Closing Cash Proceeds Adjustment. (a) At least five Business Days prior to the Closing Date, the Company shall prepare and deliver to the Purchaser the Waterfall Schedule as determined in accordance with the Company LLC Agreement and a good faith estimate of the consolidated balance sheets of the Blockers and the Company and its Subsidiaries as of the Measurement Time (the “Closing Balance Sheets”) and a good faith estimate of the Closing Cash Proceeds (the ”Estimated Closing Cash Proceeds”), together with a reasonably detailed computation of each component thereof (i.e., Cash, Working Capital, Indebtedness and Transaction Expenses) and reasonable supporting documentation, based on the Company’s and its Subsidiaries’ books and records and other information then available. The Company shall provide the Purchaser and its representatives with reasonable opportunity to review and propose comments to the Estimated Closing Cash Proceeds calculation and shall consider the Purchaser’s comments thereon in good faith to the extent received at least two Business Days prior to the Closing, it being understood that in no event shall the acceptance of Purchaser’s comments be considered a condition to Closing or otherwise delay the Closing. (b) As promptly as practicable after the Closing, but in no event later than seventy-five (75) days after the Closing Date, the Purchaser shall prepare and deliver to the Representative a statement (the ”Closing Statement”) setting forth the Purchaser’s good faith calculation of the Closing Cash Proceeds, in each case in accordance with the definition thereof, together with a reasonably detailed computation of each component thereof (i.e., Cash, Indebtedness and Transaction Expenses) and reasonable supporting documentation and consolidated balance sheets of the Blockers and the Company and its Subsidiaries as of the Measurement Time (the ”Closing Balance Sheets”). (c) The Purchaser, the Blocker Purchaser and their respective Subsidiaries (including the Blockers, the Surviving Company and its Subsidiaries) shall (i) permit the Representative and its representatives to have reasonable access to the books, records and other documents (including work papers, schedules, financial statements, memoranda, etc.) pertaining to or used in connection with the preparation of the Closing Statement or the Closing Balance Sheets and the Purchaser’s calculation of the Closing Cash Proceeds and provide the Representative with copies thereof (as reasonably requested by the Representative) and (ii) provide the Representative and its representatives reasonable access to the Purchaser’s, the Blocker Purchaser and its Subsidiaries’ (including the Blocker’s, the Surviving Company’s and its Subsidiaries’) employees and advisors (including making their chief financial officer(s) and accountants available to respond to reasonable written or oral inquiries of the Representative or its representatives). If the Representative disagrees with any part of the Purchaser’s calculation of the Closing Cash Proceeds as set forth on the Closing Statement or the Closing Balance Sheets, the Representative shall, within thirty (30) days after the Representative’s receipt of the Closing Statement and the Closing Balance Sheets, notify the Purchaser in writing of such disagreement by setting forth the Representative’s calculation of the Closing Cash Proceeds, including each of the components thereof, and describing in reasonable detail the basis for such disagreement (an “Objection Notice”). If an Objection Notice is delivered to the Purchaser, then the Purchaser and the Representative shall negotiate in good faith to resolve their disagreements with respect to the computation of the Closing Cash Proceeds. The Purchaser and the Representative acknowledge and agree that all discussions related to the Objection Notice are without prejudice communications made in confidence with the intent of attempting to resolve a litigious dispute and are subject to settlement privilege. In the event that the Purchaser and the Representative are unable to resolve all such disagreements within thirty (30) days after the Purchaser’s receipt of such Objection Notice or such longer period as the Purchaser and the Representative may mutually agree in writing, the Purchaser and the Representative shall submit such remaining disagreements to a nationally-recognized valuation or consulting firm as is reasonably acceptable to the Purchaser and the Representative, or, if such firm refuses or is otherwise unable to act in such capacity, another nationally-recognized valuation or consulting firm as is acceptable to the Purchaser and the Representative that agrees to be engaged for the purposes hereunder (the ”Firm”). (d) The Firm shall act as an expert and not as an arbitrator, and make a final and binding determination with respect to the Purchaser’s, the Representative’s and the Company’s compliance with this Section 3.05 and the computation of the Closing Cash Proceeds, including each of the components thereof, to the extent such amounts are in dispute, in accordance with the guidelines and procedures set forth in this Agreement and on Exhibit F. The Purchaser and the Representative shall cooperate with the Firm during the term of its engagement and shall use commercially reasonable efforts to cause the Firm to resolve all remaining disagreements with respect to the computation of the Closing Cash Proceeds, including