Adjustment Procedure. (a) Seller will prepare and shall cause Waters & Xxxxxx ("W&M"), Seller's independent certified public accountants, to audit the financial statements (the "Closing Financial Statements") of Seller as of June 30, 1997, which Closing Financial Statements shall contain an audited balance sheet (the "Closing Balance Sheet") at June 30, 1997, audited statements of income and retained earnings, and cash flows for the period from the date of the Balance Sheet, as defined in Section 5.7, through June 30, 1997, all prepared in accordance with generally accepted accounting principles, and a separate computation of the Acquired Net Assets. Buyer's independent certified public accountants, Deloitte & Touche LLP ("D&T") and representatives of Buyer shall review the audit conducted by W&M. Seller and Shareholder will arrange for D&T's and Buyer's representatives to have full access to the W&M audit workpapers and files. Seller and Shareholder also agree that representatives of D&T and Buyer will be present to observe the physical inventory count taken by Seller and W&M prior to June 30, 1997. Seller shall deliver the Closing Financial Statements to Buyer and D&T within sixty (60) days after the Closing Date. If, within thirty (30) days following delivery to Buyer and D&T of the Closing Financial Statements, Buyer has not given Seller notice of its objection to the Closing Financial Statements (such notice, if given, must contain a statement of the basis of Buyer's objection), then the Closing Financial Statements, including, without limitation, the computation of the Acquired Net Assets, shall be deemed to have been finally determined for purposes of this Agreement, and the Acquired Net Assets as so determined will be used in computing the Adjustment Amount. If Buyer gives such notice of an objection, then the matters as to which Buyer has objected will be submitted to D&T and W&M (the "Accountants") for resolution, and the Accountants shall determine the Acquired Net Assets. If the Accountants are unable to agree as to the resolution of such matters and the Acquired Net Assets within thirty (30) days after such matters are submitted to the Accountants, the Accountants shall select another "Big Six" accounting firm (New York City or Dallas office) (the "Other Accountants") which will resolve such matters and determine the Acquired Net Assets. Each party will furnish to the Accountants (and, if applicable, the Other Accountants) such workpapers and other documents and information relating to the disputed matters as the Accountants or the Other Accountants may request and are available to that party (or its independent public accountants), and each party will be afforded the opportunity to present to the Accountants and the Other Accountants any material relating to such disputed issues and to discuss such issues with the Accountants and the Other Accountants. The resolution of such issues under this Section 2.3 (a) by the Accountants or Other Accountants, as the case may be, as set forth in a notice delivered to both parties by the Accountants or Other Accountants shall be deemed to be a final determination thereof for purposes of this Agreement, shall be binding and conclusive on the parties, and the Acquired Net Assets, as finally determined by the Accountants or Other Accountants, will be used in computing the Adjustment Amount. Buyer and Seller shall each bear one-half of the fees of the Other Accountants in connection with the resolution or attempted resolution of the disputed matters. (b) On the tenth business day following the final determination of the Acquired Net Assets, under Section 2.3(a), and the Adjustment Amount: (i) if the Purchase Price is greater than the sum of the Closing Cash Amount and the principal amount of the Promissory Note, Buyer shall pay the difference to Seller (up to Two Hundred Fifty Thousand Dollars ($250,000.00)) by wire transfer in immediately available funds (the "Additional Cash Payment"), together with simple interest, from July 1, 1997, to the date of payment, at the annual rate of six percent (6%), and if such difference exceeds Two Hundred Fifty Thousand Dollars ($250,000.00), the Promissory Note shall be amended by Seller and Buyer by adding such excess to the principal balance under the Promissory Note; or (ii) if the Purchase Price is less than the sum of the Closing Cash Amount and the principal amount of the Promissory Note, Seller shall pay (and Shareholder shall cause Seller to pay) (A) the difference to Buyer (up to Two Hundred Fifty Thousand Dollars ($250,000.00)) by wire transfer in immediately available funds, together with simple interest, from July 1, 1997, to the date of payment, at the annual rate of six percent (6%), and (B) if such difference exceeds Two Hundred Fifty Thousand Dollars ($250,000.00), the Promissory Note shall be amended by Seller and Buyer by reducing the principal balance of the Promissory Note by the amount of such excess (up to Two Hundred Fifty Thousand Dollars ($250,000.00)), and (C) Seller shall pay (and Shareholder shall cause Seller to pay) the remainder of such excess, if any, in the same manner as provided in Subparagraph (A) of this Section 2.3(b)(ii) above.
