Adjustments to Estimated Purchase Price. Within sixty (60) days after the Closing Date, Buyer shall deliver to Seller a statement (the “Post-Closing Statement”) setting forth in reasonable detail (i) Buyer’s good faith proposed final calculation of the Closing Cash, the Closing Indebtedness, the Closing Net Working Capital, the Closing Employee Transaction Payments and the Closing Selling Expenses and (ii) Buyer’s good faith proposed final calculation of the Purchase Price as calculated pursuant to Section 2.02 incorporating such proposed final calculations in (i) above. If Seller objects to the Post-Closing Statement, then it shall provide Buyer with written notice thereof (a “Notice of Disagreement”) setting forth Seller’s good faith and specific objections in reasonable detail (each a “Disputed Item”) together with supporting documentation within fifteen (15) days after receiving the Post-Closing Statement. If Buyer and Seller working together in good faith are unable to agree on such Disputed Items contained in the Notice of Disagreement within fifteen (15) days after Buyer receives the Notice of Disagreement, then either Buyer or Seller may refer such dispute to the Accounting Firm, which shall make a final and binding determination as to all Disputed Items, and only as to such Disputed Items, on a timely basis and shall promptly notify Buyer and Seller in writing of its resolution. Such Accounting Firm handling the dispute resolution shall not have the power to modify or amend any term or provision of this Agreement. In resolving the Disputed Items, the Accounting Firm shall only assign a value to any Disputed Item that is at or between Buyer’s valuation of such Disputed Item and Seller’s valuation of such Disputed Item. Each of Buyer and Seller shall bear and pay one-half of the fees and other costs charged by such Accounting Firm and shall use commercially reasonable efforts to cooperate with the Accounting Firm. If Seller does not object to the Post-Closing Statement within the time period and in the manner set forth in the first sentence of this Section 2.05(b) or if Seller accepts the Post-Closing Statement, then the Closing Cash, the Closing Indebtedness, the Closing Net Working Capital, the Closing Employee Transaction Payments, the Closing Selling Expenses and the Purchase Price as set forth in Post-Closing Statement shall become final and binding upon the Parties for all purposes hereunder on the fifteenth (15th) day after Seller receives the Post-Closing Statement. If Seller does object to the Post-Closing Statement within the time period and in the manner set forth in the first sentence of this Section 2.05(b), then the Post-Closing Statement shall become final and binding for all purposes hereunder on the date that Buyer receives the Notice of Disagreement except with respect to, and only to the extent of, the Disputed Items in the Notice of Disagreement. Each Disputed Item shall become final and binding for all purposes hereunder on the earliest of (x) the date on which Buyer and Seller resolve in a writing signed by both Buyer and Seller such Disputed Item or (y) the date on which the Accounting Firm notifies Buyer and Seller in writing of its resolution of such Disputed Item. Buyer and Seller agree that the procedures set forth in this Section 2.05(b) for resolving disputes regarding the Disputed Items shall be the sole method for resolving such disputes.

Appears in 1 contract

Samples: Stock Purchase Agreement (3d Systems Corp)

Adjustments to Estimated Purchase Price. (a) The Seller Representative has delivered to Buyer the statement attached as Exhibit 1.3(a) (“Estimated Closing Statement”) setting forth Sellers’ good faith written estimate and consistent with the Accounting Principles of: (i) Closing Date Tangible Net Assets (“Estimated Closing Date Tangible Net Assets”) and the Estimated Closing Date Tangible Net Assets Adjustment (for the avoidance doubt the adjustment shall be the difference, plus or minus, between the Estimated Closing Date Tangible Net Assets and $125,000,000); (ii) Closing Date Cash (“Estimated Closing Date Cash”); (iii) Closing Date Debt (“Estimated Closing Date Debt”); (iv) Closing Date Seller Transaction Expenses (“Estimated Closing Date Seller Transaction Expenses”); and (v) the resulting Estimated Closing Cash Payment derived from those estimates. (b) Within ~~sixty (60)~~ 90 days after the Closing Date, Buyer ~~shall deliver~~ will cause to be prepared and delivered to the Seller Representative a statement (the “~~Post-~~Preliminary Closing Statement”) setting forth in reasonable detail ~~(i)~~ and consistent with the Accounting Principles Buyer’s good faith ~~proposed final~~ written calculation of: (i) Closing Date Tangible Net Assets and the Closing Date Tangible Net Assets Adjustment; (ii) Closing Date Cash; (iii) Closing Date Debt; (iv) Closing Date Seller Transaction Expenses; and (v) the resulting Closing Cash Payment derived from that calculation. Sellers will have the opportunity to review the Preliminary Closing Statement for 60 days following their receipt of the Preliminary Closing Statement (the “Review Period”). During the Review Period, at the request of the Seller Representative or any Seller, the Seller Representative or such Seller and their respective Representatives will, during normal business hours, be provided with such access to Books and Records of the Company and other information (including financial statements and work papers (including those prepared by independent third Persons) subject to customary access policies and procedures) of the Company and Buyer in the possession or control of the Company, Buyer or their respective Affiliates or Representatives that relate to, as well as access to personnel of Buyer, its Affiliates (including the Company) and their respective Representatives that were involved in, the calculation or determination of the items included in the Preliminary Closing Statement (including making available their chief financial officer(s) and accountants to respond to reasonable written or oral inquiries of the Seller Representative, any Seller or their respective Representatives), in each case, as is reasonably necessary in order for the Seller Representative or Sellers to respond to or evaluate the calculations contained in the Preliminary Closing Statement. Buyer’s calculation of ~~the~~ Closing ~~Cash~~Date Tangible Net Assets, the Closing ~~Indebtedness~~Date Tangible Net Assets Adjustment, Closing Date Cash, Closing Date Debt, Closing Date Seller Transaction Expenses, and the Final Closing Cash Payment derived from that calculation will, absent fraud or manifest error, become final, conclusive and binding on the Parties unless, prior to the end of the Review Period, the ~~Closing Net Working Capital~~Seller Representative or any Seller notifies Buyer in writing of Sellers’ objections to such calculation (an “Objection Notice”), the Closing Employee Transaction Payments and the Closing Selling Expenses and (ii) Buyer’s good faith proposed final calculation of the Purchase Price as calculated pursuant to Section 2.02 incorporating such proposed final calculations in (i) above. If Seller objects to the Post-Closing Statement, then it shall provide Buyer with written notice thereof (a “Notice of Disagreement”) setting forth Seller’s good faith and specific objections identifying in reasonable detail ~~(each a “Disputed Item”) together with supporting documentation~~ the disputed items, the estimated amounts of the disputed items if then reasonably determinable and the basic facts underlying Sellers’ objections. If the Seller Representative or any Seller delivers an Objection Notice to Buyer prior to the end of the Review Period, Buyer and the Seller Representative will negotiate in good faith to resolve Sellers’ objections set forth in the Objection Notice within ~~fifteen (15)~~ 30 days ~~after receiving~~ following delivery of the ~~Post-Closing Statement~~Objection Notice. If Buyer and the Seller working together in good faith are unable to agree on such Disputed Items contained in the Notice of Disagreement within fifteen (15) days after Buyer receives the Notice of Disagreement, then either Buyer Representative resolve some or ~~Seller may refer such dispute to the Accounting Firm, which shall make a final and binding determination as to~~ all Disputed Items, and only as to such Disputed Items, on a timely basis and shall promptly notify Buyer and Seller in writing of its resolution. Such Accounting Firm handling the dispute resolution shall not have the power to modify or amend any term or provision of this Agreement. In resolving the Disputed Items, the Accounting Firm shall only assign a value to any Disputed Item that is at or between Buyer’s valuation of such Disputed Item and Seller’s valuation of such Disputed Item. Each of Buyer and Seller shall bear and pay one-half of the fees and other costs charged by such Accounting Firm and shall use commercially reasonable efforts to cooperate with the Accounting Firm. If Seller does not object to the Post-Closing Statement objections within ~~the~~ that time ~~period and in the manner set forth in the first sentence of this Section 2.05(b) or if Seller accepts the Post-Closing Statement~~period, then the Closing Cash, the Closing Indebtedness, the Closing Net Working Capital, the Closing Employee Transaction Payments, the Closing Selling Expenses and the Purchase Price as set forth in Post-Closing Statement shall become final and binding upon the Parties for all purposes hereunder on the fifteenth (15th) day after Seller receives the Post-Closing Statement. If Seller does object to the Post-Closing Statement within the time period and in the manner set forth in the first sentence of this Section 2.05(b), then the Post-Closing Statement shall become final and binding for all purposes hereunder on the date that Buyer receives the Notice of Disagreement except with respect to, and only to the extent of, the Disputed Items in the Notice of Disagreement. Each Disputed Item shall become final and binding for