Balance Sheet Adjustment. The Cash consideration shall be adjusted based upon Network's balance sheet on the Closing Date (the "Balance Sheet Adjustment") to reflect X in the following formula: X = Y - Z, where X = the dollar amount of the increase or decrease in the Cash Consideration; Y = The total cash and the net realizable value of Networks' accounts receivable as of the Closing Date plus reimbursement for the actual cost of those phone cards printed for Networks prior to the Closing Date but which remain unactivated on the Closing Date. For purposes of this section, "net realizable value" shall mean the total amount received in connection with any of such accounts receivable within 75 days of the date hereof; and Z = the total of all of Network's liabilities as of the Closing Date, except those liabilities set forth on Schedule 2.5. If X is a positive number, then GTS shall distribute to the Shareholders, such amount in immediately available funds. Alternately, if X is a negative number, then the Shareholders shall pay such negative sum to GTS in immediately available funds, or if the Shareholders fail to so pay, then GTS shall be entitled, without the consent of the Shareholders, to decrease the principal amount of the Xxxxxxx Promissory Note and Xxxxxxx Promissory Note, in proportion to their respective ownership interests in Networks immediately prior to the Merger, by the amount of X. The Balance Sheet Adjustment shall be determined on or before 90 days after the Closing Date. GTS and the Stockholders will cooperate in good faith to prepare the Balance Sheet Adjustment. If any dispute arises over the preparation of the Balance Sheet Adjustment which cannot be reconciled by the Stockholders and GTS in good faith, the Stockholders and GTS will engage a mutually acceptable independent public accounting firm to determine the Balance Sheet Adjustment, such accounting fees to be paid by the parties equally. The Balance Sheet Adjustment determined by that accounting firm will be binding upon the Stockholders and GTS.
Appears in 2 contracts
Samples: Merger Agreement (Cherkas Randolph), Merger Agreement (Global Telecommunication Solutions Inc)
Balance Sheet Adjustment. The Cash (a) Notwithstanding anything to the contrary contained elsewhere in this Agreement, in addition to the Escrow Amount withheld pursuant to Section 1.5(d), a portion of the aggregate consideration otherwise payable to the Company Common Stockholders, Converted Option Holders and Converted Warrant Holders pursuant to Section 1.5(a)(ii) of this Agreement equal to $300,000 (the “Adjustment Amount”) shall be adjusted based upon Network's balance sheet on withheld. In the event that at any time within thirty (30) days following the Closing Date (the "Balance Sheet Adjustment"“Determination Deadline”) to reflect X it is determined by Parent in good faith and based on documentation shared with the following formula: X = Y - Z, where X = Stockholders’ Agent that (i) the dollar amount outstanding debt of the increase or decrease in the Cash Consideration; Y = The total cash and the net realizable value of Networks' accounts receivable Company as of the Closing Date plus reimbursement for is greater than the actual cost amounts listed on Schedule I hereto; or (ii) the amount of those phone cards printed for Networks prior to the Closing Date but which remain unactivated on the Closing Date. For purposes of this section, "net realizable value" shall mean the total amount received in connection with any of such accounts receivable within 75 days Current Net Assets of the date hereof; and Z = the total of all of Network's liabilities Company as of the Closing Date(excluding any fees, except those liabilities costs and expenses of the Company described in Section 10.3 of this Agreement) are less than the Current Net Assets of the Company set forth on Schedule 2.5. If X is a positive numberin the Unaudited Interim Balance Sheet (as defined in Section 2.4(a)(ii)) (the aggregate amount of any difference under clause (i) and (ii) being the “Shortfall”), then GTS Parent shall have the right to recover from the Escrow Amount the extent of the Shortfall.
(b) Within five (5) business days following the Determination Deadline, Parent shall distribute on a pro rata basis to the ShareholdersCompany Common Stockholders, such amount in immediately available fundsConverted Option Holders and Converted Warrant Holders the Adjustment Amount, less any Shortfall. AlternatelyWith respect to distribution of the Adjustment Amount, if X any, to the Company Common Stockholders, Converted Option Holders and Converted Warrant Holders, Parent’s sole obligation is a negative numberto deliver the balance of the Adjustment Amount, then if any. The Company Common Stockholders, Converted Option Holders or Converted Warrant Holders will not be entitled to any interest on the Shareholders shall pay such negative sum Adjustment Amount. The parties hereto agree that the Adjustment Amount is intended to GTS in immediately available fundssecure Parent partially against any Shortfall and is not the sole or exclusive remedy for Parent or any other Indemnitee for recovery of any payments or losses arising from any inaccuracy or breach of representations, or if the Shareholders fail to so paywarranties and covenants, then GTS and Parent shall be entitled, without entitled to recover any such losses or payments exceeding the consent of Adjustment Amount through the Shareholders, to decrease the principal amount of the Xxxxxxx Promissory Note and Xxxxxxx Promissory Note, in proportion to their respective ownership interests in Networks immediately prior to the Merger, by the amount of X. The Balance Sheet Adjustment shall be determined on Escrow Amount or before 90 days after the Closing Date. GTS and the Stockholders will cooperate in good faith to prepare the Balance Sheet Adjustment. If any dispute arises over the preparation of the Balance Sheet Adjustment which cannot be reconciled by the Stockholders and GTS in good faith, the Stockholders and GTS will engage a mutually acceptable independent public accounting firm to determine the Balance Sheet Adjustment, such accounting fees to be paid by the parties equally. The Balance Sheet Adjustment determined by that accounting firm will be binding upon the Stockholders and GTSother available remedy.
