, subject to execution of any customary work paper access letters required by them, the Company’s Advisors and their work papers, and (ii) otherwise cooperate with and assist the Representative and its Advisors in connection with such review. Any determination set forth on the Closing Statement which is not objected to in the Notice of Disagreement will be deemed acceptable to have accepted the Representative, and agreed will be final and binding upon all parties upon delivery of the Notice of Disagreement. If the Representative does not deliver to Buyer a Notice of Disagreement within such 30-day period, then the Closing Balance Sheet, the Closing Statement and such statement (the Closing Net Working Capital, Closing Cash, Closing Indebtedness and the calculations contained therein) Transaction Expenses will be final, binding and conclusiveconclusive upon the parties as of the expiration of such 30-day period, absent manifest error or fraud. If and the Stockholders’ Representative notifies Buyer of its objections to items contained Final Merger Consideration set forth in the Closing Statement will constitute the Final Merger Consideration for all purposes of this Section 1.07.
(or calculations contained thereinc) within such forty five (45) calendar day periodFollowing Buyer’s receipt of any Notice of Disagreement, the Representative and Buyer and the Stockholders’ Representative shall, during the thirty (30) calendar days following delivery of such notice by the Stockholders’ Representative to Buyer (or such longer period as they may mutually agree in writing) (the “Resolution Period”), attempt will discuss in good faith to resolve their differences with respect to the disputed items (or calculations) such notice (the “Disputed Items”)matters set forth therein, and all other items upon any such resolution, the Closing Balance Sheet and Closing Statement will be updated and prepared in accordance with the agreement of Buyer and the Representative. Any written resolution executed by Buyer and the Representative during such thirty (and all calculations relating thereto30) day period following Buyer’s receipt of a Notice of Disagreement as to any item identified in the Notice of Disagreement will be final, binding and conclusiveconclusive on the parties.
(d) In the event that the Representative and Buyer fail to agree on any of the Representative’s proposed adjustments set forth in the Notice of Disagreement within thirty (30) days after Buyer receives the Notice of Disagreement, absent manifest error or fraudthe Representative and Buyer agree to jointly select a nationally recognized accounting firm, and use their reasonable best efforts to cause such accounting firm, within 45 days immediately following such first 30-day period, to make the final written determination of all matters which remain in dispute that were included in the Notice of Disagreement. Any resolution If, Buyer and the Representative cannot agree on an accounting firm within fifteen (15) days after such first 30-day period, each of Buyer and the Representative will promptly select a nationally recognized accounting firm and such two accounting firms will designate a third nationally recognized accounting firm that neither presently is, nor in the past three years has been, engaged by either party. The accounting firm so agreed to by Buyer and the Stockholders’ Representative during or the Resolution Period third accounting firm so selected by the two accounting firms in accordance with the immediately preceding sentence is hereinafter referred to as to any Disputed Item shall be set forth in writing and will be final, binding and conclusive, absent manifest error or fraud.
(c) If the “Firm”. Buyer and the Stockholders’ Representative do not resolve all Disputed Items by will mutually instruct the end Firm to, and the Firm will, make a final determination of the Resolution Period, then all Disputed Items remaining items included in dispute will be submitted the Closing Balance Sheet and the Closing Statement (to the Neutral Arbitrator. The Neutral Arbitrator shall act as an arbitrator to determine only those Disputed Items remaining extent such amounts are in dispute, consistent ) solely in accordance with this Section 2.11, and shall request a statement from Agreement. Buyer and the Stockholders’ Representative regarding such Disputed Itemswill execute a customary engagement letter and will cooperate with the Firm during the term of its engagement. The scope of the disputes to be arbitrated by the Neutral Arbitrator is limited to those items or calculations specifically in dispute between Buyer and the Stockholders’ Representative; Representative will instruct the Firm not to, and the Neutral Arbitrator is not to make any other determination. In resolving each Disputed ItemFirm will not, the Neutral Arbitrator shall be bound by the principles set forth in this Section 2.11 and may not assign a value to any Disputed Item item in dispute greater than the greatest value for such Disputed Item claimed item assigned by any party Buyer, on the one hand, or the Representative, on the other hand, or less than the lowest smallest value for such Disputed Item claimed item assigned by any partyBuyer, on the one hand, or the Representative, on the other hand. Buyer and the Representative will also instruct the Firm to, and the Firm will, make its determination based solely on written submissions by Buyer and the Representative that are in accordance with this Agreement (i.e., not on the basis of an independent review). The parties further agree that Closing Balance Sheet, the adjustment contemplated by this Section 2.11 is intended to show the change between the Estimated Net Working Capital Closing Statement and the Final resulting Closing Net Working Capital, Closing Cash, Closing Indebtedness, and Transaction Expenses, in each case, as determined by the change between Firm in accordance with this Section 1.07(c), will be final, binding and conclusive on the Estimated Net Funded Indebtedness parties on the date the Firm delivers its final determination in writing to Buyer and the Final Net Funded Indebtedness Representative, and, subject to Section 11.15, Section 11.16 and Section 11.17, each of the parties hereto will be entitled to enforce such determination in a court of competent jurisdiction. The Firm will provide a written report to Buyer and the change between Estimated Transaction Related Expenses and Final Transaction Related ExpensesRepresentative, and that such changes can only be measured if each calculation is done requested by either of them, which sets forth in a manner consistent reasonable detail the basis for the Firm’s final determination. In connection with the Accounting Principles resolution of any dispute, the Firm will have reasonable access to all documents, records, work papers, facilities and personnel of the definitions thereofCompany and its Subsidiaries necessary to make its determination. All fees Each party will be afforded the opportunity to present to the Firm any material such party deems relevant to the determination and will have a continuing opportunity to discuss the matter and its position with the Firm, but no such presentation of materials or communication will be on an ex parte basis and each party will be afforded access to copies of all materials presented by each other party. The fees, costs and expenses relating to of the work, if any, to be performed by the Neutral Arbitrator Firm will be allocated between Buyer Buyer, on the one hand, and the Stockholders’ Representative (which, in the case of the Stockholders’ Representative, shall be payable by on the Stockholders’ Representative solely out of the Reserve Amount) other hand, in the same proportion that the aggregate amount of the Disputed Items disputed items so submitted to the Neutral Arbitrator Firm that is unsuccessfully disputed by each such party (as finally determined by the Neutral ArbitratorFirm) bears to the total amount of such Disputed Items so disputed items submitted. The Neutral Arbitrator For example, if the Representative submits a Notice of Disagreement for $1,000, and if Buyer contests only $500 of the amount claimed by the Representative, and if the Firm ultimately resolves the dispute by awarding the Representative $300 of the $500 contested, then the costs and expenses of the Firm will deliver be allocated 60% (i.e., 300/500) to Buyer and the Stockholders’ Representative a written determination 40% (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided i.e., 200/500) to the Neutral Arbitrator by Representative.
(e) The Closing Balance Sheet, the Stockholders’ Representative Closing Statement and Buyerthe resulting Closing Net Working Capital, Closing Cash, Closing Indebtedness, and Transaction Expenses (as revised to reflect the resolution of any disputed matters in accordance with this Section 1.07) of the Disputed Items submitted will be deemed to the Neutral Arbitrator within thirty (30) calendar days of receipt of such Disputed Items, which determination will be final, binding and conclusive, absent manifest error or fraud. The final, binding upon the earliest of (i) the failure of the Representative to provide a Notice of Disagreement within thirty (30) days after the Representative receives the Closing Balance Sheet and conclusive the Closing Statement based either upon agreement by pursuant to Section 1.07(b), (ii) the parties, or deemed agreement resolution in writing of all disputes set forth in the Notice of Disagreement pursuant to Section 1.07(c) by Buyer and the Stockholders’ Representative in accordance with this Section 2.11Representative, or (iii) the written determination delivered by the Neutral Arbitrator in accordance with this Section 2.11(c) will be the “Conclusive Closing Statement.” If any party fails to submit a statement regarding any Disputed Item submitted to the Neutral Arbitrator within the time determined by the Neutral Arbitrator or otherwise fails to give the Neutral Arbitrator access as reasonably requested, then the Neutral Arbitrator shall render a decision based solely on the evidence timely submitted and the access afforded to the Neutral Arbitrator by the other party. Except in instances involving fraud or except as may arise out resolution of the representations and warranties under Article III and Article IV and in such instances only to the extent all disputes set forth in this Agreement, neither any Stockholder, holder the Notice of Company Stock Options or Disagreement by the Stockholder Representative shall have any liability with respect Firm pursuant to Funded Indebtedness, Closing Date Funded Indebtedness, Transactions Related Expenses, or current assets or current liabilities (including as to accounts receivable and the collectability thereof) or any other component of Net Working Capital except as determined in this Section 2.111.07(d).
(df) Within two (2) Business Days after following the Final Amounts have been determined final determination of the Closing Balance Sheet and the Closing Statement in accordance with this Section 2.11:1.07(e) (such date, the “Settlement Date”):
(i) if If the Aggregate Common Equity Amount is greater than Estimated Merger Consideration exceeds the Final Payment Merger Consideration (such excess, the “Excess Amount”), then Buyer and the Stockholders’ Representative and Buyer shall instruct will deliver joint written instructions to the Escrow Agent to cause the Escrow Agent to pay to Buyer (or its designee), by wire transfer of immediately available funds, the Surviving Corporation, using first Excess Amount from the funds in Adjustment Escrow Funds. In the Merger Consideration Escrow Account and, to event that at such time the extent the funds in the Merger Consideration Escrow Account are not sufficient to satisfy such payment in full, then out of the funds in the General Escrow Account, an amount in cash equal to the amount by which the Aggregate Common Equity Amount is greater than the Final Payment Amount (as defined below); and
(ii) if the Aggregate Common Equity Excess Amount is less than the Final Payment Amount Adjustment Escrow Funds (as defined belowsuch shortfall, the “Remaining Adjustment Escrow Funds”), Buyer shall payand the Representative will simultaneously with delivery of the instructions in the immediately foregoing sentence deliver joint written instructions to the Escrow Agent to cause the Escrow Agent to pay the Remaining Adjustment Escrow Funds from the Adjustment Escrow Account to the Representative (or its designee). The Adjustment Escrow Account is Buyer’s and Merger Sub’s sole and exclusive source of recovery for any Excess Amount owing to Buyer, or cause Merger Sub or, following the Closing, the Surviving Corporation to pay, to the Stockholders’ Representative hereunder.
(for further pro rata distribution to the Fully Diluted Common Holdersii) an amount in cash equal to the amount by which the Aggregate Common Equity Amount is less than If the Final Payment Merger Consideration exceeds the Estimated Merger Consideration (such excess, the “Adjustment Amount”), then (i) Buyer will make payment of the Adjustment Amount by wire transfer of immediately available funds funds, to the Representative (or its designee), and (ii) Buyer and the Representative will deliver joint written instructions to the Escrow Agent to cause the Escrow Agent to make payment of the Adjustment Escrow Funds from the Adjustment Escrow Account to the Representative (or its designee). Notwithstanding the foregoing, in no event shall the Adjustment Amount exceed an amount payable equal to Buyer $10,000,000.
(g) When the Final Merger Consideration is finally determined pursuant to Section 2.11(d)(i) and the amount payable to the Stockholders’ Representative pursuant to this Section 2.11(d)(ii) are referred to herein as the “Merger Consideration Adjustment Amount”1.07(e); provided that any portion of any amount payable under this Section 2.11(d)(ii) that is a Compensatory Payment shall not be paid to the Stockholders’ Representative but shall instead be paid by the Surviving Corporation (or a Subsidiary of the Surviving Corporation) through its payroll system and in accordance with the Surviving Corporation’s (or such Subsidiary’s) standard withholding and payroll practices and procedures to the Person identified in writing by the Stockholders’ Representative as the Person to whom such Compensatory Payment is to be made. Any payment by Buyer, the Surviving Corporation Representative will in good faith compute or the Stockholders’ Representative (pursuant to the distribution of funds from the Merger Consideration Escrow Account or the General Escrow Account)re-compute, as the case may be, (i) the number of Vested Options, (ii) the Aggregate Fully-Diluted Common Shares, (iii) the Aggregate Option Exercise Price, (iv) the Final Adjusted Merger Consideration, (v) the Final Common Stock Merger Consideration, (vi) the Final Common Stock Per Share Merger Consideration, (vii) the Final Option Per Share Merger Consideration, and (viii) the appropriate amount payable to each Stockholder and Optionholder based on the foregoing from the Remaining Adjustment Escrow Funds, the Adjustment Amount and the Representative Holdback Amount, taking into account amounts previously received by such Stockholders and Optionholders as Closing Stock Payments or Closing Option Payments, in each case, in accordance with this Agreement and the terms of the Option Plan (and, for purposes of this Section 1.07(g), making such calculation as though all Closing Option Payments had been made without regard to reductions under any Retention Arrangement). Promptly thereafter, the Representative will notify the Escrow Agent and the Paying Agent, as applicable, of such calculations and the amount that should be distributed by them to each Stockholder and to the Surviving Corporation on behalf of each Optionholder based upon the calculations and re-calculations contemplated by the immediately preceding sentence. For the avoidance of doubt, each Stockholder and Optionholder will receive the difference between (x) the amounts payable to such Stockholder or Optionholder based upon the calculations and re-calculations contemplated by this Section 1.07(g) and (y) the Closing Stock Payment or Closing Option Payment received by such Stockholder or Optionholder, as applicable (for purposes of this Section 1.07(g), making such calculation as though all Closing Option Payments had been made without regard to reductions under any Retention Arrangement). The Representative, the Escrow Agent, and the Paying Agent, as applicable, will distribute such amounts, as applicable, in accordance with the written instructions so received from the Representative. If, at the time of the calculation of Final Adjusted Merger Consideration, the Representative determines to retain funds in the Representative Holdback Amount under Section 11.18(b), and at any time and from time to time thereafter determines a portion of such funds should be distributed to the Stockholders and Optionholders, then at each such time, the Representative will in good faith determine the appropriate amounts to be paid to the Stockholders and Optionholders from the Representative Holdback Amount and will cause such amounts to be paid from the Representative Holdback Amount to the Stockholders and to the Surviving Corporation on behalf of the Optionholders. As promptly as practicable following the receipt of funds for the Optionholders and, in any event, no later than the next scheduled payroll of the Company and its Subsidiaries, the Company will distribute to the Optionholders any payments received on their behalf under this Section 1.07(g). None of the Escrow Agent, the Paying Agent, the Surviving Corporation or Buyer will have any liability or obligation to any Stockholder or Optionholder or the Representative for any distribution made in accordance with the instructions of the Representative pursuant to this Section 2.11 will 1.07(g).
(h) The parties hereto agree that any payment made pursuant to this Section 1.07 shall be treated as an adjustment to the Merger Consideration aggregate consideration for tax Tax purposes. For purposes of this Section 2.11:, unless otherwise required by applicable Law.
Appears in 1 contract
Sources: Merger Agreement (Trimble Inc.)
Post-Closing Merger Consideration Adjustment. Following the Closing Date, the Merger Consideration will be adjusted, if at all, as set forth below:
(a) As promptly as practicable, but in any case no later than sixty Within ninety (6090) calendar days after the Closing Date, Buyer shall cause to be prepared and delivered to the StockholdersShareholders’ Representative a certificate signed by a duly authorized officer of Buyer attaching (i) the consolidated balance sheet of the Company and the related statements of income and Shareholders’ capital and statement of cash flows as of the Closing Date prepared in accordance with GAAP (without giving effect to the transactions contemplated herein), and (ii) a statement (the “Closing Statement”) setting forth including Buyer’s calculation of (A) the Closing Net Working CapitalCapital (including each component item thereof calculated in accordance with the manner of calculation reflected in Schedule 1.05 attached hereto), (B) the Net Funded Closing Indebtedness, (C) the Transaction Related Expenses (to D) the extent not paid by the Company resulting Closing Net Working Capital Surplus or any of its Affiliates prior to the Closing) Closing Net Working Capital Shortfall (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)as applicable) and the components thereofPost-Closing Adjustment (as defined herein), (E) Cash and (F) Buyer’s calculation of the Final Merger Consideration derived from the foregoing. The Post-Closing Statement Adjustment shall include be an amount equal to the amount calculated in good faith by Buyer, Closing Net Working Capital Surplus (if any, of the Merger Consideration Escrow Amount that need not be retained by the Escrow Agent pending resolution of payments to be made pursuant to Section 2.11(d) (the “Merger Consideration Escrow Release Amount”). The Merger Consideration Escrow Release Amount, to the extent there is such an amount, shall be released two (2) Business Days following Buyer’s delivery of the Closing Statement. The Closing Statement and the Net Working Capital, the Net Funded Indebtedness and the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) calculations shall be prepared and calculated in good faith, and in the manner and on a basis consistent with the Accounting Principles (to the extent applicable) and shall be in the same form and include the same line items as minus the Estimated Net Working Capital calculation, the Estimated Net Funded Indebtedness calculation and the Estimated Transaction Related Expenses calculation. If the Closing Statement is not so timely delivered, Surplus (if any) plus the Estimated Net Working Capital, Capital Shortfall (if any) minus the Closing Net Working Capital Shortfall (if any) plus the Estimated Net Funded Closing Indebtedness and minus the Closing Indebtedness plus the Estimated Transaction Related Expenses will minus the Closing Transaction Expenses plus the Estimated Cash minus the Cash (the “Post-Closing Adjustment”), provided that, the Post-Closing Adjustment shall in no way be deemed Final Net Working Capitalaffected, Final Net Funded Indebtedness and Final Transaction Related Expensesmodified or adjusted by Buyer’s Independent Investigation (as defined herein) conducted prior to the Closing, respectivelyincluding but not limited to, inventory reserves.
(b) After receipt of the Closing Statement, the StockholdersShareholders’ Representative will shall have forty five thirty (4530) calendar days to review the Closing Statement. Unless the Stockholders’ Representative delivers written notice (which notice shall include the items and amounts in dispute and supporting documentation related thereto; such notice, a “Seller Dispute Notice”) to Buyer setting forth the items disputed by the Stockholders’ Representative with respect thereto on or prior to the forty-fifth (45th) calendar day after the Stockholdersfollowing Shareholders’ Representative’s receipt of the Closing Statement, the StockholdersStatement to review and analyze Buyer’s calculations set forth therein. If Shareholders’ Representative will be deemed concurs with such calculation or shall not object thereto in a writing delivered to have accepted and agreed to Buyer within the aforesaid thirty (30) day period, B▇▇▇▇’s calculation of the Closing Statement and such statement (and the calculations contained therein) will be Net Working Capital shall become final, binding and conclusiveconclusive on the parties hereto and shall not be subject to further review, absent manifest error challenge or fraudadjustment. If the StockholdersShareholders’ Representative does not agree with B▇▇▇▇’s calculation and notifies Buyer of its objections to items contained such objection in writing within the Closing Statement (or calculations contained therein) within such forty five (45) calendar day period, Buyer and the Stockholders’ Representative shall, during the aforesaid thirty (30) calendar days following delivery day period with a statement containing reasonable detail as to the basis for all objection(s) (the “Statement of such notice by the StockholdersObjections”), Buyer and Shareholders’ Representative to Buyer shall work in good faith for a period of thirty (30) days thereafter (or such longer period as they may mutually agree in writingagree) (the “Resolution Agreement Period”), attempt in good faith ) to resolve their differences with respect to the disputed items (or calculations) agree upon such notice (the “Disputed Items”), and all other items (and all calculations relating thereto) will be final, binding and conclusive, absent manifest error or fraud. Any resolution by Buyer and the Stockholders’ Representative during the Resolution Period as to any Disputed Item shall be set forth in writing and will be final, binding and conclusive, absent manifest error or fraudcalculation.