each of the components thereof, as soon as practicable. The Firm shall consider only those items and amounts in the Purchaser’s and the Representative’s respective calculations of the Closing Cash Proceeds, including each of the components thereof, that are in the Objection Notice and identified as being items and amounts to which the Purchaser and the Representative have been unable to agree. In resolving any disputed item, the Firm may not assign a value to any item in dispute higher than the highest amount assigned by either party or lower than the lowest amount asserted by either Party. Except as permitted on Exhibit F hereto in order to clarify or understand any position or argument made by a party in a written submission, the Firm’s determination of the Closing Cash Proceeds, including each of the components thereof, shall be based solely on written presentations submitted by the Purchaser and the Representative which are in accordance with the guidelines and procedures (including the definitions of each of the components thereof) set forth in this Agreement (i.e., not on the basis of an independent review). The determination of the Firm shall be conclusive and binding upon the parties hereto and shall not be subject to appeal or further review. (e) The costs and expenses of the Firm shall be allocated between the Purchaser, on the one hand, and the Representative (on behalf of the Unitholders), on the other hand, based upon the percentage of the dollar value of the disputed amounts (as submitted to the Firm) determined in favor of the other party by the Firm bears to the dollar value contested by such party in the written presentation to the Firm. For example, if the Representative (on behalf of the Unitholders) submits an Objection Notice to the Firm for $1,000, and if the Purchaser contests to the Firm only $500 of the amount claimed by the Representative, and if the Firm ultimately resolves the dispute by awarding the Unitholders $300 of the $500 contested, then the costs and expenses of the Firm will be allocated 60% (i.e., 300/500) to the Purchaser and 40% (i.e., 200/500) to the Representative (on behalf of the Unitholders). (f) Within five (5) Business Days after the Closing Cash Proceeds, including each of the components thereof, is finally determined pursuant to this Section 3.05: (i) if the Closing Cash Proceeds as finally determined pursuant to this Section 3.05 are less than the Estimated Closing Cash Proceeds (the total amount of such deficiency, the “Purchaser Adjustment Amount”), then the Purchaser and the Representative shall deliver a joint written instruction to the Escrow Agent instructing the Escrow Agent to (A) release from the Adjustment Escrow Account to Purchaser an amount equal to the lesser of the Purchaser Adjustment Amount and the amount in the Adjustment Escrow Account and (B) release any remaining amounts in the Adjustment Escrow Account to the Paying Agent for further distribution to the Unitholders and the Blocker Sellers in accordance with the Waterfall Schedule, and the payment instructions set forth in the Letters of Transmittal; provided that, in no event will the Representative, the Unitholders, the Blocker Sellers, the Direct Seller or any of their respective Affiliates be liable to the Purchaser or any of its Affiliates under this Section 3.05(f) for any amounts in excess of the Adjustment Escrow Amount; and (ii) if the Closing Cash Proceeds as finally determined pursuant to this Section 3.05 are greater than the Estimated Closing Cash Proceeds (the total amount of such excess, the “Seller Adjustment Amount”), then (A) the Purchaser shall, or shall cause the Surviving Company or one or more of its Subsidiaries to, pay to the Paying Agent an amount equal to the lesser of the Seller Adjustment Amount and an amount equal to the Adjustment Escrow Amount and (B) the Purchaser and the Representative shall deliver a joint written instruction to the Escrow Agent instructing the Escrow Agent to release all amounts in the Adjustment Escrow Account to the Paying Agent, in each case, for further distribution to the Unitholders and the Blocker Sellers, in each case, in accordance with the Waterfall Schedule, and the payment instructions set forth in the Letters of Transmittal; provided that, in no event will the Purchaser, the Blocker Purchaser, the Surviving Company or any of their respective Affiliates be liable to the Seller or any of their Affiliates under this Section 3.05(f) for any amounts in excess of an amount of cash equal to the Adjustment Escrow Amount. (g) All payments to be made pursuant to Section 3.05(h) shall (x) be treated by all parties for Tax purposes as adjustments to the Merger Consideration to the extent permitted by applicable Law and (y) be made by wire transfer of immediately available funds to the account(s) designated by the Purchaser or the Representative, as applicable. (h) The Representative, the Unitholders and the Blocker Sellers each hereby agrees and acknowledges that the right to any payment to be made pursuant to Section 3.05(h) shall be its sole and exclusive remedy for any and all claims arising under this Agreement with respect to this Section 3.05. The Purchaser hereby agrees and acknowledges that its right to any payment to be made pursuant to Section 3.05(h) shall be the sole and exclusive remedy of the Purchaser for any and all claims arising under this Agreement with respect to this Section 3.05.
