Closing Purchase Price (a) The closing (the “Closing”) of the purchase and sale of the Transferred Assets and the assumption of the Assumed Liabilities shall be held at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, at 6:00 a.m., San Francisco time on the third business day after and excluding the date on which the conditions to Closing set forth in Article VIII hereof (other than those conditions which by their nature are to be satisfied concurrently with the Closing) shall have been satisfied or waived or at such other place, time and date as agreed in writing by Purchaser and the Seller. The date on which the Closing shall occur is hereinafter referred to as the “Closing Date.” The Closing shall be deemed to occur as of the close of business on the Closing Date.
(b) In consideration of the transfer of the Transferred Assets to Purchaser, and in reliance on the representations and warranties of Seller and the Canadian Subsidiary contained in this Agreement, at the Closing, Purchaser shall (i) pay Seller and the Canadian Subsidiary the aggregate amount of Eighty-Two Million Dollars ($82,000,000), which amount shall be adjusted as provided in this Section 2.4, Section 2.8 and Section 2.12(a), in cash (the “Cash Consideration”) by wire transfer of immediately available funds to an account or accounts designated in writing by Seller no later than one business day prior to Closing and (ii) assume the Assumed Liabilities.
(c) All expenses and other liabilities arising from the North America Business up until the close of business on the Closing Date, including assessments levied against the Transferred Assets, salesperson advances, property and equipment rentals, amounts owing under the Canadian Lease, sales taxes, applicable copyright or other fees, sales and service charges, and similar prepaid and deferred items shall be prorated between Purchaser, on the one hand, and Seller and the Canadian Subsidiary, on the other hand, in accordance with the principle that Seller and its Affiliates shall be responsible for all expenses, costs and liabilities allocable to the conduct of the North America Business for the period prior to the close of business on the Closing Date, and Purchaser shall be responsible for all expenses, costs and liabilities allocable to the conduct of the North America Business for the period after the close of business on the Closing Date; provided that, Seller and its Affiliates shall be solely responsible for all intercompany accounts among Seller and its Affiliates. The Cash Consideration shall be increased or decreased as required to effectuate the foregoing proration of expenses and liabilities. This Section 2.4(c) is subject to the provisions of Sections 2.8, 2.9 and 2.12. A preliminary schedule of such allocation, calculated in accordance with the foregoing as though the Closing had taken place on November 30, 2004, is attached hereto as Schedule 2.4(c).
(d) The Cash Consideration shall be decreased by an amount equal to (i) any customer payments and deposits received by Seller or the Canadian Subsidiary prior to the close of business on the Closing Date but attributable to products or services to be provided by Purchaser after the close of business on the Closing Date (including any interest owing thereon), (ii) any other advance payments or deposits, to the extent any of the foregoing payments or deposits are attributable to products or services to be provided after the close of business on the Closing Date and (iii) the cost of all accrued vacation for Transferred Employees, as reflected on Section 4.12 of the Seller Disclosure Letter, as updated as of the Closing Date pursuant to Section 7.3 of this Agreement. A preliminary schedule of all such payments, deposits and accrued vacation, calculated in accordance with the foregoing as though the Closing had taken place on November 30, 2004, is attached hereto as Schedule 2.4(d).
(e) At least 10 business days prior to the Closing, Seller will deliver to Purchaser a report with respect to the North America Business (the “Preliminary Report”), certified as to completeness and accuracy by Seller, showing in detail the preliminary determination of the adjustments referred to in Sections 2.4(c), 2.4(d), 2.8 and 2.12(a), which are calculated in accordance with such Section as of the Closing Date, together with any documents substantiating the determination of the adjustments to the Cash Consideration proposed in the Preliminary Report. The parties shall negotiate in good faith to resolve any dispute and to reach an agreement prior to the Closing Date on such preliminary adjustments to the Cash Consideration as of the Closing Date (provided that, in the absence of such agreement prior to the Closing Date, the Preliminary Report shall be used for determining any adjustments to the Cash Consideration at Closing) or thereafter in accordance with Section 2.4(f) below. The adjustments shown in the Preliminary Report, as adjusted by agreement of the parties, will be reflected as an adjustment to the Cash Consideration payable at the Closing.