(c) If Buyer and the StockholdersShareholders’ Representative do not resolve and Buyer fail to reach an agreement with respect to all Disputed Items by the end of the Resolution matters set forth in the Statement of Objections before expiration of the Agreement Period, then all Disputed Items any amounts remaining in dispute will (“Disputed Amounts”) shall be submitted for resolution to a Neutral Auditor mutually appointed by B▇▇▇▇ and Shareholders’ Representative who, acting as experts and not arbitrators, shall resolve the Disputed Amounts only and make any adjustments to the Neutral ArbitratorPost-Closing Adjustment, as the case may be, and the Closing Statement. The parties hereto agree that all adjustments shall be made without regard to materiality. The Neutral Arbitrator Auditor shall act as an arbitrator 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 determine only those Disputed Items remaining each such item in disputethe Closing Statement and the Statement of Objections, consistent with this Section 2.11, and shall request a statement from respectively. If Buyer and the StockholdersShareholders’ Representative regarding are unable to agree on the selection of such Disputed Items. The scope Neutral Auditor within ten (10) days after the expiration of the disputes to be arbitrated Agreement Period, then within twenty (20) days after the expiration of the Agreement Period, Buyer and Shareholders’ Representative shall each select an independent certified public accounting firm and such two (2) firms shall, within twenty-five (25) days after the expiration of the Agreement Period, select the Neutral Auditor. Such calculation by the Neutral Arbitrator is limited to those items or calculations specifically in dispute between Buyer and the Stockholders’ Representative; and the Neutral Arbitrator is not to make any other determination. In resolving each Disputed Item, the Neutral Arbitrator Auditor shall be bound by the principles set forth in this Section 2.11 and may not assign a value to any Disputed Item greater than the greatest value for such Disputed Item claimed by any party or less than the lowest value for such Disputed Item claimed by any party. The parties further agree that the adjustment contemplated by this Section 2.11 is intended to show the change between the Estimated Net Working Capital and the Final Net Working Capital, the change between the Estimated Net Funded Indebtedness and the Final Net Funded Indebtedness and the change between Estimated Transaction Related Expenses and Final Transaction Related Expenses, and that such changes can only be measured if each calculation is done in a manner consistent with the Accounting Principles and the definitions thereof. All fees and expenses relating to the work, if any, to be performed by the Neutral Arbitrator will be allocated between Buyer and the Stockholders’ Representative (which, in the case of the Stockholders’ Representative, shall be payable by the Stockholders’ Representative solely out of the Reserve Amount) in the same proportion that the aggregate amount of the Disputed Items so submitted to the Neutral Arbitrator that is unsuccessfully disputed by each such party (as finally determined by the Neutral Arbitrator) bears to the total amount of such Disputed Items so submitted. The Neutral Arbitrator will deliver to Buyer and the Stockholders’ Representative a written determination (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided to the Neutral Arbitrator by the Stockholders’ Representative and Buyer) of the Disputed Items submitted to the Neutral Arbitrator within thirty (30) calendar days of receipt of such Disputed Items, which determination will be final, binding and conclusiveconclusive on the parties hereto and shall not be subject to further review, absent manifest error challenge or fraudadjustment. The final, binding Each party hereto shall pay its own costs and conclusive Closing Statement based either upon agreement by the parties, or deemed agreement by Buyer and the Stockholders’ Representative expenses incurred in accordance connection with this Section 2.111.08(c); provided, or however, that Shareholders’ Representative and Buyer shall each pay one-half (1/2) of the written determination delivered by fees, costs and expenses of the Neutral Arbitrator in accordance with this Section 2.11(c) will be the “Conclusive Closing Statement.” If any party fails to submit a statement regarding any Disputed Item submitted to the Neutral Arbitrator within the time determined by the Neutral Arbitrator or otherwise fails to give the Neutral Arbitrator access as reasonably requested, then the Neutral Arbitrator shall render a decision based solely on the evidence timely submitted and the access afforded to the Neutral Arbitrator by the other party. Except in instances involving fraud or except as may arise out of the representations and warranties under Article III and Article IV and in such instances only to the extent set forth in this Agreement, neither any Stockholder, holder of Company Stock Options or the Stockholder Representative shall have any liability with respect to Funded Indebtedness, Closing Date Funded Indebtedness, Transactions Related Expenses, or current assets or current liabilities (including as to accounts receivable and the collectability thereof) or any other component of Net Working Capital except as determined in this Section 2.11Auditor.
(d) Within two In the event the Post-Closing Adjustment is a negative number, then within five (25) Business Days after the Final Amounts have been determined in accordance with this Section 2.11:
(i) if the Aggregate Common Equity Amount is greater than the Final Payment Amount, then the Stockholders’ Representative and Buyer shall instruct the Escrow Agent to pay to the Surviving Corporation, using first the funds in the Merger Consideration Escrow Account and, to the extent the funds in the Merger Consideration Escrow Account are not sufficient to satisfy such payment in full, then out of the funds in the General Escrow Account, an amount in cash equal to the amount by which the Aggregate Common Equity Amount is greater than the Final Payment Amount (as defined below); and
(ii) if the Aggregate Common Equity Amount is less than the Final Payment Amount Determination Date (as defined below), Buyer and Shareholders’ Representative shall pay, or cause the Surviving Corporation to pay, submit joint written instructions to the Stockholders’ Representative Escrow Agent to release from the Closing Adjustment Escrow Account (for further pro rata distribution i) to the Fully Diluted Common Holders) Buyer, an amount in cash equal to the amount by which the Aggregate Common Equity Amount Post-Closing Adjustment is less than $0 (up to the Final Payment amount then remaining in the Closing Adjustment Escrow Account) and (ii) to the Key Shareholders as directed by the Shareholders’ Representative, any amounts then remaining in the Closing Adjustment Escrow Account (after reduction pursuant to the foregoing clause (i)). If the amount to be paid to Buyer pursuant to clause (i) of the previous sentence exceeds the Closing Adjustment Escrow Amount, the Key Shareholders shall pay Buyer such amount in excess of the Closing Adjustment Escrow Amount by wire transfer of immediately available funds to such account as is directed by Buyer within five (5) Business Days of the amount payable Determination Date, or, at Buyer’s option, Buyer and Shareholders’ Representative shall submit joint written instructions to the Escrow Agent to release from the Retention Escrow Account to Buyer pursuant to Section 2.11(d)(i) and such amount in excess of the amount payable to Closing Adjustment Escrow Amount. In the Stockholders’ Representative pursuant to this Section 2.11(d)(ii) are referred to herein as event the “Merger Consideration Post-Closing Adjustment Amount”); provided that any portion of any amount payable under this Section 2.11(d)(ii) that is a Compensatory Payment shall not be paid to the Stockholders’ Representative but shall instead be paid by the Surviving Corporation positive number, then within five (or a Subsidiary 5) Business Days of the Surviving Corporation) through its payroll system Determination Date, Buyer and in accordance with the Surviving Corporation’s (or such Subsidiary’s) standard withholding and payroll practices and procedures to the Person identified in writing by the Stockholders’ Representative as the Person to whom such Compensatory Payment is to be made. Any payment by Buyer, the Surviving Corporation or the Stockholders’ Representative (pursuant to the distribution of funds from the Merger Consideration Escrow Account or the General Escrow Account), as the case may be, pursuant to this Section 2.11 will be treated as an adjustment to the Merger Consideration for tax purposes. For purposes of this Section 2.11:Shareholders’
Appears in 1 contract
Post-Closing Merger Consideration Adjustment. Following the Closing Date, the Estimated Merger Consideration will be adjusted, if at all, as set forth below:
(a) As promptly as practicableBuyer will prepare and deliver to the Representative within ninety (90) days after the Closing Date a statement (the "Closing Statement"), but together with reasonable supporting documentation and detail, setting forth a calculation of (1) Closing Net Working Capital, (2) Closing Cash, (3) Closing Indebtedness, (4) the Transaction Expenses, (5) Buyer's calculation of the Final Merger Consideration derived from the foregoing, and (6) with respect to each of the foregoing, the changes in any case no later such amounts from the corresponding amounts on the Estimated Closing Statement. The Closing Statement will be prepared, and Closing Net Working Capital, Closing Cash, Closing Indebtedness and Transaction Expenses will be determined in accordance with the definitions set forth in this Agreement, using the Accounting Principles. The parties hereto agree that the purpose of preparing the Closing Statement and calculating Final Merger Consideration is solely to (x) accurately measure the amount of Closing Net Working Capital, Closing Cash, Closing Indebtedness and Transaction Expenses and (y) measure the difference in (1) Closing Net Working Capital from Estimated Closing Net Working Capital, (2) Closing Cash from Estimated Closing Cash, (3) Closing Indebtedness from Estimated Closing Indebtedness and (4) Transaction Expenses from Estimated Transaction Expenses, and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of calculating Final Merger Consideration than sixty were used in the calculation of Estimated Merger Consideration. If the Buyer fails to deliver to the Representative the Closing Statement within ninety (6090) calendar days after the Closing Date, Buyer shall cause the Representative may, in its sole discretion, elect to be prepared and delivered to deem that the Stockholders’ Representative a statement (Estimated Merger Consideration set forth in the “Closing Statement”) setting forth the Net Working Capital, the Net Funded Indebtedness, the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) and the components thereof. The Estimated Closing Statement shall include constitutes the amount calculated in good faith by Buyer, if any, of the Final Merger Consideration Escrow Amount that need not be retained by the Escrow Agent pending resolution for all purposes of payments to be made pursuant to this Section 2.11(d) (the “Merger Consideration Escrow Release Amount”). The Merger Consideration Escrow Release Amount, to the extent there is such an amount, shall be released two (2) Business Days following Buyer’s delivery of the Closing Statement. The Closing Statement and the Net Working Capital, the Net Funded Indebtedness and the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) calculations shall be prepared and calculated in good faith, and in the manner and on a basis consistent with the Accounting Principles (to the extent applicable) and shall be in the same form and include the same line items as the Estimated Net Working Capital calculation, the Estimated Net Funded Indebtedness calculation and the Estimated Transaction Related Expenses calculation. If the Closing Statement is not so timely delivered, the Estimated Net Working Capital, the Estimated Net Funded Indebtedness and the Estimated Transaction Related Expenses will be deemed Final Net Working Capital, Final Net Funded Indebtedness and Final Transaction Related Expenses, respectively1.07.
(b) After receipt On or prior to the sixtieth (60th) day following Buyer's delivery of the Closing Statement, the Stockholders’ Representative may give Buyer a written notice stating in reasonable detail the Representative's objections (a "Notice of Disagreement") to the Closing Statement. During such 60-day period, and any period of dispute thereafter with respect to such Closing Statement, Buyer will, and will have forty cause the Company and its Subsidiaries to, (i) provide the Representative and its Advisors with reasonable access during normal business hours to the books, records (including work papers, schedules, memoranda and other documents), supporting data, facilities and personnel of the Company and its Subsidiaries (including Company personnel responsible for accounting and finance and senior management) and the Company's Advisors and their work papers and (ii) otherwise reasonably cooperate with and assist the Representative and its Advisors in connection with such review; provided that the Representative and its Advisors shall conduct any such review in a manner as not to interfere unreasonably with the business or operations of Buyer, the Company or their respective Subsidiaries and shall comply with all applicable safety rules and reasonable controls during such access. Any determination set forth on the Closing Statement which is not specifically objected to in the Notice of Disagreement will be deemed accepted by the Representative, and will be final and binding upon all parties upon delivery of the Notice of Disagreement. If the Representative does not deliver to Buyer a Notice of Disagreement within such 60-day period, then the Closing Statement and the Closing Net Working Capital, Closing Cash, Closing Indebtedness, and Transaction Expenses will be final and binding upon the parties upon the expiration of such 60-day period, and the Final Merger Consideration set forth in the Closing Statement will constitute the Final Merger Consideration for all purposes of this Section 1.07.
(c) Following Buyer's receipt of any Notice of Disagreement, the Representative and Buyer will attempt to negotiate in good faith to resolve the disputed matters set forth therein. In the event that the Representative and Buyer fail to agree on any of the Representative's proposed adjustments set forth in the Notice of Disagreement within thirty (30) days after Buyer receives the Notice of Disagreement, the Representative and Buyer agree to appoint Deloitte, or, if such firm is not available, Representative and Buyer agree to jointly select a nationally recognized accounting firm within forty-five (45) calendar days immediately following such 30-day period (Deloitte, or such other firm jointly selected pursuant to review this Section 1.07(c), the Closing Statement"Firm"), to make the final written determination of all matters which remain in dispute that were included in the Notice of Disagreement. Unless Buyer and the Stockholders’ Representative delivers written notice (which notice shall include will instruct the Firm to, and the Firm will, make a final determination of the items and amounts in dispute and supporting documentation related thereto; such notice, a “Seller Dispute Notice”) to Buyer setting forth the items disputed by the Stockholders’ Representative with respect thereto on or prior to the forty-fifth (45th) calendar day after the Stockholders’ Representative’s receipt of the Closing Statement, the Stockholders’ Representative will be deemed to have accepted and agreed to the Closing Statement and such statement (and the calculations contained therein) will be final, binding and conclusive, absent manifest error or fraud. If the Stockholders’ Representative notifies Buyer of its objections to items contained included in the Closing Statement (or calculations contained thereinto the extent such amounts are in dispute) within such forty five (45) calendar day period, solely in accordance with this Agreement. Buyer and the Stockholders’ Representative shall, will execute a customary engagement letter and will cooperate with the Firm during the thirty (30) calendar days following delivery term of such notice by the Stockholders’ Representative to Buyer (or such longer period as they may mutually agree in writing) (the “Resolution Period”), attempt in good faith to resolve their differences with respect to the disputed items (or calculations) such notice (the “Disputed Items”), and all other items (and all calculations relating thereto) will be final, binding and conclusive, absent manifest error or fraudits engagement. Any resolution by Buyer and the Stockholders’ Representative during will instruct the Resolution Period as to any Disputed Item shall be set forth in writing and will be finalFirm not to, binding and conclusive, absent manifest error or fraud.
(c) If Buyer and the Stockholders’ Representative do not resolve all Disputed Items by the end of the Resolution PeriodFirm will not, then all Disputed Items remaining in dispute will be submitted to the Neutral Arbitrator. The Neutral Arbitrator shall act as an arbitrator to determine only those Disputed Items remaining in dispute, consistent with this Section 2.11, and shall request a statement from Buyer and the Stockholders’ Representative regarding such Disputed Items. The scope of the disputes to be arbitrated by the Neutral Arbitrator is limited to those items or calculations specifically in dispute between Buyer and the Stockholders’ Representative; and the Neutral Arbitrator is not to make any other determination. In resolving each Disputed Item, the Neutral Arbitrator shall be bound by the principles set forth in this Section 2.11 and may not assign a value to any Disputed Item item in dispute greater than the greatest value for such Disputed Item claimed item assigned by any party Buyer, on the one hand, or the Representative, on the other hand, or less than the lowest smallest value for such Disputed Item claimed item assigned by Buyer, on the one hand, or the Representative, on the other hand. Buyer and the Representative will also instruct the Firm to, and the Firm will, make its determination based solely on written submissions by Buyer and the Representative that are in accordance with this Agreement (i.e., not on the basis of an independent review); provided that the parties hereto agree that no party shall have any partyex parte communications with the Firm. The parties further agree that the adjustment contemplated by this Section 2.11 is intended to show the change between the Estimated Net Working Capital Closing Statement and the Final resulting Closing Net Working Capital, the change between the Estimated Net Funded Closing Cash, Closing Indebtedness and Transaction Expenses, in each case, as determined by the Final Net Funded Indebtedness Firm in accordance with this Section 1.07(c), will be final and binding on the parties on the date the Firm delivers its final determination in writing to Buyer and the change between Estimated Transaction Related Expenses and Final Transaction Related ExpensesRepresentative. The fees, and that such changes can only be measured if each calculation is done in a manner consistent with the Accounting Principles and the definitions thereof. All fees costs and expenses relating to of the work, if any, to be performed by the Neutral Arbitrator Firm will be allocated between Buyer Buyer, on the one hand, and the Stockholders’ Representative (which, in the case of the Stockholders’ Representative, shall be payable by on the Stockholders’ Representative solely out of the Reserve Amount) other hand, in the same proportion that the aggregate amount of the Disputed Items disputed items so submitted to the Neutral Arbitrator Firm that is unsuccessfully disputed by each such party (as finally determined by the Neutral ArbitratorFirm) bears to the total amount of such Disputed Items so disputed items submitted. The Neutral Arbitrator For example, if the Representative submits a Notice of Disagreement for $1,000, and if Buyer contests only $500 of the amount claimed by the Representative, and if the Firm ultimately resolves the dispute by awarding the Representative $300 of the $500 contested, then the costs and expenses of the Firm will deliver be allocated 60% (i.e., 300/500) to Buyer and the Stockholders’ Representative a written determination 40% (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided i.e., 200/500) to the Neutral Arbitrator Representative. Buyer and the Representative shall otherwise pay their own costs and expenses incurred in connection with any such dispute. The determination of Closing Net Working Capital, Closing Cash, Closing Indebtedness and Transaction Expenses by the Stockholders’ Representative and Buyer) of the Disputed Items submitted to the Neutral Arbitrator within thirty (30) calendar days of receipt of such Disputed Items, which determination Firm will be final, conclusive and binding upon the parties hereto and conclusive, absent manifest error will not be subject to appeal or fraud. The final, binding and conclusive Closing Statement based either upon agreement by the parties, or deemed agreement by Buyer and the Stockholders’ Representative in accordance with this Section 2.11, or the written determination delivered by the Neutral Arbitrator in accordance with this Section 2.11(c) will be the “Conclusive Closing Statement.” If any party fails to submit a statement regarding any Disputed Item submitted to the Neutral Arbitrator within the time determined by the Neutral Arbitrator or otherwise fails to give the Neutral Arbitrator access as reasonably requested, then the Neutral Arbitrator shall render a decision based solely on the evidence timely submitted and the access afforded to the Neutral Arbitrator by the other party. Except in instances involving fraud or except as may arise out of the representations and warranties under Article III and Article IV and in such instances only to the extent set forth in this Agreement, neither any Stockholder, holder of Company Stock Options or the Stockholder Representative shall have any liability with respect to Funded Indebtedness, Closing Date Funded Indebtedness, Transactions Related Expenses, or current assets or current liabilities (including as to accounts receivable and the collectability thereof) or any other component of Net Working Capital except as determined in this Section 2.11further review.
(d) Within If the Estimated Merger Consideration exceeds the Final Merger Consideration (such excess, the "Excess Amount"), Buyer and the Representative will deliver joint written instructions to the Escrow Agent to cause the Escrow Agent to pay to Buyer (or its designee), within two (2) Business Days after the date the Final Amounts have been Merger Consideration is finally determined in accordance with pursuant to this Section 2.11:
1.07 (isuch date, the "Settlement Date") if the Aggregate Common Equity Amount is greater than the Final Payment Amount, then the Stockholders’ Representative and Buyer shall instruct the Escrow Agent to pay to the Surviving Corporation, using first the funds in the Merger Consideration Escrow Account and, to the extent the funds in the Merger Consideration Escrow Account are not sufficient to satisfy such payment in full, then out of the funds in the General Escrow Account, an amount in cash equal to the amount by which the Aggregate Common Equity Amount is greater than the Final Payment Amount (as defined below); and
(ii) if the Aggregate Common Equity Amount is less than the Final Payment Amount (as defined below), Buyer shall pay, or cause the Surviving Corporation to pay, to the Stockholders’ Representative (for further pro rata distribution to the Fully Diluted Common Holders) an amount in cash equal to the amount by which the Aggregate Common Equity Amount is less than the Final Payment Amount by wire transfer of immediately available funds funds, the Excess Amount from the Purchase Price Adjustment Escrow Funds. In the event that at such time the Excess Amount is less than the Purchase Price Adjustment Escrow Funds (such shortfall, the amount payable to "Remaining Purchase Price Adjustment Escrow Funds"), Buyer pursuant to Section 2.11(d)(i) and the amount payable Representative will, simultaneously with delivery of the instructions in the immediately foregoing sentence, deliver joint written instructions to the Stockholders’ Escrow Agent to cause the Escrow Agent to pay the Remaining Purchase Price Adjustment Escrow Funds from the Purchase Price Adjustment Escrow Account to the Representative (or its designee), with all such amounts received by the Representative (or its designee) pursuant to this Section 2.11(d)(ii) are referred 1.07(d), subject to herein as the “Merger Consideration Adjustment Amount”Section 10.19(b); provided that any portion of any amount payable under this Section 2.11(d)(ii) that is a Compensatory Payment shall not , to be paid to the Stockholders’ Representative but shall instead be paid by Class A Common Unitholders and the Surviving Corporation (or a Subsidiary of the Surviving Corporation) through its payroll system and Class B Unitholders, as applicable, in accordance with Section 1.07(e). The Purchase Price Adjustment Escrow Account is Buyer's, Merger Sub's and the Surviving Corporation’s (or such Subsidiary’s) standard withholding Company's sole and payroll practices and procedures exclusive source of recovery for any amounts owing to Buyer, Merger Sub or, after the Person identified in writing by the Stockholders’ Representative as the Person to whom such Compensatory Payment is to be made. Any payment by BuyerClosing, the Surviving Corporation or Company under this Agreement (including pursuant to this Section 1.07 with respect to the Stockholders’ Purchase Price Adjustment Escrow Funds).