Appears in 1 contract
Samples: Equity Purchase and Merger Agreement (Roper Technologies Inc)
Closing Cash Proceeds Adjustment. (a) At least five (5) Business Days prior to the Closing Date, the Company shall prepare and deliver to the Purchaser the Waterfall Schedule as determined in accordance with the Company LLC Agreement and a good faith estimate of the consolidated balance sheets of the Blockers and the Company and its Subsidiaries as of the Measurement Time (the “Closing Balance Sheets”) and a good good-faith estimate of the Closing Cash Proceeds (the ”“Estimated Closing Cash Proceeds”), together with a reasonably detailed computation including (i) each of each component thereof (i.e., Cash, Working Capital, Indebtedness and Transaction Expenses) and reasonable supporting documentationthe components thereof, based on the Company’s and its Subsidiaries’ books and records and other information then availableavailable and (ii) at the Purchaser’s request, a physical inventory count in accordance with the last two sentences of this Section 3.03(a) (with respect to the inventory included in the estimated Closing Working Capital located at any of the Applicable Facilities). The Purchaser may submit any comments in writing to the Company until 5:00 p.m. prevailing Eastern Time, on the second (2nd) Business Day prior to the anticipated Closing Date and the Company will consider any such comments in good faith and, if any such comments are agreed, will so revise the Estimated Closing Cash Proceeds. The Estimated Closing Cash Proceeds shall provide be calculated in accordance with the Applicable Accounting Principles. The failure by the Purchaser and its representatives with reasonable opportunity to review and propose submit any comments to the Company pursuant to the preceding sentence (or the decision by the Company to revise or not revise the Estimated Closing Cash Proceeds calculation and in response to any such comments) shall consider not be deemed a waiver of any right of the Purchaser’s comments thereon Purchaser or the Representative to raise any such objection during the course of the adjustment process set forth in good faith to the extent received at least two this Section 3.03. The Company shall complete within ten (10) Business Days prior to the Closinganticipated Closing Date a physical inventory count of inventory located at each of the Applicable Facilities or, it being understood that upon the written request of the Purchaser which is provided not later than thirty (30) days after the date of this Agreement, some but not all of the Applicable Facilities; in no event shall each case with such inventory count conducted at the acceptance of Purchaser’s comments cost (based on the actual and direct costs of the Company and its Subsidiaries incurred in conducting such inventory count). The Purchaser or one of its representatives shall be considered a condition permitted to Closing or otherwise delay observe the Closingphysical inventory count.
(b) As promptly as practicable after the Closing, but in no event later than seventy-five ninety (7590) days after the Closing Date, the Purchaser shall prepare and deliver to the Representative a statement (the ”“Closing Statement”) setting forth the Purchaser’s good faith calculation of the Closing Cash Proceeds, in including each case in accordance with of the definition components thereof, together with a reasonably detailed computation an estimate of each component thereof (i.e., Cash, Indebtedness and Transaction Expensesany payment to be made pursuant to Section 3.03(h) and reasonable supporting documentation and a consolidated balance sheets sheet of the Blockers and the Company and its Subsidiaries as of 12:01 a.m. prevailing Eastern Time on the Measurement Time Closing Date (the ”“Closing Balance SheetsSheet”).
(c) The PurchaserClosing Statement shall (i) except with respect to the calculation of Transaction Expenses, be prepared, and Closing Working Capital shall be determined, in accordance with (A) the accounting methods, policies, practices, procedures, conventions, categorizations, definitions, principles, judgments, assumptions, techniques or estimation methods with respect to financial statements, their classification or presentation or otherwise (including with respect to the nature of accounts, level of reserves or level of accruals) that are used in the preparation of the Financial Statements for the fiscal year ended September 30, 2017, and (B) to the extent not inconsistent with the foregoing clause (A), GAAP (clauses (A) and (B) together, the Blocker Purchaser “Applicable Accounting Principles”); and their respective Subsidiaries (including ii) not include any changes in assets or liabilities as a result of purchase accounting adjustments.