Appears in 1 contract
Samples: Merger Agreement (Ipass Inc)
Balance Sheet Adjustment. The Cash consideration (a) Within 30 days of the Closing Date, Seller shall be adjusted based upon Network's balance sheet on deliver to Buyer an unaudited Balance Sheet of Seller as at the Closing Date (the "Closing Balance Sheet AdjustmentSheet") to reflect X ), prepared in accordance with GAAP and consistent with the following formula: X = Y - Z, where X = the dollar amount of the increase or decrease principles applied by Seller in the Cash Consideration; Y = The total cash and the net realizable value of Networks' accounts receivable as of the Closing Date plus reimbursement for the actual cost of those phone cards printed for Networks prior to the Closing Date but which remain unactivated on the Closing Date. For purposes of this section, "net realizable value" shall mean the total amount received in connection with any of such accounts receivable within 75 days of the date hereof; and Z = the total of all of Network's liabilities as of the Closing Date, except those liabilities set forth on Schedule 2.5. If X is a positive number, then GTS shall distribute to the Shareholders, such amount in immediately available funds. Alternately, if X is a negative number, then the Shareholders shall pay such negative sum to GTS in immediately available funds, or if the Shareholders fail to so pay, then GTS shall be entitled, without the consent of the Shareholders, to decrease the principal amount of the Xxxxxxx Promissory Note and Xxxxxxx Promissory Note, in proportion to their respective ownership interests in Networks immediately prior to the Merger, by the amount of X. The Balance Sheet Adjustment shall be determined on or before 90 days after the Closing Date. GTS and the Stockholders will cooperate in good faith to prepare the Balance Sheet Adjustment. If any dispute arises over the preparation of the Base Balance Sheet, accompanied by a report showing the adjustments to the Purchase Price provided for in Section 2.5 (b) below, if any. Buyer shall have thirty (30) days after delivery of the Closing Balance Sheet Adjustment which cannot be reconciled to Buyer to examine and address with Seller any questions or issues with respect to the preparation, presentation or content of the Closing Balance Sheet or the adjustments to the Purchase Price provided in Section 2.5(b) hereof. Buyer may, at its own expense, cause its accountants to review the Closing Balance Sheet and Buyer's accountants shall have access to all the work papers used in preparation of same. Buyer shall have the right to object, by the Stockholders and GTS in good faithwritten notice to Seller, to any item on, or other matter relating to, the Stockholders Closing Balance Sheet or the adjustments to the Purchase Price provided in Section 2.5(b) hereof. If Buyer or Buyer's accountants do not give Seller such written notice within thirty (30) days after receipt of the Closing Balance Sheet, Buyer shall be deemed to have accepted the Closing Balance Sheet and GTS the schedule of adjustments. If Buyer or Buyer's accountants do so object and if Seller and Seller's accountants are unable, within fifteen (15) days after receipt by Seller of such notice of objections, to resolve any disputes as to the Closing Balance Sheet or the adjustments to the Purchase Price provided in Section 2.5(b) hereof, such dispute shall be referred to the President of Buyer and Seller, respectively, who shall attempt to resolve the issue amongst themselves. If after fifteen (15) business days they are unable to do so, the dispute shall be turned over to a firm of independent certified public accountants mutually acceptable to Buyer and Seller. The accounting firm so selected shall, as soon as practicable, deliver to Seller and Buyer a written report resolving any disputed matters, and its determination will engage be conclusive and binding upon the parties. The expense of such a mutually acceptable independent public accounting firm to determine the Balance Sheet Adjustment, such accounting fees to shall be paid borne by the parties equallyon a pro rata basis according to the degree to which the positions of the respective parties are not confirmed by the accounting firm so selected. The Balance Sheet Adjustment determined by that accounting firm adjustment to the Purchase Price will be binding upon reflected in the Stockholders Deferred Payment, with the Deferred Payment being increased by any upward adjustment in the Purchase Price and GTS.being decreased by any downward adjustment
Appears in 1 contract
Samples: Asset Purchase Agreement (Interpore International /Ca/)