(e) If the Final Merger Consideration exceeds the Estimated Merger Consideration (such excess, the "Adjustment Amount"), then (i) Buyer will, within two (2) Business Days after the Settlement Date, make payment of the lesser of (x) the $6,500,000 and (y) the Adjustment Amount (such amount, the "Paid Adjustment Amount") by wire transfer in immediately available funds to the Representative (or its designee), and (ii) Buyer and the Representative will deliver joint written instructions to the Escrow Agent to cause the Escrow Agent to make payment of the Purchase Price Adjustment Escrow Funds from the Purchase Price Adjustment Escrow Account, within two (2) Business Days after the Settlement Date, to the Representative (or its designee), with all such amounts received by the Representative (or its designee) pursuant to this Section 1.07(e), subject to Section 10.19(b), to be paid to the distribution of funds from Class A Common Unitholders and the Class B Unitholders, as applicable, pursuant to Section 1.07(e).
(f) When the Final Merger Consideration Escrow Account is finally determined pursuant to Section 1.07(b) or Section 1.07(c), the General Escrow Account)Representative will in good faith compute or re-compute, as the case may be, (i) the Final Adjusted Merger Consideration, (ii) the Final Per Unit Amount and (iii) the appropriate amount payable to each Class A Common Unitholder and each Class B Unitholder based on the foregoing from the remaining Purchase Price Adjustment Escrow Funds, the Paid Adjustment Amount and the Representative Holdback Amount, taking into account amounts previously received by such Class A Common Unitholders and such Class B Unitholders as Closing Class A Common Unit Payment or Closing Class B Unit Payment, in each case, in accordance with this Agreement. Promptly thereafter, the Representative will notify the Escrow Agent and the Paying Agent, as applicable, of such calculations and the amount that should be distributed by them to each Class A Common Unitholder and Class B Unitholder based upon the calculations and re-calculations contemplated by the immediately preceding sentence. For the avoidance of doubt, each Class A Common Unitholder and Class B Unitholder will receive the difference between (x) the amounts payable to such Class A Common Unitholder and Class B Unitholder based upon the calculations and re-calculations contemplated by this Section 1.07(e) and (y) the Closing Class A Common Unit Payment, the Closing Class B Unit Payment or any other post-Closing payments received by such Class A Common Unitholder or such Class B Unitholder, as applicable. The Representative, the Escrow Agent and the Paying Agent, as applicable, will distribute such amounts, as applicable, in accordance with the irrevocable written instructions so received from the Representative. If, at the time of the calculation of the Final Adjusted Merger Consideration, the Representative determines to retain funds in the Representative Holdback Amount under Section 10.19(b), and at any time and from time to time thereafter determines a portion of such funds should be distributed to the Class A Common Unitholders and the Class B Unitholders, then at each such time, the Representative will in good faith determine the appropriate amounts to be paid to the Class A Common Unitholders or the Class B Unitholders from the Representative Holdback Amount and will cause such amounts to be paid from the Representative Holdback Amount to the Class A Common Unitholders or the Class B Unitholders. None of the Escrow Agent, the Paying Agent, the Surviving Company or Buyer will have any liability or obligation to any Class A Common Unitholder or Class B Unitholder or the Representative for any distribution made in accordance with the instructions of the Representative pursuant to this Section 2.11 1.07(e).
(g) Buyer and Merger Sub agree that the adjustments to the Final Merger Consideration and the dispute resolution provisions provided for in this Section 1.07 will be treated as an adjustment to the Merger Consideration exclusive remedies for tax purposes. For purposes of the matters addressed or that could be addressed by this Section 2.11:1.07.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Primoris Services Corp)
Post-Closing Merger Consideration Adjustment. Following the Closing Date, the Merger Consideration will be adjusted, if at all, dollar-for-dollar as set forth below:
(a) As promptly as practicable, but in any case no later than sixty Buyer will prepare and deliver to the Representative within ninety (6090) calendar days after the Closing Date, Buyer shall cause to be prepared Date (i) an unaudited balance sheet of the Company and delivered to its Subsidiaries as of the Stockholders’ Representative Adjustment Calculation Time (the "Closing Balance Sheet") and (ii) a statement (the “"Closing Statement”") setting forth a calculation of (1) the Closing Net Working Capital, the Net Funded Indebtedness, the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) and the components thereof. The Closing Statement shall include the amount calculated in good faith by Buyer, if any, of the Merger Consideration Escrow Amount that need not be retained by the Escrow Agent pending resolution of payments to be made pursuant to Section 2.11(d) (the “Merger Consideration Escrow Release Amount”). The Merger Consideration Escrow Release Amount, to the extent there is such an amount, shall be released two (2) Business Days following the Closing Cash, (3) the Closing Indebtedness, (4) the Transaction Expenses, (5) Buyer’s delivery 's calculation of the Final Merger Consideration derived from the foregoing, and (6) with respect to each of the foregoing, the changes in such amounts from the corresponding amounts on the Estimated Closing Statement. The Closing Balance Sheet and Closing Statement will be prepared, and the Closing Cash, Closing Indebtedness and Transaction Expenses will be determined, in each case, in good faith, on a consolidated basis in accordance with GAAP and the definitions set forth in this Agreement, using, solely to the extent consistent with GAAP, the same accounting methods, assumptions, policies, principles, practices and procedures, with consistent classifications, judgments and estimation methodology, as were used in the preparation of the Latest Balance Sheet except that the Closing Net Working Capital shall be calculated in accordance with Exhibit B using, solely to the extent consistent with GAAP, the same accounting methods, assumptions, policies, principles, practices and procedures, with consistent classifications, judgments and estimation methodology, as were used in the preparation of the Latest Balance Sheet. The Closing Balance Sheet and Closing Statement (i) will not include any changes in assets or liabilities solely as a result of implementing purchase accounting adjustments and (ii) except as required by GAAP will be based on facts and circumstances as they exist as of the Adjustment Calculation Time and will exclude the effect of any act, decision or event occurring on or after the Closing. The parties agree that the purpose of preparing the Closing Balance Sheet and the Closing Statement and calculating Final Merger Consideration is solely to (x) accurately measure the Closing Net Working Capital, the Net Funded Closing Cash, Closing Indebtedness and Transaction Expenses and (y) measure the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) calculations shall be prepared and calculated difference in good faith, and in the manner and on a basis consistent with the Accounting Principles (to the extent applicable) and shall be in the same form and include the same line items as the Estimated Closing Net Working Capital calculation, the Estimated Net Funded Indebtedness calculation and the Estimated Transaction Related Expenses calculation. If the Closing Statement is not so timely delivered, the Estimated from Target Net Working Capital, and such processes are not intended to permit the introduction of different accounting methods or practices, reserves classifications or estimation methodologies for the purpose of calculating Final Merger Consideration than were used in the calculation of Estimated Net Funded Indebtedness and Merger Consideration, assuming the methodologies used in calculating Estimated Transaction Related Expenses will be deemed Final Net Working Capital, Final Net Funded Indebtedness and Final Transaction Related Expenses, respectivelyMerger Consideration were in accordance with GAAP.
(b) After receipt of the Closing Statement, the Stockholders’ Representative will have forty five (45) calendar days to review the Closing Statement. Unless the Stockholders’ Representative delivers written notice (which notice shall include the items and amounts in dispute and supporting documentation related thereto; such notice, a “Seller Dispute Notice”) to Buyer setting forth the items disputed by the Stockholders’ Representative with respect thereto on On or prior to the forty-fifth (45th) calendar day after following Buyer's delivery of the Stockholders’ Representative’s receipt of Closing Balance Sheet and the Closing Statement, the Stockholders’ Representative may give Buyer a written notice stating in reasonable detail the Representative's objections (a "Notice of Disagreement") to the Closing Balance Sheet and the Closing Statement. During such 45‑day period, and any period of dispute thereafter with respect to such Closing Balance Sheet and/or Closing Statement, Buyer will, and will cause the Company and its Subsidiaries to, (i) provide the Representative and its Advisors reasonable access to the books, records (including work papers, schedules, memoranda and other documents), supporting data, facilities, and personnel of the Company and its Subsidiaries (including Company personnel responsible for accounting and finance and senior management) and, subject to execution of any customary work paper access letters required by them, the Company's accountants and their work papers, and (ii) otherwise reasonably cooperate with and assist the Representative and its Advisors in connection with such review, in each case during normal business hours, upon reasonable advance notice and in a manner that does not unreasonably interfere with the operations of the Company's business. Any determination set forth on the Closing Statement which is not specifically objected to in the Notice of Disagreement will be deemed acceptable to have accepted the Representative, and agreed will be final and binding upon all parties upon delivery of the Notice of Disagreement. If the Representative does not deliver to Buyer a Notice of Disagreement within such 45‑day period, then the Closing Balance Sheet, the Closing Statement and the Closing Net Working Capital, Closing Cash, Closing Indebtedness and Transaction Expenses will be final and binding upon the parties as of the expiration of such statement (45-day period, and the calculations contained therein) will be final, binding and conclusive, absent manifest error or fraud. If the Stockholders’ Representative notifies Buyer of its objections to items contained Final Merger Consideration set forth in the Closing Statement will constitute the Final Merger Consideration for all purposes of this Section 1.07.
(or calculations contained thereinc) within such forty five (45) calendar day periodFollowing Buyer's receipt of any Notice of Disagreement, the Representative and Buyer and the Stockholders’ Representative shall, during the thirty (30) calendar days following delivery of such notice by the Stockholders’ Representative will attempt to Buyer (or such longer period as they may mutually agree in writing) (the “Resolution Period”), attempt negotiate in good faith to resolve their differences with respect to the disputed items (or calculations) such notice (the “Disputed Items”)matters set forth therein, and all other items such discussions and negotiations related thereto shall (and all calculations relating thereto) will be final, binding and conclusive, absent manifest error or fraud. Any resolution unless otherwise agreed by Buyer and the Stockholders’ Representative) be governed by Rule 408 of the Federal Rules of Evidence (as in effect as of the date of this Agreement) and any applicable similar state rule. In the event that the Representative during and Buyer fail to agree on any of the Resolution Period as to any Disputed Item shall be Representative's proposed adjustments set forth in writing the Notice of Disagreement within thirty (30) days after Buyer receives the Notice of Disagreement, the Representative and will be finalBuyer agree to use their respective reasonable best efforts to cause BDO USA, binding LLP (provided that if BDO USA, LLP is unable or unwilling to serve in such capacity, the Representative and conclusiveBuyer shall jointly select an alternative firm that is a nationally recognized independent accounting or valuation firm) (the "Firm"), absent manifest error or fraud.
(c) If within 45 days immediately following such first 30‑day period, to make the final written determination of all matters which remain in dispute that were included in the Notice of Disagreement. Buyer and the Stockholders’ Representative do not resolve all Disputed Items by will instruct the end Firm to, and the Firm will, make a final determination of the Resolution Period, then all Disputed Items remaining items included in dispute will be submitted the Closing Balance Sheet and the Closing Statement (to the Neutral Arbitrator. The Neutral Arbitrator shall act as an arbitrator to determine only those Disputed Items remaining extent such amounts are in dispute, consistent ) solely in accordance with this Section 2.11, and shall request a statement from Agreement. Buyer and the Stockholders’ Representative regarding such Disputed Itemswill execute a customary engagement letter and will cooperate with the Firm during the term of its engagement. The scope of the disputes to be arbitrated by the Neutral Arbitrator is limited to those items or calculations specifically in dispute between Buyer and the Stockholders’ Representative; Representative will instruct the Firm not to, and the Neutral Arbitrator is not to make any other determination. In resolving each Disputed ItemFirm will not, the Neutral Arbitrator shall be bound by the principles set forth in this Section 2.11 and may not assign a value to any Disputed Item item in dispute greater than the greatest value for such Disputed Item claimed item assigned by any party Buyer, on the one hand, or the Representative, on the other hand, or less than the lowest smallest value for such Disputed Item claimed item assigned by any partyBuyer, on the one hand, or the Representative, on the other hand. Buyer and the Representative will also instruct the Firm to, and the Firm will, make its determination based solely on written submissions by Buyer and the Representative that are in accordance with this Agreement (i.e., not on the basis of an independent review). The parties further agree that Closing Balance Sheet, the adjustment contemplated by this Section 2.11 is intended to show the change between the Estimated Net Working Capital Closing Statement and the Final resulting Closing Net Working Capital, the change between the Estimated Net Funded Closing Cash, Closing Indebtedness and Transaction Expenses, in each case, as determined by the Final Firm in accordance with this Section 1.07(c), will be final and binding on the parties on the date the Firm delivers its final determination in writing to Buyer and the Representative. The date on which the Closing Balance Sheet, the Closing Statement and the resulting Closing Net Funded Working Capital, Closing Cash, Closing Indebtedness and the change between Estimated Transaction Related Expenses and Final Transaction Related Expensesare finally determined pursuant to Section 1.07(b), and that such changes can only be measured if each calculation is done in a manner consistent with the Accounting Principles are agreed upon by Buyer and the definitions thereof. All fees Representative pursuant to this Section 1.07(c) or are determined by the Firm in accordance with this Section 1.07(c) is referred to as the "Settlement Date." The fees, costs and expenses relating to of the work, if any, to be performed by the Neutral Arbitrator Firm will be allocated between Buyer Buyer, on the one hand, and the Stockholders’ Representative (which, in the case of the Stockholders’ Representative, shall be payable by on the Stockholders’ Representative solely out of the Reserve Amount) other hand, in the same proportion that the aggregate amount of the Disputed Items disputed items so submitted to the Neutral Arbitrator Firm that is unsuccessfully disputed by each such party (as finally determined by the Neutral ArbitratorFirm) bears to the total amount of such Disputed Items so disputed items submitted. The Neutral Arbitrator For example, if the Representative submits a Notice of Disagreement for $1,000, and if Buyer contests only $500 of the amount claimed by the Representative, and if the Firm ultimately resolves the dispute by awarding the Representative $300 of the $500 contested, then the costs and expenses of the Firm will deliver be allocated 60% (i.e., 300/500) to Buyer and the Stockholders’ Representative a written determination 40% (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided i.e., 200/500) to the Neutral Arbitrator by the Stockholders’ Representative and Buyer) of the Disputed Items submitted to the Neutral Arbitrator within thirty (30) calendar days of receipt of such Disputed Items, which determination will be final, binding and conclusive, absent manifest error or fraud. The final, binding and conclusive Closing Statement based either upon agreement by the parties, or deemed agreement by Buyer and the Stockholders’ Representative in accordance with this Section 2.11, or the written determination delivered by the Neutral Arbitrator in accordance with this Section 2.11(c) will be the “Conclusive Closing Statement.” If any party fails to submit a statement regarding any Disputed Item submitted to the Neutral Arbitrator within the time determined by the Neutral Arbitrator or otherwise fails to give the Neutral Arbitrator access as reasonably requested, then the Neutral Arbitrator shall render a decision based solely on the evidence timely submitted and the access afforded to the Neutral Arbitrator by the other party. Except in instances involving fraud or except as may arise out of the representations and warranties under Article III and Article IV and in such instances only to the extent set forth in this Agreement, neither any Stockholder, holder of Company Stock Options or the Stockholder Representative shall have any liability with respect to Funded Indebtedness, Closing Date Funded Indebtedness, Transactions Related Expenses, or current assets or current liabilities (including as to accounts receivable and the collectability thereof) or any other component of Net Working Capital except as determined in this Section 2.11Representative.
(d) Within If the Estimated Merger Consideration exceeds the Final Merger Consideration (such excess, the "Excess Amount"), Buyer and the Representative will deliver joint written instructions to the Escrow Agent to cause the Escrow Agent to pay to Buyer (or its designee), within two (2) Business Days after the Final Amounts have been determined in accordance with this Section 2.11:
(i) if Settlement Date by wire transfer of immediately available funds, the Aggregate Common Equity Excess Amount from the Adjustment Escrow Funds. In the event that at such time the Excess Amount is greater less than the Final Payment AmountAdjustment Escrow Funds (such shortfall, then the Stockholders’ "Remaining Adjustment Escrow Funds"), Buyer and the Representative and Buyer shall instruct will simultaneously with delivery of the instructions in the immediately foregoing sentence deliver joint written instructions to the Escrow Agent to cause the Escrow Agent to pay the Remaining Adjustment Escrow Funds from the Adjustment Escrow Account to the Surviving CorporationRepresentative (or its designee), using first with all such amounts received by the funds Representative (or its designee) pursuant to this Section 1.07(d), subject to Section 10.19(b), to be paid to the Stockholders or Optionholders in accordance with Section 1.07(f).
(e) If the Final Merger Consideration Escrow Account and, to exceeds the extent the funds in the Estimated Merger Consideration Escrow Account are not sufficient to satisfy (such payment in fullexcess, the "Adjustment Amount"), then out (i) Buyer will, within two (2) Business Days after the Settlement Date, make payment of the funds in the General Escrow Account, an amount in cash equal to the amount by which the Aggregate Common Equity Amount is greater than the Final Payment Amount (as defined below); and
(ii) if the Aggregate Common Equity Amount is less than the Final Payment Amount (as defined below), Buyer shall pay, or cause the Surviving Corporation to pay, to the Stockholders’ Representative (for further pro rata distribution to the Fully Diluted Common Holders) an amount in cash equal to the amount by which the Aggregate Common Equity Amount is less than the Final Payment Adjustment Amount by wire transfer of immediately available funds to the Representative (the amount payable to or its designee), and (ii) Buyer pursuant to Section 2.11(d)(i) and the amount payable Representative will deliver joint written instructions to the Stockholders’ Escrow Agent to cause the Escrow Agent to make payment of the Adjustment Escrow Funds from the Adjustment Escrow Account, within two (2) Business Days after the Settlement Date, to the Representative (or its designee), with all such amounts received by the Representative (or its designee) pursuant to this Section 2.11(d)(ii) are referred 1.07(e), subject to herein as the “Merger Consideration Adjustment Amount”Section 10.19(b); provided that any portion of any amount payable under this Section 2.11(d)(ii) that is a Compensatory Payment shall not , to be paid to the Stockholders’ Representative but Stockholders or Optionholders pursuant to Section 1.07(f); provided, that in no event shall instead be the Adjustment Amount paid by Buyer exceed $2,000,000.