(d) From and after the Blockersdelivery of the Estimated Closing Cash Proceeds pursuant to Section 3.03(a), the Surviving Company and each party shall use its Subsidiaries) shall commercially reasonable efforts to (i) permit the Representative other party and its representatives to have reasonable access to the books, records and other documents (including work papers, schedules, financial statements, memoranda, etc.) pertaining to or used in connection with the preparation of the Estimated Closing Cash Proceeds, the Closing Statement or the Closing Balance Sheets and the Purchaser’s calculation of the Closing Cash Proceeds and provide the Representative other party with copies thereof (as reasonably requested by the Representativerequested) and (ii) provide the Representative other party and its representatives reasonable access to the Purchaser’s, the Blocker Purchaser and its Subsidiaries’ (including the Blocker’s, the Surviving Company’s and its Subsidiaries’) employees and advisors (including making their chief financial officer(s) and accountants available to respond to reasonable written or oral inquiries of the Representative or its representatives). .
(e) If the Representative disagrees with any part of the Purchaser’s calculation of the Closing Cash Proceeds as set forth on the Closing Statement or the Closing Balance SheetsSheet, the Representative shall, within thirty sixty (3060) days after the Representative’s receipt of the Closing Statement and the Closing Balance SheetsSheet, notify the Purchaser in writing of such disagreement by setting forth the Representative’s calculation of the Closing Cash Proceeds, including each of the components thereof, and describing in reasonable detail the basis for such disagreement (an “Objection Notice”). If an Objection Notice is delivered to the Purchaser, then the Purchaser and the Representative shall negotiate in good faith to resolve their disagreements with respect to the computation of the Closing Cash Proceeds. The Purchaser and the Representative acknowledge and agree that all discussions related to the Objection Notice are without prejudice communications made in confidence with the intent of attempting to resolve a litigious dispute and are subject to settlement privilege. In the event that the Purchaser and the Representative are unable to resolve all such disagreements within thirty (30) days after the Purchaser’s receipt of such Objection Notice or such longer period as the Purchaser and the Representative may mutually agree in writing, the Purchaser and the Representative shall submit such remaining disagreements to a nationally-recognized valuation or consulting firm as is reasonably acceptable to the Purchaser and the Representative, or, if such firm refuses or is otherwise unable to act in such capacity, another nationally-recognized valuation or consulting firm as is acceptable to the Purchaser and the Representative that agrees to be engaged for the purposes hereunder (the ”Firm”).
(d) The Firm shall act as an expert and not as an arbitrator, and make a final and binding determination with respect to the Purchaser’s, the Representative’s and the Company’s compliance with this Section 3.05 and the computation of the Closing Cash Proceeds, including each of the components thereof, to the extent such amounts are in dispute, in accordance with the guidelines and procedures set forth in this Agreement and on Exhibit F. The Purchaser and the Representative shall cooperate with the Firm during the term of its engagement and shall use commercially reasonable efforts to cause the Firm to resolve all remaining disagreements with respect to the computation of the Closing Cash Proceeds, including each of the components thereof, as soon as practicable. The Firm shall consider only those items and amounts in the Purchaser’s and the Representative’s respective calculations of the Closing Cash Proceeds, including each of the components thereof, that are in the Objection Notice and identified as being items and amounts to which the Purchaser and the Representative have been unable to agree. In resolving any disputed item, the Firm may not assign a value to any item in dispute higher than the highest amount assigned by either party or lower than the lowest amount asserted by either Party. Except as permitted on Exhibit F hereto in order to clarify or understand any position or argument made by a party in a written submission, the Firm’s determination of the Closing Cash Proceeds, including each of the components thereof, shall be based solely on written presentations submitted by the Purchaser and the Representative which are in accordance with the guidelines and procedures (including the definitions of each of the components thereof) set forth in this Agreement (i.e., not on the basis of an independent review). The determination of the Firm shall be conclusive and binding upon the parties hereto and shall not be subject to appeal or further review.
