Audit Adjustment. (a) Seller shall deliver to Purchaser the 2012 Audited Financial Statements and, to the extent required pursuant to Rule 3-05 of Regulation S-X for Purchaser to meet its external financial reporting obligations under the Exchange Act, (i) the audited balance sheet of the Customer Care Business as of December 31, 2013 and (ii) the audited statements of income and cash flows of the Customer Care Business for the year ended December 31, 2013 (the “2013 Audited Financial Statements”). Seller shall prepare a statement (the “Initial 2012 Audit Adjustment Statement”) setting forth (x) the 2012 Audited Income which shall be prepared in the same manner (including by using the same methodologies, principles, policies and procedures) as the 2012 Unaudited Income was prepared in Section 7.06 of the Seller Disclosure Letter, and (y) the Audit Adjustment Amount, and deliver such Initial 2012 Audit Adjustment Statement along with the 2012 Audited Financial Statements to Purchaser. (b) If Purchaser objects to the Initial 2012 Audit Adjustment Statement, Purchaser shall deliver to Seller, as soon as reasonably practicable and in no event later than 15 Business Days following receipt of the Initial 2012 Audit Adjustment Statement, a notice setting forth in reasonable detail such objections (an “Audit Objection Notice”), together with reasonable supporting documentation. If Purchaser does not timely deliver an Audit Objection Notice to Seller or if Purchaser notifies Seller that it has no objections, the Initial 2012 Audit Adjustment Statement shall be final and binding on the Parties for purposes of this Section 2.06 and shall be deemed the “Final 2012 Audit Adjustment Statement”. (c) If Purchaser timely delivers an Audit Objection Notice to Seller, Purchaser and Seller shall attempt in good faith to resolve such matters within 10 days after receipt of the same by Seller (the “Audit 10-Day Period”), and if unable to do so, Purchaser and Seller shall refer all remaining disputes (the “Audit Disputed Items”) to an independent public accounting firm mutually acceptable to Seller and Purchaser (the “Audit Dispute Accounting Firm”) promptly upon the expiration of the Audit 10-Day Period, which shall be instructed to arbitrate and resolve such disputes within 20 Business Days of the referral. The Audit Dispute Accounting Firm shall have authority hereunder to interpret this Section 2.06 and other provisions of this Agreement only to the extent necessary to resolve disputes under this Section 2.06. Purchaser and Seller shall have the right to meet jointly but not separately with the Audit Dispute Accounting Firm during this period and to present their respective positions. No ex parte communications with the Audit Dispute Accounting Firm shall be permitted. Each of Seller and Purchaser shall furnish or cause to be furnished to the Audit Dispute Accounting Firm only the data, correspondence and other materials it presented to or received from the other Party pursuant to this Section 2.06, and no other materials. The determination by the Audit Dispute Accounting Firm for each Audit Disputed Item shall be equal to one of the values, or within the range between the values, assigned to such Audit Disputed Item by the Parties as presented by Seller in the Initial 2012 Audit Adjustment Statement delivered pursuant to Section 2.06(a) and by Purchaser in the Audit Objection Notice delivered pursuant to Section 2.06(b). The resolution of disputes by the Audit Dispute Accounting Firm will be set forth in writing, will be deemed an award in arbitration and will be final and binding upon the Parties for purposes of this Section 2.06, upon the date of such resolution, and such resolution shall be deemed the “Final 2012 Audit Adjustment Statement”. (d) In making its determination, the Audit Dispute Accounting Firm shall consider only those items that Seller and Purchaser have referred to the Audit Dispute Accounting Firm, and the Audit Dispute Accounting Firm shall be bound by the terms and conditions of this Agreement, including the terms of this Section 2.06. Seller, on the one hand, and Purchaser, on the other hand, will each pay its own fees and expenses (including any fees and expenses of its accountants and other Representatives) in connection with the resolution of any dispute under this Section 2.06 (excluding the fees and expenses of the Audit Dispute Accounting Firm). The fees and expenses of the Audit Dispute Accounting Firm incurred pursuant to this Section 2.06 shall be borne equally by Purchaser and Seller on a one-half basis. (e) If the Final 2012 Audit Adjustment Statement becomes final and binding for purposes of this Section 2.06 at least two Business Days before the Initial Closing Date, then, if the Audit Adjustment Amount is negative, the Initial Cash Consideration paid on the Initial Closing Date shall be decreased by the absolute value of the Audit Adjustment Amount. (f) If the Final 2012 Audit Adjustment Statement becomes final and binding for purposes of this Section 2.06 after the date that is two Business Days before the Initial Closing Date, then, if the Audit Adjustment Amount is negative, within 30 days after the Final 2012 Audit Adjustment Statement becomes final and binding, Seller shall pay an amount in cash in U.S. dollars equal to the absolute value of the Audit Adjustment Amount to Purchaser or as otherwise designated by Purchaser. (g) All payments made pursuant to Section 2.06(f) hereof shall be treated as an adjustment to the Cash Consideration for Tax purposes unless there is no reasonable basis for doing so under the relevant Tax law. (h) The Net Tangible Assets adjustment contemplated in Section 2.05 and the audited income adjustment contemplated in this Section 2.06 shall be independent adjustments to the Cash Consideration. On the date that is the later of (i) the date the Final Balance Sheet becomes final and binding on both Parties pursuant to Section 2.05 and (ii) the date the Final 2012 Audit Adjustment Statement becomes final and binding on both Parties pursuant to this Section 2.06, the Cash Consideration shall be deemed adjusted based on the net impact of both adjustments.