(f) When the Surviving Corporation (Final Merger Consideration is finally determined pursuant to Section 1.07(b) or a Subsidiary of the Surviving Corporation) through its payroll system and in accordance with the Surviving Corporation’s (or such Subsidiary’s) standard withholding and payroll practices and procedures to the Person identified in writing by the Stockholders’ Representative as the Person to whom such Compensatory Payment is to be made. Any payment by BuyerSection 1.07(c), the Surviving Corporation Representative will in good faith compute or the Stockholders’ Representative (pursuant to the distribution of funds from the Merger Consideration Escrow Account or the General Escrow Account)re-compute, as the case may be, (i) the number of Vested Options, (ii) the Aggregate Fully-Diluted Common Shares, (iii) the Aggregate Option Exercise Price, (iv) the Final Adjusted Merger Consideration, (v) the Final Common Stock Merger Consideration, (vi) the Final Common Stock Per Share Merger Consideration, (vii) the Final Option Per Share Merger Consideration and (viii) the appropriate amount payable to each Stockholder and Optionholder based on the foregoing from the Remaining Adjustment Escrow Funds, the Adjustment Amount and the Representative Holdback Amount, taking into account amounts previously received by such Stockholders and Optionholders as Closing Stock Payments or Closing Option Payments, in each case, in accordance with this Agreement and the terms of the Option Plan. Promptly thereafter, the Representative will notify the Escrow Agent and the Paying Agent, as applicable, of such calculations and the amount that should be distributed by them (and, subject to Section 10.19(b), shall ensure that the Paying Agent has received any amounts paid by Buyer to the Representative or its designee, if not the Paying Agent, under Section 1.07(d) or Section 1.07(e) to the extent such amounts are payable to the Stockholders and Optionholders pursuant to this Agreement) and shall cause the Escrow Agent and the Paying Agent, as applicable, to pay such amounts owed to each Stockholder and to the Surviving Corporation on behalf of each Optionholder, based upon the calculations and re-calculations contemplated by the immediately preceding sentence. For the avoidance of doubt, each Stockholder and Optionholder will receive the difference between (x) the amounts payable to such Stockholder or Optionholder based upon the calculations and re-calculations contemplated by this Section 1.07(f) and (y) the Closing Stock Payment or Closing Option Payment received at the Closing by such Stockholder or Optionholder, as applicable. The Representative, the Escrow Agent, the Surviving Corporation, and the Paying Agent, as applicable, will distribute such amounts, as applicable, in accordance with the irrevocable written instructions so received from the Representative. If, at the time of the calculation of Final Adjusted Merger Consideration, the Representative determines to retain funds in the Representative Holdback Amount under Section 10.19(b), and at any time and from time to time thereafter determines a portion of such funds should be distributed to the Stockholders and Optionholders, then at each such time, the Representative will in good faith determine the appropriate amounts to be paid to the Stockholders and Optionholders from the Representative Holdback Amount (taking into account any changes in Vested Options, Aggregate Option Exercise Price or Aggregate Fully-Diluted Common Shares necessary based on such distribution of funds and any prior amounts received as Closing Stock Payments, Closing Option Payments or under this Section 1.07(f)) and will cause such amounts to be paid from the Representative Holdback Amount to the Stockholders and to the Surviving Corporation on behalf of the Optionholders. As promptly as practicable following the receipt of funds for the Optionholders and, in any event, no later than the next scheduled full payroll cycle of the Company and its Subsidiaries, the Surviving Corporation will distribute to the Optionholders any payments received on their behalf under this Section 1.07(f). None of the Escrow Agent, the Paying Agent, the Surviving Corporation or Buyer will have any liability or obligation to any Stockholder or Optionholder or the Representative for any distribution made in accordance with the instructions of the Representative pursuant to this Section 2.11 will 1.07(f), Section 1.06(a) or Section 1.06(b).
(g) The parties hereto agree that any payment made pursuant to this Section 1.07 shall be treated as an adjustment to the Merger Consideration aggregate consideration for tax Tax purposes. For purposes of this Section 2.11:, unless otherwise required by applicable Law.
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Post-Closing Merger Consideration Adjustment. (a) As promptly as practicable, but in any case no later than Within sixty (60) calendar days after the Closing Date, Buyer shall cause to be prepared and delivered to the Stockholders’ Representative a statement (the “Closing Statement”) setting forth the Net Working Capital, the Net Funded Indebtedness, the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 5.2 and Section 12.7)) ), the Excess Load-In Charge, and the components thereof. The Closing Statement shall include the amount calculated in good faith by Buyer, if any, of the Merger Consideration Escrow Amount that need not be retained by the Escrow Agent pending resolution of payments to be made pursuant to Section 2.11(d) (the “Merger Consideration Escrow Release Amount”). The Merger Consideration Escrow Release Amount, to the extent there is such an amount, shall be released two (2) Business Days following Buyer’s delivery of the Closing Statement. The Closing Statement and the Net Working Capital, the Net Funded Indebtedness and the Indebtedness, Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 5.2 and Section 12.7)) calculations and Excess Load-In Charge set forth therein shall be prepared and calculated in good faith, and in the manner and on a basis consistent with the Accounting Principles (to the extent applicable) applicable definitions thereof and shall be in the same form and include the same line items as the Estimated Net Working Capital calculation, the Estimated Net Funded Indebtedness calculation and calculation, the Estimated Transaction Related Expenses calculation and the Estimated Excess Load-In Charge calculation. If the Closing Statement is not so timely delivered, the Estimated Net Working Capital, the Estimated Net Funded Indebtedness and the Indebtedness, Estimated Transaction Related Expenses and Estimated Excess Load-In Charge will be deemed Final Net Working Capital, Final Net Funded Indebtedness and Indebtedness, Final Transaction Related Expenses, and Final Excess Load-In Charge respectively, absent manifest error or fraud.
(b) After receipt of the Closing Statement, the Stockholders’ Representative will have forty five sixty (4560) calendar days to review the Closing Statement. Unless the Stockholders’ Representative delivers written notice (which notice shall include the items and amounts in dispute and supporting documentation related thereto; such notice, a “Seller Dispute Notice”) to Buyer setting forth in reasonable detail the specific items disputed by the Stockholders’ Representative in good faith with respect thereto thereto, and the specific basis for each such objection, on or prior to the forty-fifth sixtieth (45th60th) calendar day after the Stockholders’ Representative’s receipt of the Closing Statement, the Stockholders’ Representative will be deemed to have accepted and agreed to the Closing Statement and such statement (and the calculations contained therein) will be final, binding and conclusive, absent manifest error or fraud. If the Stockholders’ Representative notifies delivers to Buyer of its objections to items contained in the Closing Statement (or calculations contained therein) a Seller Dispute Notice within such forty five sixty (4560) calendar day period, Buyer and the Stockholders’ Representative shall, during the thirty (30) calendar days following delivery of such notice Seller Dispute Notice by the Stockholders’ Representative to Buyer (or such longer period as they may mutually agree in writing) (the “Resolution Period”), attempt in good faith to resolve their differences with respect to the disputed items (or calculations) in such notice Seller Dispute Notice (the “Disputed Items”), and all other items (and all calculations relating thereto) will be final, binding and conclusive, absent manifest error or fraud. Any resolution by Buyer and the Stockholders’ Representative during the Resolution Period as to any Disputed Item shall be set forth in writing and will be final, binding and conclusive, absent manifest error or fraud.
(c) If Buyer and the Stockholders’ Representative do not resolve all Disputed Items by the end of the Resolution Period, then all Disputed Items remaining in dispute will be submitted to the Neutral ArbitratorArbitrator pursuant to an engagement letter reasonably acceptable to the Stockholders’ Representative and the Buyer. The Neutral Arbitrator shall act as an arbitrator to determine only those Disputed Items remaining in dispute, consistent with this Section 2.112.14, and shall request a statement from Buyer and the Stockholders’ Representative regarding such Disputed Items. The scope of the disputes to be arbitrated by the Neutral Arbitrator is limited to those items or calculations specifically in dispute between Buyer and the Stockholders’ Representative; and the Neutral Arbitrator is not to make any other determination, including not making any determination as to whether the Closing Statement or Net Working Capital, Net Funded Indebtedness, Transaction Related Expenses or Excess Load-In Charge was prepared in accordance with GAAP or whether the agreed upon dollar amount of the Target Net Working Capital is correct or appropriate or in accordance with GAAP or the definition of Net Working Capital. In resolving each Disputed Item, the Neutral Arbitrator shall be bound by the principles set forth in this Section 2.11 2.14 and may not assign a value to any Disputed Item greater than the greatest value for such Disputed Item claimed by any party or less than the lowest value for such Disputed Item claimed by any party. The parties further agree that the adjustment contemplated by this Section 2.11 2.14 is intended to show the change between the Estimated Net Working Capital and the Final Net Working Capital, the change between the Estimated Net Funded Indebtedness and the Final Net Funded Indebtedness and Indebtedness, the change between Estimated Transaction Related Expenses and Final Transaction Related Expenses, and the change between Estimated Excess Load-In Charge and Final Excess Load-In Charge, and that such changes can only be measured if each calculation is done in a manner consistent with the Accounting Principles and the applicable definitions thereof. All fees and expenses relating to the work, if any, to be performed by the Neutral Arbitrator will be allocated between Buyer and the Stockholders’ Representative (which, in the case of the Stockholders’ Representative, shall be payable by the Stockholders’ Representative solely out of the Reserve Amount, or by setoff against one or more Contingent Payments) in the same proportion that the aggregate amount of the Disputed Items so submitted to the Neutral Arbitrator that is unsuccessfully disputed by each such party (as finally determined by the Neutral Arbitrator) bears to the total amount of such Disputed Items so submitted. The Neutral Arbitrator will deliver to Buyer and the Stockholders’ Representative a written determination (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided to the Neutral Arbitrator by the Stockholders’ Representative and Buyer, and a written explanation in reasonable detail of each such determination) of the Disputed Items submitted to the Neutral Arbitrator within thirty (30) calendar days days, or such longer period as may be required by the Neutral Arbitrator, of receipt of such Disputed Items, which determination will be final, binding and conclusive, absent manifest error or fraud. The final, binding and conclusive Closing Statement based either upon agreement by the parties, or deemed agreement by Buyer and the Stockholders’ Representative in accordance with this Section 2.112.14, or the written determination delivered by the Neutral Arbitrator in accordance with this Section 2.11(c2.14(c) will be the “Conclusive Closing Statement.” If any party fails to submit a statement regarding any Disputed Item submitted to the Neutral Arbitrator within the time determined by the Neutral Arbitrator or otherwise fails to give the Neutral Arbitrator access as reasonably requested, then the Neutral Arbitrator shall render a decision based solely on the evidence timely submitted and the access afforded to the Neutral Arbitrator by the other party. Except in instances involving fraud or except as may arise out of the representations and warranties under Article III and Article IV and in such instances only to the extent set forth in this Agreement, neither Neither any Stockholder, holder of Company Stock Options or Options, holder of Company RSUs nor the Stockholder Stockholders’ Representative shall have any liability with respect to Funded Indebtedness, Closing Date Funded Indebtedness, Transactions Transaction Related Expenses, or current assets or current liabilities (including as to accounts receivable and the collectability thereof) or any other component of Net Working Capital except as determined in this Section 2.112.14, except that this sentence shall not limit a claim for a breach of a representation or warranty pursuant to Section 11.2(a) (but for the avoidance of doubt any liability under Section 2.14 or Damages under Section 11.2(a) may not be recovered more than once in respect of the same liability or Damages, as the case may be). All negotiations pursuant to this Section 2.14(c) shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable other laws including state rules of evidence, and all negotiations, submissions to the Neutral Arbitrator, and dispute resolution proceedings under this Section 2.14(c) shall be treated as such. The Neutral Arbitrator shall be bound by a mutually agreeable confidentiality confidential information agreement. The procedures of this Section 2.14(c) are exclusive and, except as set forth below, the determination of the Neutral Arbitrator shall be final and binding on the parties. The decision rendered pursuant to this Section 2.14(c) may be filed as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 2.14(c). The other party’s only defense to such a request for specific enforcement or other legal action shall be manifest error or fraud by or upon the Neutral Arbitrator. Absent such manifest error or fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
(d) Within two (2) Business Days after the Final Amounts have been determined in accordance with this Subject to Section 2.11:2.14(e):
(i) if the Aggregate Common Equity Cash Amount is greater than the Final Payment Amount, then the Stockholders’ Representative and Buyer shall instruct the Escrow Agent to pay to the Surviving Corporation, using first the funds in the Merger Consideration Escrow Account and, to the extent the funds in the Merger Consideration Escrow Account are not sufficient to satisfy such payment in full, then solely out of the funds in the General Adjustment Escrow Account, an amount in cash equal to the amount by which the Aggregate Common Equity Cash Amount is greater than the Final Payment Amount (as defined belowAmount; provided that, if such amount exceeds the funds in the Adjustment Escrow Account by greater than $500,000, the Surviving Corporation shall be entitled to recover such amount either from the Indemnity Escrow Account, or by way of offset against any Contingent Payments pursuant to Section 2.10(c); and
(ii) if the Aggregate Common Equity Cash Amount is less than the Final Payment Amount (as defined below)Amount, Buyer shall pay, or cause the Surviving Corporation to pay, pay to the Stockholders’ Representative Paying Agent (for further pro rata distribution to the Fully Diluted Common Holders, as set forth in Section 2.8) an amount in cash equal to the amount by which the Aggregate Common Equity Cash Amount is less than the Final Payment Amount by wire transfer of immediately available funds (the amount payable to Buyer pursuant to Section 2.11(d)(i2.14(d)(i) and the amount payable to the Stockholders’ Representative Paying Agent (for further pro rata distribution to the Fully Diluted Common Holders) pursuant to this Section 2.11(d)(ii2.14(d)(ii) are referred to herein as the “Merger Consideration Adjustment Amount”); provided that provided, however, Buyer shall cause any portion of any amount payable under this Section 2.11(d)(ii) such payment that is a Compensatory Payment shall not to be promptly paid from the relevant accounts of the Company (or its Subsidiary) through the payroll system of the Company (or its Subsidiary) to the Stockholders’ Representative but shall instead be paid by the Surviving Corporation (or a Subsidiary of the Surviving Corporation) through its payroll system and in accordance with the Surviving Corporation’s (or such Subsidiary’s) standard withholding and payroll practices and procedures to the Person identified in writing by the Stockholders’ Representative as the applicable Person to whom such Compensatory Payment is payments are to be made. Any payment by Buyer, the Surviving Corporation subject to any applicable deductions or the Stockholders’ Representative (pursuant withholding Taxes applicable to the distribution of funds from the Merger Consideration Escrow Account or the General Escrow Account), as the case may be, pursuant to this Section 2.11 will be treated as an adjustment to the Merger Consideration for tax purposessuch payments. For purposes of this Section 2.112.14:
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Post-Closing Merger Consideration Adjustment. Following the Closing Date, the Merger Consideration will be adjusted, if at all, as set forth below:
(a) As promptly as practicable, but in any case no later than sixty Buyer will prepare and deliver to the Representative within ninety (6090) calendar days after the Closing DateDate (i) an unaudited balance sheet of the Company and its Subsidiaries as of the Adjustment Calculation Time (the “Closing Balance Sheet”), Buyer shall cause to be prepared and delivered to the Stockholders’ Representative (ii) a statement (the “Closing Statement”) setting forth a calculation of (1) the Closing Net Working Capital, (2) the Closing Cash, (3) the Closing Indebtedness, (4) the Transaction Expenses, (5) Buyer’s calculation of the Final Merger Consideration derived from the foregoing, and (6) with respect to each of the foregoing, the changes in such amounts from the corresponding amounts set forth in the Estimated Closing Statement and (iii) reasonably detailed information and support for the foregoing calculations and proposed changes. The Closing Balance Sheet and Closing Statement will be prepared, and the Closing Net Working Capital, Closing Cash, Closing Indebtedness and Transaction Expenses will be determined, in each case, in good faith, on a consolidated basis in accordance with the Accounting Principles. For the avoidance of doubt, and without in any way limiting Section 11.03(l), none of the Closing Net Working Capital, the Net Funded IndebtednessClosing Cash, the Closing Indebtedness or the Transaction Related Expenses (to the extent not paid by the Company shall take into account in any manner NuPark or any of NuPark’s Subsidiaries. If Buyer fails to timely deliver the Closing Balance Sheet and the Closing Statement, in accordance with this Section 1.08(a), then the Representative may, at its Affiliates prior election, either (i) treat the estimates delivered pursuant to Section 1.05(a) as the ClosingClosing Balance Sheet and the Closing Statement and the Closing Net Working Capital, Closing Cash, Closing Indebtedness and Transaction Expenses, as final and binding upon the Parties or (ii) (except for any treat such Transaction Related Expenses reimbursable or indemnifiable estimates as the Closing Balance Sheet and Closing Statement delivered by Buyer pursuant to this Agreement Section 1.08(a), in which case, Seller shall be entitled to all dispute and other rights set forth in the remainder of this Section 1.08 with respect thereto.
(including Section 6.2 and Section 12.7)b) and the components thereof. The Closing Statement shall include the amount calculated in good faith by Buyer, if any, of the Merger Consideration Escrow Amount that need not be retained by the Escrow Agent pending resolution of payments to be made pursuant to Section 2.11(d) (the “Merger Consideration Escrow Release Amount”). The Merger Consideration Escrow Release Amount, On or prior to the extent there is such an amount, shall be released two sixtieth (260th) Business Days day following Buyer’s delivery of the Closing Statement. The Closing Statement Balance Sheet and the Net Working Capital, the Net Funded Indebtedness and the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) calculations shall be prepared and calculated in good faith, and in the manner and on a basis consistent with the Accounting Principles (to the extent applicable) and shall be in the same form and include the same line items as the Estimated Net Working Capital calculation, the Estimated Net Funded Indebtedness calculation and the Estimated Transaction Related Expenses calculation. If the Closing Statement is not so timely delivered, the Estimated Net Working Capital, the Estimated Net Funded Indebtedness and the Estimated Transaction Related Expenses will be deemed Final Net Working Capital, Final Net Funded Indebtedness and Final Transaction Related Expenses, respectively.
(b) After receipt of the Closing Statement, the Stockholders’ Representative will have forty five may give Buyer a written notice stating in reasonable detail the Representative’s objections (45a “Notice of Disagreement”) calendar days to review the Closing Balance Sheet and the Closing Statement. Unless the Stockholders’ Representative delivers written notice (which notice shall include the items During such 60‑day period, and amounts in any period of dispute and supporting documentation related thereto; such notice, a “Seller Dispute Notice”) to Buyer setting forth the items disputed by the Stockholders’ Representative thereafter with respect thereto on or prior to the forty-fifth (45th) calendar day after the Stockholders’ Representative’s receipt of the such Closing Balance Sheet and/or Closing Statement, Buyer will, and will cause the Stockholders’ Surviving Corporation and its Subsidiaries to, (i) provide the Representative and its Advisors reasonable access to the books, records (including work papers, schedules, memoranda and other documents), supporting data, facilities, and personnel of the Surviving Corporation and its Subsidiaries (including Surviving Corporation personnel responsible for accounting and finance and senior management) and, subject to execution of any customary work paper access letters required by them, the Surviving Corporation’s accountants and their work papers, and (ii) otherwise cooperate with and assist the Representative and its Advisors in connection with such review. Any determination set forth on the Closing Statement which is not specifically objected to in the Notice of Disagreement will be deemed acceptable to have accepted the Representative, and agreed will be final and binding upon all Parties upon delivery of the Notice of Disagreement. If the Representative does not deliver to Buyer a Notice of Disagreement within such 60‑day period, then the Closing Balance Sheet, the Closing Statement and the Closing Net Working Capital, Closing Cash, Closing Indebtedness and Transaction Expenses will be final and binding upon the Parties as of the expiration of such statement (60‑day period, and the calculations contained therein) will be final, binding and conclusive, absent manifest error or fraud. If the Stockholders’ Representative notifies Buyer of its objections to items contained Final Merger Consideration set forth in the Closing Statement will constitute the Final Merger Consideration for all purposes of this Section 1.08.
(or calculations contained c) Following Buyer’s receipt of any Notice of Disagreement, the Representative and Buyer may attempt to negotiate in good faith to resolve the disputed matters set forth therein) within , and all such forty five discussions and negotiations related thereto shall (45) calendar day period, unless otherwise agreed by Buyer and the Stockholders’ Representative) be governed by Rule 408 of the Federal Rules of Evidence (as in effect as of the date of this Agreement) and any applicable similar state rule. In the event that the Representative shall, during and Buyer fail to agree on any of the Representative’s proposed adjustments set forth in the Notice of Disagreement within thirty (30) calendar days following delivery after Buyer receives the Notice of such notice by the Stockholders’ Representative to Buyer Disagreement (or such longer period as they may mutually agree in writing) (the “Resolution Period”), attempt in good faith to resolve their differences with respect to the disputed items (or calculations) such notice (the “Disputed Items”), and all other items (and all calculations relating thereto) will be final, binding and conclusive, absent manifest error or fraud. Any resolution agreed by Buyer and the Stockholders’ Representative during in writing), the Resolution Period as Representative and Buyer agree to any Disputed Item use their respective reasonable best efforts to cause Deloitte & Touche LLP (provided that if Deloitte & Touche LLP is unable or unwilling to serve in such capacity, the Representative and Buyer shall be set forth jointly select an alternative firm that is a nationally recognized independent accounting or valuation firm (the “Firm”), within forty‑five (45) days immediately following such first 30‑day period, to make the final written determination of all matters which remain in writing and will be final, binding and conclusive, absent manifest error or fraud.