(f) Within 90 days after the Closing Date, Purchaser shall deliver to Seller a report with respect to the North America Business (the “Final Report”), showing in detail the final determination of any adjustments which were not calculated as of the Closing Date and containing any corrections to the Preliminary Report, together with any documents substantiating the final calculation of the adjustments proposed in the Final Report. If Seller shall conclude that the Final Report does not accurately reflect the adjustments and prorations to be made to the Cash Consideration in accordance with this Section 2.4, Seller shall, within 30 days after its receipt of the Final Report, provide to Purchaser its written statement of any discrepancies believed to exist. Purchaser and Seller shall use good faith efforts to jointly resolve the discrepancies within 30 days of Purchaser’s receipt of Seller’s written statement of discrepancies, which resolution, if achieved, shall be binding upon all parties to this Agreement and not subject to dispute or judicial review. If Purchaser and Seller cannot resolve the discrepancies to their mutual satisfaction within such 30-day period, Purchaser and Seller shall, within the following 10 days, jointly designate a national independent public accounting firm to be retained to review the Final Report together with Seller’s discrepancy statement and any other relevant documents. The parties agree that the foregoing independent public accounting firm shall not be one that is regularly engaged by Purchaser or Seller. Such firm shall report its conclusions as to adjustments pursuant to this Section 2.4, which shall be conclusive on all parties to this Agreement and not subject to dispute or judicial review. The conclusion of such firm with respect to each discrepancy shall be within the range established for such item by the Final Report and Seller’s discrepancy statement. If Purchaser or Seller is determined to owe an amount to the other, the appropriate party shall pay such amount thereof to the other within three business days after receipt of such determination. The cost of retaining such independent public accounting firm shall be borne equally by the parties.
Asset Purchase Price (a) All Assets and assets of the Failed Bank subject to an option to purchase by the Assuming Institution shall be purchased for the amount, or the amount resulting from the method specified for determining the amount, as specified on Schedule 3.2, except as otherwise may be provided herein. Any Asset, asset of the Failed Bank subject to an option to purchase or other asset purchased for which no purchase price is specified on Schedule 3.2 or otherwise herein shall be purchased at its Book Value. Loans or other assets charged off the Accounting Records of the Failed Bank before the Bid Valuation Date shall be purchased at a price of zero.
(b) The purchase price for securities (other than the capital stock of any Acquired Subsidiary, Shared-Loss Securities, FRB and FHLB stock) purchased under Section 3.1 by the Assuming Institution shall be the market value thereof as of Bank Closing, which market value shall be (i) the market price for each such security quoted at the close of the trading day effective on Bank Closing as published electronically by Bloomberg, L.P., or alternatively, at the discretion of the Receiver, IDC/Financial Times (FT) Interactive Data; (ii) provided, that if such market price is not available for any such security, the Assuming Institution will submit a bid for each such security within three days of notification/bid request by the Receiver (unless a different time period is agreed to by the Assuming Institution and the Receiver) and the Receiver, in its sole discretion will accept or reject each such bid; and (iii) further provided in the absence of an acceptable bid from the Assuming Institution, each such security shall not pass to the Assuming Institution and shall be deemed to be an excluded asset hereunder.
(c) Qualified Financial Contracts shall be purchased at market value determined in accordance with the terms of Exhibit 3.2(c). Any costs associated with such valuation shall be shared equally by the Receiver and the Assuming Institution.
Post-Closing Purchase Price Adjustment 1.9.1 Within ninety (90) days following the Closing Date, Seller shall prepare, or cause to be prepared, and deliver to Purchaser a statement (the “Closing Net Working Capital Statement”) which shall set forth the Net Working Capital of the Newsprint Business and of Apache as of the Closing Time (which shall be set forth separately for each of the Newsprint Business and Apache, but as aggregated shall be referred to as the “Closing Net Working Capital”) and shall be prepared in accordance with Seller’s past accounting methods, policies, practices and procedures and in the same manner, with consistent classification and estimation methodology, as the Financial Statements were prepared, except that the Excluded Assets and the Newsprint Retained Obligations shall be excluded. The Closing Net Working Capital Statement may not be amended by Seller after it is delivered to Purchaser.