all purposes hereunder on the earliest of (x) the date on which Buyer and Seller resolve they will document their resolution in a writing signed by ~~both~~ each of them, and such resolution will be final, conclusive and binding on the Parties. If Buyer and the Seller Representative are unable to resolve all of Sellers’ objections within the 30-day time period following the delivery of the Objection Notice, the Parties will promptly refer any matters still in dispute for resolution as provided in Section 1.3(c). (c) Any unresolved dispute concerning the Preliminary Closing Statement under Section 1.3(b) will be referred for resolution to the Chicago office of KPMG, who will be jointly retained by Buyer and Sellers. If the Parties are unable to engage KPMG for any reason, then Buyer and the Seller Representative will each designate a nationally or regionally recognized independent accounting firm with whom no Party has any current professional relationship, and the accounting firm to resolve the dispute will be chosen by lot (KPMG or any other chosen accounting firm is referred to in this Agreement as the “Accounting Firm”). The Accounting Firm will determine the allocation of its fees and expenses to the respective Parties based on the inverse of the percentage that the Accounting Firm’s resolution of the disputed items (before such ~~Disputed Item or~~ allocation) bears to the total amount of the disputed items as originally submitted to the Accounting Firm. (y) For example, if the ~~date on which~~ total amount of the disputed items as originally submitted to the Accounting Firm ~~notifies~~ equal $1,000 and the Accounting Firm awards $600 in favor of the Seller Representative’s position, sixty percent (60%) of the fees and expenses of the Accounting Firm would be borne by Buyer and ~~Seller~~ forty percent (40%) of the fees and expenses of the Accounting Firm would be borne by Sellers). The Accounting Firm will act as a neutral arbitrator and will resolve only the disputed items that have been referred to it pursuant to this Section 1.3(c) and solely in ~~writing of its resolution of such Disputed Item. Buyer and Seller agree that~~ accordance with the procedures (including any relevant defined terms and consistent with the Accounting Principles) set forth in this Agreement. Any resolution of a disputed item by the Accounting Firm must be within the range of the differences between Buyer’s and the Seller Representative’s positions with respect to such disputed item. The Parties will provide the Accounting Firm with all Books and Records in their possession reasonably relevant to the determinations to be made by it as may be requested by the Accounting Firm. No Party or any Affiliate or Representative of a Party will meet or discuss any substantive matters with the Accounting Firm without Buyer and the Seller Representative and their respective Representatives present or having the opportunity following at least three Business Days’ written notice to be present, either in person or by telephone. The Accounting Firm will have the power to require a Party to provide to it such Books and Records and other information it deems reasonably relevant to the resolution of the dispute, and to require a Party to answer questions that it deems reasonably relevant to the resolution of the dispute. All Books and Records and other information (including answers to questions from the Accounting Firm) submitted to the Accounting Firm must be concurrently delivered to each other Party. All disputes with respect to the application of accounting principles, including the Accounting Principles or to the mathematical calculation of any disputed components of the Preliminary Closing Statement that have been referred to the Accounting Firm pursuant to this Section ~~2.05(b~~1.3 will be resolved exclusively by the Accounting Firm. The determination of the Accounting Firm with respect to disputes to be resolved by it under this Agreement, absent fraud or manifest error, will be final, conclusive and binding upon the Parties. Closing Date Tangible Net Assets, the Closing Date Tangible Net Assets Adjustment, Closing Date Cash, Closing Date Debt, Closing Date Seller Transaction Expenses, and the resulting Final Closing Cash Payment derived from them, in each case as finally determined in accordance with this Section 1.3 (whether as a result of a failure to timely deliver an Objection Notice, mutual resolution of the Parties pursuant to Section 1.3(b), determination by the Accounting Firm in accordance with this Section 1.3(c), or any combination), will be used for purposes of any adjustments to the Estimated Purchase Price pursuant to Section 1.3(d). (d) Following Closing, the Estimated Purchase Price will be: (i) increased on a dollar-for-dollar basis by the amount that the Final Closing Cash Payment is greater than the Estimated Closing Cash Payment; and (ii) decreased on a dollar-for-dollar basis by the amount that the Estimated Closing Cash Payment is greater than the Final Closing Cash Payment. (A) If the Estimated Purchase Price is increased by the adjustment provided for in Section 1.3(d)(i), then within five Business Days following the determination of the Final Closing Cash Payment, Buyer will pay such increase to Sellers by wire transfer of immediately available funds to the accounts designated by Sellers. (B) If the Estimated Purchase Price is decreased by the adjustment provided for in Section 1.3(d)(ii), then within five Business Days following the determination of the Final Closing Cash Payment, Sellers’ Representative will cause Sellers to pay such decrease to Buyer by wire transfer of immediately available funds to the account designated by Buyer. (e) For the avoidance of doubt, and notwithstanding anything else contained in this Agreement to the contrary: (i) for ~~resolving disputes regarding~~ purposes of calculating the ~~Disputed Items~~ Closing Date Tangible Net Assets, the Estimated Purchase Price, the Final Closing Cash Payment or the Purchase Price, no items included in the definitions of Closing Date Tangible Net Assets, including Closing Date Cash, Closing Date Debt, and Closing Date Seller Transaction Expenses (or any components of them) will be double counted; and (ii) for purposes of calculating the Final Closing Cash Payment, any and all Tax deductions of the Company that are permitted under the Code or other applicable Law in respect of, or that are attributable to, any of the following will be treated as occurring prior to the close of business on the Closing Date: (A) any and all Seller Transaction Expenses (including amounts that would be Closing Date Seller Transaction Expenses except for the fact that such expenses were paid prior to Closing); (B) any and all amounts incurred in connection with the retirement of the Indebtedness of the Company (including the retirement of Closing Date Debt as contemplated in this Agreement); (C) any and all employee bonuses or debt prepayment fees (including the employer portion of any payroll Taxes due in connection therewith); (D) any and all deductions for unamortized financing costs of the Company (without duplication of amounts taken into account in clause (ii)(B) above); and (E) any and all other amounts paid with respect to the transactions contemplated by this Agreement that are properly deductible in a Pre-Closing Period. (f) On the morning of July 1, 2016, Buyer shall cause the Company and its Subsidiaries to commence a complete physical identification of their inventory and count thereof as of the Closing, excluding certain raw materials that are tracked on a perpetual basis and which were subject to testing on June 9, 2016. Testing Procedures on July 1 will include the verification of finished goods and work-in-progress (“WIP”) units and chassis, including inventory maintained at the Company’s Idaho facility. In addition, a complete physical observation shall be performed at the ~~sole method~~ Highland Ridge subsidiary on July 1, 2016. An acceptable confirmation from the applicable third party will be obtained for ~~resolving~~ all inventory (raw, chassis, WIP, or finished goods) located off-site as of the Closing. The Company shall provide the Buyer with a complete listing of all raw materials tracked on a perpetual basis as of the Closing by location and the Buyer reserves the right to perform additional testing of such ~~disputes~~inventory. The Sellers’ Representative and the Buyer, and each of their respective representatives and accountants, shall be entitled (i) to have unrestricted access to observe, and make inquiries and receive responsive information with regard to, the foregoing inventory count, and (ii) to test and sample such inventory during the course of such inventory count. Any disagreement between the Parties with respect to the inventory count, but not the value of such inventory, shall be resolved at the time of the inventory count, subject to the ability of Sellers to provide an inventory count listing as of the end of the inventory count procedures on that date. This inventory count will be utilized by the Parties in the determination of the Closing Date Tangible Net Assets. Buyer and Sellers agree to use their best efforts to adjust any inventory count that is, or appears to be, incorrect based on a review of the inventory compilation prepared by the Company and its Subsidiaries utilizing the counts from the inventory count procedures. If Buyer, prior to final determination of the Closing Date Tangible Net Assets or Final Closing Date Tangible Net Assets, determines that any inventory count appears mathematically incorrect as the result of a data entry, recording spreadsheet error or similar objective mistake, Buyer shall not be bound by the incorrect inventory count when determining the Closing Date Tangible Net Assets or Final Closing Date Tangible Net Assets, as applicable, but shall instead use the methodology set forth on the Accounting Principles on attached Annex 1 to Exhibit 9.1 with respect to the specific inventory which Buyer has determined was mathematically incorrect.