(c) If dispute that were included in the Notice of Disagreement. Buyer and the Stockholders’ Representative do not resolve all Disputed Items by will instruct the end Firm to, and the Firm will, make a final determination of the Resolution Period, then all Disputed Items remaining items included in dispute will be submitted the Closing Balance Sheet and the Closing Statement (to the Neutral Arbitrator. The Neutral Arbitrator shall act extent such amounts are in dispute) solely in accordance with this Agreement, acting as an arbitrator to determine only those Disputed Items remaining in dispute, consistent with this Section 2.11, expert and shall request a statement from not as an arbitrator. Buyer and the Stockholders’ Representative regarding such Disputed Itemswill execute a customary engagement letter and will cooperate with the Firm during the term of its engagement. The scope of the disputes to be arbitrated by the Neutral Arbitrator is limited to those items or calculations specifically in dispute between Buyer and the Stockholders’ Representative; Representative will instruct the Firm not to, and the Neutral Arbitrator is not to make any other determination. In resolving each Disputed ItemFirm will not, the Neutral Arbitrator shall be bound by the principles set forth in this Section 2.11 and may not assign a value to any Disputed Item item in dispute greater than the greatest value for such Disputed Item claimed item assigned by any party Buyer, on the one hand, or the Representative, on the other hand, or less than the lowest smallest value for such Disputed Item claimed item assigned by any partyBuyer, on the one hand, or the Representative, on the other hand. Buyer and the Representative will also instruct the Firm to, and the Firm will, make its determination based solely on the terms and provisions of this Agreement and on written submissions by Buyer and the Representative that are in accordance with this Agreement (i.e., not on the basis of an independent review). The parties further agree that Closing Balance Sheet, the adjustment contemplated by this Section 2.11 is intended to show the change between the Estimated Net Working Capital Closing Statement and the Final resulting Closing Net Working Capital, the change between the Estimated Net Funded Closing Cash, Closing Indebtedness and Transaction Expenses, in each case, as determined by the Final Firm in accordance with this Section 1.08(c), will be final and binding on the Parties on the date the Firm delivers its final determination in writing to Buyer and the Representative. The date on which the Closing Balance Sheet, the Closing Statement and the resulting Closing Net Funded Working Capital, Closing Cash, Closing Indebtedness and the change between Estimated Transaction Related Expenses and Final Transaction Related Expensesare finally determined pursuant to Section 1.08(b), and that such changes can only be measured if each calculation is done in a manner consistent with the Accounting Principles are agreed upon by Buyer and the definitions thereof. All fees Representative pursuant to this Section 1.08(c) or are determined by the Firm in accordance with this Section 1.08(c) is referred to as the “Settlement Date.” The fees, costs and expenses relating to of the work, if any, to be performed by the Neutral Arbitrator Firm will be allocated between Buyer Buyer, on the one hand, and the Stockholders’ Representative (which, in the case on behalf of the Stockholders’ RepresentativeStockholders and Optionholders), shall be payable by on the Stockholders’ Representative solely out of the Reserve Amount) other hand, in the same proportion that the aggregate amount of the Disputed Items disputed items so submitted to the Neutral Arbitrator Firm that is unsuccessfully disputed by each such party Party (as finally determined by the Neutral ArbitratorFirm) bears to the total amount of such Disputed Items so disputed items submitted. The Neutral Arbitrator For example, if the Representative submits a Notice of Disagreement for $1,000, and if Buyer contests only $500 of the amount claimed by the Representative, and if the Firm ultimately resolves the dispute by awarding the Representative (on behalf of the Stockholders and Optionholders) $300 of the $500 contested, then the costs and expenses of the Firm will deliver be allocated 60% (i.e., 300/500) to Buyer and the Stockholders’ Representative a written determination 40% (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided i.e., 200/500) to the Neutral Arbitrator by the Stockholders’ Representative and Buyer) (on behalf of the Disputed Items submitted to the Neutral Arbitrator within thirty (30) calendar days of receipt of such Disputed Items, which determination will be final, binding Stockholders and conclusive, absent manifest error or fraud. The final, binding and conclusive Closing Statement based either upon agreement by the parties, or deemed agreement by Buyer and the Stockholders’ Representative in accordance with this Section 2.11, or the written determination delivered by the Neutral Arbitrator in accordance with this Section 2.11(c) will be the “Conclusive Closing Statement.” If any party fails to submit a statement regarding any Disputed Item submitted to the Neutral Arbitrator within the time determined by the Neutral Arbitrator or otherwise fails to give the Neutral Arbitrator access as reasonably requested, then the Neutral Arbitrator shall render a decision based solely on the evidence timely submitted and the access afforded to the Neutral Arbitrator by the other party. Except in instances involving fraud or except as may arise out of the representations and warranties under Article III and Article IV and in such instances only to the extent set forth in this Agreement, neither any Stockholder, holder of Company Stock Options or the Stockholder Representative shall have any liability with respect to Funded Indebtedness, Closing Date Funded Indebtedness, Transactions Related Expenses, or current assets or current liabilities (including as to accounts receivable and the collectability thereof) or any other component of Net Working Capital except as determined in this Section 2.11Optionholders).
(d) Within two (2) Business Days after If the Estimated Merger Consideration exceeds the Final Amounts have been determined in accordance with this Section 2.11:
Merger Consideration (i) if such excess, the Aggregate Common Equity Amount is greater than “Excess Amount”), Buyer and the Final Payment Amount, then Representative will deliver joint written instructions to the Stockholders’ Representative and Buyer shall instruct Escrow Agent to cause the Escrow Agent to pay to Buyer (or its designee), within five (5) Business Days after the Surviving CorporationSettlement Date by wire transfer of immediately available funds, using first the funds in Excess Amount from the Merger Consideration Adjustment Escrow Account and, to Funds. In the extent event that the funds in the Merger Consideration Escrow Account are not sufficient to satisfy such payment in full, then out of the funds in the General Escrow Account, an amount in cash equal to the amount by which the Aggregate Common Equity Amount is greater than the Final Payment Amount (as defined below); and
(ii) if the Aggregate Common Equity Excess Amount is less than the Final Payment Amount Adjustment Escrow Funds (as defined belowsuch shortfall, the “Remaining Adjustment Escrow Funds”), Buyer shall payand the Representative will, simultaneously with delivery of the instructions in the immediately foregoing sentence, deliver joint written instructions to the Escrow Agent to cause the Escrow Agent to pay the Remaining Adjustment Escrow Funds from the Adjustment Escrow Account to or cause as directed by the Representative (or its designee), with all such amounts, subject to Section 10.19(b), to be paid to the Stockholders or Optionholders in accordance with each such holder’s Pro Rata Portion; provided, that the portion of any such amounts payable to Optionholders may, if so directed by the Representative, be remitted to the Surviving Corporation for payment to pay, such Persons through the Surviving Corporation’s payroll procedures after applicable Tax withholding pursuant to Section 1.10 and subject to the Stockholders’ Surviving Corporation’s receipt of the applicable duly executed Option Cancellation Agreement, and the Surviving Corporation shall make such payments as directed by the Representative promptly following receipt thereof. The Adjustment Escrow Funds shall be the sole and exclusive source of recovery for any Excess Amount.
(for further pro rata distribution to the Fully Diluted Common Holderse) an amount in cash equal to the amount by which the Aggregate Common Equity Amount is less than If the Final Payment Merger Consideration exceeds the Estimated Merger Consideration (the “Adjustment Amount”), then (i) Buyer will, within five (5) Business Days after the Settlement Date, make payment of the Adjustment Amount by wire transfer of immediately available funds to or as directed by the Representative (or its designee), and (ii) Buyer and the amount Representative will deliver joint written instructions to the Escrow Agent to cause the Escrow Agent to make payment of the Adjustment Escrow Funds from the Adjustment Escrow Account, within five (5) Business Days after the Settlement Date, to or as directed by the Representative (or its designee), with all such amounts, subject to Section 10.19(b), to be paid to the Stockholders or Optionholders based on each such holder’s Pro Rata Portion; provided, that the portion of any such amounts payable to Buyer Optionholders may, if so directed by the Representative, be remitted to the Surviving Corporation for payment to such Persons through the Surviving Corporation’s payroll procedures after applicable Tax withholding pursuant to Section 2.11(d)(i) 1.10 and subject to the Surviving Corporation’s receipt of the applicable duly executed Option Cancellation Agreement, and the amount payable to Surviving Corporation shall make such payments as directed by the Stockholders’ Representative promptly following receipt thereof.
(f) The Parties hereto agree that any payment made pursuant to this Section 2.11(d)(ii) are referred to herein as the “Merger Consideration Adjustment Amount”); provided that any portion of any amount payable under this Section 2.11(d)(ii) that is a Compensatory Payment 1.08 shall not be paid to the Stockholders’ Representative but shall instead be paid by the Surviving Corporation (or a Subsidiary of the Surviving Corporation) through its payroll system and in accordance with the Surviving Corporation’s (or such Subsidiary’s) standard withholding and payroll practices and procedures to the Person identified in writing by the Stockholders’ Representative as the Person to whom such Compensatory Payment is to be made. Any payment by Buyer, the Surviving Corporation or the Stockholders’ Representative (pursuant to the distribution of funds from the Merger Consideration Escrow Account or the General Escrow Account), as the case may be, pursuant to this Section 2.11 will be treated for all purposes as an adjustment to the Merger Consideration for tax purposes. For purposes of this Section 2.11:Consideration, unless otherwise required by applicable Law.
Appears in 1 contract
Post-Closing Merger Consideration Adjustment. (a) As promptly soon as practicable, but in any case no later than sixty (60) calendar days after reasonably practicable following the Closing Date, Buyer and in any event within 90 days thereof, Parent shall cause the Company to be prepared prepare and delivered deliver to the Stockholders’ Stockholder Representative (i) a statement consolidated balance sheet of the Company and its Subsidiaries as of immediately prior to the Closing (the “Final Closing StatementBalance Sheet”) and audited by Ernst & Young LLP (“Parent’s Auditor”), together with the report of Parent’s Auditor, to the effect that Parent’s Auditor has conducted, in accordance with generally accepted auditing standards, an audit of the Final Closing Balance Sheet and that such firm believes that such audit provides a reasonable basis for such firm’s opinion thereon and that the Final Closing Balance Sheet presents fairly, in all material respects, the financial condition of the Company and its Subsidiaries on a consolidated basis as of the Closing Date and prepared in conformity with GAAP (except as noted in the final sentence of this Section 3.4(a)), and (ii) the calculation of the Closing Working Capital and the Assumed Indebtedness pursuant to the Final Closing Balance Sheet. The Final Closing Balance Sheet shall be prepared using the same accounting principles and practices and in the same format and using the same line item classifications, used by the Company in preparing the Preliminary Closing Balance Sheet; provided, however, that the Closing Working Capital shall be prepared in accordance with the Balance Sheet Rules.
(b) If the Stockholder Representative shall disagree with Parent’s calculation of any of the Closing Working Capital or the Assumed Indebtedness, it shall notify Parent of such disagreement in writing, setting forth in reasonable detail the Net Working Capitalparticulars of such disagreement, within 30 days after its receipt of the Net Funded IndebtednessFinal Closing Balance Sheet. Following the Closing, Parent shall provide the Transaction Related Expenses (Stockholder Representative and its Specified Representatives access to the records and employees of Parent and the Company to the extent necessary for the review of the Final Closing Balance Sheet and shall cause the employees of Parent and the Company and its Subsidiaries to cooperate with the Stockholder Representative in connection with its review of the Final Closing Balance Sheet, the Closing Working Capital and the Assumed Indebtedness; provided that such access shall be reasonably necessary and does not paid by unreasonably disrupt the personnel and operations of Parent or the Company or any of its Affiliates prior Subsidiaries, as the case may be. In the event that the Stockholder Representative does not provide such a notice of disagreement to the Closing) (except for any Parent within such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) and the components thereof. The Closing Statement shall include the amount calculated in good faith by Buyer, if any, of the Merger Consideration Escrow Amount that need not be retained by the Escrow Agent pending resolution of payments to be made pursuant to Section 2.11(d) (the “Merger Consideration Escrow Release Amount”). The Merger Consideration Escrow Release Amount, to the extent there is such an amount, shall be released two (2) Business Days following Buyer’s delivery of the Closing Statement. The Closing Statement and the Net Working Capital30-day period, the Net Funded Indebtedness and the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) calculations Stockholder Representative shall be prepared and calculated in good faith, and in the manner and on a basis consistent with the Accounting Principles (to the extent applicable) and shall be in the same form and include the same line items as the Estimated Net Working Capital calculation, the Estimated Net Funded Indebtedness calculation and the Estimated Transaction Related Expenses calculation. If the Closing Statement is not so timely delivered, the Estimated Net Working Capital, the Estimated Net Funded Indebtedness and the Estimated Transaction Related Expenses will be deemed Final Net Working Capital, Final Net Funded Indebtedness and Final Transaction Related Expenses, respectively.
(b) After receipt of the Closing Statement, the Stockholders’ Representative will have forty five (45) calendar days to review the Closing Statement. Unless the Stockholders’ Representative delivers written notice (which notice shall include the items and amounts in dispute and supporting documentation related thereto; such notice, a “Seller Dispute Notice”) to Buyer setting forth the items disputed by the Stockholders’ Representative with respect thereto on or prior to the forty-fifth (45th) calendar day after the Stockholders’ Representative’s receipt of the Closing Statement, the Stockholders’ Representative will be deemed to have accepted the Final Closing Balance Sheet and agreed to Parent’s calculation of the Closing Statement and such statement (Working Capital and the calculations contained therein) will Assumed Indebtedness, which shall be final, binding and conclusiveconclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, absent manifest error or fraud. If the Stockholders’ Representative notifies Buyer of its objections to items contained in the Closing Statement (or calculations contained therein) within such forty five (45) calendar day period, Buyer Parent and the Stockholders’ Stockholder Representative shall, during the thirty (30) calendar shall use commercially reasonable efforts for a period of 30 days following delivery of such notice by the Stockholders’ Representative to Buyer (or such longer period as they may mutually agree in writingagree) (the Table of Contents “Resolution Period”), attempt in good faith to resolve their differences any disagreements with respect to the disputed items (Final Closing Balance Sheet or calculations) such notice (Parent’s calculation of the “Disputed Items”), and all other items (and all calculations relating thereto) will be final, binding and conclusive, absent manifest error or fraud. Any resolution by Buyer Closing Working Capital and the Stockholders’ Representative during the Resolution Period as to any Disputed Item shall be set forth in writing and will be finalAssumed Indebtedness. If, binding and conclusive, absent manifest error or fraud.
(c) If Buyer and the Stockholders’ Representative do not resolve all Disputed Items by at the end of the Resolution Period, they are unable to resolve such disagreements, then all Disputed Items the Final Closing Balance Sheet along with the Stockholder Representative’s notice of disagreement (both modified to reflect only unresolved disagreements) and a written response from Parent to the Stockholder Representative’s notice of disagreement (setting forth in reasonable detail the particulars of Parent’s disagreement) shall be submitted within 10 days after the last day of the Resolution Period to such nationally recognized independent accounting firm as may be mutually selected by Parent and the Stockholder Representative (the “Adjustments Auditor”) to resolve any remaining disagreements. If Parent and the Stockholder Representative are unable to agree on the Adjustments Auditor within such 10-day period, then within five days after the end of such 10-day period, Parent and the Stockholder Representative shall jointly request the American Arbitration Association to appoint the Adjustments Auditor, which shall not have had a material relationship with Parent, the Company or the Stockholder Representative or any of their respective Affiliates subsequent to December 31, 2009. Each of Parent and the Stockholder Representative agrees to execute, if requested by the Adjustments Auditor, a customary engagement letter. The Adjustments Auditor shall determine as promptly as practicable, but in any event within 30 days of the date on which such dispute will be is referred to the Adjustments Auditor, whether (and only with respect to the remaining disagreements submitted to the Neutral Arbitrator. The Neutral Arbitrator shall act Adjustments Auditor) and to what extent (if any) the amount of the Closing Working Capital or the Assumed Indebtedness as an arbitrator determined pursuant to determine only those Disputed Items remaining in dispute, consistent with this Section 2.11, and shall request a statement from Buyer the Final Closing Balance Sheet (as modified by any agreement between Parent and the Stockholders’ Representative regarding such Disputed Items. The Stockholder Representative) requires correction; provided that the scope of the disputes dispute to be arbitrated resolved by the Neutral Arbitrator is Adjustments Auditor shall be limited to those items or calculations specifically in dispute between Buyer whether the Final Closing Balance Sheet and the Stockholders’ Representative; Assumed Indebtedness were prepared in conformity with GAAP (except as noted in the final sentence of Section 3.4(a)) using the same accounting principles and practices and in the same format and using the same line item classifications used by the Company in preparing the Preliminary Closing Balance Sheet, whether the Closing Working Capital was prepared in accordance with the Balance Sheet Rules, and whether there were mathematical errors in the computation of the Closing Working Capital, or the Assumed Indebtedness, and the Neutral Arbitrator is Adjustments Auditor shall not to make any other determination. In resolving each Disputed Itemreaching its determination, the Neutral Arbitrator shall only alternatives available to the Adjustments Auditor will be bound by to (i) accept the principles set forth in this Section 2.11 and may not assign position of Parent, (ii) accept the position of the Stockholder Representative or (iii) determine a value to any Disputed Item greater than the greatest value for such Disputed Item claimed by any party or less than the lowest value for such Disputed Item claimed by any partyposition between those two positions. The parties further agree that Adjustments Auditor will determine the adjustment contemplated by this Section 2.11 is intended to show the change between the Estimated Net Working Capital and the Final Net Working Capital, the change between the Estimated Net Funded Indebtedness and the Final Net Funded Indebtedness and the change between Estimated Transaction Related Expenses and Final Transaction Related Expenses, and that such changes can only be measured if each calculation is done in a manner consistent with the Accounting Principles and the definitions thereof. All fees allocation of its costs and expenses relating to based on the work, if any, to be performed by the Neutral Arbitrator will be allocated between Buyer and the Stockholders’ Representative (which, in the case inverse of the Stockholders’ Representative, shall be payable by the Stockholders’ Representative solely out of the Reserve Amount) in the same proportion that the aggregate amount of the Disputed Items so submitted to the Neutral Arbitrator that is unsuccessfully disputed by each percentage which its award (before such party (as finally determined by the Neutral Arbitratorallocation) bears to the total amount of such Disputed Items so submittedthe total items in arbitration as originally submitted to it. The Neutral Arbitrator will deliver Accordingly, by way of example, should the items in arbitration total in amount to Buyer $1,000 and the Stockholders’ Representative a written determination (such determination to include a work sheet setting forth all material calculations used Adjustments Auditor awards $600 in arriving at such determination and to be based solely on information provided to the Neutral Arbitrator by the Stockholders’ Representative and Buyer) favor of the Disputed Items submitted to the Neutral Arbitrator within thirty (30) calendar days of receipt of such Disputed ItemsStockholder Representative’s position, which determination will be final, binding and conclusive, absent manifest error or fraud. The final, binding and conclusive Closing Statement based either upon agreement by the parties, or deemed agreement by Buyer and the Stockholders’ Representative in accordance with this Section 2.11, or the written determination delivered by the Neutral Arbitrator in accordance with this Section 2.11(c) will be the “Conclusive Closing Statement.” If any party fails to submit a statement regarding any Disputed Item submitted to the Neutral Arbitrator within the time determined by the Neutral Arbitrator or otherwise fails to give the Neutral Arbitrator access as reasonably requested, then the Neutral Arbitrator shall render a decision based solely on the evidence timely submitted and the access afforded to the Neutral Arbitrator by the other party. Except in instances involving fraud or except as may arise out 60% of the representations costs and warranties under Article III expenses would be assessed against Parent and Article IV 40% of the costs and in such instances only to expenses would be assessed against the extent set forth in this Agreement, neither any Stockholder, holder of Company Stock Options or Common Holders and the Stockholder Representative shall have any liability with respect to Funded Indebtedness, Closing Date Funded Indebtedness, Transactions Related Expenses, or current assets or current liabilities (including as to accounts receivable and the collectability thereof) or any other component of Net Working Capital except as determined in this Section 2.11.