Appears in 1 contract
Adjustment Procedure. (a) Seller Sellers will prepare and shall or cause Waters & Xxxxxx ("W&M"), Seller's independent certified public accountants, to audit the be prepared consolidated financial statements (the "Closing Financial Statements") of Seller the Company as of June 30the Effective Date in accordance with GAAP for the period beginning January 1, 19972003 through the close of business on the day before the Effective Date, which including a computation of Net Book Value as of the Effective Date. The fees and expenses of Sellers (including the fees and expenses of Sellers' counsel, accountants, brokers, representatives and other agents), to the extent paid or to be paid by Company as permitted hereunder, shall be reflected either as a reduction in cash or as a liability in the Closing Financial Statements Statements, and no fees or expenses of Sellers shall contain be paid by the Company after the Closing that are not reflected as liabilities on the Closing Financial Statements. Sellers will deliver to Buyer within 35 days after the Effective Date (i) consolidated financial statements for the most recently completed fiscal year ending December 31, 2002 in an audited balance sheet SEC reporting format together with an unqualified audit opinion of the Sellers' accountants that the statements present fairly the financial condition and the results of operations, changes in stockholders' equity and cash flows of the Company for the period and have been prepared in accordance with GAAP applied on a consistent basis (the "2002 Audited Financial Statements"), and (ii) the Closing Balance Sheet") at June 30Financial Statements, 1997which financial statements will fairly present and reflect the financial condition and the results of operations, audited statements of income and retained earningschanges in stockholders' equity, and cash flows of the Company for the period from the date of the Balance Sheetthen ended, as defined in Section 5.7, through June 30, 1997, all prepared in accordance with generally accepted accounting principles, and GAAP applied on a separate computation of the Acquired Net Assetsconsistent basis. If within 30 days following Buyer's independent certified public accountants, Deloitte & Touche LLP ("D&T") and representatives of Buyer shall review the audit conducted by W&M. Seller and Shareholder will arrange for D&T's and Buyer's representatives to have full access to the W&M audit workpapers and files. Seller and Shareholder also agree that representatives of D&T and Buyer will be present to observe the physical inventory count taken by Seller and W&M prior to June 30, 1997. Seller shall deliver the Closing Financial Statements to Buyer and D&T within sixty (60) days after the Closing Date. If, within thirty (30) days following delivery to Buyer and D&T receipt of the Closing Financial Statements, Buyer has not given Seller the Sellers' Representative notice of its objection to the Closing Financial Statements (such notice, if given, notice must contain a statement of the basis of Buyer's objection), then the Net Book Value reflected in the Closing Financial Statements, including, without limitation, the computation of the Acquired Net Assets, Statements shall be deemed to have been finally determined complete and accurate, solely for purposes of this Agreementthe adjustment procedure set forth herein and for no other purpose, and the Acquired Net Assets as so determined will be used in computing the Adjustment Amount. If Buyer gives such notice of an objectionobjection and Buyer and the Seller's Representative cannot agree with regard to such objection within 14 days thereafter, then the matters as to which Buyer has objected issues in dispute will be submitted to D&T and W&M nationally recognized certified public accountants mutually agreed upon by the parties (which have not been engaged by either party or their respective subsidiaries or affiliates for at least two years prior to the date of delivery to Buyer of the Closing Financial Statements) (the "Independent Accountants") ), for resolution, and the Accountants shall determine the Acquired Net Assets. If the Accountants are unable to agree as to the resolution of such matters and the Acquired Net Assets within thirty (30) days after such matters issues in dispute are submitted to the AccountantsIndependent Accountants for resolution, the Accountants shall select another "Big Six" accounting firm (New York City or Dallas officei) (the "Other Accountants") which will resolve such matters and determine the Acquired Net Assets. Each within 15 business days after request, each party will furnish to the Independent Accountants (and, if applicable, the Other Accountants) such workpapers work papers and other documents and information relating to the disputed matters issues as the Accountants or the Other Independent Accountants may request and are available to that party (or its independent public accountants), and each party will be afforded the opportunity to present to and discuss with the Accountants and the Other Independent Accountants any material relating to such disputed issues and the dispute prior to discuss such issues with the Accountants and Independent Accountants' determination; (ii) the Other Accountants. The resolution of such issues under this Section 2.3 (a) determination by the Accountants or Other Independent Accountants, as the case may be, as set forth in a notice delivered to both parties Buyer and the Seller's Representative by the Accountants or Other Accountants shall be deemed to be a final determination thereof for purposes of this AgreementIndependent Accountants, shall will be binding and conclusive on Buyer and all Sellers in the parties, absence of manifest error; and (iii) the Acquired Net Assets, fees and disbursements of the Independent Accountants shall be allocated between Buyer and Sellers so that Buyer's share of such fees and disbursements shall be in the same proportion that the aggregate amount of the Adjustment Amount based on the disputed Closing Financial Statements that is unsuccessfully disputed by Buyer (as finally determined by the Accountants or Other Independent Accountants, will be used in computing ) bears to the total amount of such Adjustment Amount. Buyer and Seller shall each bear one-half of the fees of the Other Accountants in connection with the resolution or attempted resolution of the disputed matters.