Appears in 1 contract

Samples: Stock Purchase Agreement (Thor Industries Inc)

Adjustments to Estimated Purchase Price. ~~Within sixty~~ Not later than three days prior to the anticipated Closing Date, Seller shall deliver to Buyer Seller’s estimate (60the “Estimate”) of the Working Capital as of the Closing Date (“Estimated Working Capital”) and any documentation substantiating Seller’s calculation of Estimated Working Capital. Seller shall prepare the Estimate in good faith in accordance with GAAP on a consistent basis with that used in the preparation of the Audited Financial Statements (to the extent not inconsistent with GAAP). If the Estimated Working Capital is less than the Target Working Capital, the Estimated Purchase Price shall be reduced dollar-for-dollar by the amount of such difference. If the Estimated Working Capital is greater than the Target Working Capital, the Estimated Purchase Price shall be increased by dollar-for-dollar by the amount of such difference. The amount of any such adjustment based on the Estimate shall be referred to herein as the “Estimated Working Capital Adjustment.” 2.5.1 As soon as is reasonably practicable after the Closing Date, but not more than 90 days after the Closing Date, Buyer shall prepare and deliver to Seller a ~~statement~~ report (the “~~Post-Closing Statement~~Adjustment Report”) showing in reasonable detail Buyer’s computation of the Working Capital as of the Closing Date. The Adjustment Report shall be prepared in accordance with GAAP on a consistent basis with that used in the preparation of the Audited Financial Statements, and shall indicate the specific line items in the Estimate to which Buyer objects or with which Buyer disagrees. 2.5.2 Within 30 days after receipt of the Adjustment Report, Seller by written notice to Buyer may object to the computation of the Working Capital as set forth in the Adjustment Report, setting forth in such notice (the “Objection Notice”) Seller’s objection in reasonable detail ~~(i)~~ to Buyer’s ~~good faith proposed final~~ calculation of the ~~Closing Cash, the Closing Indebtedness, the Closing Net~~ Working Capital, and Seller’s proposal with respect to the ~~Closing Employee Transaction Payments and the Closing Selling Expenses and (ii) Buyer’s good faith proposed final~~ calculation of the ~~Purchase Price as calculated pursuant~~ Working Capital. Within 20 days following timely delivery of the Objection Notice, Seller and Buyer shall attempt, in good faith, to ~~Section 2.02 incorporating such proposed final calculations in (i) above. If Seller objects to~~ resolve all disputes between them concerning the Post-Closing Statement, then it shall provide Buyer with written notice thereof (a “Notice of Disagreement”) setting forth Seller’s good faith and specific objections in reasonable detail (each a “Disputed Item”) together with supporting documentation within fifteen (15) days after receiving the Post-Closing StatementObjection Notice. If Buyer and Seller ~~working together~~ cannot resolve such disputes within such 20-day period, then (i) the matters in ~~good faith are unable to agree on~~ dispute shall be determined by KPMG LLP or, if KPMG LLP is unavailable, another independent public accounting firm designated jointly by Seller and Buyer (the “Arbitrator”), and (ii) the Arbitrator shall be engaged by Seller and Buyer within five days following the expiration of such ~~Disputed Items contained in the Notice of Disagreement within fifteen (15)~~ 20-day period. Promptly, but not later than 30 days after acceptance of this appointment, the Arbitrator shall determine (based solely on presentations by Seller and Buyer ~~receives~~ to the ~~Notice~~ Arbitrator, and not by independent review) only those items in dispute and will render its report as to its resolution of ~~Disagreement~~such terms and resulting calculations of the Working Capital as of the Closing Date. In determining each disputed item, ~~then~~ the Arbitrator may not assign a value to such item greater than the greatest value for such item claimed by either Buyer or Seller ~~may refer~~ or less than the lowest value for such ~~dispute~~ term claimed by either Buyer or Seller. Seller and Buyer shall cooperate with the Arbitrator in making its determination and such determination shall be conclusive and binding upon the Parties. The losing party (as defined below) in any such arbitration shall pay all costs and fees (including reasonable attorneys’ fees and expenses) related to such determination by the Arbitrator, including the costs relating to any negotiations with the Arbitrator with respect to the ~~Accounting Firm~~terms and conditions of such Arbitrator’s engagement. For purposes of this Section 2.5.2, ~~which~~ as between Seller and Buyer, the “losing party” in any such determination shall ~~make a final and binding~~ mean the party whose proposed adjustment to the Estimated Purchase Price arising out of the calculation of Working Capital as at the Closing Date as set forth in the Adjustment Report, in the case of Buyer, or the Objection Notice, in the case of Seller, is farthest from the adjustment to the Estimated Purchase Price required by the determination of Working Capital as at the Closing Date, by the Arbitrator. If the difference between the adjustment to ~~all Disputed Items, and only as to such Disputed Items, on a timely basis and shall promptly notify~~ the Estimated Purchase Price arising out of the calculation of Working Capital proposed by Buyer and the adjustment to the Estimated Purchase Price arising out of the calculation of Working Capital determined by the Arbitrator is equal to the difference between the adjustment to the Estimated Purchase Price arising out of the calculation of Working Capital proposed by Seller ~~in writing~~ and the adjustment to the Estimated Purchase Price arising out of ~~its resolution. Such Accounting Firm handling~~ the ~~dispute resolution shall not have~~ calculation of Working Capital determined by the ~~power to modify or amend any term or provision of this Agreement. In resolving the Disputed Items~~Arbitrator, ~~the Accounting Firm shall only assign a value to any Disputed Item that is at or between Buyer’s valuation of such Disputed Item and Seller’s valuation of such Disputed Item. Each of~~ then Buyer and Seller shall ~~bear and~~ each pay one-half of all costs and fees related to such determination by the Arbitrator (including reasonable attorneys’ fees and ~~other costs charged~~ expenses, if any, incurred by ~~such Accounting Firm and shall use commercially reasonable efforts to cooperate with~~ the ~~Accounting Firm.~~ Arbitrator). 2.5.3 If Seller does not ~~object~~ timely deliver an Objection Notice, then Seller shall be deemed to have accepted the ~~Post-~~calculation of the Working Capital as of the Closing ~~Statement within the time period and in the manner~~ Date as set forth in the first sentence of this Section 2.05(b) or if Seller accepts the Post-Closing Statement, then the Closing Cash, the Closing Indebtedness, the Closing Net Working Capital, the Closing Employee Transaction Payments, the Closing Selling Expenses and the Purchase Price as set forth in Post-Closing Statement shall become final and binding upon the Parties for all purposes hereunder on the fifteenth (15th) day after Seller receives the Post-Closing Statement. If Seller does object to the Post-Closing Statement within the time period and in the manner set forth in the first sentence of this Section 2.05(b), then the Post-Closing Statement shall become final and binding for all purposes hereunder on the date that Buyer receives the Notice of Disagreement except with respect to, and only to the extent of, the Disputed Items in the Notice of Disagreement. Each Disputed Item shall become final and binding for all purposes hereunder on the earliest of (x) the date on which Buyer and Seller resolve in a writing signed by both Buyer and Seller such Disputed Item or (y) the date on which the Accounting Firm notifies Buyer and Seller in writing of its resolution of such Disputed Item. Buyer and Seller agree that the procedures set forth in this Section 2.05(b) for resolving disputes regarding the Disputed Items shall be the sole method for resolving such disputesAdjustment Report.