(d) Within two (2) Business Days after the Final Amounts have been determined in accordance with this Section 2.11:
(i) if the Aggregate Common Equity Amount is greater than the Final Payment Amount, then the Stockholders’ Representative and Buyer shall instruct the Escrow Agent to pay to such amount due from the Surviving Corporation, using first Common Holders from the funds in the Merger Consideration Escrow Account and, to the extent the funds in the Merger Consideration Escrow Account are not sufficient to satisfy such payment in full, then out Amount. The determination of the funds in the General Escrow AccountAdjustments Auditor shall be final, an amount in cash equal to binding and conclusive. The date on which the amount by which of the Aggregate Common Equity Amount is greater than the Final Payment Amount (as defined below); and
(ii) if the Aggregate Common Equity Amount is less than the Final Payment Amount (as defined below), Buyer shall pay, or cause the Surviving Corporation to pay, to the Stockholders’ Representative (for further pro rata distribution to the Fully Diluted Common Holders) an amount in cash equal to the amount by which the Aggregate Common Equity Amount is less than the Final Payment Amount by wire transfer of immediately available funds (the amount payable to Buyer pursuant to Section 2.11(d)(i) Closing Working Capital and the amount payable to the Stockholders’ Representative pursuant to this Section 2.11(d)(ii) are referred to herein as the “Merger Consideration Adjustment Amount”); provided that any portion of any amount payable under this Section 2.11(d)(ii) that Assumed Indebtedness is a Compensatory Payment shall not be paid to the Stockholders’ Representative but shall instead be paid by the Surviving Corporation (or a Subsidiary of the Surviving Corporation) through its payroll system and finally determined in accordance with this Section 3.4(b) (whether due to agreement by Parent and the Surviving Corporation’s (Stockholder Representative or such Subsidiary’s) standard withholding and payroll practices and procedures a determination by the Adjustments Auditor in accordance with this Section 3.4(b)), is hereinafter referred as to the Person identified in writing by the Stockholders’ Representative as the Person to whom such Compensatory Payment is to be made. Any payment by Buyer, the Surviving Corporation or the Stockholders’ Representative (pursuant to the distribution of funds from the Merger Consideration Escrow Account or the General Escrow Account), as the case may be, pursuant to this Section 2.11 will be treated as an adjustment to the Merger Consideration for tax purposes. For purposes of this Section 2.11:“Determination Date.”
Appears in 1 contract
Sources: Merger Agreement (Trinet Group Inc)
Post-Closing Merger Consideration Adjustment. (a) As promptly soon as practicable, but in any case no later event more than sixty one hundred and twenty (60120) calendar days after following the Closing Date, Buyer the Surviving Corporation shall cause to be prepared prepare and delivered deliver to the Stockholders’ Representative a statement (the “Initial Closing Statement”) setting forth (i) Parent and Surviving Corporation’s reasonable, good faith determination of the Net Working Capital as of the close of business on the Closing Date (the “Closing Date Working Capital”), (ii) Parent and Surviving Corporation’s reasonable, good faith determination of all Cash of the Company, as of the close of business on the Closing Date (the “Closing Date Cash”), (iii) Parent and Surviving Corporation’s reasonable, good faith determination of all Indebtedness of the Company, as of the close of business on the Closing Date (the “Closing Date Indebtedness”), (iv) an unaudited, consolidated balance sheet of the Company as of the Closing Date (the “Closing Balance Sheet”), (v) all Transaction Expenses (the “Closing Date Transaction Expenses”) and (vi) the Surviving Corporation’s reasonable, good faith calculation of the Merger Consideration in accordance with Section 1.9. The Initial Closing Statement (including the Closing Date Working Capital, the Net Funded Closing Date Cash, the Closing Date Indebtedness, the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) Closing Balance Sheet and the components thereof. The Closing Statement shall include the amount calculated in good faith by Buyer, if any, of the Merger Consideration Escrow Amount that need not be retained by the Escrow Agent pending resolution of payments to be made pursuant to Section 2.11(dDate Transaction Expenses) (the “Merger Consideration Escrow Release Amount”). The Merger Consideration Escrow Release Amount, to the extent there is such an amount, shall be released two (2) Business Days following Buyer’s delivery of the Closing Statement. The Closing Statement and the Net Working Capital, the Net Funded Indebtedness and the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) calculations shall be prepared and calculated reasonable and in good faithfaith in accordance with GAAP (and, and in the manner and on a basis consistent with the Accounting Principles (to the extent applicablenot inconsistent with GAAP, using the same accounting policies, principles, methodologies and preparations as the Audited Financials) and shall be or as otherwise expressly provided in the same form applicable definitions of this Agreement and include Exhibits, without giving effect to the same line items Contemplated Transactions (other than as relates to the Estimated Net Working Capital calculation, the Estimated Net Funded Indebtedness calculation and the Estimated of Transaction Related Expenses calculation. If the Closing Statement is not so timely delivered, the Estimated Net Working Capital, the Estimated Net Funded Indebtedness and the Estimated Transaction Related Expenses will be deemed Final Net Working Capital, Final Net Funded Indebtedness and Final Transaction Related Expenses, respectively).
(b) After receipt of the Closing Statement, the The Stockholders’ Representative will have forty five and its accountants shall complete their review of the Initial Closing Statement within thirty (4530) calendar days after the Surviving Corporation’s delivery thereof to review the Closing Statement. Unless the Stockholders’ Representative delivers written notice (which notice Representative. During such review period, the Surviving Corporation shall include the items and amounts in dispute and supporting documentation related thereto; such notice, a “Seller Dispute Notice”) to Buyer setting forth the items disputed by the provide Stockholders’ Representative with respect thereto on access to all books and records reasonably requested by Stockholders’ Representative to review the Initial Closing Statement (including the calculation and preparation of the Closing Date Working Capital, Closing Date Cash, Closing Date Indebtedness, Closing Date Transaction Expenses and the Closing Balance Sheet), any work papers prepared by the Surviving Corporation or prior its accountants, subject to the forty-fifth (45th) calendar day after internal policies of the Surviving Corporation’s accountants, in connection with such calculations, and the Surviving Corporation shall make reasonably available its Representatives responsible for the preparation of the Initial Closing Statement in order to respond to the inquiries of Stockholders’ Representative’s receipt of the Closing Statement, the . If Stockholders’ Representative will be deemed to have accepted and agreed objects to the contents of the Initial Closing Statement and such statement (and the calculations contained therein) will be finalfor any reason, binding and conclusive, absent manifest error or fraud. If the Stockholders’ Representative notifies Buyer of its objections to items contained in the Closing Statement (or calculations contained therein) within such forty five (45) calendar day period, Buyer and the Stockholders’ Representative shall, during on or before the last day of such 30-day period, so inform the Surviving Corporation and Parent in writing (a “Stockholders’ Objection”), setting forth, to the extent known, a specific description of the basis of its determination and the adjustments to the Initial Closing Statement that the Stockholders’ Representative believes should be made. To the extent any disagreement therewith is not described in a Stockholders’ Objection received by Surviving Corporation on or before the last day of such 30-day period, then all items described in the Initial Closing Statement delivered by the Surviving Corporation to Stockholders’ Representative shall be deemed agreed, final and binding on the parties.
(c) If Stockholders’ Representative timely delivers a Stockholders’ Objection to the Surviving Corporation and Parent, and Stockholders’ Representative and the Surviving Corporation are unable to resolve all of their disagreements with respect to the proposed adjustments set forth in Stockholders’ Objection within thirty (30) calendar days following delivery the Surviving Corporation’s receipt of such notice by Stockholders’ Objection, then they shall jointly retain the CPA Firm, which, acting as an expert and neutral and not as an arbitrator, shall determine, on the basis set forth in and in accordance with this Section 1.11, and only with respect to those items or any line items within the calculation of the Closing Date Working Capital specifically described in Stockholders’ Objection, in each case, on which the Surviving Corporation and Stockholders’ Representative to Buyer (or such longer period as they may mutually agree in writing) (the “Resolution Period”), attempt in good faith to resolve their differences with respect to the disputed items (or calculations) such notice have not agreed (the “Disputed Items”), whether and all other items to what extent, if any, the Merger Consideration requires adjustment. The Surviving Corporation and Stockholders’ Representative shall instruct the CPA Firm to deliver its written determination to the Surviving Corporation and Stockholders’ Representative no later than thirty (30) days after submitting the Disputed Items to it for resolution. At the time of retention of the CPA Firm the Surviving Corporation shall specify in writing to the CPA Firm and all calculations relating thereto) will Stockholders’ Representative the amount of the Surviving Corporation’s computation of the Disputed Items and the Merger Consideration (the “Surviving Corporation’s Position”), and Stockholders’ Representative shall specify in writing to the CPA Firm and to the Surviving Corporation the amount of its computation of the Disputed Items and the Merger Consideration (the “Stockholders’ Position”). CPA Firm’s determination shall be finalconclusive and binding upon the Parent, binding Surviving Corporation, Stockholders’ Representative and conclusive, Stockholders absent manifest error or fraud. Any resolution by Buyer and the Stockholders’ Representative during the Resolution Period as to (which includes, for this purpose, any Disputed Item shall be set forth in writing and will be final, binding and conclusive, absent manifest calculation error or fraud.
(c) If Buyer and the Stockholders’ Representative do not resolve all Disputed Items by the end of the Resolution Period, then all Disputed Items remaining in dispute will be submitted failure to adhere to the Neutral Arbitrator. The Neutral Arbitrator shall act as an arbitrator to determine only those Disputed Items remaining in dispute, consistent with terms of this Section 2.11, and shall request a statement from Buyer and the Stockholders’ Representative regarding such Disputed Items. The scope of the disputes to be arbitrated by the Neutral Arbitrator is limited to those items or calculations specifically in dispute between Buyer and the Stockholders’ Representative; and the Neutral Arbitrator is not to make any other determinationAgreement). In resolving each any Disputed Item, the Neutral Arbitrator shall be bound by the principles set forth in this Section 2.11 and CPA Firm may not assign a value to any Disputed Item that is greater than the greatest value for such Disputed Item claimed by any party the Surviving Corporation or Stockholders’ Representative at the time the CPA Firm is retained or less than the lowest smallest value claimed for such the Disputed Item claimed by any partythe Surviving Corporation or Stockholders’ Representative at such time. The parties further agree that scope of the adjustment contemplated dispute(s) to be resolved by this Section 2.11 the CPA Firm is intended limited to show whether the change between the Estimated Net Working Capital Disputed Items were prepared and the Final Net Working Capital, the change between the Estimated Net Funded Indebtedness and the Final Net Funded Indebtedness and the change between Estimated Transaction Related Expenses and Final Transaction Related Expenses, and that such changes can only be measured if each calculation is done calculated in a manner consistent with the Accounting Principles provisions, definitions, and Exhibits of this Agreement and mathematically accurate, and the definitions thereofCPA Firm is not to make any other determination unless jointly requested in writing by Stockholders’ Representative and the Surviving Corporation. All fees and expenses relating to the work, if any, to be performed by the Neutral Arbitrator CPA Firm (the “Merger Consideration Dispute Expenses”) will be allocated between Buyer Parent, on the one hand, and Stockholders, on the Stockholders’ Representative (whichother hand, in the case of the Stockholders’ Representative, shall be payable by the Stockholders’ Representative solely out of the Reserve Amount) in the same proportion that the aggregate amount of the Disputed Items so submitted to the Neutral Arbitrator Accounting Firm that is unsuccessfully disputed by each such party Party (as finally determined by the Neutral ArbitratorCPA Firm) bears to the total disputed amount of such Disputed Items items so submitted. The Neutral Arbitrator will deliver to Buyer Surviving Corporation, the Parent and the Stockholders’ Representative a written determination (such determination to include a work sheet setting forth all material calculations used in arriving at such determination shall cooperate with the CPA Firm during its resolution of the disagreement and to be based solely on information provided make readily available to the Neutral Arbitrator CPA Firm all relevant personnel and Representatives, books and records and any work papers (including those of the parties’ respective accountants, to the extent permitted by such accountants, and Representatives) relating to amounts set forth in the Initial Closing Statement and Stockholders’ Objection and all other items reasonably requested by the CPA Firm in connection therewith.
(d) The Initial Closing Statement, including the Closing Balance Sheet, Closing Date Cash, Closing Date Indebtedness, Closing Date Transaction Expenses and the Closing Date Working Capital, as agreed to (or deemed to have been agreed to in accordance with the foregoing) between the Surviving Corporation and Stockholders’ Representative or as determined by the CPA Firm, as applicable, shall be conclusive and Buyer) binding on all of the Disputed Items submitted to the Neutral Arbitrator within thirty (30) calendar days of receipt of such Disputed Items, which determination will be final, binding and conclusive, parties hereto absent manifest error (which includes, for this purpose, any calculation error or fraud. The finalfailure to adhere to the terms of this Agreement), binding and conclusive all Stockholders and shall be deemed the “Actual Closing Statement based either upon agreement by Balance Sheet,” “Actual Cash,” “Actual Indebtedness”, “Actual Transaction Expenses” and “Actual Working Capital,” respectively, for all purposes herein.
(e) Upon completion of the partiescalculation of the Actual Closing Balance Sheet, or deemed agreement by Buyer Actual Cash, Actual Indebtedness, Actual Transaction Expenses and the Stockholders’ Representative Actual Working Capital in accordance with this Section 2.111.11, or the written determination delivered by Merger Consideration shall be recalculated, and the Neutral Arbitrator in accordance with this Section 2.11(c) will be following adjustments (the “Conclusive Closing Statement.” Merger Consideration Adjustment”) made:
(i) If any party fails to submit a statement regarding any Disputed Item submitted to the Neutral Arbitrator within Merger Consideration calculated using the time determined by Actual Working Capital, Actual Cash, Actual Transaction Expenses and Actual Indebtedness is greater than the Neutral Arbitrator or otherwise fails to give Merger Consideration calculated using the Neutral Arbitrator access as reasonably requestedEstimated Working Capital, Estimated Cash, Estimated Transaction Expenses and Estimated Indebtedness, then the Neutral Arbitrator Parent shall render a decision based solely on the evidence timely submitted and the access afforded to the Neutral Arbitrator by the other party. Except promptly (but in instances involving fraud or except as may arise out of the representations and warranties under Article III and Article IV and in such instances only to the extent set forth in this Agreement, neither any Stockholder, holder of Company Stock Options or the Stockholder Representative shall have any liability with respect to Funded Indebtedness, Closing Date Funded Indebtedness, Transactions Related Expenses, or current assets or current liabilities no event later than three (including as to accounts receivable and the collectability thereof) or any other component of Net Working Capital except as determined in this Section 2.11.
(d) Within two (23) Business Days after the Final Amounts have been determined final determination) pay, or cause to be paid, such difference in accordance with this Section 2.11:cash to the Exchange Agent and the NWC Escrow Amount shall be released and paid to the Exchange Agent; or
(iii) if If the Aggregate Common Equity Amount Merger Consideration calculated using the Actual Working Capital, Actual Cash, Actual Transaction Expenses and Actual Indebtedness is greater less than the Final Payment AmountMerger Consideration calculated using the Estimated Working Capital, Estimated Cash, Estimated Transaction Expenses and Estimated Indebtedness, then the Stockholders’ Representative and Buyer shall instruct direct the Escrow Agent to pay such difference promptly from the NWC Escrow Amount (but in no event later than three (3) Business Days after the final determination) to the Surviving Corporation, using first the funds in the Merger Consideration Escrow Account and, to the extent the funds in the Merger Consideration Escrow Account are not sufficient to satisfy such payment in full, then out of the funds in the General Escrow Account, an amount in cash equal to the amount by which the Aggregate Common Equity Amount is greater than the Final Payment Amount (as defined below); and.
(iif) if the Aggregate Common Equity Amount is less than the Final Payment Amount (as defined below), Buyer shall pay, or cause the Surviving Corporation to pay, to the Stockholders’ Representative (for further pro rata distribution to the Fully Diluted Common Holders) an amount in cash equal to the amount by which the Aggregate Common Equity Amount is less than the Final Payment Amount by wire transfer of immediately available funds (the amount Any amounts payable to Buyer pursuant to Section 2.11(d)(i1.11(e) and the amount payable to the Stockholders’ Representative pursuant to this Section 2.11(d)(ii) are referred to herein as the “Merger Consideration Adjustment Amount”); provided that any portion of any amount payable under this Section 2.11(d)(ii) that is a Compensatory Payment shall not be paid to the Stockholders’ Representative but shall instead be paid by the Surviving Corporation (or a Subsidiary of the Surviving Corporation) through its payroll system and in accordance with the Surviving Corporation’s (or such Subsidiary’s) standard withholding and payroll practices and procedures to the Person identified in writing by the Stockholders’ Representative as the Person to whom such Compensatory Payment is to be made. Any payment by Buyer, the Surviving Corporation or the Stockholders’ Representative (pursuant to the distribution of funds from the Merger Consideration Escrow Account or the General Escrow Account), as the case may be, pursuant to this Section 2.11 will be treated by all parties as an adjustment adjustments to the Merger Consideration for tax all federal, state, provincial, local and foreign Tax purposes. For purposes of this Section 2.11:, and the parties agree to file their respective Tax Returns accordingly, except as otherwise required by applicable Law.
Appears in 1 contract
Post-Closing Merger Consideration Adjustment. (ai) As promptly as practicable, but in any case no later than Within sixty (60) calendar days after the Closing Date, Buyer the Stockholders shall cause prepare and deliver to be prepared and delivered to Acquiror an update of the Stockholders’ Representative a statement Estimated Closing Net Debt Statement (the “Post-Closing Net Debt Statement”) setting forth the Net Working Capital, Debt of the Net Funded Indebtedness, Companies and the Transaction Related Expenses Designated Subsidiaries (to presented as if they were one consolidated entity as of immediately following Closing) as of 11:59 p.m (EST) on the extent not paid by the Company or any of its Affiliates Business Day immediately prior to the Closing) Closing Date (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer Net Debt, as it may be adjusted pursuant to this Agreement Section 2(e), the “Final Closing Net Debt”). Without limiting any other rights and remedies that may be applicable, in the event of a breach of any covenant set forth in clause (including y) of Section 6.2 5(a)(i) that would otherwise reduce the Final Closing Net Debt as of such day, the Final Closing Net Debt shall be calculated as though such breach had not occurred. Acquiror agrees to provide the Stockholders and Section 12.7)) their representatives with reasonable access to the properties and books and records of each of Surviving Entities and the components thereofDesignated Subsidiaries and the personnel responsible therefor or otherwise involved in the preparation thereof and otherwise to cooperate with the Stockholders and their representatives as they may reasonably request in connection with the preparation of the Post-Closing Net Debt Statement.
(ii) The Post-Closing Net Debt Statement will become final and binding upon the Parties at 5:00 p.m. (EST) on the thirtieth (30th) day following the Stockholders’ delivery thereof unless Acquiror gives the Stockholders written notice of a good faith disagreement with any amount or computation thereof (the “Notice of Disagreement”) prior to such date and time. The Closing Statement Notice of Disagreement shall include the amount calculated in set forth Acquiror’s good faith determination of the Final Closing Net Debt and specify, in reasonable detail, the nature of any disagreement with the Stockholders’ determination. If a Notice of Disagreement is received by Buyerthe Stockholders in a timely manner, the Post-Closing Net Debt Statement (as adjusted, as applicable, pursuant to this Section 2(e) to reflect final resolution of differences, if any, between the Parties) will become final and binding upon the Parties as of the Merger Consideration Escrow Amount that need not be retained by earlier of (x) the Escrow Agent pending resolution of payments to be made pursuant to Section 2.11(d) (date on which the “Merger Consideration Escrow Release Amount”). The Merger Consideration Escrow Release Amount, Parties resolve in writing all differences they have with respect to the extent there is matters specified in the Notice of Disagreement and (y) the date on which all such an amount, shall be released two (2) Business Days following Buyer’s delivery differences are resolved by a determination of the Closing Statement. The Closing Statement and the Net Working Capital, the Net Funded Indebtedness and the Transaction Related Expenses Accountants as described in clause (to the extent not paid by the Company or any of its Affiliates prior to the Closingiii) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) calculations shall be prepared and calculated in good faith, and in the manner and on a basis consistent with the Accounting Principles (to the extent applicable) and shall be in the same form and include the same line items as the Estimated Net Working Capital calculation, the Estimated Net Funded Indebtedness calculation and the Estimated Transaction Related Expenses calculation. If the Closing Statement is not so timely delivered, the Estimated Net Working Capital, the Estimated Net Funded Indebtedness and the Estimated Transaction Related Expenses will be deemed Final Net Working Capital, Final Net Funded Indebtedness and Final Transaction Related Expenses, respectivelybelow.