(b) On By the tenth business day following the final determination of the Acquired Net Assets, under Section 2.3(a), and the Adjustment Amount:
(i) , if the Purchase Price (after consideration of the Adjustment Amount) is greater than the sum payment made pursuant to Section 2.4(b)(i) and 2.4(b)(ii), Buyer will pay the difference to Sellers, and if the Purchase Price (after consideration of the Closing Cash Amount Adjustment Amount) is less than such amount, Sellers will pay the difference to Buyer. All payments will be made together with interest at a rate equal to the rate on U.S. Treasury Bills with a maturity of three months, as reported in the Wall Street Journal for the Effective Date, beginning on the Effective Date and ending on the principal amount date of payment. Payments must be made in immediately available funds. The Purchase Price shall be the Purchase Price as adjusted by the Adjustment Amount. Payments to Sellers must be made in the manner set forth in Section 2.4(b)(i). Payments to Buyer must be made by wire transfer to such bank account as Buyer will specify. Any good faith dispute in the calculation of the Promissory NoteAdjustment Amount will not constitute a breach of any of the representations or warranties of either Buyer or Sellers hereunder and will not give either party any right to indemnification hereunder. Within thirty (30) days of Buyer's receipt from Sellers of an invoice of the Company's accountants, Buyer shall pay an additional amount to Sellers equal to the difference incremental cost required by the Company's accountants to Seller (up to Two Hundred Fifty prepare the 2002 Audited Financial Statements in accordance with SEC requirements; provided, that, in any event such payment shall not exceed Twenty Thousand Dollars ($250,000.0020,000.00)) by wire transfer in immediately available funds (the "Additional Cash Payment"), together with simple interest, from July 1, 1997, to the date of payment, at the annual rate of six percent (6%), and if such difference exceeds Two Hundred Fifty Thousand Dollars ($250,000.00), the Promissory Note shall be amended by Seller and Buyer by adding such excess to the principal balance under the Promissory Note; or
(ii) if the Purchase Price is less than the sum of the Closing Cash Amount and the principal amount of the Promissory Note, Seller shall pay (and Shareholder shall cause Seller to pay)
(A) the difference to Buyer (up to Two Hundred Fifty Thousand Dollars ($250,000.00)) by wire transfer in immediately available funds, together with simple interest, from July 1, 1997, to the date of payment, at the annual rate of six percent (6%), and (B) if such difference exceeds Two Hundred Fifty Thousand Dollars ($250,000.00), the Promissory Note shall be amended by Seller and Buyer by reducing the principal balance of the Promissory Note by the amount of such excess (up to Two Hundred Fifty Thousand Dollars ($250,000.00)), and (C) Seller shall pay (and Shareholder shall cause Seller to pay) the remainder of such excess, if any, in the same manner as provided in Subparagraph (A) of this Section 2.3(b)(ii) above.