Appears in 2 contracts
Samples: Master Asset Purchase Agreement, Master Asset Purchase Agreement (Synnex Corp)
Audit Adjustment. (a) Seller shall cause PriceWaterhouseCoopers LLP to deliver to Purchaser the 2012 Audited Financial Statements andBuyer, not less than five (5) business days prior to the extent required pursuant to Rule 3-05 Closing Date, copies of (i) an audited combined balance sheet of the Company and its Subsidiaries at December 31, 2004 (the “Audited December 31, 2004 Balance Sheet”), and (ii) audited combined statements of operations, invested capital and cash flows for the fiscal year ended December 31, 2004 (the “Audited December 31, 2004 Income Statement”). The Audited December 31, 2004 Balance Sheet and the Audited December 31, 2004 Income Statement (together, the “Audited December 31, 2004 Financial Statements”) shall be prepared in accordance with GAAP and the requirements of Regulation S-X for Purchaser promulgated by the United States Securities and Exchange Commission applicable to meet its external financial reporting obligations companies required to file current and periodic reports under the Securities Exchange ActAct of 1934, (i) as amended, and shall fairly present, in all material respects, the audited balance sheet financial condition, invested capital, cash flows and results of operations of the Customer Care Business as Company and its Subsidiaries of and for the fiscal year then ended. In addition, Seller shall cause PriceWaterhouseCoopers LLP to deliver a report describing procedures applied to a written calculation, based upon the Audited December 31, 2013 and 2004 Income Statement, of 2004 EBITDA, in substantially the form of Exhibit 6 to the unaudited combined financial statements attached as Section 1.4(a) to the Company Disclosure Schedule (ii) the audited statements of income and cash flows “EBITDA Statement”). Such procedures shall include recalculation of the Customer Care Business for EBITDA Statement, comparison of amounts on the year ended EBITDA Statement to the Audited December 31, 2013 (2004 Financial Statements and such other procedures as may be mutually agreed by Buyer and Seller. The determination of 2004 EBITDA set forth on the “2013 Audited Financial Statements”). Seller shall prepare a statement (the “Initial 2012 Audit Adjustment Statement”) setting forth (x) the 2012 Audited Income which EBITDA Statement shall be prepared in the final and conclusive determination of the same manner (including for all purposes under this Agreement. All costs and expenses of the preparation of the Audited December 31, 2004 Financial Statements up to an aggregate of $300,000 shall be paid by using the same methodologiesCompany, principles, policies and procedures) as but shall be deemed not to have been incurred for purposes of the 2012 Unaudited Income was prepared calculation of the adjustments provided for in Section 7.06 1.4 and this Section 1.5, it being the intent of the parties that the economic effect of such preparation shall to such extent be borne by Buyer. Any costs or expenses for such preparation in excess of such $300,000 limit shall be reimbursed by Seller Disclosure Letter, promptly after written notice from Buyer accompanied by copies of third-party invoices demonstrating that such limit has been exceeded and (y) the Audit Adjustment Amount, and deliver amount of such Initial 2012 Audit Adjustment Statement along with the 2012 Audited Financial Statements to Purchaserexcess.
(b) If Purchaser objects To the extent that 2004 EBITDA is less than Thirty-Three Million Five Hundred Twenty Nine Thousand Dollars ($33,529,000) (the “Initial EBITDA Threshold”), the Purchase Price shall be decreased at Closing by an amount equal to the Initial 2012 Audit Adjustment Statement, Purchaser shall deliver to Seller, as soon as reasonably practicable and in no event later than 15 Business Days following receipt product of (x) the excess of the Initial 2012 Audit Adjustment StatementEBITDA Threshold over 2004 EBITDA, up to a notice setting forth in reasonable detail such objections maximum of One Million Dollars (an “Audit Objection Notice”$1,000,000), together with reasonable supporting documentation. If Purchaser does not timely deliver an Audit Objection Notice to Seller or if Purchaser notifies Seller that it has no objections, the Initial 2012 Audit Adjustment Statement shall be final and binding on the Parties for purposes of this Section 2.06 and shall be deemed the “Final 2012 Audit Adjustment Statement”.
multiplied by (cy) If Purchaser timely delivers an Audit Objection Notice to Seller, Purchaser and Seller shall attempt in good faith to resolve such matters within 10 days after receipt of the same by Seller nine (the “Audit 10-Day Period”9), and if unable to do so, Purchaser and Seller shall refer all remaining disputes (it being acknowledged that the “Audit Disputed Items”) to an independent public accounting firm mutually acceptable to Seller and Purchaser (the “Audit Dispute Accounting Firm”) promptly upon the expiration of the Audit 10-Day Period, which shall be instructed to arbitrate and resolve such disputes within 20 Business Days of the referral. The Audit Dispute Accounting Firm shall have authority hereunder to interpret this Section 2.06 and other provisions of this Agreement only to the extent necessary to resolve disputes maximum Purchase Price reduction possible under this Section 2.06. Purchaser and Seller shall have the right to meet jointly but not separately with the Audit Dispute Accounting Firm during this period and to present their respective positions. No ex parte communications with the Audit Dispute Accounting Firm 1.5(b) shall be permitted. Each of Seller and Purchaser shall furnish or cause to be furnished to the Audit Dispute Accounting Firm only the data, correspondence and other materials it presented to or received from the other Party pursuant to this Section 2.06, and no other materials. The determination by the Audit Dispute Accounting Firm for each Audit Disputed Item shall be equal to one of the values, or within the range between the values, assigned to such Audit Disputed Item by the Parties as presented by Seller in the Initial 2012 Audit Adjustment Statement delivered pursuant to Section 2.06(a) and by Purchaser in the Audit Objection Notice delivered pursuant to Section 2.06(bNine Million Dollars ($9,000,000). The resolution of disputes by the Audit Dispute Accounting Firm will be set forth in writing, will be deemed an award in arbitration and will be final and binding upon the Parties for purposes of this Section 2.06, upon the date of such resolution, and such resolution shall be deemed the “Final 2012 Audit Adjustment Statement”.