1.9.2 Purchaser shall, within thirty (30) days after the delivery of the Closing Net Working Capital Statement to it, complete its review of the Closing Net Working Capital reflected on the Closing Net Working Capital Statement. If Purchaser wishes to dispute the Closing Net Working Capital, Purchaser shall notify Seller in writing in reasonable detail of such disagreement and any reason therefore (“Purchaser’s Objection”), setting forth a specific description of the basis of Purchaser’s Objection and the adjustments to the Closing Net Working Capital that Purchaser believes should be made, on or before the last day of such thirty (30) day period, which Purchaser’s Objection may not be amended by Purchaser after it is delivered to Seller (except to withdraw any such Purchaser’s Objection). Any items on the Closing Net Working Capital Statements not disputed in Purchaser’s Objection shall be irrevocably deemed to be accepted by Purchaser. Seller shall then have thirty (30) days to review and respond to Purchaser’s Objection. If Seller and Purchaser are unable to resolve all of their disagreements with respect to the determination of the foregoing items within thirty (30) days following Seller’s receipt of Purchaser’s Objection (the “Negotiation Period”), they shall refer their remaining differences to a mutually agreeable independent accounting firm of national recognition (other than an independent accounting firm utilized by any of Seller, Apache or Purchaser or any Affiliate of any of the foregoing within the past three (3) years) acceptable to both Seller and Purchaser or if Seller and Purchaser are unable to agree as to such third party accounting firm within ten (10) days after the conclusion of the Negotiation Period, either Seller or Purchaser may request that the Chairman of the American Arbitration Association (or the nominated representative of the Chairman) appoint a third party accounting firm meeting the aforementioned requirements to resolve the dispute (the accounting firm selected being referred to as the “CPA Firm”), who shall determine, only with respect to the remaining differences so submitted, whether and to what extent, if any, the Closing Net Working Capital requires adjustment. The procedure and schedule under which any dispute shall be submitted to the CPA Firm shall be as follows:
(a) Within ten (10) days after the later of (i) the end of the Negotiation Period and (ii) the selection of the CPA Firm, Purchaser shall submit any unresolved elements of the Purchaser’s Objection to the CPA Firm in writing (with a copy to Seller), supported by any documents and/or affidavits upon which it relies. Failure to timely do so shall constitute a withdrawal by Purchaser of the Purchaser’s Objection with respect to any unresolved element to which such failure relates.
(b) Within fifteen (15) days following Purchaser’s submission of the unresolved elements of the Purchaser’s Objection as specified in sub-clause (a) above, Seller shall submit its response to the CPA Firm in writing (with a copy to Purchaser), supported by any documents and/or affidavits upon which it relies. Failure to timely do so shall constitute an acceptance by Seller with respect to any unresolved elements to which such failure relates.
(c) The CPA Firm shall deliver its written determination to Purchaser and Seller no later than the thirtieth (30th) day after the remaining differences underlying Purchaser’s Objection are referred to the CPA Firm, or such longer period of time as the CPA Firm determines is necessary.
Additional Purchase Price Purchaser shall pay to the Sellers an additional amount determined as follows:
(i) Purchaser shall pay the Sellers in cash an aggregate amount (collectively, the “Earnout Payment”) equal to (i) the product of (x) 0.75 (the “Multiplier”) multiplied by (y) the Forward EBITDA plus (ii) the positive difference, if any, resulting from (x) the Forward EBITDA minus (y) the TTM Adjusted EBITDA, provided that if the Forward EBITDA is less than the TTM Adjusted EBITDA by $350,000 or more, the Multiplier shall be reduced from 0.75 to 0.5 and provided, further, if the Forward EBITDA exceeds the TTM Adjusted EBITDA by more than $350,000, then the Multiplier shall be increased from 0.75 to 1.0. No later than 45 days after the end of the Earnout Period, the Purchaser shall provide the Sellers with a detailed written calculation together with all supporting documentation that the Sellers may reasonably request, including but not limited to billing invoices, employee time records and salary records and Purchase Orders, of the Forward EBITDA for the Earnout Period (“Purchaser’s Earnout Calculation”).