Appears in 1 contract

Samples: Share Purchase Agreement (Trintech Group PLC)

Adjustments to Estimated Purchase Price. (a) At least three Business Days prior to the Closing Date, Sellers’ Representative will deliver to Buyer a statement setting forth in reasonable detail Sellers’ good faith written estimate of: (i) Closing Date Net Working Capital (the “Estimated Closing Date Net Working Capital”) and the Closing Date Net Working Capital Adjustment (the “Estimated Closing Date Net Working Capital Adjustment”); (ii) Closing Date Cash (“Estimated Closing Date Cash”); (iii) Closing Date Debt (“Estimated Closing Date Debt”); (iv) Closing Date Pre-Closing Taxes (“Estimated Closing Date Pre-Closing Taxes”); (v) Closing Date Pre-Closing Tax Refunds (“Estimated Closing Date Pre-Closing Tax Refunds”); (vi) Closing Date Seller Transaction Expenses (“Estimated Closing Date Seller Transaction Expenses”); (vii) the Closing Construction Amount (the “Estimated Closing Construction Amount”); and (viii) the resulting Estimated Closing Cash Payment derived therefrom. Buyer will have the right to review and comment on the Estimated Closing Cash Payment (including the components thereof), and Sellers’ Representative will consider and negotiate in good faith any objections and revisions proposed by Buyer to the Estimated Closing Cash Payment (including the components thereof), provided that failure to object or comment will not prejudice or limit Buyer’s rights pursuant to this Section 1.3. (b) Within ~~sixty (60)~~ 90 days after the Closing Date, Buyer ~~shall~~ will deliver to ~~Seller~~ Sellers’ Representative a statement (the “~~Post-~~Preliminary Closing Statement”) setting forth in reasonable detail ~~(i)~~ Buyer’s good faith ~~proposed final~~ written calculation of: (i) Closing Date Net Working Capital and the Closing Date Net Working Capital Adjustment; (ii) Closing Date Cash; (iii) Closing Date Debt; (iv) Closing Date Pre-Closing Taxes; (v) Closing Date Pre-Closing Tax Refunds; (vi) Closing Date Seller Transaction Expenses; (vi) Closing Construction Amount; and (vi) the resulting Final Closing Cash Payment derived therefrom. Sellers will have an opportunity to review the Preliminary Closing Statement for 60 days following its receipt thereof from Buyer (the “Review Period”). During the Review Period, at Sellers’ Representative’s request, Sellers and their Representatives will, during normal business hours, be provided with reasonable access to all Books and Records and other information related to the preparation and calculation of the Final Closing ~~Cash~~Cash Payment (including financial statements and work papers, whether prepared internally or by third Persons) in the possession or control of Buyer or any of its Affiliates (including the Companies) or Representatives, as well as access to personnel of Buyer and its Affiliates (including the Companies) and Representatives that were involved in the calculation or determination of the items included in the Preliminary Closing ~~Indebtedness~~Statement, in each case, as is reasonably requested by Sellers’ Representative in connection with the review of the Preliminary Closing Statement; provided, that such access will be in a manner that does not interfere with the normal business operations of Buyer and the Companies. Buyer’s calculation of Closing Date Net Working Capital, the Closing ~~Employee~~ Date Net Working Capital Adjustment, Closing Date Cash, Closing Date Debt, Closing Date Pre-Closing Taxes, Closing Date Pre-Closing Tax Refunds, Closing Date Seller Transaction ~~Payments~~ Expenses, Closing Construction Amount and the Final Closing ~~Selling Expenses~~ Cash Payment derived therefrom will become final, conclusive and binding unless, prior to the end of the Review Period, Sellers’ Representative notifies Buyer in writing of Sellers’ objections to such calculation (an “Objection Notice”), identifying in reasonable detail the disputed items, the estimated amounts of the disputed items if then reasonably determinable and the basic facts underlying such objections. If Sellers’ Representative delivers an Objection Notice to Buyer prior to the end of the Review Period, Sellers’ Representative and Buyer will try in good faith to resolve Sellers’ objections within 15 days following delivery of the Objection Notice. If Sellers’ Representative and Buyer resolve some or all of such objections within such 15-day period, they will document their resolution in a writing signed by each of them, and such resolution will be final, conclusive and binding. If Sellers’ Representative and Buyer are unable to resolve all of Sellers’ objections within 15 days following delivery of the Objection Notice, they will promptly refer the matters remaining in dispute for resolution as provided in Section 1.3(c). (c) Any unresolved dispute concerning the Preliminary Closing Statement under Section 1.3(b) will be referred for resolution to the Atlanta, Georgia office of BDO USA, LLP, who will be jointly retained by Sellers and Buyer. If Sellers and Buyer are unable to engage BDO USA, LLP for any reason, then Sellers’ Representative and Buyer will each designate a nationally or regionally recognized independent accounting firm located in Atlanta, Georgia with whom no Party (or any of its Affiliates) has any current professional relationship, and the accounting firm to resolve the dispute will be chosen by lot (BDO USA, LLP or any other chosen accounting firm, the “Accounting Firm”). The selection of the Accounting Firm will be made as promptly as possible after the expiration of the 15-day period following the delivery of the Objection Notice, with the understanding that Buyer and Sellers will retain the Accounting Firm within 30 days after the expiration of such 15-day period. The Accounting Firm will determine the allocation of its fees and expenses to Sellers and Buyer based on the inverse of the percentage that the Accounting Firm’s resolution of the disputed items (before such allocation) bears to the total amount of the disputed items as originally submitted to the Accounting Firm. (For example, if the total amount of the disputed items as originally submitted to the Accounting Firm equals $1,000 and the Accounting Firm awards $600 in favor of the position of Sellers’ Representative, sixty percent (60%) of the fees and expenses of the Accounting Firm would be borne by Buyer and forty percent (40%) of the fees and expenses of the Accounting Firm would be borne by Sellers). The Accounting Firm will act as a neutral arbitrator and will resolve only the disputed items that have been referred to it pursuant to this Section 1.3(c) and solely in accordance with the procedures (including any relevant defined terms) set forth in this Agreement. Any resolution of a disputed item by the Accounting Firm must be within the range of the differences between the respective positions of Sellers’ Representative and Buyer with respect to such disputed item. Sellers’ Representative and Buyer will each submit: (i) an initial written submission to the Accounting Firm setting forth in reasonable detail its position with respect to matters in dispute within 15 days after the selection of the Accounting Firm, or on the schedule otherwise determined by the Accounting Firm; and (ii) ~~Buyer’s good faith proposed final calculation of the Purchase Price as calculated pursuant to Section 2.02 incorporating such proposed final calculations in (i) above. If Seller objects~~ a written submission responding to the ~~Post-Closing Statement~~initial submission made by the Other Party promptly following the date on which such initial submission is made by the Other Party (but in any event within 15 days after the date on which such initial submission was made by the Other Party). In addition, ~~then it shall~~ each Party will provide the Accounting Firm with all Books and Records in its or its respective Affiliates’ possession or control to the extent such Books and Records are requested by the Accounting Firm and relate to the Objection Notice. No Party and no Affiliate or Representative of a Party will meet or discuss any substantive matters with the Accounting Firm without Sellers’ Representative and Buyer ~~with~~ and their respective Representatives present or having the opportunity following at least three Business Days’ written notice ~~thereof (a “Notice of Disagreement”) setting forth Seller’s good faith and specific objections~~ to be present, either in ~~reasonable detail (each a “Disputed Item”) together with supporting documentation within fifteen (15) days after receiving the Post-Closing Statement~~person or by telephone. If Buyer and Seller working together in good faith are unable to agree on such Disputed Items contained in the Notice of Disagreement within fifteen (15) days after Buyer receives the Notice of Disagreement, then either Buyer or Seller may refer such dispute to the Accounting Firm, which shall make a final and binding determination as to all Disputed Items, and only as to such Disputed Items, on a timely basis and shall promptly notify Buyer and Seller in writing of its resolution. Such The Accounting Firm ~~handling the dispute resolution shall not~~ will have the power to ~~modify or amend~~ require any ~~term or provision~~ Party to provide to it such Books and Records and other information it deems reasonably relevant to the resolution of ~~this Agreement~~the dispute, and to require any Party to answer questions that it deems reasonably relevant to the resolution of the dispute. ~~In resolving~~ All Books and Records and other information (including answers to questions from the ~~Disputed Items,~~ Accounting Firm) submitted to the Accounting Firm ~~shall only assign a value~~ must be concurrently delivered to the Other Party. All disputes with respect to the application of Accounting Principles or to the mathematical calculation of any ~~Disputed Item that is at or between Buyer’s valuation of such Disputed Item and Seller’s valuation of such Disputed Item. Each of Buyer and Seller shall bear and pay one-half~~ disputed components of the ~~fees and other costs charged by such~~ Preliminary Closing Statement that have been referred to the Accounting Firm ~~and shall use commercially reasonable efforts to cooperate with~~ will be resolved exclusively by the Accounting Firm. ~~If Seller does not object~~ The determination of the Accounting Firm with respect to ~~the Post-~~disputes to be resolved by it hereunder, absent manifest error, will be final, conclusive and binding. Closing Statement within the time period and in the manner set forth in the first sentence of this Section 2.05(b) or if Seller accepts the Post-Closing Statement, then the Closing Cash, the Closing Indebtedness, the Closing Date Net Working Capital, the Closing ~~Employee~~ Date Net Working Capital Adjustment, Closing Date Cash, Closing Date Debt, Closing Date Pre-Closing Taxes, Closing Date Pre-Closing Tax Refunds, Closing Date Seller Transaction ~~Payments, the Closing Selling~~ Expenses and the resulting Final Closing Cash Payment derived therefrom, in each case as finally determined in accordance with this Section 1.3 (whether as a result of a failure to timely deliver an Objection Notice, mutual resolution of Sellers’ Representative and Buyer, determination by the Accounting Firm, or any combination thereof), will be used for purposes of any adjustments to the Estimated Purchase Price ~~as set forth~~ pursuant to Section 1.3(d). (d) After Closing, the Estimated Purchase Price will be either: (i) increased on a dollar-for-dollar basis by the amount that the Final Closing Cash Payment is greater than the Estimated Closing Cash Payment (such excess amount, the “Sellers’ Adjustment Amount”) or (ii) decreased on a dollar-for-dollar basis by the amount that the Estimated Closing Cash Payment is greater than the Final Closing Cash Payment (such excess amount, the “Buyer’s Adjustment Amount”). (a) If the Estimated Purchase Price is increased by the adjustment provided for in Post-Closing Statement shall become final and binding upon the Parties for all purposes hereunder on the fifteenth (15th) day after Seller receives the Post-Closing Statement. If Seller does object to the Post-Closing Statement within the time period and in the manner set forth in the first sentence of this Section ~~2.05(b~~1.3(d), then within three Business Days following the ~~Post~~determination of the Final Closing Cash Payment, Buyer will pay the Sellers’ Adjustment Amount to Sellers by wire transfer of immediately available funds to an account designated by Sellers’ Representative. (b) If the Estimated Purchase Price is decreased by the adjustment provided for in Section 1.3(d), then within three Business Days following the determination of the Final Closing Cash Payment, Sellers will pay the Buyer’s Adjustment Amount to Buyer by wire transfer of immediately available funds to an account designated by Buyer; provided, however, if Sellers fail to timely pay such amount, Buyer will have the option, in Buyer’s sole discretion, to recover the Buyer’s Adjustment Amount from the Escrow Funds and Buyer and Sellers’ Representative will provide the Escrow Agent with joint written instructions directing the payment of the Buyer’s Adjustment Amount to Buyer. (c) If the Final Cash Closing Payment is equal to the Estimated Cash Closing Payment, there will be no adjustment to the Estimated Purchase Price pursuant to Section 1.3(d). (d) For the avoidance of doubt, and notwithstanding anything else contained in this Agreement to the contrary : (i) for purposes of calculating the Estimated Purchase Price, the Final Closing Cash Payment or the Purchase Price hereunder, no items included in the definitions of Closing Date Cash, Closing Date Debt, Closing Date Pre-Closing ~~Statement shall become final~~ Taxes, Closing Date Pre-Closing Tax Refunds or Closing Date Seller Transaction Expenses (or any components thereof) will be double counted; and ~~binding~~ (ii) for purposes of calculating Closing Date Pre-Closing Tax Refunds used to determine the Final Closing Cash Payment, any and all ~~purposes hereunder~~ Tax deductions of each Company that are permitted under the Code or other applicable Law in respect of, or that are attributable to, any of the following will be treated as occurring prior to the Closing Effective Time on the ~~date~~ Closing Date: (A) any and all Seller Transaction Expenses (including amounts that ~~Buyer receives~~ would be Closing Date Seller Transaction Expenses except for the ~~Notice~~ fact that such expenses were paid prior to Closing); (B) any and all amounts incurred in connection with the retirement of ~~Disagreement except~~ the Indebtedness of any Company (including the retirement of Closing Date Debt as contemplated in this Agreement); (C) any and all deductions for unamortized financing costs of any Company (without duplication of amounts taken into account in clause (ii)(B) above); and (D) any and all other amounts paid with respect ~~to, and only~~ to the extent of, the Disputed Items in the Notice of Disagreement. Each Disputed Item shall become final and binding for all purposes hereunder on the earliest of (x) the date on which Buyer and Seller resolve transactions contemplated by this Agreement that are properly deductible in a writing signed by both Buyer and Seller such Disputed Item or (y) the date on which the Accounting Firm notifies Buyer and Seller in writing of its resolution of such Disputed Item. Buyer and Seller agree that the procedures set forth in this Section 2.05(b) for resolving disputes regarding the Disputed Items shall be the sole method for resolving such disputesPre-Closing Period.