(d) In making its determination, the Audit Dispute Accounting Firm shall consider only those items that Seller and Purchaser have referred to the Audit Dispute Accounting Firm, and the Audit Dispute Accounting Firm shall be bound by the terms and conditions of this Agreement, including the terms of this Section 2.06. Seller, on the one hand, and Purchaser, on the other hand, will each pay its own fees and expenses (including any fees and expenses of its accountants and other Representatives) in connection with the resolution of any dispute under this Section 2.06 (excluding the fees and expenses of the Audit Dispute Accounting Firm). The fees and expenses of the Audit Dispute Accounting Firm incurred pursuant to this Section 2.06 shall be borne equally by Purchaser and Seller on a one-half basis.
(e) If the Final 2012 Audit Adjustment Statement becomes final and binding for purposes of this Section 2.06 at least two Business Days before the Initial Closing Date, then, if the Audit Adjustment Amount is negative, the Initial Cash Consideration paid on the Initial Closing Date shall be decreased by the absolute value of the Audit Adjustment Amount.
(f) If the Final 2012 Audit Adjustment Statement becomes final and binding for purposes of this Section 2.06 after the date that is two Business Days before the Initial Closing Date, then, if the Audit Adjustment Amount is negative, within 30 days after the Final 2012 Audit Adjustment Statement becomes final and binding, Seller shall pay an amount in cash in U.S. dollars equal to the absolute value of the Audit Adjustment Amount to Purchaser or as otherwise designated by Purchaser.
(g) All payments made pursuant to Section 2.06(f) hereof shall be treated as an adjustment to the Cash Consideration for Tax purposes unless there is no reasonable basis for doing so under the relevant Tax law.
(h) The Net Tangible Assets adjustment contemplated in Section 2.05 and the audited income adjustment contemplated in this Section 2.06 shall be independent adjustments to the Cash Consideration. On the date that is the later of (i) the date the Final Balance Sheet becomes final and binding on both Parties pursuant to Section 2.05 and (ii) the date the Final 2012 Audit Adjustment Statement becomes final and binding on both Parties pursuant to this Section 2.06, the Cash Consideration shall be deemed adjusted based on the net impact of both adjustments.
Appears in 1 contract
Audit Adjustment. (a) Seller As soon as practicable after the Closing Date, the Company shall deliver to Purchaser the 2012 Audited Financial Statements and, to the extent required pursuant to Rule 3-05 of Regulation S-X for Purchaser to meet its external financial reporting obligations under the Exchange Act, engage (i) PricewaterhouseCoopers (the "Public Accountants") to audit the Company's consolidated balance sheet as of June 30, 2001, (ii) an independent actuary selected by the Transaction Committee and the Purchasers (the "Independent Actuary") to review the reserves for claims and claims expenses on such balance sheet, and (iii) an independent pricing service selected by the Transaction Committee and the Purchasers (the "Pricing Service") to determine the estimated fair value as of the Closing Date of the Company's investments in marketable securities included on such balance sheet. The audit shall be performed on the same basis as the preparation of the unaudited balance sheet and, in particular, the $4.3 million liability associated with an anticipated but incomplete reinsurance transaction shall either remain or be deemed to remain on the audited balance sheet of as a liability. The Pricing Service, the Customer Care Business as of December 31, 2013 Public Accountants and (ii) the audited statements of income and cash flows of the Customer Care Business for the year ended December 31, 2013 (the “2013 Audited Financial Statements”). Seller shall prepare a statement (the “Initial 2012 Audit Adjustment Statement”) setting forth (x) the 2012 Audited Income which shall be prepared in the same manner (including by using the same methodologies, principles, policies and procedures) Independent Actuary are referred to as the 2012 Unaudited Income was prepared in Section 7.06 of the Seller Disclosure Letter, and (y) the Audit Adjustment Amount, and deliver such Initial 2012 Audit Adjustment Statement along with the 2012 Audited Financial Statements to Purchaser"Independent Advisors."
(b) If Purchaser objects The Company shall provide the Independent Advisors with full access to its books and records for the purposes of such audit and reviews. The Independent Advisors shall keep the Transaction Committee and the Purchasers informed as to the Initial 2012 Audit Adjustment Statementprogress of such audit and reviews, Purchaser and the Transaction Committee and the Purchasers shall deliver have the right to Seller, as soon as reasonably practicable participate and in no event later than 15 Business Days following receipt of comment upon such audit and reviews. Any reviews pursuant to paragraph (d) below shall also be subject to the Initial 2012 Audit Adjustment Statement, a notice setting forth in reasonable detail such objections (an “Audit Objection Notice”), together with reasonable supporting documentation. If Purchaser does not timely deliver an Audit Objection Notice to Seller or if Purchaser notifies Seller that it has no objections, the Initial 2012 Audit Adjustment Statement shall be final and binding on the Parties for purposes provisions of this Section 2.06 and shall be deemed the “Final 2012 Audit Adjustment Statement”paragraph.
(c) If Purchaser timely delivers Within 60 days after the Closing Date (or as soon thereafter as practicable), the Independent Advisors shall deliver the following to the Board of Directors and the Purchasers (the "Initial Determinations"):
(i) The Public Accountants shall deliver the Company's consolidated balance sheet as of June 30, 2001 and an Audit Objection Notice unqualified report thereto (the "Audited Balance Sheet").