Appears in 1 contract
Samples: Stock Purchase Agreement (Edo Corp)
Adjustment Procedure. (a) Seller Buyers at their expense will prepare and shall cause Waters & Xxxxxx ("W&M"), Seller's independent certified public accountants, to audit the financial statements (the "Closing Financial Statements") of Seller the Company as of June 30, 1997, which the Closing Financial Statements shall contain an audited balance sheet (the "Closing Balance Sheet") at June 30, 1997, audited statements of income Date and retained earnings, and cash flows for the period from the date of the April Balance Sheet through the Closing Date (the balance sheet as of the Closing Date, the "Closing Date Balance Sheet"), including a computation of consolidated stockholders' equity as defined in Section 5.7, through June 30, 1997, all of the Closing Date and a schedule setting forth a computation of the Purchase Price. The Closing Financial Statements will be prepared as of the close of business on the Closing Date without regard to the Contemplated Transaction. They will be prepared in accordance with generally accepted accounting principles, and GAAP applied on a separate computation basis consistent with the preparation of the Acquired Net Assets. Buyer's independent certified public accountantsAugust Balance Sheet; provided, Deloitte & Touche LLP however, that assets, liabilities, gains, losses, revenues and expenses in interim periods or as of dates other than year end ("D&T"which normally are determined through the application of so-called interim accounting conventions or procedures) and representatives of Buyer shall review the audit conducted by W&M. Seller and Shareholder will arrange for D&T's and Buyer's representatives to have full access to the W&M audit workpapers and files. Seller and Shareholder also agree that representatives of D&T and Buyer will be present to observe determined, for purposes of the physical inventory count taken by Seller and W&M prior to June Closing Date Financial Statements, through full application of the procedures used in preparing the most recent unaudited balance sheet of the Company included within the audited balance sheet as of April 30, 19971995 described in Section 3.4(a) hereto and the Closing Date Balance Sheet shall not include any asset or liability (including income taxes, which are the responsibility of Sellers) of the Company otherwise required to be presented which Sellers retain or are responsible for under the terms of this Agreement after the Closing. Seller shall Buyers will deliver the Closing Financial Statements to Buyer and D&T Seller within sixty (60) days after the Closing Date. If, If within thirty (30) days following delivery to Buyer and D&T of the Closing Financial Statements, Buyer has Sellers have not given Seller Buyers notice of its their objection to the Closing Financial Statements (such notice, if given, notice must contain a reasonably detailed statement of the basis of Buyer's Sellers' objection), then ) or at such earlier time as Sellers give to Buyers notice that they do not object to the Closing Financial Statements, including, without limitation, then the computation of consolidated stockholders' equity reflected in the Acquired Net Assets, shall be deemed to have been finally determined for purposes of this Agreement, and the Acquired Net Assets as so determined Closing Financial Statements will be used in computing the Adjustment Amount. If Buyer gives Sellers give such notice of an objection, the Buyers and the Sellers will use reasonable efforts to resolve any such objections themselves. If the Buyers and the Sellers do not obtain a final resolution within 30 days, then the matters as to which Buyer has objected issues in dispute will be submitted within two (2) business days to D&T and W&M the Kansas City, Missouri office of KPMG Peat Marwick, certified public accountants (the "Accountants") ), for resolution, and the Accountants shall determine the Acquired Net Assets. If the Accountants are unable to agree as to the resolution of such matters and the Acquired Net Assets within thirty (30) days after such matters issues in dispute are submitted to the AccountantsAccountants for resolution, (i) the Accountants shall select another "Big Six" accounting firm Buyers will revise the Closing Financial Statements as appropriate to reflect the resolution of any objections thereto pursuant to this Section 2.6(a), (New York City or Dallas officeii) (the "Other Accountants") which will resolve such matters and determine the Acquired Net Assets. Each each party will furnish to the Accountants (and, if applicable, the Other Accountants) such workpapers and other documents and information relating to the disputed matters issues as the Accountants or the Other Accountants may request and are available to that party or its subsidiaries (or its independent public accountants), and each party will be afforded the opportunity to present to the Accountants and the Other Accountants any material relating to such disputed issues the determination and to discuss such issues the determination with the Accountants and Accountants; (iii) the Other Accountants. The resolution of such issues under this Section 2.3 (a) determination by the Accountants or Other Accountants, as the case may be, as set forth in a notice delivered to both parties by the Accountants or Other Accountants shall be deemed to be a final determination thereof for purposes of this AgreementAccountants, shall will be binding and conclusive on the parties; and (iv) Buyers and Sellers will share responsibility for the fees and expenses of the Accountants for such determination as follows:
(A) if the Accountants resolve all of the remaining objections in favor of the Buyers (the consolidated stockholders' equity so determined is referred to herein as the "Low Value"), the Sellers will be responsible for all of the fees and expenses of the Accountants;
(B) if the Accountants resolve all of the remaining objections in favor of the Sellers (the consolidated stockholders' equity so determined is referred to herein as the "High Value"), the Buyers will be responsible for all of the fees and expenses of the Accountants; and
(C) if the Accountants resolve some of the remaining objections in favor of the Buyers and the rest of the remaining objections in favor of the Sellers (the consolidated stockholders' equity so determined is referred to herein as the "Actual Value"), the Sellers will be responsible for that fraction of the fees and expenses of the Accountants equal to (x) the difference between the High Value and the Actual Value over (y) the difference between the High Value and the Low Value, and the Acquired Net Assets, as finally determined by the Accountants or Other Accountants, Buyers will be used in computing responsible for the Adjustment Amount. Buyer and Seller shall each bear one-half remainder of the fees of the Other Accountants in connection with the resolution or attempted resolution of the disputed mattersand expenses.
(b) On the tenth fifth business day following the final determination of the Acquired Net Assets, under Section 2.3(a), and the Adjustment Amount:
(i) , if the Purchase Price (plus any amount owed to Buyers pursuant to Section 2.7) is greater than the sum of the Closing Cash Amount and the principal amount of the Promissory NoteEstimated Purchase Price, Buyer shall Buyers will pay the difference to Seller Sellers, and if the Purchase Price (up plus any amount owed to Two Hundred Fifty Thousand Dollars ($250,000.00)Buyers pursuant to Section 2.7) by wire transfer is less than such amount, Sellers will pay the difference to Buyers. All payments will be made in immediately available funds (with interest thereon at the "Additional Cash Payment"), together with simple interest, prime rate of Boatmen's Bank as in effect from July 1, 1997, time to time from the Closing Date and ending on the date of payment. Payments must be made by wire transfer to such bank account as Buyers or Sellers, at the annual rate of six percent (6%)as applicable, and if such difference exceeds Two Hundred Fifty Thousand Dollars ($250,000.00), the Promissory Note shall be amended by Seller and Buyer by adding such excess to the principal balance under the Promissory Note; orwill specify.
(iic) if For a period commencing on the Closing and ending at such time as the Purchase Price is less than finally determined, Buyers shall provide Sellers and its accountants and other representatives access to the sum books and records of the Company (all of which shall be in the possession of Company at Closing Cash Amount as represented and warranted in Section 3.5) for the principal amount purpose of obtaining information concerning the Adjustment Amount. In the event that the calculation of Purchase Price is submitted to the Accountants for their determination, Buyers and Seller shall use their best efforts to cause the Accountants to make a final determination of Purchase Price within 30 days of the Promissory Notedate such matter is submitted to them for their final determination. The payment obligations under this Section 2.6 and Section 2.7 of Buyers or Sellers, Seller shall pay (and Shareholder shall cause Seller to pay)
(A) as the difference to Buyer (up to Two Hundred Fifty Thousand Dollars ($250,000.00)) by wire transfer in immediately available fundscase may be, together with simple interest, from July 1, 1997, to the date of payment, at the annual rate of six percent (6%), and (B) if such difference exceeds Two Hundred Fifty Thousand Dollars ($250,000.00), the Promissory Note shall be amended by Seller subject to any set-off for any claim for the breach of any representation and Buyer by reducing the principal balance of the Promissory Note by the amount of such excess (up to Two Hundred Fifty Thousand Dollars ($250,000.00)), and (C) Seller shall pay (and Shareholder shall cause Seller to pay) the remainder of such excess, if any, in the same manner as provided in Subparagraph (A) of warranty or for indemnification under this Section 2.3(b)(ii) aboveAgreement.