Appears in 1 contract

Samples: Stock and Membership Interest Purchase Agreement (CST Brands, Inc.)

Adjustments to Estimated Purchase Price. (a) Sellers’ Representative will, prior to Closing, deliver (or cause to be delivered) to Buyer Sellers’ good faith written calculation of the Estimated Closing Date Net Working Capital, Estimated Closing Date Cash, Estimated Closing Date Pre-Closing Taxes, Estimated Closing Date Pre-Closing Tax Refunds and, if applicable, the Estimated Delayed Closing Date Adjustment Amount. At the Closing, the Closing Cash Payment will be (i) determined by reference to the amount of Sellers’ good faith calculation of Estimated Closing Date Cash, Estimated Closing Date Pre-Closing Taxes, Estimated Closing Date Pre-Closing Tax Refunds and, if applicable, the Estimated Delayed Closing Date Adjustment Amount and (ii) determined by reference to the amount by which Sellers’ good faith calculation of Estimated Closing Date Net Working Capital is greater than the sum of the Target Amount plus $25,000 (such sum is the “Upper Collar Amount”) or less than the remainder of the Target Amount minus $25,000 (such remainder is the “Lower Collar Amount”), with no adjustment being made to the Closing Cash Payment if the Estimated Closing Date Net Working Capital is between the Upper Collar Amount and Lower Collar Amount. The amount of any adjustment to the Closing Cash Payment for Estimated Closing Date Net Working Capital as provided in Section 1.3(a)(ii) is referred to as the “Estimated Closing Date Net Working Capital Adjustment”. (b) Within ~~sixty (60)~~ 60 days after the Closing Date, Buyer ~~shall deliver~~ will cause to ~~Seller a statement (the “Post-Closing Statement”) setting forth in reasonable detail (i)~~ be prepared, and delivered to Sellers’ Representative Buyer’s good faith ~~proposed final~~ written calculation of Closing Date Net Working Capital, Closing Date Cash, Closing Date Pre-Closing Taxes, Closing Date Pre-Closing Tax Refunds and, if applicable, the Delayed Closing Date Adjustment Amount. Sellers will have the opportunity to review Buyer’s calculation of Closing Date Net Working Capital, Closing Date Cash, Closing Date Pre-Closing Taxes, Closing Date Pre-Closing Tax Refunds and, if applicable, the Delayed Closing Date Adjustment Amount for 45 days (the “Review Period”). Buyer’s calculation of Closing Date Net Working Capital, Closing Date Cash, Closing Date Pre-Closing Taxes, Closing Date Pre-Closing Tax Refunds and, if applicable, the Delayed Closing Date Adjustment Amount will become final, conclusive and binding on the Parties unless, prior to the end of the Review Period, Sellers’ Representative notifies Buyer in writing of Sellers’ objections to such calculation, identifying the disputed items, the estimated amounts of the disputed items if then reasonably determinable and the basic facts underlying Sellers’ objections. If Sellers’ Representative delivers an objection notice, the Parties will try in good faith to resolve Sellers’ objections within 15 days following delivery of the objection notice. If Buyer and Sellers’ Representative resolve some or all of such objections within that time period, they will document their resolution in a writing signed by each of them, and such resolution will be final, conclusive and binding on the Parties. If Buyer and Sellers’ Representative are unable to resolve all of Sellers’ objections within the 15-day time period, the Parties will promptly refer any matters still in dispute for resolution as provided in Section 1.3(c). (c) In the event of any unresolved dispute concerning Closing Date Net Working Capital, Closing Date Cash, Closing Date Pre-Closing Taxes, Closing Date Pre-Closing Tax Refunds and, if applicable, the Delayed Closing Date Adjustment Amount under Section 1.3(b), then Buyer and Sellers will each designate a nationally or regionally recognized independent accounting firm with whom neither Party has any current professional relationship, and the accounting firm to resolve the dispute will be chosen by lot (such accounting firm is referred to in this Agreement as the “Accounting Firm”). The fees and expenses of the Accounting Firm will be paid by the non-prevailing Party as determined by the Accounting Firm (it being agreed that the non-prevailing Party is the Party whose calculation of the disputed components of Closing Date Net Working Capital, Closing Date Cash, Closing Date Pre-Closing Taxes, Closing Date Pre-Closing Tax Refunds and/or the Delayed Closing ~~Indebtedness~~Date Adjustment Amount (as applicable) was the furthest, in absolute dollars, from the resolution of the disputed items as determined by the Accounting Firm). The Accounting Firm will act as a neutral arbitrator and will exercise its discretion independently to resolve only the disputed items using the accounting principles used to determine the Target Amount, but within the range of the differences between Buyer and Sellers. The Parties will provide the Accounting Firm with all Books and Records in their possession reasonably relevant to the determinations to be made by it. No Party nor any Affiliate or Representative of a Party will meet or discuss any substantive matters with the Accounting Firm without Buyer and Sellers’ Representative and their respective Representatives present or having the opportunity following at least three Business Days’ notice to be present, either in person or by telephone. The Accounting Firm will have the power to require a Party to provide to it such Books and Records and other information it deems reasonably relevant to the resolution of the dispute, and to require a Party to answer questions that it deems reasonably relevant to the resolution of the dispute. All Books and Records and other information (including answers to questions from the Accounting Firm) submitted to the Accounting Firm must be concurrently delivered to each Party. All disputes with respect to the application of accounting principles or to the mathematical calculation of Closing Date Net Working Capital, Closing Date Cash, Closing Date Pre-Closing Taxes, Closing Date Pre-Closing Tax Refunds or, if applicable, the Delayed Closing Date Adjustment Amount will be resolved exclusively by the Accounting Firm. The determination of the Accounting Firm with respect to disputes to be resolved by it hereunder, absent manifest error, will be final, conclusive and binding upon the Parties. Closing Date Net Working Capital, Closing Date Cash, Closing Date Pre-Closing Taxes, Closing Date Pre-Closing Tax Refunds and, if applicable, the Delayed Closing Date Adjustment Amount, as finally determined in accordance with this Section 1.3, are referred to as the “Final Closing Date Net Working Capital,” “Final Closing Date Cash,” “Final Closing Date Pre-Closing Taxes,” “Final Closing Date Pre-Closing Tax Refunds,” and the “Final Delayed Closing Date Adjustment Amount,” respectively. (d) Following Closing, the Purchase Price (exclusive of the Earn-out) will be determined by adding to, or subtracting from, the Estimated Purchase Price (as applicable) on a dollar-for-dollar basis an amount equal to the net result of: (i) either (A) if the Estimated Closing Date Net Working Capital was between the Upper Collar Amount and Lower Collar Amount, then by the amount by which the Final Closing Date Net Working Capital is greater than or less than (as applicable) the Upper Collar Amount or Lower Collar Amount (as applicable), with no adjustment being made to the Estimated Purchase Price if the Final Closing Date Net Working Capital is between the Upper Collar Amount and Lower Collar Amount or (B) if the Estimated Closing Date Net Working Capital was greater than the Upper Collar Amount or less than the Lower Collar Amount, then by the amount by which the Final Closing Date Net Working Capital is greater than or less than (as applicable) the Estimated Closing Date Net Working Capital; provided, however, that if the Final Closing Date Net Working Capital is between the Upper Collar Amount and Lower Collar Amount, then the amount to be added to, or subtracted from, the Estimated Purchase Price (as applicable) will be equal to the inverse of the amount of the Estimated Closing Date Net Working Capital Adjustment (for example, if the Estimated Closing Date Net Working Capital Adjustment was a negative $100, the inverse would be a positive $100), plus or minus (ii) the amount by which the Final Closing Date Cash is greater than or less than (as applicable) the Estimated Closing Date Cash, plus or minus (iii) the amount by which the Final Closing Date Pre-Closing Taxes is greater than or less than (as applicable) the Estimated Closing Date Pre-Closing Taxes, plus or minus (iv) the amount by which the Final Closing Date Pre-Closing Tax Refunds is greater than or less than (as applicable) the Estimated Closing Date Pre-Closing Tax Refunds, plus or minus (v) the amount by which the Final Delayed Closing Adjustment Amount is greater than or less than (as applicable) the Estimated Delayed Closing Date Adjustment Amount. If the Estimated Purchase Price is increased by the adjustment provided for in this Section 1.3(d), Buyer will pay such increase to Sellers within five Business Days following the determination of the Final Closing Date Net Working Capital, the Final Closing Employee Transaction Payments and the Closing Selling Expenses and (ii) Buyer’s good faith proposed final calculation of the Purchase Price as calculated pursuant to Section 2.02 incorporating such proposed final calculations in (i) above. If Seller objects to the Post-Closing Statement, then it shall provide Buyer with written notice thereof (a “Notice of Disagreement”) setting forth Seller’s good faith and specific objections in reasonable detail (each a “Disputed Item”) together with supporting documentation within fifteen (15) days after receiving the Post-Closing Statement. If Buyer and Seller working together in good faith are unable to agree on such Disputed Items contained in the Notice of Disagreement within fifteen (15) days after Buyer receives the Notice of Disagreement, then either Buyer or Seller may refer such dispute to the Accounting Firm, which shall make a final and binding determination as to all Disputed Items, and only as to such Disputed Items, on a timely basis and shall promptly notify Buyer and Seller in writing of its resolution. Such Accounting Firm handling the dispute resolution shall not have the power to modify or amend any term or provision of this Agreement. In resolving the Disputed Items, the Accounting Firm shall only assign a value to any Disputed Item that is at or between Buyer’s valuation of such Disputed Item and Seller’s valuation of such Disputed Item. Each of Buyer and Seller shall bear and pay one-half of the fees and other costs charged by such Accounting Firm and shall use commercially reasonable efforts to cooperate with the Accounting Firm. If Seller does not object to the Post-Closing Statement within the time period and in the manner set forth in the first sentence of this Section 2.05(b) or if Seller accepts the Post-Closing Statement, then the Closing Date Cash, the Final Closing ~~Indebtedness~~Date Pre-Closing Taxes, the Final Closing Date Pre-Closing Tax Refunds and, if applicable, the Final Delayed Closing Date Adjustment Amount by wire transfer of immediately available funds to the accounts designated by Sellers’ Representative. If the Estimated Purchase Price is decreased by the adjustment provided for in this Section 1.3(d), Sellers will pay such decrease to Buyer within five Business Days following the determination of the Final Closing Date Net Working Capital, ~~the~~ Final Closing ~~Employee Transaction Payments~~Date Cash, Final Closing Date Pre-Closing Taxes, Final Closing Date Pre-Closing Tax Refunds and, if applicable, the Final Delayed Closing Selling Expenses and the Purchase Price as set forth in Post-Closing Statement shall become final and binding upon the Parties for all purposes hereunder on the fifteenth (15th) day after Seller receives the Post-Closing Statement. If Seller does object Date Adjustment Amount by wire transfer of immediately available funds to the Post-Closing Statement within the time period and in the manner set forth in the first sentence of this Section 2.05(b), then the Post-Closing Statement shall become final and binding for all purposes hereunder on the date that Buyer receives the Notice of Disagreement except with respect to, and only to the extent of, the Disputed Items in the Notice of Disagreement. Each Disputed Item shall become final and binding for all purposes hereunder on the earliest of (x) the date on which Buyer and Seller resolve in a writing signed an account designated by both Buyer and Seller such Disputed Item or (y) the date on which the Accounting Firm notifies Buyer and Seller in writing of its resolution of such Disputed Item. Buyer and Seller agree that the procedures set forth in this Section 2.05(b) for resolving disputes regarding the Disputed Items shall be the sole method for resolving such disputesBuyer.

Appears in 1 contract

Samples: Stock Purchase Agreement (Andersons, Inc.)