(e) The costs and expenses of the Firm shall be allocated between the Purchaser, on the one hand, and the Representative (on behalf of the Unitholders), on the other hand, based upon the percentage of the dollar value of the disputed amounts (as submitted to the Firm) determined in favor of the other party by the Firm bears to the dollar value contested by such party in the written presentation to the Firm. For example, if the Representative (on behalf of the Unitholders) submits an Objection Notice to the Firm for $1,000, and if the Purchaser contests to the Firm only $500 of the amount claimed by the Representative, and if the Firm ultimately resolves the dispute by awarding the Unitholders $300 of the $500 contested, then the costs and expenses of the Firm will be allocated 60% (i.e., 300/500) to the Purchaser and 40% (i.e., 200/500) to the Representative (on behalf of the Unitholders).
(f) Within five (5) Business Days after the Closing Cash Proceeds, including each of the components thereof, is finally determined pursuant to this Section 3.05:
(i) if the Closing Cash Proceeds as finally determined pursuant to this Section 3.05 are less than the Estimated Closing Cash Proceeds (the total amount of such deficiency, the “Purchaser Adjustment Amount”), then the Purchaser and the Representative shall deliver a joint written instruction to the Escrow Agent instructing the Escrow Agent to (A) release from the Adjustment Escrow Account to Purchaser an amount equal to the lesser of the Purchaser Adjustment Amount and the amount in the Adjustment Escrow Account and (B) release any remaining amounts in the Adjustment Escrow Account to the Paying Agent for further distribution to the Unitholders and the Blocker Sellers in accordance with the Waterfall Schedule, and the payment instructions set forth in the Letters of Transmittal; provided that, in no event will the Representative, the Unitholders, the Blocker Sellers, the Direct Seller or any of their respective Affiliates be liable to the Purchaser or any of its Affiliates under this Section 3.05(f) for any amounts in excess of the Adjustment Escrow Amount; and
(ii) if the Closing Cash Proceeds as finally determined pursuant to this Section 3.05 are greater than the Estimated Closing Cash Proceeds (the total amount of such excess, the “Seller Adjustment Amount”), then (A) the Purchaser shall, or shall cause the Surviving Company or one or more of its Subsidiaries to, pay to the Paying Agent an amount equal to the lesser of the Seller Adjustment Amount and an amount equal to the Adjustment Escrow Amount and (B) the Purchaser and the Representative shall deliver a joint written instruction to the Escrow Agent instructing the Escrow Agent to release all amounts in the Adjustment Escrow Account to the Paying Agent, in each case, for further distribution to the Unitholders and the Blocker Sellers, in each case, in accordance with the Waterfall Schedule, and the payment instructions set forth in the Letters of Transmittal; provided that, in no event will the Purchaser, the Blocker Purchaser, the Surviving Company or any of their respective Affiliates be liable to the Seller or any of their Affiliates under this Section 3.05(f) for any amounts in excess of an amount of cash equal to the Adjustment Escrow Amount.
(g) All payments to be made pursuant to Section 3.05(h) shall (x) be treated by all parties for Tax purposes as adjustments to the Merger Consideration to the extent permitted by applicable Law and (y) be made by wire transfer of immediately available funds to the account(s) designated by the Purchaser or the Representative, as applicable.
(h) The Representative, the Unitholders and the Blocker Sellers each hereby agrees and acknowledges that the right to any payment to be made pursuant to Section 3.05(h) shall be its sole and exclusive remedy for any and all claims arising under this Agreement with respect to this Section 3.05. The Purchaser hereby agrees and acknowledges that its right to any payment to be made pursuant to Section 3.05(h) shall be the sole and exclusive remedy of the Purchaser for any and all claims arising under this Agreement with respect to this Section 3.05.thirty
Appears in 1 contract
Samples: Merger Agreement (Hubbell Inc)
Closing Cash Proceeds Adjustment. (a) At least five three (3) Business Days prior to the Closing Date, the Company shall prepare and deliver to the Purchaser the Waterfall Schedule as determined in accordance with the Company LLC Agreement and a good faith estimate of the consolidated balance sheets of the Blockers and the Company and its Subsidiaries as of the Measurement Time (the “Closing Balance Sheets”) and a good faith estimate of the Closing Cash Proceeds (the ”"Estimated Closing Cash Proceeds”"), together with a reasonably detailed computation including each of each component thereof (i.e., Cash, Working Capital, Indebtedness and Transaction Expenses) and reasonable supporting documentationthe components thereof, based on the Company’s 's and its Subsidiaries’ ' books and records and other information then available. The Following delivery of the Company's calculation of the Estimated Closing Cash Proceeds, to the extent reasonably requested by the Purchaser, the Company shall provide make available to the Purchaser and its representatives with reasonable opportunity to review and propose comments to supporting documentation used in preparing the Estimated Closing Cash Proceeds calculation and the Company shall consider any reasonable comments provided by the Purchaser’s comments thereon Purchaser in good faith based on the Purchaser's review of the Estimated Closing Cash Proceeds and such documentation, provided, that if there is a dispute over the Estimated Closing Cash Proceeds, the Estimated Closing Cash Proceeds delivered by the Company shall govern and the obligation of the Company to consider such reasonable comments of the extent received at least two Business Days prior to Purchaser regarding the Closing, it being understood that Estimated Closing Cash Proceeds shall in no event shall require that the acceptance Company revise its calculation of Purchaser’s comments the Estimated Closing Cash Proceeds or that the contemplated Closing be considered a condition to Closing postponed or otherwise delay the Closingdelayed.