(ii) The Independent Actuary shall deliver a report on the reserves for claims and claims expenses on the Audited Balance Sheet (the "Reserve Report").
(iii) The Pricing Service shall deliver a report of its determinations of estimated fair value as of the business day immediately preceding the Closing Date of the marketable securities in the Company's investment portfolio included in the Audited Balance Sheet (the "Portfolio Review"). In determining such estimated fair value, the Pricing Service shall use the Mark to SellerMarket Procedures.
(iv) The Public Accountants xxxll calculate the Per Share Price including, Purchaser without limitation, the amount set forth in clause (a)(i) of the definition of Per Share Price, and Seller report the amounts to the Board of Directors and the Purchasers (the "Per Share Calculation").
(d) After receipt of the Initial Determinations, the Transaction Committee and the Purchasers shall attempt have the right to make a full review of the Initial Determinations including, but not limited to, access by such professionals as Purchasers may deem necessary, to all of the workpapers and reports prepared by the Independent Advisors in connection with such Initial Determinations. The Transaction Committee may object to the Initial Determinations or one or more components thereof by giving written notice to the Purchasers, and the Purchasers (acting collectively) may object to the Initial Determinations or one or more components thereof by giving written notice to the Transaction Committee, in each case, within 30 days of the date on which the Initial Determinations are delivered. Any such notice shall state the basis of the objections in reasonable detail. The Transaction Committee and the Purchasers shall then endeavor in good faith to resolve such matters the dispute as soon as possible. If the dispute is not resolved within 10 days after receipt of the same objection, within five days thereafter the Transaction Committee and the Purchasers shall mutually agree on (i) a firm of independent accountants to review the Audited Balance Sheet or the Per Share Calculation, (ii) an independent actuary to review the Reserve Report and/or (iii) an independent pricing service to review the Portfolio Review, who shall complete such reviews within 30 days of appointment. Based upon such independent reviews, the independent accountants referred to in the preceding sentence shall select either the per share calculation recommended by Seller (the “Audit 10-Day Period”)Transaction Committee or that recommended by the Purchasers, whichever is closer to the independent review, and if unable to do so, Purchaser and Seller shall refer all remaining disputes (the “Audit Disputed Items”) to an independent public accounting firm mutually acceptable to Seller and Purchaser (the “Audit Dispute Accounting Firm”) promptly upon the expiration of the Audit 10-Day Period, which per share calculation so selected shall be instructed to arbitrate and resolve dispositive. If the Initial Determination (if not reviewed) or such disputes within 20 Business Days of the referral. The Audit Dispute Accounting Firm shall have authority hereunder to interpret this Section 2.06 and other provisions of this Agreement only review requires an adjustment to the extent necessary to resolve disputes under this Section 2.06. Purchaser and Seller shall have Audited Balance Sheet, the right to meet jointly but not separately with the Audit Dispute Accounting Firm during this period and to present their respective positions. No ex parte communications with the Audit Dispute Accounting Firm shall be permitted. Each of Seller and Purchaser shall furnish or cause to be furnished to the Audit Dispute Accounting Firm only the data, correspondence and other materials it presented to or received from the other Party pursuant to this Section 2.06, and no other materials. The determination by the Audit Dispute Accounting Firm for each Audit Disputed Item shall be equal to one of the values, or within the range between the values, assigned to such Audit Disputed Item by the Parties Audited Balance Sheet as presented by Seller in the Initial 2012 Audit Adjustment Statement delivered pursuant to Section 2.06(a) and by Purchaser in the Audit Objection Notice delivered pursuant to Section 2.06(b). The resolution of disputes by the Audit Dispute Accounting Firm will be set forth in writing, will be deemed an award in arbitration and will be final and binding upon the Parties for purposes of this Section 2.06, upon the date of such resolution, and such resolution so adjusted shall be deemed to be the “Final 2012 Audit Adjustment Statement”.
(d) In making its determination, the Audit Dispute Accounting Firm shall consider only those items that Seller and Purchaser have referred to the Audit Dispute Accounting Firm, and the Audit Dispute Accounting Firm shall be bound by the terms and conditions of this Agreement, including the terms of this Section 2.06. Seller, on the one hand, and Purchaser, on the other hand, will each pay its own fees and expenses (including any fees and expenses of its accountants and other Representatives) in connection with the resolution of any dispute under this Section 2.06 (excluding the fees and expenses of the Audit Dispute Accounting Firm). The fees and expenses of the Audit Dispute Accounting Firm incurred pursuant to this Section 2.06 shall be borne equally by Purchaser and Seller on a one-half basis"Audited Balance Sheet" hereunder.
(e) If the Final 2012 Audit Adjustment Statement becomes final and binding for purposes of this Section 2.06 at least two Business Days before Per Share Price is greater than the Estimated Per Share Price, within five business days after the last date on which the Initial Closing Determinations may be objected to or after the date that all reviews following any such objection have been completed (the "Applicable Date"), then, if each Purchaser shall either (i) pay to the Audit Adjustment Company an amount (the "Aggregate Amount") in cash equal to the difference between the Per Share Price and the Estimated Per Share Price times the number of Preference Shares purchased by such Purchaser or (ii) surrender to the Company a number of Preference Shares equal to the Aggregate Amount is negative, the Initial Cash Consideration paid on the Initial Closing Date shall be decreased divided by the absolute value greater of (A) the Per Share Price or (B) the Fair Market Value of a Preference Share as of the Audit Adjustment AmountApplicable Date. The Purchasers shall make such payment by wire transfer of immediately available funds to the account of the Company designated by the Company.