Adjustments to Estimated Purchase Price. ~~Within sixty~~ (60a) Three (3) Business Days prior to the Closing Date, Sellers caused the Tiffin Group to deliver to Buyer, and Buyer agreed to and accepted, a statement (“Estimated Closing Statement”) setting forth the Tiffin Group’s good faith estimate, consistent with the Accounting Principles, of: (i) Closing Date Cash (“Estimated Closing Date Cash”); (ii) Closing Date Debt (“Estimated Closing Date Debt”); and (iii) Closing Date Seller Transaction Expenses (“Estimated Closing Date Seller Transaction Expenses”). (b) Buyer will use its reasonable best efforts to cause to be prepared and delivered to the Seller Representative, within 60 days after the Closing Date, ~~Buyer shall deliver to Seller~~ a statement (the “~~Post-~~Preliminary Closing Statement”) setting forth in reasonable detail ~~(i)~~ and consistent with the Accounting Principles, Buyer’s good faith ~~proposed final~~ written calculation of: (i) Closing Date Tangible Net Assets and the Closing Date Tangible Net Assets Adjustment; (ii) Closing Date Cash; (iii) Closing Date Debt; (iv) Closing Date Seller Transaction Expenses; and (v) the resulting Closing Cash Payment derived from that calculation; provided, however, that if, despite Buyer’s reasonable best efforts, it cannot deliver the Preliminary Closing Statement within 60 days, Buyer may have an additional 30 days within which to prepare and deliver the Preliminary Closing Statement. (c) Seller Representative and Sellers will have the opportunity to review the Preliminary Closing Statement for 30 days following their receipt of the Preliminary Closing Statement (the “Review Period”). During the Review Period, at the request of the Seller Representative, the Seller Representative and their respective Representatives will, during normal business hours, be provided with such access to Books and Records of the Tiffin Group and Subsidiaries, and other information (including financial statements and work papers (including those prepared by independent third Persons) subject to customary access policies and procedures) of the Tiffin Group, Subsidiaries and Buyer in the possession or control of the Tiffin Group, Buyer or their respective Affiliates or Representatives that relate to, as well as access to personnel of Buyer, its Affiliates (including the Tiffin Group and Subsidiaries) and their respective Representatives that were involved in, the calculation or determination of the items included in the Preliminary Closing Statement (including making available their chief financial officer(s) and accountants to respond to reasonable written or oral inquiries of the Seller Representative, any Seller or their respective Representatives), in each case, as is reasonably necessary in order for the Seller Representative or Sellers to respond to or evaluate the calculations contained in the Preliminary Closing Statement. Buyer’s calculation of ~~the~~ Closing ~~Cash~~Date Tangible Net Assets, the Closing ~~Indebtedness~~Date Tangible Net Assets Adjustment, Closing Date Cash, Closing Date Debt, Closing Date Seller Transaction Expenses, and the Final Closing Cash Payment derived from that calculation will, absent fraud or manifest error, become final, conclusive and binding on the Parties unless, prior to the end of the Review Period, the ~~Closing Net Working Capital~~Seller Representative notifies Buyer in writing of Sellers’ objections to such calculation (an “Objection Notice”), the Closing Employee Transaction Payments and the Closing Selling Expenses and (ii) Buyer’s good faith proposed final calculation of the Purchase Price as calculated pursuant to Section 2.02 incorporating such proposed final calculations in (i) above. If Seller objects to the Post-Closing Statement, then it shall provide Buyer with written notice thereof (a “Notice of Disagreement”) setting forth Seller’s good faith and specific objections identifying in reasonable detail ~~(each a “Disputed Item”) together with supporting documentation~~ the disputed items, the estimated amounts of the disputed items if then reasonably determinable and the basic facts underlying Sellers’ objections. If the Seller Representative delivers an Objection Notice to Buyer prior to the end of the Review Period, Buyer and the Seller Representative will negotiate in good faith to resolve Sellers’ objections set forth in the Objection Notice within ~~fifteen (15)~~ 30 days ~~after receiving~~ following delivery of the ~~Post-Closing Statement~~Objection Notice. If Buyer and the Seller working together in good faith are unable to agree on such Disputed Items contained in the Notice of Disagreement within fifteen (15) days after Buyer receives the Notice of Disagreement, then either Buyer Representative resolve some or ~~Seller may refer such dispute to the Accounting Firm, which shall make a final and binding determination as to~~ all Disputed Items, and only as to such Disputed Items, on a timely basis and shall promptly notify Buyer and Seller in writing of its resolution. Such Accounting Firm handling the dispute resolution shall not have the power to modify or amend any term or provision of this Agreement. In resolving the Disputed Items, the Accounting Firm shall only assign a value to any Disputed Item that is at or between Buyer’s valuation of such Disputed Item and Seller’s valuation of such Disputed Item. Each of Buyer and Seller shall bear and pay one-half of the fees and other costs charged by such Accounting Firm and shall use commercially reasonable efforts to cooperate with the Accounting Firm. If Seller does not object to the Post-Closing Statement objections within ~~the~~ that time ~~period and in the manner set forth in the first sentence of this Section 2.05(b) or if Seller accepts the Post-Closing Statement~~period, then the Closing Cash, the Closing Indebtedness, the Closing Net Working Capital, the Closing Employee Transaction Payments, the Closing Selling Expenses and the Purchase Price as set forth in Post-Closing Statement shall become final and binding upon the Parties for all purposes hereunder on the fifteenth (15th) day after Seller receives the Post-Closing Statement. If Seller does object to the Post-Closing Statement within the time period and in the manner set forth in the first sentence of this Section 2.05(b), then the Post-Closing Statement shall become final and binding for all purposes hereunder on the date that Buyer receives the Notice of Disagreement except with respect to, and only to the extent of, the Disputed Items in the Notice of Disagreement. Each Disputed Item shall become final and binding for all purposes hereunder on the earliest of (x) the date on which Buyer and Seller resolve they will document their resolution in a writing signed by ~~both~~ each of them, and such resolution will be final, conclusive and binding on the Parties. If Buyer and the Seller Representative are unable to resolve all of Sellers’ objections within the 30‑day time period following the delivery of the Objection Notice, the Parties will promptly refer any matters still in dispute for resolution as provided in Section 1.3(d). (d) Any unresolved dispute concerning the Preliminary Closing Statement under Section 1.3(c) will be referred for resolution to KPMG US who will be jointly retained by Buyer and Seller Representative. If the Parties are unable to engage such ~~Disputed Item~~ firm for any reason, then Buyer and the Seller Representative will each designate a nationally recognized independent accounting firm with whom no Party has any current professional relationship, and the accounting firm to resolve the dispute will be chosen by lot (KPMG US, or ~~(y)~~ any other chosen accounting firm, is referred to in this Agreement as the ~~date on which~~ “Accounting Firm”). The fees and expenses of the Accounting Firm ~~notifies~~ shall be allocated fifty percent (50%) to Sellers and fifty percent (50%) to Buyer. The Accounting Firm will act as a neutral arbitrator and will resolve only the disputed items that have been referred to it pursuant to this Section 1.3(d) and solely in accordance with the procedures (including any relevant defined terms and consistent with the Accounting Principles) set forth in this Agreement. Any resolution of a disputed item by the Accounting Firm must be within the range of the differences between Buyer’s and the Seller Representative’s positions with respect to such disputed item. The Parties will provide the Accounting Firm with all Books and Records in their possession reasonably relevant to the determinations to be made by it as may be requested by the Accounting Firm. No Party or any Affiliate or Representative of a Party will meet or discuss any substantive matters with the Accounting Firm without Buyer and the Seller Representative and their respective Representatives present or having the opportunity following at least three Business Days’ written notice to be present, either in ~~writing of its~~ person or by telephone. The Accounting Firm will have the power to require a Party to provide to it such Books and Records and other information it deems reasonably relevant to the resolution of the dispute, and to require a Party to answer questions that it deems reasonably relevant to the resolution of the dispute. All Books and Records and other information (including answers to questions from the Accounting Firm) submitted to the Accounting Firm must be concurrently delivered to each other Party. All disputes with respect to the application of accounting principles, including the Accounting Principles or to the mathematical calculation of any disputed components of the Preliminary Closing Statement that have been referred to the Accounting Firm pursuant to this Section 1.3 will be resolved exclusively by the Accounting Firm. The determination of the Accounting Firm with respect to disputes to be resolved by it under this Agreement, absent fraud or manifest error, will be final, conclusive and binding upon the Parties. Closing Date Tangible Net Assets, the Closing Date Tangible Net Assets Adjustment, Closing Date Cash, Closing Date Debt, Closing Date Seller Transaction Expenses, and the resulting Final Closing Cash Payment derived from them, in each case as finally determined in accordance with this Section 1.3 (whether as a result of a failure to timely deliver an Objection Notice, mutual resolution of the Parties pursuant to Section 1.3(c), determination by the Accounting Firm in accordance with this Section 1.3(d), or any combination), will be used for purposes of any adjustments to the Estimated Purchase Price pursuant to Section 1.3(e). (e) Following Closing, the Estimated Purchase Price will be: (i) increased on a dollar-for-dollar basis by the amount that the Final Closing Cash Payment is greater than the Estimated Closing Cash Payment; and (ii) decreased on a dollar-for-dollar basis by the amount that the Estimated Closing Cash Payment is greater than the Final Closing Cash Payment. (f) If the Estimated Purchase Price is increased by the adjustment provided for in Section 1.3(e)(i), then within five Business Days following the determination of the Final Closing Cash Payment, Buyer will pay such ~~Disputed Item~~increase to Sellers by wire transfer of immediately available funds to the accounts designated by Seller Representative. If the Estimated Purchase Price is decreased by the adjustment provided for in Section 1.3(e)(ii), then within five Business Days following the determination of the Final Closing Cash Payment, Seller Representative will cause Sellers to pay such decrease to Buyer by wire transfer of immediately available funds to the account designated by Buyer. (g) For the avoidance of doubt, and notwithstanding anything else contained in this Agreement to the contrary: (i) for purposes of calculating the Closing Date Tangible Net Assets, the Estimated Purchase Price, the Final Closing Cash Payment or the Purchase Price, no items included in the definitions of Closing Date Tangible Net Assets, including Closing Date Cash, Closing Date Debt, Negative Redemption Account Amount, and Closing Date Seller Transaction Expenses (or any components of them) will be double counted; and (ii) for purposes of calculating the Final Closing Cash Payment, any and all Tax deductions of the Tiffin Group that are permitted under the Code or other applicable Law in respect of, or that are attributable to, any of the following will be treated as occurring prior to the close of business on the Closing Date: (A) any and all Seller Transaction Expenses (including amounts that would be Closing Date Seller Transaction Expenses except for the fact that such expenses were paid prior to Closing); (B) any and all amounts incurred in connection with the retirement of the Indebtedness of the Tiffin Group (including the retirement of Closing Date Debt as contemplated in this Agreement); (C) any and all employee bonuses or debt prepayment fees (including the employer portion of any payroll Taxes due in connection therewith); (D) any and all deductions for unamortized financing costs of the Tiffin Group (without duplication of amounts taken into account in the foregoing clause (ii)(B)); and (E) any and all other amounts paid with respect to the transactions contemplated by this Agreement that are properly deductible in a Pre‑Closing Period. (h) On the morning of the day immediately following the Closing Date, Buyer shall cause the Tiffin Group and the Subsidiaries to commence a complete physical identification of their inventory and count thereof as of the Closing, in accordance with agreed upon inventory procedures. The inventory testing procedures will include the verification of finished goods and work-in-progress (“WIP”) units and chassis, including inventory and raw materials maintained at the Tiffin Group’s facilities. An acceptable confirmation from the applicable third party will be obtained for all inventory (raw, chassis, WIP, or finished goods) located off‑site as of the Closing. The Sellers’ Representative and the Buyer, and each of their respective representatives and accountants, shall be entitled (i) to have unrestricted access to observe, and make inquiries and receive responsive information with regard to, the foregoing inventory count, and (ii) to test and sample such inventory during the course of such inventory count. Buyer and Sellers shall use reasonable best efforts to resolve any disagreement between the Parties with respect to the inventory count, but not the value of such inventory, at the time of the inventory count. This inventory count will be utilized by the Parties in the determination of the Closing Date Tangible Net Assets. Buyer and Seller ~~agree~~ Representative, on behalf of Sellers, shall use their best efforts to adjust any inventory count that is, or appears to be, incorrect based on a review of the ~~procedures set forth in this Section 2.05(b) for resolving disputes regarding~~ inventory compilation prepared by the ~~Disputed Items~~ Tiffin Group and the Subsidiaries utilizing the counts from the inventory count procedures. If Buyer, prior to final determination of the Closing Date Tangible Net Assets or Final Closing Date Tangible Net Assets, determines that any inventory count appears incorrect as the result of a data entry, recording spreadsheet error, unit of measure or similar objective mistake, Buyer shall not be bound by the ~~sole method for resolving such disputes~~incorrect inventory count when determining the Closing Date Tangible Net Assets or Final Closing Date Tangible Net Assets.