Appears in 1 contract
Adjustment Procedure. (a) Seller Sellers will prepare and shall will cause Waters Ernst & Xxxxxx ("W&M")Young, Sellerthe Company's independent certified public accountants, to audit the financial statements (the "Closing Financial Statements") of Seller the Company as of June 30, 1997, which the Closing Financial Statements shall contain an audited balance sheet (the "Closing Balance Sheet") at June 30, 1997, audited statements of income Date and retained earnings, and cash flows for the period from the date of the Balance Sheet, Audited Financial Statements (as defined in Section 5.72.5) through the Closing Date, through June 30, 1997, all prepared in accordance with generally accepted accounting principles, and including a separate computation of stockholders' equity as of the Acquired Net AssetsClosing Date. Buyer's independent certified public accountants, Deloitte & Touche LLP ("D&T") and representatives of Buyer shall review the audit conducted by W&M. Seller and Shareholder Sellers will arrange for D&T's and Buyer's representatives to have full access to the W&M audit workpapers and files. Seller and Shareholder also agree that representatives of D&T and Buyer will be present to observe the physical inventory count taken by Seller and W&M prior to June 30, 1997. Seller shall deliver the Closing Financial Statements to Buyer and D&T within sixty (60) days after the Closing Date. If, within During the thirty (30) days day period following the delivery to Buyer and D&T of the Closing Financial Statements, Buyer and its auditors shall have access to the working papers of the Company's auditors prepared in connection with the Closing Financial Statements. If within thirty days following delivery of the Closing Financial Statements, the Buyer has not given Seller the Sellers written notice of its objection to the Closing Financial Statements (such notice, if given, must contain a statement "Notice of the basis of Buyer's objectionObjection"), then the stockholders' equity reflected in the Closing Financial Statements, including, without limitation, the computation of the Acquired Net Assets, shall be deemed to have been finally determined for purposes of this Agreement, and the Acquired Net Assets as so determined Statements will be used in computing the Adjustment Amount. If To be effective, a Notice of Objection shall (i) specify in reasonable detail the nature of any disagreement so asserted, (ii) only include disagreements based on mathematical errors or based on stockholders' equity of the Company and its Subsidiaries not being calculated in accordance with Section 1.4 and this Section 1.5 and (iii) be accompanied by a certificate of Buyer's independent auditors that they concur with each of the positions taken by Buyer gives such notice in the Notice of an objectionObjection. During the 30 day period following the delivery of a Notice of Objection, then Sellers and Buyer shall seek in good faith to resolve in writing any differences that they may have with respect to the matters as specified in the Notice of Objection. During such period Sellers and their auditors shall have access to which the working papers of Buyer's auditors prepared in connection with their certification of the Notice of Objection. At the end of such 30-day period, Sellers and Buyer has objected will be submitted shall submit to D&T and W&M an independent accounting firm (the "AccountantsAccounting Firm") for resolution, arbitration any and all matters that remain in dispute and which were properly included in the Accountants shall determine Notice of Objection. Sellers and Buyer agree to use reasonable efforts to cause the Acquired Net AssetsAccounting Firm to render a decision resolving the matters submitted to the Accounting Firm within 30 days following submission. If the Accountants are unable to agree as to the resolution of such matters and the Acquired Net Assets within thirty (30) days after such matters issues in dispute are submitted to the AccountantsAccounting Firm for resolution, the Accountants shall select another "Big Six" accounting firm (New York City or Dallas officei) (the "Other Accountants") which will resolve such matters and determine the Acquired Net Assets. Each each party will furnish to the Accountants (and, if applicable, the Other Accountants) Accounting Firm such workpapers and other documents and information relating to the disputed matters issues as the Accountants or the Other Accountants Accounting Firm may request and are available to that party or its Subsidiaries (or its independent public accountants), and each party will be afforded the opportunity to present to the Accountants and the Other Accountants Accounting Firm any material relating to such disputed issues the determination and to discuss such issues the determination with the Accountants and the Other Accountants. The resolution of such issues under this Section 2.3 (a) by the Accountants or Other Accountants, as the case may be, as set forth in a notice delivered to both parties by the Accountants or Other Accountants shall be deemed to be a final determination thereof for purposes of this Agreement, shall be binding and conclusive on the parties, and the Acquired Net Assets, as finally determined by the Accountants or Other Accountants, will be used in computing the Adjustment Amount. Buyer and Seller shall each bear one-half of the fees of the Other Accountants in connection with the resolution or attempted resolution of the disputed matters.