(f) If the Final 2012 Audit Adjustment Statement becomes final and binding for purposes of this Section 2.06 after Estimated Per Share Price is greater than the date that is two Business Days before the Initial Closing Date, then, if the Audit Adjustment Amount is negativePer Share Price, within 30 five business days after the Final 2012 Audit Adjustment Statement becomes final Applicable Date, the Company shall issue and binding, Seller shall pay an amount deliver to each Purchaser one or more certificates registered in cash in U.S. dollars the name of such Purchaser (or its designee) representing that number of Preference Shares equal to the absolute value of the Audit Adjustment Amount to Purchaser or as otherwise designated by Purchaser.
(g) All payments made pursuant to Section 2.06(f) hereof shall be treated as an adjustment to the Cash Consideration for Tax purposes unless there is no reasonable basis for doing so under the relevant Tax law.
(h) The Net Tangible Assets adjustment contemplated in Section 2.05 and the audited income adjustment contemplated in this Section 2.06 shall be independent adjustments to the Cash Consideration. On the date that is the later of (i) the date difference between the Final Balance Sheet becomes final Estimated Per Share Price and binding on both Parties pursuant to Section 2.05 and the Per Share Price times (ii) the date the Final 2012 Audit Adjustment Statement becomes final and binding on both Parties pursuant to this Section 2.06, the Cash Consideration shall be deemed adjusted based number of Preference Shares purchased by such Purchaser on the net impact of both adjustmentsClosing Date divided by (iii) the Per Share Price.
Appears in 1 contract
Audit Adjustment. (a) Seller As soon as practicable after the Closing Date, the Company shall deliver to Purchaser the 2012 Audited Financial Statements and, to the extent required pursuant to Rule 3-05 of Regulation S-X for Purchaser to meet its external financial reporting obligations under the Exchange Act, engage (i) PricewaterhouseCoopers (the “Public Accountants”) to audit the Company’s consolidated balance sheet as of June 30, 2001, (ii) an independent actuary selected by the Transaction Committee and the Purchasers (the “Independent Actuary”) to review the reserves for claims and claims expenses on such balance sheet, and (iii) an independent pricing service selected by the Transaction Committee and the Purchasers (the “Pricing Service”) to determine the estimated fair value as of the Closing Date of the Company’s investments in marketable securities included on such balance sheet. The audit shall be performed on the same basis
(1) Amendment No. 1: “The parties agree that (a) effective as of the Closing, the only Class A Warrants outstanding will be held by The Trident Partnership, L.P. and Taracay Investors and the only Class B Warrants outstanding will be held by Xxxxxx Xxxxxxxx (or members of his family or trusts established for his or his family’s benefit) and (b) there is no adjustment under section 3.1 of the Class A Warrants of the Company or under section 4.1 of the Class B Warrants of the Company in connection with the grants set forth on Schedule 5 to Amendment No.1, or the issuance of the Preference Shares, the Warrants, or the Common Shares issuable upon conversion or exercise thereof, under the Subscription Agreement or the Management Subscription Agreements.” as the preparation of the unaudited balance sheet and, in particular, the $4.3 million liability associated with an anticipated but incomplete reinsurance transaction shall either remain or be deemed to remain on the audited balance sheet of as a liability. The Pricing Service, the Customer Care Business Public Accountants and the Independent Actuary are referred to as of December 31, 2013 and (ii) the audited statements of income and cash flows of the Customer Care Business for the year ended December 31, 2013 (the “2013 Audited Financial StatementsIndependent Advisors.”). Seller shall prepare a statement (the “Initial 2012 Audit Adjustment Statement”) setting forth (x) the 2012 Audited Income which shall be prepared in the same manner (including by using the same methodologies, principles, policies and procedures) as the 2012 Unaudited Income was prepared in Section 7.06 of the Seller Disclosure Letter, and (y) the Audit Adjustment Amount, and deliver such Initial 2012 Audit Adjustment Statement along with the 2012 Audited Financial Statements to Purchaser.
(b) If Purchaser objects The Company shall provide the Independent Advisors with full access to its books and records for the purposes of such audit and reviews. The Independent Advisors shall keep the Transaction Committee and the Purchasers informed as to the Initial 2012 Audit Adjustment Statementprogress of such audit and reviews, Purchaser and the Transaction Committee and the Purchasers shall deliver have the right to Seller, as soon as reasonably practicable participate and in no event later than 15 Business Days following receipt of comment upon such audit and reviews. Any reviews pursuant to paragraph (d) below shall also be subject to the Initial 2012 Audit Adjustment Statement, a notice setting forth in reasonable detail such objections (an “Audit Objection Notice”), together with reasonable supporting documentation. If Purchaser does not timely deliver an Audit Objection Notice to Seller or if Purchaser notifies Seller that it has no objections, the Initial 2012 Audit Adjustment Statement shall be final and binding on the Parties for purposes provisions of this Section 2.06 and shall be deemed the “Final 2012 Audit Adjustment Statement”paragraph.
(c) If Purchaser timely delivers Within 60 days after the Closing Date (or as soon thereafter as practicable), the Independent Advisors shall deliver the following to the Board of Directors and the Purchasers (the “Initial Determinations”):
(i) The Public Accountants shall deliver the Company’s consolidated balance sheet as of June 30, 2001 and an Audit Objection Notice unqualified report thereto (the “Audited Balance Sheet”).
(ii) The Independent Actuary shall deliver a report on the reserves for claims and claims expenses on the Audited Balance Sheet (the “Reserve Report”).
(iii) The Pricing Service shall deliver a report of its determinations of estimated fair value as of the business day immediately preceding the Closing Date of the marketable securities in the Company’s investment portfolio included in the Audited Balance Sheet (the “Portfolio Review”). In determining such estimated fair value, the Pricing Service shall use the Xxxx to SellerMarket Procedures.