Appears in 1 contract

Samples: Stock Purchase Agreement (Thor Industries Inc)

Adjustments to Estimated Purchase Price. (a) At least three Business Days prior to the Closing Date, Sellers’ Representative will deliver to Buyer a statement setting forth in reasonable detail Sellers’ good faith written estimate of: (i) Closing Date Net Working Capital (the “Estimated Closing Date Net Working Capital”) and the Closing Date Net Working Capital Adjustment (the “Estimated Closing Date Net Working Capital Adjustment”); (ii) Closing Date Cash (“Estimated Closing Date Cash”); (iii) Closing Date Debt (“Estimated Closing Date Debt”); (iv) Closing Date Pre-Closing Taxes (“Estimated Closing Date Pre-Closing Taxes”); (v) Closing Date Pre-Closing Tax Refunds (“Estimated Closing Date Pre-Closing Tax Refunds”); (vi) Closing Date Seller Transaction Expenses (“Estimated Closing Date Seller Transaction Expenses”); (vii) the Closing Construction Amount (the “Estimated Closing Construction Amount”); and (viii) the resulting Estimated Closing Cash Payment derived therefrom. Buyer will have the right to review and comment on the Estimated Closing Cash Payment (including the components thereof), and Sellers’ Representative will consider and negotiate in good faith any objections and revisions proposed by Buyer to the Estimated Closing Cash Payment (including the components thereof), provided that failure to object or comment will not prejudice or limit Buyer’s rights pursuant to this Section 1.3. (b) Within ~~sixty (60)~~ 90 days after the Closing Date, Buyer ~~shall~~ will deliver to ~~Seller~~ Sellers’ Representative a statement (the “~~Post-~~Preliminary Closing Statement”) setting forth in reasonable detail ~~(i)~~ Buyer’s good faith ~~proposed final~~ written calculation of: (i) Closing Date Net Working Capital and the Closing Date Net Working Capital Adjustment; (ii) Closing Date Cash; (iii) Closing Date Debt; (iv) Closing Date Pre-Closing Taxes; (v) Closing Date Pre-Closing Tax Refunds; (vi) Closing Date Seller Transaction Expenses; (vi) Closing Construction Amount; and (vi) the resulting Final Closing Cash Payment derived therefrom. Sellers will have an opportunity to review the Preliminary Closing Statement for 60 days following its receipt thereof from Buyer (the “Review Period”). During the Review Period, at Sellers’ Representative’s request, Sellers and their Representatives will, during normal business hours, be provided with reasonable access to all Books and Records and other 3 information related to the preparation and calculation of the Final Closing ~~Cash~~Cash Payment (including financial statements and work papers, whether prepared internally or by third Persons) in the possession or control of Buyer or any of its Affiliates (including the Companies) or Representatives, as well as access to personnel of Buyer and its Affiliates (including the Companies) and Representatives that were involved in the calculation or determination of the items included in the Preliminary Closing ~~Indebtedness~~Statement, in each case, as is reasonably requested by Sellers’ Representative in connection with the review of the Preliminary Closing Statement; provided, that such access will be in a manner that does not interfere with the normal business operations of Buyer and the Companies. Buyer’s calculation of Closing Date Net Working Capital, the Closing ~~Employee~~ Date Net Working Capital Adjustment, Closing Date Cash, Closing Date Debt, Closing Date Pre-Closing Taxes, Closing Date Pre-Closing Tax Refunds, Closing Date Seller Transaction ~~Payments~~ Expenses, Closing Construction Amount and the Final Closing ~~Selling Expenses~~ Cash Payment derived therefrom will become final, conclusive and binding unless, prior to the end of the Review Period, Sellers’ Representative notifies Buyer in writing of Sellers’ objections to such calculation (an “Objection Notice”), identifying in reasonable detail the disputed items, the estimated amounts of the disputed items if then reasonably determinable and the basic facts underlying such objections. If Sellers’ Representative delivers an Objection Notice to Buyer prior to the end of the Review Period, Sellers’ Representative and Buyer will try in good faith to resolve Sellers’ objections within 15 days following delivery of the Objection Notice. If Sellers’ Representative and Buyer resolve some or all of such objections within such 15-day period, they will document their resolution in a writing signed by each of them, and such resolution will be final, conclusive and binding. If Sellers’ Representative and Buyer are unable to resolve all of Sellers’ objections within 15 days following delivery of the Objection Notice, they will promptly refer the matters remaining in dispute for resolution as provided in Section 1.3(c). (c) Any unresolved dispute concerning the Preliminary Closing Statement under Section 1.3(b) will be referred for resolution to the Atlanta, Georgia office of BDO USA, LLP, who will be jointly retained by Sellers and Buyer. If Sellers and Buyer are unable to engage BDO USA, LLP for any reason, then Sellers’ Representative and Buyer will each designate a nationally or regionally recognized independent accounting firm located in Atlanta, Georgia with whom no Party (or any of its Affiliates) has any current professional relationship, and the accounting firm to resolve the dispute will be chosen by lot (BDO USA, LLP or any other chosen accounting firm, the “Accounting Firm”). The selection of the Accounting Firm will be made as promptly as possible after the expiration of the 15-day period following the delivery of the Objection Notice, with the understanding that Buyer and Sellers will retain the Accounting Firm within 30 days after the expiration of such 15-day period. The Accounting Firm will determine the allocation of its fees and expenses to Sellers and Buyer based on the inverse of the percentage that the Accounting Firm’s resolution of the disputed items (before such allocation) bears to the total amount of the disputed items as originally submitted to the Accounting Firm. (For example, if the total amount of the disputed items as originally submitted to the Accounting Firm equals $1,000 and the Accounting Firm awards $600 in favor of the position of Sellers’ Representative, sixty percent (60%) of the fees and expenses of the Accounting Firm would be borne by Buyer and forty percent (40%) of the fees and expenses of the Accounting Firm would be borne by Sellers). The Accounting Firm will act as a neutral arbitrator and will resolve only the disputed items that have been referred to it pursuant to this Section 1.3(c) and solely in accordance with the procedures (including any relevant defined terms) set forth in this Agreement. Any resolution of a disputed item by the Accounting 4 Firm must be within the range of the differences between the respective positions of Sellers’ Representative and Buyer with respect to such disputed item. Sellers’ Representative and Buyer will each submit: (i) an initial written submission to the Accounting Firm setting forth in reasonable detail its position with respect to matters in dispute within 15 days after the selection of the Accounting Firm, or on the schedule otherwise determined by the Accounting Firm; and (ii) ~~Buyer’s good faith proposed final calculation of the Purchase Price as calculated pursuant to Section 2.02 incorporating such proposed final calculations in (i) above. If Seller objects~~ a written submission responding to the ~~Post-Closing Statement~~initial submission made by the Other Party promptly following the date on which such initial submission is made by the Other Party (but in any event within 15 days after the date on which such initial submission was made by the Other Party). In addition, ~~then it shall~~ each Party will provide the Accounting Firm with all Books and Records in its or its respective Affiliates’ possession or control to the extent such Books and Records are requested by the Accounting Firm and relate to the Objection Notice. No Party and no Affiliate or Representative of a Party will meet or discuss any substantive matters with the Accounting Firm without Sellers’ Representative and Buyer ~~with~~ and their respective Representatives present or having the opportunity following at least three Business Days’ written notice ~~thereof (a “Notice of Disagreement”) setting forth Seller’s good faith and specific objections~~ to be present, either in ~~reasonable detail (each a “Disputed Item”) together with supporting documentation within fifteen (15) days after receiving the Post-Closing Statement~~person or by telephone. If Buyer and Seller working together in good faith are unable to agree on such Disputed Items contained in the Notice of Disagreement within fifteen (15) days after Buyer receives the Notice of Disagreement, then either Buyer or Seller may refer such dispute to the Accounting Firm, which shall make a final and binding determination as to all Disputed Items, and only as to such Disputed Items, on a timely basis and shall promptly notify Buyer and Seller in writing of its resolution. Such The Accounting Firm ~~handling the dispute resolution shall not~~ will have the power to ~~modify or amend~~ require any ~~term or provision~~ Party to provide to it such Books and Records and other information it deems reasonably relevant to the resolution of ~~this Agreement~~the dispute, and to require any Party to answer questions that it deems reasonably relevant to the resolution of the dispute. ~~In resolving~~ All Books and Records and other information (including answers to questions from the ~~Disputed Items,~~ Accounting Firm) submitted to the Accounting Firm ~~shall only assign a value~~ must be concurrently delivered to the Other Party. All disputes with respect to the application of Accounting Principles or to the mathematical calculation of any ~~Disputed Item that is at or between Buyer’s valuation of such Disputed Item and Seller’s valuation of such Disputed Item. Each of Buyer and Seller shall bear and pay one-half~~ disputed components of the ~~fees and other costs charged by such~~ Preliminary Closing Statement that have been referred to the Accounting Firm ~~and shall use commercially reasonable efforts to cooperate with~~ will be resolved exclusively by the Accounting Firm. ~~If Seller does not object~~ The determination of the Accounting Firm with respect to ~~the Post-~~disputes to be resolved by it hereunder, absent manifest error, will be final, conclusive and binding. Closing Statement within the time period and in the manner set forth in the first sentence of this Section 2.05(b) or if Seller accepts the Post-Closing Statement, then the Closing Cash, the Closing Indebtedness, the Closing Date Net Working Capital, the Closing ~~Employee~~ Date Net Working Capital Adjustment, Closing Date Cash, Closing Date Debt, Closing Date Pre-Closing Taxes, Closing Date Pre-Closing Tax Refunds, Closing Date Seller Transaction ~~Payments, the Closing Selling~~ Expenses and the resulting Final Closing Cash Payment derived therefrom, in each case as finally determined in accordance with this Section 1.3 (whether as a result of a failure to timely deliver an Objection Notice, mutual resolution of Sellers’ Representative and Buyer, determination by the Accounting Firm, or any combination thereof), will be used for purposes of any adjustments to the Estimated Purchase Price ~~as set forth~~ pursuant to Section 1.3(d). (d) After Closing, the Estimated Purchase Price will be either: (i) increased on a dollar-for-dollar basis by the amount that the Final Closing Cash Payment is greater than the Estimated Closing Cash Payment (such excess amount, the “Sellers’ Adjustment Amount”) or (ii) decreased on a dollar-for-dollar basis by the amount that the Estimated Closing Cash Payment is greater than the Final Closing Cash Payment (such excess amount, the “Buyer’s Adjustment Amount”). (a) If the Estimated Purchase Price is increased by the adjustment provided for in Post-Closing Statement shall become final and binding upon the Parties for all purposes hereunder on the fifteenth (15th) day after Seller receives the Post-Closing Statement. If Seller does object to the Post-Closing Statement within the time period and in the manner set forth in the first sentence of this Section ~~2.05(b~~1.3(d), then within three Business Days following the ~~Post~~determination of the Final Closing Cash Payment, Buyer will pay the Sellers’ Adjustment Amount to Sellers by wire transfer of immediately available funds to an account designated by Sellers’ Representative. 5 (b) If the Estimated Purchase Price is decreased by the adjustment provided for in Section 1.3(d), then within three Business Days following the determination of the Final Closing Cash Payment, Sellers will pay the Buyer’s Adjustment Amount to Buyer by wire transfer of immediately available funds to an account designated by Buyer; provided, however, if Sellers fail to timely pay such amount, Buyer will have the option, in Buyer’s sole discretion, to recover the Buyer’s Adjustment Amount from the Escrow Funds and Buyer and Sellers’ Representative will provide the Escrow Agent with joint written instructions directing the payment of the Buyer’s Adjustment Amount to Buyer. (c) If the Final Cash Closing Payment is equal to the Estimated Cash Closing Payment, there will be no adjustment to the Estimated Purchase Price pursuant to Section 1.3(d). (d) For the avoidance of doubt, and notwithstanding anything else contained in this Agreement to the contrary : (i) for purposes of calculating the Estimated Purchase Price, the Final Closing Cash Payment or the Purchase Price hereunder, no items included in the definitions of Closing Date Cash, Closing Date Debt, Closing Date Pre-Closing ~~Statement shall become final~~ Taxes, Closing Date Pre-Closing Tax Refunds or Closing Date Seller Transaction Expenses (or any components thereof) will be double counted; and ~~binding~~ (ii) for purposes of calculating Closing Date Pre-Closing Tax Refunds used to determine the Final Closing Cash Payment, any and all ~~purposes hereunder~~ Tax deductions of each Company that are permitted under the Code or other applicable Law in respect of, or that are attributable to, any of the following will be treated as occurring prior to the Closing Effective Time on the ~~date~~ Closing Date: (A) any and all Seller Transaction Expenses (including amounts that ~~Buyer receives~~ would be Closing Date Seller Transaction Expenses except for the ~~Notice~~ fact that such expenses were paid prior to Closing); (B) any and all amounts incurred in connection with the retirement of ~~Disagreement except~~ the Indebtedness of any Company (including the retirement of Closing Date Debt as contemplated in this Agreement); (C) any and all deductions for unamortized financing costs of any Company (without duplication of amounts taken into account in clause (ii)(B) above); and (D) any and all other amounts paid with respect ~~to, and only~~ to the extent of, the Disputed Items in the Notice of Disagreement. Each Disputed Item shall become final and binding for all purposes hereunder on the earliest of (x) the date on which Buyer and Seller resolve transactions contemplated by this Agreement that are properly deductible in a writing signed by both Buyer and Seller such Disputed Item or (y) the date on which the Accounting Firm notifies Buyer and Seller in writing of its resolution of such Disputed Item. Buyer and Seller agree that the procedures set forth in this Section 2.05(b) for resolving disputes regarding the Disputed Items shall be the sole method for resolving such disputesPre-Closing Period.