(biii) After receipt of the Closing Statement, the Stockholders’ Representative will have forty five (45) calendar days to review the Closing Statement. Unless the Stockholders’ Representative delivers written notice (which notice shall include the items and amounts in dispute and supporting documentation related thereto; such notice, a “Seller Dispute Notice”) to Buyer setting forth the items disputed by the Stockholders’ Representative with respect thereto on or prior to the forty-fifth (45th) calendar day after the Stockholders’ Representative’s receipt of the Closing Statement, the Stockholders’ Representative will be deemed to have accepted and agreed to the Closing Statement and such statement (and the calculations contained therein) will be final, binding and conclusive, absent manifest error or fraud. If the Stockholders’ Representative notifies Buyer of its objections to items contained in the Closing Statement (or calculations contained therein) within such forty five (45) calendar day period, Buyer and the Stockholders’ Representative shall, during During the thirty (30) calendar days day period following delivery the receipt of such notice by the Stockholders’ Representative to Buyer (or such longer period as they may mutually agree in writing) (Notice of Disagreement, the “Resolution Period”), attempt Stockholders and Acquiror shall seek in good faith to resolve their differences with respect to the disputed items matter(s) specified in the Notice of Disagreement. If, by the expiry of that thirty-day period, the Stockholders and Acquiror have not reached an agreement on all such matters then, within ten (or calculations10) such notice (the “Disputed Items”), and all other items (and all calculations relating thereto) will be final, binding and conclusive, absent manifest error or fraud. Any resolution by Buyer and the Stockholders’ Representative during the Resolution Period as to any Disputed Item shall be set forth in writing and will be final, binding and conclusive, absent manifest error or fraud.
(c) If Buyer and the Stockholders’ Representative do not resolve all Disputed Items by Business Days from the end of the Resolution Periodthirty-day period, then the Parties shall submit all Disputed Items remaining matters that remain in dispute will (the “Dispute”) to the Accountants for sole and final review and resolution as the Accountants determine to be appropriate. With respect to each disputed item or amount, the Accountants shall adopt a position that is equal to Acquiror’s proposed position, equal to the Stockholders proposed position, or between the positions proposed by Acquiror and the Stockholders. The Accountants shall establish the process of reviewing any Dispute, but shall be directed by the Parties to provide their final determination with respect to any Dispute as soon as practicable and in any event within thirty (30) days following the date on which the Dispute is first submitted to the Neutral Arbitrator. The Neutral Arbitrator shall act as an arbitrator Accountants pursuant to determine only those Disputed Items remaining in dispute, consistent with this Section 2.112(e) for their consideration. Each Party agrees to promptly make available to each other and to the Accountants all documents, books, records and personnel under that Party’s control as the Accountants shall request a statement from Buyer determine in their judgment to be necessary or relevant to their review of the Dispute and otherwise to cooperate with the other parties and the Stockholders’ Representative regarding such Disputed Items. The scope Accountants to facilitate a prompt resolution of the disputes to be arbitrated by the Neutral Arbitrator is limited to those items or calculations specifically in dispute between Buyer and the Stockholders’ RepresentativeDispute; and the Neutral Arbitrator is not to make any other determination. In resolving each Disputed Item, the Neutral Arbitrator shall be bound by the principles set forth provided that nothing contained in this Section 2.11 and may not assign 2(e) shall require a value Party to disclose any Disputed Item greater than attorney-client privileged information to the greatest value for such Disputed Item claimed by any party or less than the lowest value for such Disputed Item claimed by any party. The parties further agree extent that the adjustment contemplated disclosure thereof may result in the loss of attorney-client privilege by this Section 2.11 such Party.
(iv) If Final Closing Net Debt is intended to show different from the change between projected Net Debt amount as of the Estimated Closing Date (determined based on the Net Working Capital and Debt Statement in accordance with Exhibit E), then the Final Net Working CapitalMerger Consideration will be adjusted following the Closing (the Merger Consideration following such adjustment, the change between “Final Merger Consideration”) and Acquiror or the Estimated Net Funded Indebtedness and the Final Net Funded Indebtedness and the change between Estimated Transaction Related Expenses and Final Transaction Related ExpensesStockholders, and that such changes can only be measured if each calculation is done in a manner consistent with the Accounting Principles and the definitions thereof. All fees and expenses relating as applicable, will pay to the work, if any, to be performed by the Neutral Arbitrator will be allocated between Buyer and the Stockholders’ Representative (which, in the case of the Stockholders’ Representative, shall be payable by the Stockholders’ Representative solely out of the Reserve Amount) in the same proportion that other the aggregate amount of the Disputed Items so submitted excess or shortfall (after giving full credit for any adjustments made to the Neutral Arbitrator that is unsuccessfully disputed by each such party (as finally determined by the Neutral Arbitrator) bears Merger Consideration in respect of Net Debt at Closing pursuant to Section 2(d)). Any payment to the total amount of such Disputed Items so submitted. The Neutral Arbitrator will deliver to Buyer and the Stockholders’ Representative a written determination (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided to the Neutral Arbitrator by the Stockholders’ Representative and Buyer) of the Disputed Items submitted to the Neutral Arbitrator within thirty (30) calendar days of receipt of such Disputed Items, which determination will be final, binding and conclusive, absent manifest error or fraud. The final, binding and conclusive Closing Statement based either upon agreement by the parties, or deemed agreement by Buyer and the Stockholders’ Representative in accordance with this Section 2.11, or the written determination delivered by the Neutral Arbitrator in accordance with this Section 2.11(c) will be the “Conclusive Closing Statement.” If any party fails to submit a statement regarding any Disputed Item submitted to the Neutral Arbitrator within the time determined by the Neutral Arbitrator or otherwise fails to give the Neutral Arbitrator access as reasonably requested, then the Neutral Arbitrator shall render a decision based solely on the evidence timely submitted and the access afforded to the Neutral Arbitrator by the other party. Except in instances involving fraud or except as may arise out of the representations and warranties under Article III and Article IV and in such instances only to the extent set forth in this Agreement, neither any Stockholder, holder of Company Stock Options or the Stockholder Representative shall have any liability with respect to Funded Indebtedness, Closing Date Funded Indebtedness, Transactions Related Expenses, or current assets or current liabilities (including as to accounts receivable and the collectability thereof) or any other component of Net Working Capital except as determined Stockholders described in this Section 2.11.
(d2(e)(iv) Within two (2) Business Days after the Final Amounts have been determined in accordance with this Section 2.11:
(i) if the Aggregate Common Equity Amount is greater than the Final Payment Amount, then the Stockholders’ Representative and Buyer shall instruct the Escrow Agent to pay be made by Acquiror to the Surviving Corporation, using first the funds in the Merger Consideration Escrow Account and, to the extent the funds in the Merger Consideration Escrow Account are not sufficient to satisfy such payment in full, then out of the funds in the General Escrow Account, an amount Stockholders in cash equal to the amount by which the Aggregate Common Equity Amount is greater than the Final Payment Amount (as defined below); and
(ii) if the Aggregate Common Equity Amount is less than the Final Payment Amount (as defined below), Buyer shall pay, or cause the Surviving Corporation to pay, to the Stockholders’ Representative (for further pro rata distribution to the Fully Diluted Common Holders) an amount in cash equal to the amount by which the Aggregate Common Equity Amount is less than the Final Payment Amount by wire transfer of immediately available funds (the amount payable to Buyer pursuant to Section 2.11(d)(i) and the amount payable to the Stockholders’ Representative pursuant to this Section 2.11(d)(ii) are referred to herein as the “Merger Consideration Adjustment Amount”); provided that any portion of any amount payable under this Section 2.11(d)(ii) that is a Compensatory Payment shall not be paid to the Stockholders’ Representative but shall instead be paid account designated by the Surviving Corporation Stockholders promptly and in any event within five (or a Subsidiary 5) Business Days of the Surviving Corporation) through its payroll system date on which the Post-Closing Net Debt Statement became final (and allocated among the Stockholders in accordance with the Surviving Corporation’s allocation method set forth in Section 2(a)(ii)). In the event of any delay in payment by Acquiror of the amount required by this Section 2(e)(iv) beyond five (or 5) Business Days after the Post-Closing Net Debt Statement became final, the Stockholders also will be entitled to receive interest on the unpaid amount from such Subsidiary’s) standard withholding and payroll practices and procedures to the Person identified fifth Business Day at 10% per annum, compounding monthly, until all amounts owing hereunder have been paid in writing by the Stockholders’ Representative as the Person to whom such Compensatory Payment is to be madefull. Any payment by Buyer, to Acquiror as described in the Surviving Corporation or the Stockholders’ Representative (pursuant to the distribution of funds from the Merger Consideration Escrow Account or the General Escrow Account), as the case may be, pursuant to this Section 2.11 will be treated as an adjustment to the Merger Consideration for tax purposes. For purposes first sentence of this Section 2.11:2(e)(iv) shall be effected by Acquiror canceling the applicable number of shares of its common stock (determined based on the Value Per Share, rounded to the nearest whole number of shares) that it delivered to the Stockholders at Closing.
Appears in 1 contract
Sources: Merger Agreement (Ventas Inc)
Post-Closing Merger Consideration Adjustment. (a) As promptly soon as practicable, but in any case no later than sixty (60) [***] calendar days after the Closing Date, Buyer Parent shall cause to be prepared and delivered to the Stockholders’ Shareholder Representative a statement (the “Closing Statement”) setting forth Parent’s calculation of the Net Working Capital, the Net Working Capital Adjustment, the Net Funded Indebtedness, the Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) Expenses, and the components thereof. The Closing Statement shall include the amount calculated thereof in good faith by Buyer, if any, of the Merger Consideration Escrow Amount that need not be retained by the Escrow Agent pending resolution of payments to be made pursuant to Section 2.11(d) (the “Merger Consideration Escrow Release Amount”). The Merger Consideration Escrow Release Amount, to the extent there is such an amount, shall be released two (2) Business Days following Buyer’s delivery of the Closing Statementreasonable detail. The Closing Statement and Parent’s calculation of the Net Working Capital, the Net Funded Indebtedness and the Transaction Related Expenses (to set forth in the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) calculations Closing Statement shall be prepared and calculated in good faith, and in the manner and on a basis consistent with the Accounting *** Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. Principles (to in the extent applicablecase of Net Working Capital) and the definitions thereof, and shall be in the same form and include the same line items as the Estimated Net Working Capital calculation, the Estimated Net Working Capital Adjustment calculation, the Estimated Net Funded Indebtedness calculation calculation, and the Estimated Transaction Related Expenses calculation, and shall otherwise (i) not include any changes in assets or liabilities as a result of purchase accounting adjustments or other changes arising from or resulting as a consequence of the transactions contemplated hereby, (ii) be based on facts and circumstances as they exist on the Closing Date and (iii) not include any changes in assets or liabilities as a result of any event occurring on or after the Closing Date. In furtherance of the foregoing, each party hereto acknowledges and agrees that the Accounting Principles are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies. If the Closing Statement is not so timely delivered, then the Shareholder Representative shall be permitted, within five (5) Business Days after the expiration of the foregoing [***]-day period, to prepare and deliver a written notice to Parent setting forth the itemized amounts, if any, included in any of the Estimated Net Working Capital, the Estimated Net Working Capital Adjustment, the Estimated Net Funded Indebtedness and the Estimated Transaction Related Expenses that, after giving effect to the Closing, the Shareholder Representative disputes (such itemized amounts, the “Shareholder Disputed Amounts”, and such notice, together with the calculations contained therein, the “Shareholder Representative Closing Notice”), together with supporting documentation relating thereto. If the Shareholder Representative does not deliver such Shareholder Representative Closing Notice on or prior to such fifth (5th) Business Day, then the Estimated Net Working Capital, the Estimated Net Working Capital Adjustment, the Estimated Net Funded Indebtedness and the Estimated Transaction Related Expenses will be deemed Final Net Working Capital, Final Net Working Capital Adjustment, Final Net Funded Indebtedness and Final Transaction Related Expenses, respectively. In the event that the Shareholder Representative delivers to Parent such Shareholder Representative Closing Notice within such five (5) Business Day period, Parent will have twenty (20) Business Days to review the Shareholder Representative Closing Notice. If Parent provides written notice to the Shareholder Representative setting forth the itemized amounts, if any, included in the Shareholder Disputed Amounts Parent disputes, together with supporting documentation relating thereto, within such twenty (20) Business Day period, then such disputed itemized amounts (but not any other amounts) shall be resolved in accordance with the procedures set forth in Section 2.9(b) and Section 2.9(c) mutatis mutandis (with “Shareholder Disputed Amounts” being treated as “Disputed Items” for purposes thereunder). Unless Parent delivers written notice to the Shareholder Representative on or prior to the twentieth (20th) Business Day after Parent’s receipt of the Shareholder Representative Closing Notice, Parent will be deemed to have accepted and agreed to the Shareholder Representative Closing Notice and such statement (and the calculations contained therein) will be final, binding and conclusive.
(b) After receipt of the Closing Statement, the Stockholders’ Shareholder Representative will have forty five twenty (4520) calendar days Business Days to review the Closing Statement. Unless the Stockholders’ Shareholder Representative delivers written notice (which notice shall include the items and amounts in dispute and supporting documentation related thereto; thereto (each such noticeitem, a “Seller Dispute NoticeDisputed Item”)) to Buyer setting forth the items disputed by the Stockholders’ Representative with respect thereto Parent on or prior to the forty-fifth twentieth (45th20th) calendar day Business Day after the Stockholders’ Shareholder Representative’s receipt of the Closing Statement, the Stockholders’ Shareholder Representative will be deemed to have accepted and agreed to the Closing Statement and such statement (and the calculations contained therein) will be final, binding and conclusive, absent manifest error or fraud. If the Stockholders’ Shareholder Representative notifies Buyer Parent of its objections to items contained in the Closing Statement (or calculations contained therein) Disputed Items within such forty five twenty (4520) calendar day Business Day period, Buyer Parent and the Stockholders’ Shareholder Representative shall, during the thirty (30) calendar days following delivery of such notice by the Stockholders’ Shareholder Representative to Buyer Parent (or such longer period as they may mutually agree in writing) *** Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. (the “Resolution Period”), attempt in good faith to resolve their differences with respect to the disputed items (or calculations) such notice (the “Disputed Items”), and all other items (and all calculations relating thereto) will be final, binding and conclusive, absent manifest error or fraud. Any resolution by Buyer Parent and the Stockholders’ Shareholder Representative during the Resolution Period as to any Disputed Item shall be set forth in writing and will be final, binding and conclusive, absent manifest error or fraud.
(c) If Buyer Parent and the Stockholders’ Shareholder Representative do not resolve all Disputed Items by the end of the Resolution Period, then all Disputed Items remaining in dispute will be submitted to the Neutral ArbitratorFirm. The Neutral Arbitrator Firm shall act as an expert and not an arbitrator to determine only those Disputed Items remaining in dispute, consistent with this Section 2.11, Section 2.9.(c) and shall request a statement from Buyer Parent and the Stockholders’ Shareholder Representative regarding such Disputed Items. The scope of the disputes to be arbitrated by the Neutral Arbitrator is Firm shall be limited solely to those items or calculations specifically in dispute between Buyer and the Stockholders’ RepresentativeDisputed Items; and the Neutral Arbitrator is Firm shall not to make any other determination, including not making any determination as to whether any of the Closing Statement or Net Working Capital, the Net Working Capital Adjustment, Net Funded Indebtedness or Transaction Related Expenses was prepared in accordance with GAAP or whether the Target Net Working Capital Amount is correct or appropriate. In resolving each Disputed Item, the Neutral Arbitrator Firm shall be bound by the principles set forth in this Section 2.11 Section 2.9.(c) and may not assign a value to any Disputed Item greater than the greatest value for such Disputed Item claimed by any party or less than the lowest value for such Disputed Item claimed by any party. The parties further agree that the adjustment contemplated by this Section 2.11 Section 2.9.(c) is intended to show the change between the Estimated Net Working Capital and the Final Net Working Capital, the change between the Estimated Net Working Capital Adjustment and the Final Net Working Capital Adjustment, the change between the Estimated Net Funded Indebtedness and the Final Net Funded Indebtedness Indebtedness, and the change between the Estimated Transaction Related Expenses and the Final Transaction Related Expenses, and that such changes can only be measured if each calculation is done in a manner consistent with the Accounting Principles (in the case of Net Working Capital) and the definitions thereof. All fees and expenses relating to the work, if any, to be performed by the Neutral Arbitrator Firm will be allocated between Buyer Parent and the Stockholders’ Shareholder Representative (which, in the case of the Stockholders’ Representative, shall be payable by the Stockholders’ Representative solely out of the Reserve Amount) in the same proportion that the aggregate amount of the Disputed Items so submitted to the Neutral Arbitrator Firm that is unsuccessfully disputed by each such party (as finally determined by the Neutral ArbitratorFirm) bears to the total amount of such Disputed Items so submitted. The parties shall instruct the Neutral Arbitrator will Firm to deliver to Buyer Parent and the Stockholders’ Shareholder Representative a written determination (such determination to include a work sheet setting forth all material calculations and corresponding explanations used in arriving at such determination and to be based solely on information provided to the Neutral Arbitrator Firm by the Stockholders’ Shareholder Representative and BuyerParent) of the Disputed Items submitted to the Neutral Arbitrator Firm within thirty (30) calendar days of receipt of such Disputed Items, which determination will be final, binding and conclusive, absent manifest error or frauderror. The final, binding and conclusive Closing Statement based either upon agreement by the parties, or deemed agreement by Buyer Parent and the Stockholders’ Shareholder Representative in accordance with this Section 2.11Section 2.9, or the written determination delivered by the Neutral Arbitrator Firm in accordance with this Section 2.11(cSection 2.9.(c) will be the “Conclusive conclusive Closing StatementStatement for all purposes hereunder.”
(d) If any party fails to submit a statement regarding any Disputed Item submitted to the Neutral Arbitrator Firm within the time determined by the Neutral Arbitrator Firm or otherwise fails to give the Neutral Arbitrator Firm access as reasonably requested, then the Neutral Arbitrator Firm shall render a decision based solely on the evidence timely submitted and the access afforded to the Neutral Arbitrator Firm by the other party. Except in instances involving fraud or except as may arise out of the representations and warranties under Article III and Article IV and in such instances only to the extent set forth in this Agreement, neither any Stockholder, holder of Company Stock Options or the Stockholder Representative shall have any liability with respect to Funded Indebtedness, Closing Date Funded Indebtedness, Transactions Related Expenses, or current assets or current liabilities (including as to accounts receivable and the collectability thereof) or any other component of Net Working Capital except as determined in this Section 2.11.