(iv) The Public Accountants shall calculate the Per Share Price including, Purchaser without limitation, the amount set forth in clause (i)(A) of the definition of Per Share Price, and Seller report the amounts to the Board of Directors and the Purchasers (the “Per Share Calculation”).
(d) After receipt of the Initial Determinations, the Transaction Committee and the Purchasers shall attempt have the right to make a full review of the Initial Determinations including, but not limited to, access by such professionals as Purchasers may deem necessary, to all of the workpapers and reports prepared by the Independent Advisors in connection with such Initial Determinations. The Transaction Committee may object to the Initial Determinations or one or more components thereof by giving written notice to the Purchasers, and the Purchasers (acting collectively) may object to the Initial Determinations or one or more components thereof by giving written notice to the Transaction Committee, in each case, within 30 days of the date on which the Initial Determinations are delivered. Any such notice shall state the basis of the objections in reasonable detail. The Transaction Committee and the Purchasers shall then endeavor in good faith to resolve such matters the dispute as soon as possible. If the dispute is not resolved within 10 days after receipt of the same objection, within five days thereafter the Transaction Committee and the Purchasers shall mutually agree on (i) a firm of independent accountants to review the Audited Balance Sheet or the Per Share Calculation, (ii) an independent actuary to review the Reserve Report and/or (iii) an independent pricing service to review the Portfolio Review, who shall complete such reviews within 30 days of appointment. Based upon such independent reviews, the independent accountants referred to in the preceding sentence shall select either the per share calculation recommended by Seller (the “Audit 10-Day Period”)Transaction Committee or that recommended by the Purchasers, whichever is closer to the independent review, and if unable to do so, Purchaser and Seller shall refer all remaining disputes (the “Audit Disputed Items”) to an independent public accounting firm mutually acceptable to Seller and Purchaser (the “Audit Dispute Accounting Firm”) promptly upon the expiration of the Audit 10-Day Period, which per share calculation so selected shall be instructed to arbitrate and resolve dispositive. If the Initial Determination (if not reviewed) or such disputes within 20 Business Days of the referral. The Audit Dispute Accounting Firm shall have authority hereunder to interpret this Section 2.06 and other provisions of this Agreement only review requires an adjustment to the extent necessary to resolve disputes under this Section 2.06. Purchaser and Seller shall have Audited Balance Sheet, the right to meet jointly but not separately with the Audit Dispute Accounting Firm during this period and to present their respective positions. No ex parte communications with the Audit Dispute Accounting Firm shall be permitted. Each of Seller and Purchaser shall furnish or cause to be furnished to the Audit Dispute Accounting Firm only the data, correspondence and other materials it presented to or received from the other Party pursuant to this Section 2.06, and no other materials. The determination by the Audit Dispute Accounting Firm for each Audit Disputed Item shall be equal to one of the values, or within the range between the values, assigned to such Audit Disputed Item by the Parties Audited Balance Sheet as presented by Seller in the Initial 2012 Audit Adjustment Statement delivered pursuant to Section 2.06(a) and by Purchaser in the Audit Objection Notice delivered pursuant to Section 2.06(b). The resolution of disputes by the Audit Dispute Accounting Firm will be set forth in writing, will be deemed an award in arbitration and will be final and binding upon the Parties for purposes of this Section 2.06, upon the date of such resolution, and such resolution so adjusted shall be deemed to be the “Final 2012 Audit Adjustment Statement”.
(d) In making its determination, the Audit Dispute Accounting Firm shall consider only those items that Seller and Purchaser have referred to the Audit Dispute Accounting Firm, and the Audit Dispute Accounting Firm shall be bound by the terms and conditions of this Agreement, including the terms of this Section 2.06. Seller, on the one hand, and Purchaser, on the other hand, will each pay its own fees and expenses (including any fees and expenses of its accountants and other Representatives) in connection with the resolution of any dispute under this Section 2.06 (excluding the fees and expenses of the Audit Dispute Accounting Firm). The fees and expenses of the Audit Dispute Accounting Firm incurred pursuant to this Section 2.06 shall be borne equally by Purchaser and Seller on a one-half basisAudited Balance Sheet” hereunder.
(e) If the Final 2012 Audit Adjustment Statement becomes final and binding for purposes of this Section 2.06 at least two Business Days before Per Share Price is greater than the Estimated Per Share Price, within five business days after the last date on which the Initial Closing Determinations may be objected to or after the date that all reviews following any such objection have been completed (the “Applicable Date”), then, if each Purchaser shall either (i) pay to the Audit Adjustment Company an amount (the “Aggregate Amount”) in cash equal to the difference between the Per Share Price and the Estimated Per Share Price times the number of Preference Shares purchased by such Purchaser or (ii) surrender to the Company a number of Preference Shares equal to the Aggregate Amount is negative, the Initial Cash Consideration paid on the Initial Closing Date shall be decreased divided by the absolute value greater of (A) the Per Share Price or (B) the Fair Market Value of a Preference Share as of the Audit Adjustment AmountApplicable Date. The Purchasers shall make such payment by wire transfer of immediately available funds to the account of the Company designated by the Company.
(f) If the Final 2012 Audit Adjustment Statement becomes final and binding for purposes of this Section 2.06 after Estimated Per Share Price is greater than the date that is two Business Days before the Initial Closing Date, then, if the Audit Adjustment Amount is negativePer Share Price, within 30 five business days after the Final 2012 Audit Adjustment Statement becomes final Applicable Date, the Company shall issue and binding, Seller shall pay an amount deliver to each Purchaser one or more certificates registered in cash in U.S. dollars the name of such Purchaser (or its designee) representing that number of Preference Shares equal to the absolute value of the Audit Adjustment Amount to Purchaser or as otherwise designated by Purchaser.