(b) As promptly as practicable after the Closing, but in no event later than seventy-five ninety (7590) days after the Closing Date, the Purchaser shall prepare and deliver to the Representative a statement (the ”"Closing Statement”") setting forth the Purchaser’s 's good faith calculation of the Closing Cash Proceeds, in including each case in accordance with of the definition components thereof, together with a reasonably detailed computation of each component thereof (i.e., Cash, Indebtedness and Transaction Expenses) and reasonable supporting documentation and consolidated balance sheets sheet of the Blockers and the Company and its Subsidiaries as of the Measurement Time (the ”"Closing Balance Sheets”Sheet"), and the Purchaser's good faith calculation of the Closing Working Capital.
(c) The Closing Balance Sheet shall (i) be prepared, and Cash and Closing Working Capital (subject to the specific adjustments set forth on the Working Capital Schedule) shall be determined, in accordance with the Accounting Principles, and (ii) not include any changes in assets or liabilities as a result of purchase accounting adjustments, changes arising from or resulting as a consequence of the transactions contemplated hereby or changes due to events or circumstances occurring or arising following the Closing. Notwithstanding anything to the contrary set forth in the immediately preceding sentence, the inventory of the Company and its Subsidiaries which is able to be measured in such fashion shall be measured by unmanned aerial vehicle(s) surveillance by a provider mutually acceptable to the Company, the Purchaser, and the Blocker Representative on or immediately prior to the Closing Date, and the Purchaser and their respective the Representative agree to use the measured amount of such inventory for purposes of calculating Closing Working Capital pursuant to this Section 2.04.
(d) The Purchaser and its Subsidiaries (including the Blockers, the Surviving Company and its Subsidiaries) shall (i) permit the Representative and its representatives to have reasonable access to the books, records and other documents (including work papers, schedules, financial statements, memoranda, etc.) pertaining to or used in connection with the preparation of the Closing Statement or the Closing Balance Sheets Sheet and the Purchaser’s 's calculation of the Closing Cash Proceeds and Closing Working Capital and provide the Representative with copies thereof (as reasonably requested by the Representative) and (ii) provide the Representative and its representatives reasonable access to the Purchaser’s, the Blocker Purchaser 's and its Subsidiaries’ ' (including the Blocker’s, the Surviving Company’s 's and its Subsidiaries’') employees and advisors (including making their chief financial officer(s) and accountants available to respond to reasonable written or oral inquiries of the Representative or its representatives); provided, that such access does not unreasonably interfere with the normal operations of the Purchaser and its Subsidiaries (including the Company and its Subsidiaries), shall be subject to customary confidentiality requirements, is permissible under applicable Law (after taking into account any applicable COVID-19 Measures) and does not jeopardize the health and safety of any employee of the Purchaser or its Subsidiaries (including the Company and its Subsidiaries). If the Representative disagrees with any part of the Purchaser’s 's calculation of the Closing Cash Proceeds or Closing Working Capital as set forth on the Closing Statement or the Closing Balance SheetsSheet, the Representative shall, within thirty (30) days after the Representative’s 's receipt of the Closing Statement and the Closing Balance SheetsSheet, notify the Purchaser in writing of such disagreement by setting forth the Representative’s 's calculation of the Closing Cash ProceedsProceeds or Closing Working Capital, as applicable, including each of the components thereof, and describing in reasonable detail the basis for such disagreement (an “"Objection Notice”"). If an Objection Notice is delivered to the Purchaser, then the Purchaser and the Representative shall negotiate in good faith to resolve their disagreements with respect to the computation of the Closing Cash ProceedsProceeds or Closing Working Capital, as applicable. The Purchaser and the Representative Sellers acknowledge and agree that all discussions related to the Objection Notice are are, without prejudice prejudice, communications made in confidence with the intent of attempting to resolve a litigious dispute and are subject to settlement privilege. In the event that the Purchaser and the Representative are unable to resolve all such disagreements within thirty (30) days after the Purchaser’s 's receipt of such Objection Notice or such longer period as the Purchaser and the Representative may mutually agree in writing, the Purchaser and the Representative shall submit such remaining disagreements to a nationally-recognized valuation or consulting firm as is reasonably acceptable to the Purchaser and the RepresentativeDeloitte, or, if such firm refuses or is otherwise unable to act in such capacity, another a nationally-recognized valuation or consulting firm as is acceptable to the Purchaser and the Representative that agrees to be engaged for the purposes hereunder (the ”"Firm”").