Appears in 1 contract

Samples: Stock and Membership Interest Purchase Agreement

Adjustments to Estimated Purchase Price. ~~Within sixty~~ (60a) ~~days after~~ No later than three (3) Business Days prior to the Closing Date, ~~Buyer~~ for purposes of determining the Estimated Purchase Price, Seller shall deliver to Buyer Seller's good-faith estimates of Closing Cash ("Estimated Closing Cash") and Closing Net Working Capital ("Estimated Closing Net Working Capital"), such estimates to be (i) subject to the approval of Buyer, such approval not to be unreasonably withheld, conditioned or delayed, and (ii) based on the Company's books and records and other information then available and prepared in accordance with the accounting principles, policies, methodologies and procedures set forth on Schedule 1.6(a) attached hereto (the "Specified Accounting Principles"). Seller shall deliver to Buyer all reasonably requested relevant backup materials, in detail reasonably requested by Buyer, together with a certification, signed on behalf of Seller by its Chief Executive Officer and confirming that such estimates have been prepared in good faith in accordance with the Specified Accounting Principles, concurrently with the delivery of such estimates. As provided in Section 1.3 hereof, the Estimated Purchase Price shall be adjusted, dollar for dollar, up or down, as appropriate, to the extent that the Estimated Closing Net Working Capital either (I) exceeds the Base Net Working Capital (such excess the "Estimated Overage") or (II) is less than the Base Net Working Capital (such shortfall, the "Estimated Underage"), as applicable. (b) No later than thirty (30) days following the delivery of the Audited Closing Financial Statements to Buyer as provided in Section 4.12 hereof, Buyer shall cause to be prepared in accordance with the Specified Accounting Principles a statement (the ~~“Post-~~"Closing ~~Statement”~~Date Schedule") setting forth in reasonable detail ~~(i)~~ Buyer~~’s good faith proposed final~~ 's calculation of ~~the~~ Closing ~~Cash, the Closing Indebtedness, the~~ Cash and Closing Net Working Capital, and shall deliver the Closing ~~Employee Transaction Payments~~ Date Schedule to Seller. Buyer shall deliver to Seller all reasonably requested relevant backup materials, in detail reasonably requested by Seller, together with a certification, signed on behalf of Buyer by its Controller and confirming that such Closing Date Schedule has been prepared in good faith in accordance with the Specified Accounting Principles, concurrently with the delivery of such schedule. (c) If Seller disputes the calculation of any component of Closing Cash or Closing Net Working Capital set forth in the Closing ~~Selling Expenses and~~ Date Schedule, then Seller may deliver a written notice (iia "Dispute Notice") ~~Buyer’s good faith proposed final~~ to Buyer at any time during the twenty (20) day period commencing upon receipt by Seller of the Closing Date Schedule (the "Review Period"). The Dispute Notice shall set forth in reasonable detail the basis for any dispute as well as Seller's calculation of the ~~Purchase Price as calculated pursuant to Section 2.02 incorporating such proposed final calculations~~ disputed component, which shall be done in ~~(i) above~~good faith in accordance with the Specified Accounting Principles. If Seller ~~objects~~ does not deliver a Dispute Notice prior to the ~~Post-Closing Statement~~expiration of the Review Period, then ~~it shall provide Buyer with written notice thereof (a “Notice~~ Buyer's determination of ~~Disagreement”) setting~~ Closing Cash and Closing Net Working Capital set forth Seller’s good faith and specific objections in reasonable detail (each a “Disputed Item”) together with supporting documentation within fifteen (15) days after receiving the Post-Closing Statement. If Buyer and Seller working together in good faith are unable to agree on such Disputed Items contained in the ~~Notice of Disagreement within fifteen (15) days after Buyer receives the Notice of Disagreement, then either Buyer or Seller may refer such dispute to the Accounting Firm, which~~ Closing Date Schedule shall ~~make a~~ be deemed final and binding ~~determination as to~~ on Seller and Buyer for all Disputed Items, and only as to such Disputed Items, on a timely basis and shall promptly notify Buyer and Seller in writing of its resolution. Such Accounting Firm handling the dispute resolution shall not have the power to modify or amend any term or provision purposes of this Agreement~~. In resolving~~ . (d) If Seller delivers a Dispute Notice to Buyer prior to the Disputed Items, the Accounting Firm shall only assign a value to any Disputed Item that is at or between Buyer’s valuation of such Disputed Item and Seller’s valuation of such Disputed Item. Each of Buyer and Seller shall bear and pay one-half expiration of the ~~fees~~ Review Period, then Seller and ~~other costs charged by such Accounting Firm and~~ Buyer shall use commercially reasonable efforts to ~~cooperate with the Accounting Firm~~reach agreement on each component of Closing Cash and Closing Net Working Capital that is in dispute. If Seller ~~does not object~~ and Buyer are unable to reach agreement on the final resolution of each component of Closing Cash and Closing Net Working Capital that is in dispute within thirty (30) days after the end of the Review Period, then either party shall have the right to refer such dispute to Ernst & Young LLP to resolve such dispute (the "Neutral Auditor"). In connection with the resolution of any such dispute by the Neutral Auditor: (i) each of Seller and Buyer shall have a reasonable opportunity to meet with the Neutral Auditor to provide their views as to any issues with respect to the ~~Post-~~calculation of any of Closing ~~Statement~~ Cash and Closing Net Working Capital that are unresolved from the Dispute Notice; (ii) the Neutral Auditor shall determine Closing Cash and Closing Net Working Capital in accordance with the Specified Accounting Principles within thirty (30) days of such referral, and upon reaching such determination shall deliver a copy of its calculations (the ~~time period~~ "Expert Calculations") to Seller and ~~in the manner set forth in the first sentence of this Section 2.05(b~~Buyer; and (iii) ~~or if Seller accepts the Post-~~Closing ~~Statement, then the Closing Cash, the Closing Indebtedness, the~~ Cash and Closing Net Working Capital, as determined by the ~~Closing Employee Transaction Payments~~Neutral Auditor shall, ~~the Closing Selling Expenses and the Purchase Price as set forth in Post-Closing Statement shall become final and~~ absent fraud or manifest error, be binding upon the ~~Parties for all purposes hereunder on~~ parties. In performing the ~~fifteenth~~ Expert Calculations, the Neutral Auditor (~~15th~~i) ~~day after Seller receives the Post-Closing Statement. If Seller does object~~ shall be limited to ~~the Post-Closing Statement within the time period and~~ addressing any particular disputes referred to in the ~~manner~~ Dispute Notice and (ii) such calculation shall, with respect to any disputed item, be no greater than the higher amount calculated by Seller or Buyer, and no less than the lower amount calculated by Seller or Buyer, as the case may be. The Expert Calculations shall reflect in detail the differences, if any, between Closing Cash and Closing Net Working Capital reflected therein and Closing Cash and Closing Net Working Capital set forth in the ~~first sentence of this Section 2.05(b)~~Closing Date Schedule. If such a review is conducted, then the ~~Post-Closing Statement shall become final and binding for all purposes hereunder~~ party (i.e., Buyer, on the ~~date that Buyer receives the Notice of Disagreement except with respect to~~one hand, ~~and only to the extent of~~or Seller, ~~the Disputed Items in the Notice of Disagreement. Each Disputed Item shall become final and binding for all purposes hereunder~~ on the ~~earliest~~ other hand) whose last proposed offer for the settlement of the items in dispute, taken as a whole, was farther away from the final determination by the Neutral Auditor pursuant to this Section 1.6(d), shall pay all fees and expenses associated with such review. (xe) No later than three (3) Business Days following the ~~date on which~~ final determination of Closing Cash and Closing Net Working Capital pursuant to Section 1.6(c) and (d): (i) if the sum of Closing Cash and Closing Net Working Capital, as finally determined pursuant to Section 1.6(c) and Section 1.6(d), exceeds the sum of Estimated Closing Cash and Estimated Closing Net Working Capital, then Buyer ~~and Seller resolve in a writing signed by both Buyer and Seller such Disputed Item or (y)~~ shall pay the ~~date on which the Accounting Firm notifies Buyer and Seller in writing of its resolution~~ amount of such ~~Disputed Item~~excess to Seller; and (ii) if the sum of Closing Cash and Closing Net Working Capital, as finally determined pursuant to Section 1.6(c) and Section 1.6(d), is less than the sum of Estimated Closing Cash and Estimated Closing Net Working Capital, then the parties will cause an amount equal to such shortfall to be released to Buyer from the Escrow Amount, in accordance with the terms of the Escrow Agreement. ~~Buyer and Seller agree that the procedures set forth~~ All payments described in this Section ~~2.05(b~~1.6(e) ~~for resolving disputes regarding the Disputed Items~~ shall be made by wire transfer of immediately available funds to the ~~sole method for resolving such disputes~~account or accounts previously specified in writing by the recipient party.

Appears in 1 contract

Samples: Stock Purchase Agreement (Idex Corp /De/)

Common use of Adjustments to Estimated Purchase Price Clause in Contracts