(b) On the tenth business day following the final determination of the Acquired Net Assets, under Section 2.3(a), and the Adjustment Amount:
(i) if the Purchase Price is greater than the sum of the Closing Cash Amount and the principal amount of the Promissory Note, Buyer shall pay the difference to Seller (up to Two Hundred Fifty Thousand Dollars ($250,000.00)) by wire transfer in immediately available funds (the "Additional Cash Payment"), together with simple interest, from July 1, 1997, to the date of payment, at the annual rate of six percent (6%), and if such difference exceeds Two Hundred Fifty Thousand Dollars ($250,000.00), the Promissory Note shall be amended by Seller and Buyer by adding such excess to the principal balance under the Promissory Note; or
(ii) if the Purchase Price is less than the sum of the Closing Cash Amount and the principal amount of the Promissory Note, Seller shall pay (and Shareholder shall cause Seller to pay)
(A) the difference to Buyer (up to Two Hundred Fifty Thousand Dollars ($250,000.00)) by wire transfer in immediately available funds, together with simple interest, from July 1, 1997, to the date of payment, at the annual rate of six percent (6%), and (B) if such difference exceeds Two Hundred Fifty Thousand Dollars ($250,000.00), the Promissory Note shall be amended by Seller and Buyer by reducing the principal balance of the Promissory Note by the amount of such excess (up to Two Hundred Fifty Thousand Dollars ($250,000.00)), and (C) Seller shall pay (and Shareholder shall cause Seller to pay) the remainder of such excess, if any, in the same manner as provided in Subparagraph (A) of this Section 2.3(b)(ii) above.Accounting Firm;
Appears in 1 contract
Adjustment Procedure. (a) Seller Sellers will prepare and shall or cause Waters & Xxxxxx ("W&M")to be prepared, Selleron a basis consistent with the customary method used in the preparation of the Company's independent certified public accountantsmonth end financial statements, to audit the unaudited consolidated financial statements (the "Closing Financial Statements") of Seller the Company as of June 30the Closing Date in accordance with GAAP applied on a consistent basis for the period from January 1, 19972002 through the Closing Date, which including a computation of Net Book Value as of the Closing Date. The fees and expenses of Sellers (including the fees and expenses of Sellers' counsel, accountants, brokers, investment bankers, financial advisors, representatives and other agents), to the extent paid or to be paid by Company as permitted hereunder, shall be reflected either as a reduction in cash or as a liability in the Closing Financial Statements Statements, and no fees or expenses of Sellers shall contain be paid by the Company after the Closing that are not reflected as liabilities on the Closing Financial Statements. Sellers will deliver to Buyer within thirty days after the Closing Date (i) consolidated financial statements for the most recently completed fiscal year ending December 31, 2002 in an audited balance sheet SEC reporting format together with an unqualified audit opinion of the Sellers' accountants that the statements present fairly the financial condition and the results of operations, changes in stockholders' equity and cash flows of the Company for the period and have been prepared in accordance with GAAP applied on a consistent basis (the "2002 Audited Financial Statements"), and (ii) the Closing Balance Sheet") at June 30Financial Statements, 1997which financial statements will fairly present and reflect the financial condition and the results of operations, audited statements of income and retained earningschanges in stockholders' equity, and cash flows of the Company for the period from the date of the Balance Sheet, as defined in Section 5.7, through June 30, 1997, all then ended and will have been prepared in accordance with generally accepted accounting principles, and GAAP applied on a separate computation of the Acquired Net Assetsconsistent basis. If within thirty days following Buyer's independent certified public accountants, Deloitte & Touche LLP ("D&T") and representatives of Buyer shall review the audit conducted by W&M. Seller and Shareholder will arrange for D&T's and Buyer's representatives to have full access to the W&M audit workpapers and files. Seller and Shareholder also agree that representatives of D&T and Buyer will be present to observe the physical inventory count taken by Seller and W&M prior to June 30, 1997. Seller shall deliver the Closing Financial Statements to Buyer and D&T within sixty (60) days after the Closing Date. If, within thirty (30) days following delivery to Buyer and D&T receipt of the Closing Financial Statements, Buyer has not given Seller Sellers notice of its objection to the Closing Financial Statements (such notice, if given, notice