(de) The Firm shall act as an expert and not as an arbitrator, and make a final and binding determination with respect to the Purchaser’s, the Representative’s 's and the Company’s 's compliance with this Section 3.05 2.04 and the computation of the Closing Cash Proceeds, including each of the components thereof, and Closing Working Capital to the extent such amounts are in dispute, in accordance with the guidelines and procedures set forth in this Agreement and on Exhibit F. E. The Purchaser and the Representative shall cooperate with the Firm during the term of its engagement and shall use commercially reasonable efforts to cause the Firm to resolve all remaining disagreements with respect to the computation of the Closing Cash Proceeds, including each of the components thereof, and Closing Working Capital as soon as practicable. The Firm shall consider only those items and amounts in the Purchaser’s 's and the Representative’s 's respective calculations of the Closing Cash Proceeds, including each of the components thereof, and Closing Working Capital that are in the Objection Notice and identified as being items and amounts to which the Purchaser and the Representative have been unable to agree. In resolving any disputed item, the Firm may not assign a value to any item in dispute higher greater than the highest amount assigned greater value for such item claimed by either party or lower in its Initial Report (as defined on Exhibit E) which may not be greater than the lowest corresponding amount asserted in the Closing Statement or Objection Notice, as applicable, or less than the smaller value for such item claimed by either PartyPerson in its Initial Report (as defined on Exhibit E) which may not be less than the corresponding amount in the Closing Statement or Objection Notice, as applicable. Except as permitted on Exhibit F E hereto in order to clarify or understand any position or argument made by a party in a written submission, the Firm’s 's determination of the Closing Cash Proceeds, including each of the components thereof, and Closing Working Capital shall be based solely on written presentations submitted by the Purchaser and the Representative which are in accordance with the guidelines and procedures (including the definitions of each of the components thereof) set forth in this Agreement (i.e., not on the basis of an independent review). The determination of the Firm shall be conclusive and binding upon the parties hereto and shall not be subject to appeal or further review.
(ef) The costs and expenses of the Firm in determining the Closing Cash Proceeds, including each of the components thereof, and Closing Working Capital shall be borne by the Purchaser, on the one hand, and the Representative, on the other hand, based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party. For example, if the Purchaser claims the Closing Cash Proceeds or Closing Working Capital are, in the aggregate, one thousand dollars ($1,000) less than the amount determined by the Representative, and the Representative contests only five hundred dollars ($500) of the amount claimed by the Purchaser, and if the Firm ultimately resolves the dispute by awarding the Purchaser three hundred dollars ($300) of the five hundred dollars ($500) contested, then the costs and expenses of the Firm will be allocated between sixty percent (60%) (i.e., 300 ÷ 500) to the Representative and forty percent (40%) (i.e., 200 ÷ 500) to the Purchaser. Prior to the Firm's determination of the Closing Cash Proceeds and Closing Working Capital, (i) the Purchaser, on the one hand, and the Representative (on behalf of the UnitholdersSellers), on the other hand, based upon shall retain the percentage Firm and each pay fifty percent (50%) of the dollar value of the disputed amounts (as submitted any retainer paid to the Firm, and (ii) determined in favor during the engagement of the other party by Firm, the Firm bears will xxxx fifty percent (50%) of the total charges to each of the dollar value contested by such party in Purchaser, on the written presentation to the Firm. For exampleone hand, if and the Representative (on behalf of the Unitholders) submits an Objection Notice Sellers), on the other hand. In connection with the Firm's determination of the Closing Cash Proceeds and Closing Working Capital, the Firm shall also determine, pursuant to the Firm for $1,000terms of the first and second sentences of this Section 2.04(f), and if the Purchaser contests to the Firm only $500 of the amount claimed by the Representativetaking into account all fees, and if the Firm ultimately resolves the dispute by awarding the Unitholders $300 of the $500 contested, then the costs and expenses of the Firm will be allocated 60% (i.e.already paid by each of the Purchaser, 300/500) to on the one hand, and the Representative, on the other hand, as of the date of such determination, the allocation of the Firm's fees, costs and expenses between the Purchaser and 40% (i.e.the Representative, 200/500) to which such determination shall be conclusive and binding upon the Representative (on behalf of the Unitholders)parties hereto.