(de) Within two (2) Business Days after the Final Amounts have been determined in accordance with this Subject to Section 2.11:2.9(f)(ii):
(i) if If the Aggregate Common Equity Estimated Closing Date Merger Consideration Amount is greater than the Final Payment Merger Consideration Amount, then Parent and the Stockholders’ Shareholder Representative and Buyer shall instruct the Escrow Agent to pay release from the Escrow Amount to Parent, pursuant to the Surviving Corporation, using first the funds in the Merger Consideration Escrow Account and, to the extent the funds in the Merger Consideration Escrow Account are not sufficient to satisfy such payment in full, then out terms of the funds in the General Escrow AccountAgreement, an amount in cash equal to the amount by which the Aggregate Common Equity Estimated Closing Date Merger Consideration Amount is greater than exceeds the Final Payment Amount (as defined below)Merger Consideration Amount; and
(ii) if If the Aggregate Common Equity Estimated Closing Date Merger Consideration Amount is less than the Final Payment Amount (as defined below)Merger Consideration Amount, Buyer Parent shall pay, or cause the Surviving Corporation Company to pay, to the Stockholders’ Shareholder Representative (for the benefit of and further pro rata distribution to the Fully Diluted Common HoldersShareholder) an amount in cash equal to the amount by which the Aggregate Common Equity Estimated Closing Date Merger Consideration Amount is less than the Final Payment Amount Merger Consideration Amount, by wire transfer of immediately available funds (the funds. Any amount payable to Buyer pursuant to Section 2.11(d)(i) and the amount payable to the Stockholders’ Representative any party pursuant to this Section 2.11(d)(ii) are referred to herein as the “Merger Consideration Adjustment Amount”); provided that any portion of any amount payable under this Section 2.11(d)(ii) that is a Compensatory Payment 2.9 shall not be paid to the Stockholders’ Representative but shall instead be paid by the Surviving Corporation (or a Subsidiary of the Surviving Corporation) through its payroll system and in accordance with the Surviving Corporation’s (or such Subsidiary’s) standard withholding and payroll practices and procedures to the Person identified in writing by the Stockholders’ Representative as the Person to whom such Compensatory Payment is to be made. Any payment by Buyer, the Surviving Corporation or the Stockholders’ Representative (pursuant to the distribution of funds from the Merger Consideration Escrow Account or the General Escrow Account), as the case may be, pursuant to this Section 2.11 will be treated as an adjustment to the Estimated Closing Date Merger Consideration for tax purposesAmount. For purposes Notwithstanding anything to the contrary herein or otherwise, Parent, on behalf of itself and its Affiliates, acknowledges that the sole and exclusive remedy of itself, Merger Sub and the Surviving Company to receive payments owed to it under this Section 2.11:2.9 shall be the recovery available solely from the funds in the Escrow Account and that the Escrow Amount and funds in the Escrow Account shall not be available to satisfy any other claim or obligation hereunder. In the event that the funds in the Escrow Account are insufficient to pay to the Surviving Company, Merger Sub or Parent any amounts owed to it pursuant to this Section 2.9, neither Parent, Merger Sub nor the Surviving Company shall be entitled to collect any remaining amounts not satisfied from the funds in the Escrow Account, and none of the Shareholder Representative, the Shareholder or any other Person shall have any liability for any such deficiency. Within one Business Day after payment to either Parent or the Shareholder Representative, pursuant to Section 2.9(e)(i) or Section 2.9(e)(ii), respectively, the Escrow Agent will be instructed to distribute any funds remaining in the Escrow Account as of such date to the Shareholder Representative (for the benefit of and further distribution to the Shareholder).
(f) If, after receipt of the Closing Statement or a Shareholder Representative Closing Notice, as applicable, pursuant to Section Section 2.9.(a):
(i) (A) following delivery of a Closing Statement, the Shareholder Representative does not deliver a notice of dispute as described in Section Section 2.9.(b) within the twenty (20) Business Day period following the Shareholder Representative’s receipt of the Closing Statement or if within such period the Shareholder Representative delivers a notice to Parent stating that the Shareholder Representative does not dispute any item in the Closing Statement or (B) following delivery of a Shareholder Representative Closing Notice, Parent does not deliver a notice of dispute as described in Section Section 2.9.(a) within the twenty (20) Business Day period following Parent’s receipt of the Shareholder Representative Closing Notice or if within such period Parent delivers a notice to the Shareholder Representative stating that Parent does not dispute any item in the Shareholder Representative Closing Notice (in either case such notice, a “Non-Dispute Notice”), then on the second (2nd) Business Day following the earlier of (x) the last day of such twenty (20) Business Day period (in the case of a Closing Statement) or such twenty (20) Business Day period (in the case of a Shareholder Representative Closing Notice), and (y) the date on which Parent or Shareholder Representative, as applicable, receives such Non-Dispute Notice, the payments set forth in Section Section 2.9.(e) shall be made, and Parent and the Shareholder Representative shall instruct the Escrow Agent to concurrently therewith release the remaining funds in the Escrow Account, if any, to the Shareholder Representative (for the benefit of and further distribution to the Shareholder);
(ii) (A) following delivery of a Closing Statement, if the Shareholder Representative delivers a notice of dispute as described in Section Section 2.9.(b) within the twenty (20) Business Day period following the Shareholder Representative’s receipt of the Closing Statement or (B) following delivery of a Shareholder Representative Closing Notice, Parent delivers a notice of dispute as described in Section Section 2.9.(a) within the twenty (20) Business Day period following Parent’s receipt of the Shareholder Representative Closing Notice, then on the second (2nd) Business Day following the date on which Parent or Shareholder Representative, as applicable, receives such notice of dispute, the payments set forth in Section Section 2.9.(e) shall be made, if any, in respect of any amount in such Closing Statement or Shareholder Representative Closing Notice, as applicable, that is not subject to dispute; and
(iii) with respect to any Disputed Item, within two (2) Business Days after resolution or deemed resolution of such Disputed Item in accordance with Section 2.9(b) and Section 2.9(c) (whether by mutual agreement between Parent and the Shareholder Representative, or by decision of the Neutral Firm), Parent shall pay Shareholder Representative (for the benefit of and further distribution to the Shareholder) by wire transfer of immediately available funds, or Parent and Shareholder Representative shall instruct the Escrow Agent to release an amount from the Escrow Account, pursuant to the Escrow Agreement, equal to the amount of such Disputed Item (or portion thereof) pursuant to the resolution of such Disputed Item (or portion thereof) in favor of such other party, as applicable, in accordance with this Section 2.9(f)(ii). Immediately following the payment in respect of the final Disputed Item, Parent and Shareholder Representative shall instruct the Escrow Agent to promptly release the remaining funds in the Escrow Account, if any, to Shareholder Representative (for the benefit of and further distribution to the Shareholder).
(g) After the Closing and until the Final Net Working Capital, the Final Net Funded Indebtedness and the Final Transaction Related Expenses have been determined to be final in accordance with this Section 2.9, Parent shall, and shall cause the Surviving Company (and its Subsidiaries) to, provide to the Shareholder Repres
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Post-Closing Merger Consideration Adjustment. (a) As promptly as practicable, but in any case no later than sixty Within ninety (6090) calendar days after the Closing Date, Buyer the Surviving Corporation shall cause to be prepared prepare and delivered to the Stockholders’ Representative deliver a statement (the “Initial Closing Statement”) to Sellers’ Representative setting forth (i) the Net Working CapitalSurviving Corporation’s determination of Cash as of the close of business on the Closing Date (the “Closing Date Cash”), (ii) all Indebtedness of the Net Funded Company as of the close of business on the Closing Date (the “Closing Date Indebtedness”), (iii) Current Liabilities as of the close of business on the Closing Date (the “Closing Date Current Liabilities”), (iv) the Seller Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the Closing) (except for any such “Closing Date Seller Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)Expenses”) and (v) the components thereof. The Closing Statement shall include the amount calculated in good faith by Buyer, if any, Surviving Corporation’s calculation of the Merger Consideration Escrow Amount that need not be retained by the Escrow Agent pending resolution of payments to be made pursuant to Section 2.11(d) (the “Merger Consideration Escrow Release Amount”)Consideration. The Merger Consideration Escrow Release Amount, to the extent there is such an amount, shall be released two Initial Closing Statement (2) Business Days following Buyer’s delivery of including the Closing Statement. The Date Cash, Closing Statement Date Indebtedness, Closing Date Current Liabilities and the Net Working Capital, the Net Funded Indebtedness and the Closing Date Seller Transaction Related Expenses (to the extent not paid by the Company or any of its Affiliates prior to the ClosingExpenses) (except for any such Transaction Related Expenses reimbursable or indemnifiable by Buyer pursuant to this Agreement (including Section 6.2 and Section 12.7)) calculations shall be prepared and calculated in good faithaccordance with GAAP (and, and to the extent not inconsistent with GAAP, the past practice of the Company) or as provided in the manner definitions of this Agreement. If the Surviving Corporation does not deliver the Initial Closing Statement to Sellers’ Representative within one hundred twenty (120) days following the Closing Date, then, at the election of Sellers’ Representative in its sole discretion, either (A) the Estimated Cash, Estimated Indebtedness, Estimated Current Liabilities and on a basis Estimated Seller Transaction Expenses shall be deemed the Actual Cash, Actual Indebtedness, Actual Current Liabilities and Actual Seller Transaction Expenses and shall be considered final for all purposes hereunder or (B) Sellers’ Representative shall retain (with the cost borne as set forth in Section 1.10(c)) the CPA Firm to review the calculations of Estimated Cash, Estimated Indebtedness, Estimated Current Liabilities and Estimated Seller Transaction Expenses and make any adjustments necessary thereto consistent with the Accounting Principles (to provisions of this Section 1.10, and the extent applicable) and determination of the CPA Firm shall be in deemed agreed, final and binding on the same form and include the same line items as the Estimated Net Working Capital calculation, the Estimated Net Funded Indebtedness calculation and the Estimated Transaction Related Expenses calculation. If the Closing Statement is not so timely delivered, the Estimated Net Working Capital, the Estimated Net Funded Indebtedness and the Estimated Transaction Related Expenses will be deemed Final Net Working Capital, Final Net Funded Indebtedness and Final Transaction Related Expenses, respectivelyparties.
(b) After receipt Sellers’ Representative, on behalf of the Stockholders, shall complete its review of the Initial Closing Statement within thirty (30) days after the Surviving Corporation’s delivery thereof to Sellers’ Representative. During such review period, the Surviving Corporation shall provide Sellers’ Representative with access to all books and records reasonably requested by Sellers’ Representative to review the Initial Closing Statement (including the calculation and preparation of the Closing StatementDate Cash, Closing Date Indebtedness, Closing Date Current Liabilities and Closing Date Seller Transaction Expenses), any work papers prepared by the StockholdersSurviving Corporation or its accountants, subject to the internal policies of the Surviving Corporation’s accountants, in connection with such calculations, and the Surviving Corporation shall make reasonably available its Representatives responsible for the preparation of the Initial Closing Statement in order to respond to the inquiries of Sellers’ Representative. If Sellers’ Representative will have forty five (45) calendar days to review the Closing Statement. Unless the Stockholders’ Representative delivers written notice (which notice shall include the items and amounts in dispute and supporting documentation related thereto; such notice, a “Seller Dispute Notice”) to Buyer setting forth the items disputed by the Stockholders’ Representative with respect thereto on or prior objects to the forty-fifth (45th) calendar day after the Stockholders’ Representative’s receipt contents of the Closing Statement, the Stockholders’ Representative will be deemed to have accepted and agreed to the Initial Closing Statement and such statement (and the calculations contained therein) will be finalfor any reason, binding and conclusive, absent manifest error or fraud. If the Stockholders’ Representative notifies Buyer of its objections to items contained in the Closing Statement (or calculations contained therein) within such forty five (45) calendar day period, Buyer and the StockholdersSellers’ Representative shall, during on or before the thirty (30) calendar days following delivery last day of such notice by 30-day period, so inform the StockholdersSurviving Corporation in writing (a “Sellers’ Representative to Buyer (or such longer period as they may mutually agree in writing) (the “Resolution PeriodObjection”), attempt in good faith to resolve their differences with respect setting forth a specific description of the basis of its determination and the adjustments to the disputed items (or calculations) such notice (the “Disputed Items”), and all other items (and all calculations relating thereto) will be final, binding and conclusive, absent manifest error or fraud. Any resolution by Buyer and the StockholdersInitial Closing Statement that Sellers’ Representative during believes should be made. To the Resolution Period as extent any disagreement therewith is not described in a Sellers’ Objection received by Surviving Corporation on or before the last day of such 30-day period, then the items described in the Initial Closing Statement delivered by the Surviving Corporation to any Disputed Item Sellers’ Representative shall be set forth in writing deemed agreed, final and will be final, binding and conclusive, absent manifest error or fraudon the parties.
(c) If Buyer Sellers’ Representative timely delivers a Sellers’ Objection to the Surviving Corporation, and Sellers’ Representative and the Surviving Corporation are unable to resolve all of their disagreements with respect to the proposed adjustments set forth in the Sellers’ Objection within thirty (30) days following the Surviving Corporation’s receipt of the Sellers’ Objection, then they shall jointly retain the CPA Firm, which, acting as an expert and not as an arbitrator, shall determine, on the basis set forth herein and in accordance with this Section 1.10, and only with respect to those items specifically described in the Sellers’ Objection on which the Surviving Corporation and Sellers’ Representative have not agreed, whether and to what extent, if any, the Merger Consideration requires adjustment. The Surviving Corporation and Sellers’ Representative shall instruct the CPA Firm to deliver its written determination to the Surviving Corporation and Sellers’ Representative no later than 30 days after submitting the matter to it for resolution. At the time of retention of the CPA Firm, the Surviving Corporation shall specify in writing to the CPA Firm and Sellers’ Representative the amount of the Surviving Corporation’s computation of the Merger Consideration (the “Surviving Corporation’s Position”), and Sellers’ Representative shall specify in writing to the CPA Firm and to the Surviving Corporation the amount of its computation of the Merger Consideration (the “Sellers’ Position”). The CPA Firm’s determination shall be conclusive and binding upon the Surviving Corporation and the Stockholders’ Representative do not resolve all Disputed Items by the end of the Resolution Period, then all Disputed Items remaining in dispute will be submitted to the Neutral Arbitrator. The Neutral Arbitrator shall act as an arbitrator to determine only those Disputed Items remaining in dispute, consistent with this Section 2.11, and shall request a statement from Buyer and the Stockholders’ Representative regarding such Disputed Items. The scope of the disputes to be arbitrated by the Neutral Arbitrator is limited to those items absent fraud or calculations specifically in dispute between Buyer and the Stockholders’ Representative; and the Neutral Arbitrator is not to make any other determinationmanifest error. In resolving each Disputed Itemany disputed item, the Neutral Arbitrator shall be bound by the principles set forth in this Section 2.11 and CPA Firm may not assign a value to any Disputed Item disputed item that is greater than the greatest value for such Disputed Item claimed by any party the Surviving Corporation or Sellers’ Representative at the time the CPA Firm is retained or less than the lowest smallest value claimed for the item by the Surviving Corporation or Sellers’ Representative at such Disputed Item claimed by any partytime. The parties further agree that scope of the adjustment contemplated dispute(s) to be resolved by this Section 2.11 the CPA Firm is intended limited to show whether the change between the Estimated Net Working Capital calculation of Closing Date Cash, Closing Date Indebtedness, Closing Date Current Liabilities and the Final Net Working Capital, the change between the Estimated Net Funded Indebtedness and the Final Net Funded Indebtedness and the change between Estimated Closing Date Seller Transaction Related Expenses and Final Transaction Related Expenses, and that such changes can only be measured if each calculation is were done in a manner consistent with the Accounting Principles provisions and definitions of this Agreement and mathematically accurate, and the definitions thereofCPA Firm is not to make any other determination unless jointly requested in writing by Sellers’ Representative and the Surviving Corporation. All The fees and expenses relating to the work, if any, to be performed by the Neutral Arbitrator will be allocated between Buyer and the Stockholders’ Representative (which, in the case disbursements of the Stockholders’ RepresentativeCPA Firm (collectively, the “Merger Consideration Dispute Expenses”) shall be payable borne by (i) Stockholders in that proportion equal to a fraction (expressed as a percentage) the Stockholdersnumerator of which is equal to Sellers’ Representative solely out of Position minus the Reserve Amount) in the same proportion that the aggregate amount of the Disputed Items so submitted to the Neutral Arbitrator that is unsuccessfully disputed by each such party (as finally Merger Consideration determined by the Neutral Arbitrator) bears to the total amount of such Disputed Items so submitted. The Neutral Arbitrator will deliver to Buyer CPA Firm, and the Stockholdersdenominator of which is equal to Sellers’ Representative Position minus Surviving Corporation’s Position and (ii) the Surviving Corporation in that proportion equal to a written determination fraction (such determination expressed as a percentage) equal to include a work sheet setting forth all material calculations used one (1) minus the fraction described in arriving at such determination clause (i). For example, if Sellers’ Position is that the Merger Consideration should be $150,000 and to the Surviving Corporation’s Position is that the Merger Consideration should be based solely on information provided to $100,000, the Neutral Arbitrator by CPA Firm determines that the Stockholders’ Representative Merger Consideration should be $130,000 and Buyerthe Merger Consideration Dispute Expenses are $10,000, then (i) the Stockholders shall pay $4,000 (40%) of the Disputed Items submitted Merger Consideration Dispute Expenses and (ii) the Surviving Corporation shall pay $6,000 (60%) of the Merger Consideration Dispute Expenses. The Surviving Corporation, the Company and Sellers’ Representative shall cooperate with the CPA Firm during its resolution of the disagreement and make readily available to the Neutral Arbitrator within thirty CPA Firm all relevant personnel and Representatives, books and records and any work papers (30) calendar days including those of receipt of such Disputed Items, which determination will be final, binding and conclusive, absent manifest error or fraud. The final, binding and conclusive Closing Statement based either upon agreement by the parties’ respective accountants, or deemed agreement by Buyer and the Stockholders’ Representative in accordance with this Section 2.11, or the written determination delivered by the Neutral Arbitrator in accordance with this Section 2.11(c) will be the “Conclusive Closing Statement.” If any party fails to submit a statement regarding any Disputed Item submitted to the Neutral Arbitrator within the time determined by the Neutral Arbitrator or otherwise fails to give the Neutral Arbitrator access as reasonably requested, then the Neutral Arbitrator shall render a decision based solely on the evidence timely submitted and the access afforded to the Neutral Arbitrator by the other party. Except in instances involving fraud or except as may arise out of the representations and warranties under Article III and Article IV and in such instances only to the extent permitted by such accountants) relating to amounts set forth in this Agreement, neither any Stockholder, holder of Company Stock Options or the Stockholder Representative shall have any liability with respect to Funded Indebtedness, Initial Closing Date Funded Indebtedness, Transactions Related Expenses, or current assets or current liabilities (including as to accounts receivable Statement and Sellers’ Objection and all other items reasonably requested by the collectability thereof) or any other component of Net Working Capital except as determined CPA Firm in this Section 2.11connection therewith.
(d) Within two The Initial Closing Statement including the Closing Date Cash, Closing Date Indebtedness, Closing Date Current Liabilities and Closing Date Seller Transaction Expenses, as agreed to (2) Business Days after the Final Amounts or deemed to have been determined in accordance with this Section 2.11:
(iagreed to) if the Aggregate Common Equity Amount is greater than the Final Payment Amount, then the Stockholders’ Representative and Buyer shall instruct the Escrow Agent to pay to the Surviving Corporation, using first the funds in the Merger Consideration Escrow Account and, to the extent the funds in the Merger Consideration Escrow Account are not sufficient to satisfy such payment in full, then out of the funds in the General Escrow Account, an amount in cash equal to the amount by which the Aggregate Common Equity Amount is greater than the Final Payment Amount (as defined below); and
(ii) if the Aggregate Common Equity Amount is less than the Final Payment Amount (as defined below), Buyer shall pay, or cause between the Surviving Corporation to pay, to the Stockholdersand Sellers’ Representative (for further pro rata distribution to or as determined by the Fully Diluted Common Holders) an amount in cash equal to CPA Firm, as applicable, shall be conclusive and binding on all of the amount by which the Aggregate Common Equity Amount is less than the Final Payment Amount by wire transfer of immediately available funds (the amount payable to Buyer pursuant to Section 2.11(d)(i) parties hereto and the amount payable to the Stockholders’ Representative pursuant to this Section 2.11(d)(ii) are referred to herein as shall be deemed the “Merger Consideration Adjustment AmountActual Cash”); provided that any portion of any amount payable under this Section 2.11(d)(ii) that is a Compensatory Payment shall not be paid to the Stockholders’ Representative but shall instead be paid by the Surviving Corporation (or a Subsidiary of the Surviving Corporation) through its payroll system , “Actual Indebtedness”, “Actual Current Liabilities” and in accordance with the Surviving Corporation’s (or such Subsidiary’s) standard withholding and payroll practices and procedures to the Person identified in writing by the Stockholders’ Representative as the Person to whom such Compensatory Payment is to be made. Any payment by Buyer“Actual Seller Transaction Expenses”, the Surviving Corporation or the Stockholders’ Representative (pursuant to the distribution of funds from the Merger Consideration Escrow Account or the General Escrow Account)respectively, as the case may be, pursuant to this Section 2.11 will be treated as an adjustment to the Merger Consideration for tax purposes. For all purposes of this Section 2.11:herein.
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Sources: Merger Agreement (Opko Health, Inc.)