Common use of Post-Completion Adjustment Clause in Contracts

Post-Completion Adjustment. 6.1 The Purchase Price shall be determined following Completion in accordance with this Clause 6 (Post-Completion Adjustment). The Purchase Price shall be equal to the Estimated Purchase Price plus any additional payments required to be made by the Purchaser pursuant to Clauses 6.7.1, 6.7.3 and 6.7.6, and minus any payments or repayments required to be made by the Seller pursuant to Clauses 6.7.2, 6.7.4 and 6.7.5. 6.2 The Seller shall, as soon as practicable following the Completion Date but in any event no later than thirty (30) Business Days following the Completion Date, prepare: 6.2.1 a draft of the Inventory Statement to be prepared in the form set out in Part I (Pro Forma Inventory Statement) of Schedule 11 (Pro Forma Statements) based on the volume and description of EDS Inventory as recorded as part of the Stock Take and otherwise in accordance with the Accounting Principles (the “Draft Inventory Statement”); 6.2.2 a draft of the Net Receivables Statement to be prepared in the form set out in Part III (Pro Forma Net Receivables Items Statement) of Schedule 11 (Pro Forma Statements) and in accordance with the Accounting Principles (the “Draft Net Receivables Statement”); 6.2.3 a draft of the Debt-Like Items Statement to be prepared in the form set out in Part V (Pro Forma Debt-Like Items Statement) of Schedule 11 (Pro Forma Statements) and in accordance with the Accounting Principles (the “Draft Debt-Like Items Statement”); 6.2.4 a draft of the Net Intercompany Statement to be prepared in the form set out in Part II (Pro Forma Net Intercompany Statement) of Schedule 11 (Pro Forma Statements) and in accordance with the Accounting Principles (the “Draft Net Intercompany Statement”); 6.2.5 a draft of the Working Capital Statement to be prepared in the form set out in Part IV (Pro Forma Working Capital Statement) of Schedule 11 (Pro Forma Statements) and in accordance with the Accounting Principles (the “Draft Working Capital Statement”); and 6.2.6 a draft statement prepared in the form set out in Part VI (Pro Forma Purchase Price Statement) of Schedule 11 (Pro Forma Statements) showing the bridge from the Enterprise Value to the Estimated Purchase Price to the Purchase Price (the “Draft Purchase Price Statement” and, together with the Draft Inventory Statement, the Draft Debt-Like Items Statement, the Draft Net Receivables Statement, the Draft Net Intercompany Statement and the Draft Working Capital Statement, the “Draft Statements”), and deliver the Draft Statements, all relevant calculations, analysis and other working papers to the Purchaser. In order to enable the preparation and determination of these documents, the Purchaser shall, and shall procure that the relevant members of the Purchaser’s Group shall, ensure that all Books and Records relating to the EDS Business are kept up-to-date and shall provide to the Seller and its Representatives such reasonable access to the Books and Records of each of the EDS Entities and relevant personnel (including the accountants or other service providers of each of the EDS Entities) as the Seller or its Representatives shall reasonably require, within working hours at the place where such Books and Records and the relevant personnel are located and without disruption to the EDS Business, and shall generally cooperate with the Seller’s Representatives with regard to the preparation and determination of the Draft Statements. 6.3 The Draft Statements will be subject to review by or on behalf of the Purchaser. Within thirty (30) Business Days after the Purchaser has received the Draft Statements, the Purchaser will notify the Seller in writing whether, based on such review, it has any objections to the Draft Statements (the “Objections Statement”). For each item disputed, the Objections Statement must include reasonable details of the specific items that are not accepted, the original amounts for these, the adjustment, as well as the adjusted amount according to the Purchaser, all summarised and presented in similar formats as the relevant Draft Statement to which it relates. The Purchaser shall not propose adjustments to any line items in any of the Draft Statements to the extent that such adjustments involve a judgment as to the future earnings potential, prospects or feasibility of the EDS Business or other aspects of a forward-looking nature, provided that such judgment is consistent with past practice in determining the relevant line items in the relevant Draft Statements. 6.4 If the Purchaser does not deliver an Objections Statement in accordance with Clause 6.3, the Draft Inventory Statement shall become the Inventory Statement, the Draft Debt-Like Items Statement shall become the Debt-Like Items Statement, the Draft Net Receivables Statement shall become the Net Receivables Statement, the Draft Net Intercompany Statement shall become the Net Intercompany Statement, the Draft Working Capital Statement shall become the Working Capital Statement and the Draft Purchase Price Statement shall become the Purchase Price Statement and each shall be final and binding on the Purchaser and the Seller for the purposes of this Agreement. 