(g) All payments made pursuant to Section 2.06(f) hereof shall be treated as an adjustment to the Cash Consideration for Tax purposes unless there is no reasonable basis for doing so under the relevant Tax law.
(h) The Net Tangible Assets adjustment contemplated in Section 2.05 and the audited income adjustment contemplated in this Section 2.06 shall be independent adjustments to the Cash Consideration. On the date that is the later of (i) the date difference between the Final Balance Sheet becomes final Estimated Per Share Price and binding on both Parties pursuant to Section 2.05 and the Per Share Price times (ii) the date the Final 2012 Audit Adjustment Statement becomes final and binding on both Parties pursuant to this Section 2.06, the Cash Consideration shall be deemed adjusted based number of Preference Shares purchased by such Purchaser on the net impact of both adjustmentsClosing Date divided by (iii) the Per Share Price.
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Audit Adjustment. (a) Seller As soon as practicable after the Closing Date, the Company shall deliver to Purchaser the 2012 Audited Financial Statements and, to the extent required pursuant to Rule 3-05 of Regulation S-X for Purchaser to meet its external financial reporting obligations under the Exchange Act, engage (i) PricewaterhouseCoopers (the "PUBLIC ACCOUNTANTS") to audit the Company's consolidated balance sheet as of June 30, 2001, (ii) an independent actuary selected by the Transaction Committee and the Purchasers (the "INDEPENDENT ACTUARY") to review the reserves for claims and claims expenses on such balance sheet, and (iii) an independent pricing service selected by the Transaction Committee and the Purchasers (the "PRICING SERVICE") to determine the estimated fair value as of the Closing Date of the Company's investments in marketable securities included on such balance sheet. The audit shall be performed on the same basis as the preparation of the unaudited balance sheet and, in particular, the $4.3 million liability associated with an anticipated but incomplete reinsurance transaction shall either remain or be deemed to remain on the audited balance sheet of as a liability. The Pricing Service, the Customer Care Business as of December 31, 2013 Public Accountants and (ii) the audited statements of income and cash flows of the Customer Care Business for the year ended December 31, 2013 (the “2013 Audited Financial Statements”). Seller shall prepare a statement (the “Initial 2012 Audit Adjustment Statement”) setting forth (x) the 2012 Audited Income which shall be prepared in the same manner (including by using the same methodologies, principles, policies and procedures) Independent Actuary are referred to as the 2012 Unaudited Income was prepared in Section 7.06 of the Seller Disclosure Letter, and (y) the Audit Adjustment Amount, and deliver such Initial 2012 Audit Adjustment Statement along with the 2012 Audited Financial Statements to Purchaser"INDEPENDENT ADVISORS."
(b) If Purchaser objects The Company shall provide the Independent Advisors with full access to its books and records for the purposes of such audit and reviews. The Independent Advisors shall keep the Transaction Committee and the Purchasers informed as to the Initial 2012 Audit Adjustment Statementprogress of such audit and reviews, Purchaser and the Transaction Committee and the Purchasers shall deliver have the right to Seller, as soon as reasonably practicable participate and in no event later than 15 Business Days following receipt of comment upon such audit and reviews. Any reviews pursuant to paragraph (d) below shall also be subject to the Initial 2012 Audit Adjustment Statement, a notice setting forth in reasonable detail such objections (an “Audit Objection Notice”), together with reasonable supporting documentation. If Purchaser does not timely deliver an Audit Objection Notice to Seller or if Purchaser notifies Seller that it has no objections, the Initial 2012 Audit Adjustment Statement shall be final and binding on the Parties for purposes provisions of this Section 2.06 and shall be deemed the “Final 2012 Audit Adjustment Statement”paragraph.
(c) If Purchaser timely delivers Within 60 days after the Closing Date (or as soon thereafter as practicable), the Independent Advisors shall deliver the following to the Board of Directors and the Purchasers (the "INITIAL DETERMINATIONS"):
(i) The Public Accountants shall deliver the Company's consolidated balance sheet as of June 30, 2001 and an Audit Objection Notice unqualified report thereto (the "AUDITED BALANCE SHEET").
(ii) The Independent Actuary shall deliver a report on the reserves for claims and claims expenses on the Audited Balance Sheet (the "RESERVE REPORT").
(iii) The Pricing Service shall deliver a report of its determinations of estimated fair value as of the business day immediately preceding the Closing Date of the marketable securities in the Company's investment portfolio included in the Audited Balance Sheet (the "PORTFOLIO REVIEW"). In determining such estimated fair value, the Pricing Service shall use the Mark to SellerMarket Procedures.
(iv) The Public Accounxxxxs shall calculate the Per Share Price including, Purchaser without limitation, the amount set forth in clause (i)(A) of the definition of Per Share Price, and Seller report the amounts to the Board of Directors and the Purchasers (the "PER SHARE CALCULATION").