(ii) The Purchaser’ Earnout Calculation shall be prepared in consultation with the Purchaser’s independent auditors. Subject to Section 11.6, Purchaser shall pay to Sellers an aggregate amount of cash equal to the Earnout Payment set forth on Purchaser’s Earnout Calculation within the later of (A) 60 days of the delivery of Purchaser’s Earnout Calculation or (B) the resolution of any dispute related thereto pursuant to this Section 2.3(b).
(iii) If either Active Shareholder objects to Purchaser’s Earnout Calculation, he shall deliver a written notice to Purchaser to such effect no later than 5:00 p.m. Eastern Time on the tenth (10th) day following delivery of Purchaser’s Earnout Calculation (such notice, an “Earnout Disagreement Notice”) accompanied by (A) supporting documents, work papers, and other data setting forth in reasonable detail the basis for such Active Shareholder’s disagreement with Purchaser’s Earnout Calculation and (B) a certificate signed by such Active Shareholder certifying that the Earnout Disagreement Notice was delivered in accordance with this Section 2.3(b). Failure of the Active Shareholders to deliver a Disagreement Notice by such date and time shall be deemed to constitute final and conclusive acceptance of all parties hereto of the Earnout Payment set forth in Purchaser’s Earnout Calculation for purposes of this Agreement
(iv) If an Active Shareholder timely provides an Earnout Disagreement Notice, the Purchaser and Active Shareholders shall attempt to resolve such disagreement in good faith through discussions and negotiations for a period of at least thirty (30) days. Following the expiration of such thirty (30) day period, either Purchaser or either Active Shareholder may submit the matter to a mutually-agreeable accounting firm as designated arbitrator, for final resolution. The amount of the Earnout Payment determined by such arbitrator shall be final and binding on all parties hereto.
(v) In connection with the Earnout Payment, at the Closing, Purchaser shall issue an aggregate of 2,000 shares of Series G Preferred Stock of Purchaser (the “Preferred Stock”) with terms and conditions as set forth in a Certificate of Designation (the “Certificate of Designation”) substantially in the form of Exhibit B hereto (such shares of Preferred Stock, the “Earnout Shares”). Sellers agree that that, as and when Purchaser makes any payment required by this Section 2.3(b), a number of Earnout Shares equal to (A) the amount of such payment divided by (B) $1,000 (with any resulting fractional shares calculated to the nearest three decimal places) shall be automatically cancelled without further action. In the event of any such cancellation, Sellers agree to promptly return any certificate(s) representing Earnout Shares to be marked as “cancelled” (and if less than all Earnout Shares were cancelled, reissuance for the balance of the Earnout Shares that remain outstanding). If the Earnout Payment, as finally determined, is less than $2,000,000, any outstanding Working Capital Shares shall be cancelled upon such final determination. In the event of any redemption of Earnout Shares, the amount of the Earnout Payment owed by Purchaser pursuant to this Agreement shall be reduced by the amount of such redemption. In the event of any conversion of Earnout Shares into shares of Purchaser’s Common Stock, the amount of the Earnout Payment owed by Purchaser pursuant to this Agreement shall be reduced by the fair market value of the shares into which such Earnout Shares were converted (with the fair market value deemed to be as the lowest closing trading price for the thirty days following conversion).
Base Purchase Price Buyer agrees to pay for the Assets the total sum of Thirty Million and No/100 Dollars ($30,000,000.00) (“Base Purchase Price”) to be paid by direct bank deposit or wire transfer in same day funds at the Closing, subject only to the price adjustments set forth in this Agreement.