must contain a statement of the basis of Buyer's objection), then the Net Book Value reflected in the Closing Financial Statements, including, without limitation, the computation of the Acquired Net Assets, shall be deemed to have been finally determined for purposes of this Agreement, and the Acquired Net Assets as so determined Statements will be used in computing the Adjustment Amount. If Buyer gives such notice of an objectionobjection and Buyer and the Sellers cannot agree with regard to such objection within 14 days thereafter, then the matters as to which Buyer has objected issues in dispute will be submitted to D&T and W&M nationally recognized certified public accountants mutually agreed upon by the parties (which have not been engaged by either party or their respective subsidiaries or affiliates for at least two years prior to the date of delivery to Buyer of the Closing Financial Statements) (the "Independent Accountants") ), for resolution, and the Accountants shall determine the Acquired Net Assets. If the Accountants are unable to agree as to the resolution of such matters and the Acquired Net Assets within thirty (30) days after such matters issues in dispute are submitted to the AccountantsIndependent Accountants for resolution, the Accountants shall select another "Big Six" accounting firm (New York City or Dallas officei) (the "Other Accountants") which will resolve such matters and determine the Acquired Net Assets. Each within 15 business days after request, each party will furnish to the Independent Accountants (and, if applicable, the Other Accountants) such workpapers work papers and other documents and information relating to the disputed matters issues as the Accountants or the Other Independent Accountants may request and are available to that party (or its independent public accountants), and each party will be afforded the opportunity to present to and discuss with the Accountants and the Other Independent Accountants any material relating to such disputed issues and the dispute prior to discuss such issues with the Accountants and Independent Accountants' determination; (ii) the Other Accountants. The resolution of such issues under this Section 2.3 (a) determination by the Accountants or Other Independent Accountants, as the case may be, as set forth in a notice delivered to both parties Buyer and the Sellers by the Accountants or Other Accountants shall be deemed to be a final determination thereof for purposes of this AgreementIndependent Accountants, shall will be binding and conclusive on parties in the parties, absence of manifest error; and (iii) the Acquired Net Assets, as finally determined by fees and disbursements of the Independent Accountants or Other Accountants, will shall be used in computing the Adjustment Amount. allocated between Buyer and Seller Sellers so that Buyer's share of such fees and disbursements shall each bear one-half of be in the fees of same proportion that the Other Accountants in connection with the resolution or attempted resolution of the disputed matters.
(b) On the tenth business day following the final determination of the Acquired Net Assets, under Section 2.3(a), and the Adjustment Amount:
(i) if the Purchase Price is greater than the sum of the Closing Cash Amount and the principal aggregate amount of the Promissory Note, Buyer shall pay the difference to Seller (up to Two Hundred Fifty Thousand Dollars ($250,000.00)) by wire transfer in immediately available funds (the "Additional Cash Payment"), together with simple interest, from July 1, 1997, to the date of payment, at the annual rate of six percent (6%), and if such difference exceeds Two Hundred Fifty Thousand Dollars ($250,000.00), the Promissory Note shall be amended by Seller and Buyer by adding such excess to the principal balance under the Promissory Note; or
(ii) if the Purchase Price is less than the sum of the Closing Cash Adjustment Amount and the principal amount of the Promissory Note, Seller shall pay (and Shareholder shall cause Seller to pay)
(A) the difference to Buyer (up to Two Hundred Fifty Thousand Dollars ($250,000.00)) by wire transfer in immediately available funds, together with simple interest, from July 1, 1997, to the date of payment, at the annual rate of six percent (6%), and (B) if such difference exceeds Two Hundred Fifty Thousand Dollars ($250,000.00), the Promissory Note shall be amended by Seller and Buyer by reducing the principal balance of the Promissory Note by the amount of such excess (up to Two Hundred Fifty Thousand Dollars ($250,000.00)), and (C) Seller shall pay (and Shareholder shall cause Seller to pay) the remainder of such excess, if any, in the same manner as provided in Subparagraph (A) of this Section 2.3(b)(ii) above.based on the
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Samples: Stock Purchase Agreement (Edo Corp)