6.5 If the Purchaser delivers an Objections Statement in accordance with Clause 6.3, then the Seller shall have fifteen (15) Business Days from its receipt of the Objections Statement to review and respond to the Objections Statement, and: 6.5.1 the Seller may, at its election, designate all or part of the line items in the Draft Statements that are not included in the Objections Statement as final and binding on the Parties for all purposes; 6.5.2 the Seller and the Purchaser shall negotiate in good faith with a view to resolving the issues in dispute and accordingly to agree on each Draft Statement within forty-five (45) Business Days following receipt of the Objections Statement. If the Purchaser and the Seller reach agreement on each Draft Statement within such forty-five (45) Business Day period, the Draft Statements (as adjusted in accordance with the agreement so reached) shall become the Inventory Statement, the Debt-Like Items Statement, the Net Receivables Statement, the Net Intercompany Statement, the Working Capital Statement or the Purchase Price Statement, as the case may be, and shall be final and binding on the Purchaser and the Seller for the purposes of this Agreement; and 6.5.3 no adjustment with respect to any line item included in the Draft Statements shall be made unless (i) the aggregate adjustment amount for all items in such Draft Statement agreed or resolved in accordance with this Agreement exceeds EUR 50,000 (fifty thousand euros), and (ii) the aggregate net adjustment amount for all Draft Statements exceeds EUR 250,000 (two hundred and fifty thousand euros), in which case the aggregate net adjustment amount, and not just the excess over EUR 250,000 (two hundred and fifty thousand euros), shall be adjusted. 6.6 If the Purchaser and the Seller do not reach agreement on the Draft Statements within such forty-five (45) Business Day period, then any Party may refer the matters still in dispute (but not, for the avoidance of doubt, any other matters which have been agreed in writing between the Seller and the Purchaser) to PricewaterhouseCoopers, failing which an internationally reputable accountancy firm independent from the Parties and appointed upon application of either the Seller or the Purchaser by the President for the time being of the Institute of Chartered Accountants of England and Wales who in making such determination shall act as expert (the “Expert”). Each of the Parties shall instruct the Expert as soon as reasonably practicable (as an expert and not as an arbitrator) to determine the matters still in dispute (but not, for the avoidance of doubt, any other matters which have been agreed in writing between the Seller and the Purchaser) on the Draft Statements as soon as reasonably practicable, by applying the basis on which the pro forma statements set out in Schedule 11 (Pro Forma Statements) were drawn up and the Accounting Principles and taking into account the arrangements among the Parties in this Agreement, and to notify the Purchaser and the Seller of its determination in writing. For such purpose, each of Seller and the Purchaser shall provide to the Expert reasonable access to such documents, Books and Records and relevant personnel of the Seller’s Group or Purchaser’s Group (as the case may be) as the Expert shall reasonably request. The fees, costs and expenses of the Expert shall be allocated to and borne by the Purchaser and the Seller based on the inverse percentage that the Expert’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Expert (for example, should the items in dispute total in amount to US$1,000 and the Expert awards US$600 in favour of the Seller’s position, 60% of the costs of its review would be borne by the Purchaser and 40% of the costs would be borne by the Seller). The Draft Inventory Statement (as adjusted in accordance with the determination of the Expert and any other agreements in writing previously reached between the Seller and the Purchaser) shall become the Inventory Statement, the Draft Debt-Like Items Statement (as adjusted in accordance with the determination of the Expert and any other agreements in writing previously agreed between the Seller and the Purchaser) shall become the Debt-Like Items Statement, the Draft Net Intercompany Statement (as adjusted in accordance with the determination of the Expert and any other agreements in writing previously reached between the Seller and the Purchaser) shall become the Net Intercompany Statement, the Draft Working Capital Statement (as adjusted in accordance with the determination of the Expert and any other agreements in writing previously reached between the Seller and the Purchaser) shall become the Working Capital Statement and the Draft Purchase Price Statement (as adjusted in accordance with the determination of the Expert and any other agreements in writing previously reached between the Seller and the Purchaser) shall become the Purchase Price Statement and each shall be final and binding on the Purchaser and the Seller for the purposes hereof. 