(d) After receipt of the Initial Determinations, the Transaction Committee and the Purchasers shall attempt have the right to make a full review of the Initial Determinations including, but not limited to, access by such professionals as Purchasers may deem necessary, to all of the workpapers and reports prepared by the Independent Advisors in connection with such Initial Determinations. The Transaction Committee may object to the Initial Determinations or one or more components thereof by giving written notice to the Purchasers, and the Purchasers (acting collectively) may object to the Initial Determinations or one or more components thereof by giving written notice to the Transaction Committee, in each case, within 30 days of the date on which the Initial Determinations are delivered. Any such notice shall state the basis of the objections in reasonable detail. The Transaction Committee and the Purchasers shall then endeavor in good faith to resolve such matters the dispute as soon as possible. If the dispute is not resolved within 10 days after receipt of the same objection, within five days thereafter the Transaction Committee and the Purchasers shall mutually agree on (i) a firm of independent accountants to review the Audited Balance Sheet or the Per Share Calculation, (ii) an independent actuary to review the Reserve Report and/or (iii) an independent pricing service to review the Portfolio Review, who shall complete such reviews within 30 days of appointment. Based upon such independent reviews, the independent accountants referred to in the preceding sentence shall select either the per share calculation recommended by Seller (the “Audit 10-Day Period”)Transaction Committee or that recommended by the Purchasers, whichever is closer to the independent review, and if unable to do so, Purchaser and Seller shall refer all remaining disputes (the “Audit Disputed Items”) to an independent public accounting firm mutually acceptable to Seller and Purchaser (the “Audit Dispute Accounting Firm”) promptly upon the expiration of the Audit 10-Day Period, which per share calculation so selected shall be instructed to arbitrate and resolve dispositive. If the Initial Determina- tion (if not reviewed) or such disputes within 20 Business Days of the referral. The Audit Dispute Accounting Firm shall have authority hereunder to interpret this Section 2.06 and other provisions of this Agreement only review requires an adjustment to the extent necessary to resolve disputes under this Section 2.06. Purchaser and Seller shall have Audited Balance Sheet, the right to meet jointly but not separately with the Audit Dispute Accounting Firm during this period and to present their respective positions. No ex parte communications with the Audit Dispute Accounting Firm shall be permitted. Each of Seller and Purchaser shall furnish or cause to be furnished to the Audit Dispute Accounting Firm only the data, correspondence and other materials it presented to or received from the other Party pursuant to this Section 2.06, and no other materials. The determination by the Audit Dispute Accounting Firm for each Audit Disputed Item shall be equal to one of the values, or within the range between the values, assigned to such Audit Disputed Item by the Parties Audited Balance Sheet as presented by Seller in the Initial 2012 Audit Adjustment Statement delivered pursuant to Section 2.06(a) and by Purchaser in the Audit Objection Notice delivered pursuant to Section 2.06(b). The resolution of disputes by the Audit Dispute Accounting Firm will be set forth in writing, will be deemed an award in arbitration and will be final and binding upon the Parties for purposes of this Section 2.06, upon the date of such resolution, and such resolution so adjusted shall be deemed to be the “Final 2012 Audit Adjustment Statement”.
(d) In making its determination, the Audit Dispute Accounting Firm shall consider only those items that Seller and Purchaser have referred to the Audit Dispute Accounting Firm, and the Audit Dispute Accounting Firm shall be bound by the terms and conditions of this Agreement, including the terms of this Section 2.06. Seller, on the one hand, and Purchaser, on the other hand, will each pay its own fees and expenses (including any fees and expenses of its accountants and other Representatives) in connection with the resolution of any dispute under this Section 2.06 (excluding the fees and expenses of the Audit Dispute Accounting Firm). The fees and expenses of the Audit Dispute Accounting Firm incurred pursuant to this Section 2.06 shall be borne equally by Purchaser and Seller on a one-half basis"Audited Balance Sheet" hereunder.
(e) If the Final 2012 Audit Adjustment Statement becomes final and binding for purposes of this Section 2.06 at least two Business Days before Per Share Price is greater than the Estimated Per Share Price, within five business days after the last date on which the Initial Closing DateDeterminations may be objected to or after the date that all reviews following any such objection have been completed (the "APPLICABLE DATE"), then, if each Purchaser shall either (i) pay to the Audit Adjustment Company an amount (the "AGGREGATE AMOUNT") in cash equal to the difference between the Per Share Price and the Estimated Per Share Price times the number of Preference Shares purchased by such Purchaser or (ii) surrender to the Company a number of Preference Shares equal to the Aggregate Amount is negative, the Initial Cash Consideration paid on the Initial Closing Date shall be decreased divided by the absolute value greater of (A) the Per Share Price or (B) the Fair Market Value of a Preference Share as of the Audit Adjustment AmountApplicable Date. The Purchasers shall make such payment by wire transfer of immediately available funds to the account of the Company designated by the Company.
(f) If the Final 2012 Audit Adjustment Statement becomes final and binding for purposes of this Section 2.06 after Estimated Per Share Price is greater than the date that is two Business Days before the Initial Closing Date, then, if the Audit Adjustment Amount is negativePer Share Price, within 30 five business days after the Final 2012 Audit Adjustment Statement becomes final Applicable Date, the Company shall issue and binding, Seller shall pay an amount deliver to each Purchaser one or more certificates registered in cash in U.S. dollars the name of such Purchaser (or its designee) representing that number of Preference Shares equal to the absolute value of the Audit Adjustment Amount to Purchaser or as otherwise designated by Purchaser.
(g) All payments made pursuant to Section 2.06(f) hereof shall be treated as an adjustment to the Cash Consideration for Tax purposes unless there is no reasonable basis for doing so under the relevant Tax law.
(h) The Net Tangible Assets adjustment contemplated in Section 2.05 and the audited income adjustment contemplated in this Section 2.06 shall be independent adjustments to the Cash Consideration. On the date that is the later of (i) the date difference between the Final Balance Sheet becomes final Estimated Per Share Price and binding on both Parties pursuant to Section 2.05 and the Per Share Price times (ii) the date the Final 2012 Audit Adjustment Statement becomes final and binding on both Parties pursuant to this Section 2.06, the Cash Consideration shall be deemed adjusted based number of Preference Shares purchased by such Purchaser on the net impact of both adjustmentsClosing Date divided by (iii) the Per Share Price.
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