6.7 Within five (5) Business Days following the agreement or determination of the Inventory Statement, the Debt-Like Items Statement, the Working Capital Statement and the Purchase Price Statement pursuant to this Clause 6 (Post-Completion Adjustment): 6.7.1 if the Completion Inventory Amount exceeds the Estimated Inventory Amount, the Purchaser shall pay to the Seller an amount equal to the aggregate amount of such excess; 6.7.2 if the Completion Inventory Amount is less than the Estimated Inventory Amount, the Seller shall pay to the Purchaser an amount equal to the aggregate amount of such shortfall; 6.7.3 if the Completion Debt-Like Items Amount (expressed as an absolute value) exceeds the Estimated Debt-Like Items Amount (expressed as an absolute value), the Purchaser shall pay to the Seller an amount equal to the aggregate amount of such excess; 6.7.4 if the Completion Debt-Like Items Amount (expressed as an absolute value) is less than the Estimated Debt-Like Items Amount (expressed as an absolute value), the Seller shall pay to the Purchaser an amount equal to the aggregate amount of such shortfall; 6.7.5 if the Completion Working Capital Amount is a higher number than the Estimated Working Capital Amount, the Purchaser shall pay to the Seller an amount equal to the difference between the Estimated Working Capital Amount and the Completion Working Capital Amount; 6.7.6 if the Completion Working Capital Amount is a lower number than the Estimated Working Capital Amount, the Seller shall pay to the Purchaser an amount equal to the difference between the Completion Working Capital Amount and the Estimated Working Capital Amount, in each case by electronic transfer for same-day value and in cleared funds, in US Dollars, in accordance with Clause 6.10. To the extent applicable, the payments to be made pursuant to this Clause 6.7 shall be aggregated and discharged by way of set-off against each other, but not against any other claims or payments. 6.8 Within five (5) Business Days following the agreement or determination of the Net Intercompany Statement pursuant to this Clause 6 (Post-Completion Adjustment): 6.8.1 with respect to the settlement of the Net Intercompany Amount: (a) the Seller shall procure that each member of the Seller’s Group shall settle the aggregate Intercompany Credit Amount, as it appears in the Net Intercompany Statement, due by them to any of the EDS Entities as at the Completion Date such that the full Intercompany Credit Amount is settled; and (b) the Purchaser shall procure that each of the EDS Entities settles the aggregate Intercompany Debt Amount, as it appears in the Net Intercompany Statement, due by the relevant EDS Entity to the relevant members of the Seller’s Group as at the Completion Date such that the full Intercompany Debt Amount is settled; 6.8.2 with respect to the Purchase Price: (a) if the Net Intercompany Amount as it appears in the Net Intercompany Statement is a net payment by the EDS Entities to the members of the Seller’s Group, the Seller shall pay to the Purchaser an amount equal to the Net Intercompany Amount; and (b) if the Net Intercompany Amount as it appears in the Net Intercompany Statement is a net receivable by the EDS Entities from the members of the Seller’s Group, the Purchaser shall pay to the Seller an amount equal to the Net Intercompany Amount, and the Purchase Price shall be deemed to be adjusted accordingly; 6.8.3 with respect to the Transferring Intercompany Receivables: (a) if the amount of the Transferring Intercompany Receivables as it appears in the Net Intercompany Statement exceeds the estimated amount of the Transferring Intercompany Receivables as it appears in the Estimated Net Intercompany Statement, the amount of the Transferring Intercompany Receivables as set forth in Schedule 9 (Purchase Price Allocation) shall be deemed to be increased by an amount equal to the aggregate amount of any such excess; or (b) if the amount of the Transferring Intercompany Receivables as it appears in the Net Intercompany Statement is less than the estimated amount of the Transferring Intercompany Receivables as it appears in the Estimated Net Intercompany Statement, the amount of the Transferring Intercompany Receivables as set forth in Schedule 9 (Purchase Price Allocation) shall be deemed to be reduced by an amount equal to the aggregate amount of any such shortfall, and the Purchase Price shall be deemed to be adjusted accordingly. For the avoidance of doubt, no payment in relation to the Transferring Intercompany Receivables shall be made by either Party. 6.9 Any payment obligations under Clauses 6.7 and 6.8 shall, to the extent possible, be discharged by way of set-off (or netting) against other payment obligations referred to in Clauses 6.7 and 6.8 (but not against any other payment obligations). 6.10 The Seller hereby instructs the Purchaser, and the Purchaser agrees to pay, the amount due to the Seller (if any) in accordance with Clauses 6.7 and/or 6.8 directly into the Seller’s Nominated Account. The Purchaser hereby instructs the Seller, and the Seller agrees to pay, the amount due to it (if any) in accordance with Clauses 6.7 and/or 6.8 directly to the Purchaser’s Nominated Account.