(fg) Within five (5) Business Days after the Closing Cash Proceeds, including each of the components thereof, and Closing Working Capital is finally determined pursuant to this Section 3.052.04:
(i) if the Closing Cash Proceeds as finally determined pursuant to this Section 3.05 2.04 are less than the Estimated Closing Cash Proceeds (the total amount of such deficiency, the “Purchaser Adjustment Amount”)Proceeds, then the Purchaser and the Representative shall deliver a joint written instruction to the Escrow Agent instructing cause the Escrow Agent to (A) release from the Adjustment Escrow Account to Purchaser an amount equal to the lesser of the Purchaser Adjustment Amount and the amount in the Adjustment Escrow Account and (B) release any remaining amounts in the Adjustment Escrow Account to the Paying Agent for further distribution to the Unitholders and the Blocker Sellers in accordance with the Waterfall Schedule, and the payment instructions set forth in the Letters of Transmittal; provided that, in no event will the Representative, the Unitholders, the Blocker Sellers, the Direct Seller or any of their respective Affiliates be liable pay to the Purchaser or any of its Affiliates under this Section 3.05(f) for any amounts from the Purchase Price Adjustment Escrow Funds an amount (which in excess no case shall exceed the amount of the Purchase Price Adjustment Escrow Funds) (the "Purchaser Adjustment Amount; and") equal to such deficiency;
(ii) if the Closing Cash Proceeds as finally determined pursuant to this Section 3.05 2.04 are greater than the Estimated Closing Cash Proceeds (the total amount of such excess, the “"Seller Adjustment Amount”"), then (A) the Purchaser shall, shall pay or shall cause the Surviving Company or one or more of its Subsidiaries to, pay to be paid (1) to the Paying Agent an amount equal Representative, for the benefit of and for further distribution to the lesser each Seller, each such Seller's Pro Rata Share in respect of such Seller's Common Units of the Seller Adjustment Amount Amount, and (2) to the Company, for the benefit of and for further distribution to each Optionholder and Phantom Award Recipient through the payroll processing system of the Company and its Subsidiaries in accordance with the Company's payroll processes and procedures, an aggregate amount equal to the Adjustment Escrow Amount (x) each such Optionholder's Pro Rata Share in respect of such Optionholder's Options and (By) each such Phantom Award Recipient's Pro Rata Share in respect of such Phantom Award Recipient's Phantom Units, in each case, of the Seller Adjustment Amount;
(iii) if the Closing Working Capital as finally determined pursuant to this Section 2.04 is less than the Closing Working Capital Minimum, then the Purchaser and the Representative shall deliver a joint written instruction to the Escrow Agent instructing cause the Escrow Agent to release all amounts in pay to the Purchaser from the Purchase Price Adjustment Escrow Account Funds remaining after distribution of any amount to the Paying AgentPurchaser pursuant to Section 2.04(g)(i) an amount (which in no case shall exceed the amount of the Purchase Price Adjustment Escrow Funds remaining after distribution of any amount to the Purchaser pursuant to Section 2.04(g)(i)) (the "Working Capital Purchaser Adjustment Amount") equal to such deficiency;
(iv) if the Closing Working Capital as finally determined pursuant to this Section 2.04 is greater than the Closing Working Capital Maximum (the total amount of such excess, the "Working Capital Seller Adjustment Amount"), then the Purchaser shall pay or cause to be paid (1) to the Representative, for the benefit of and for further distribution to each Seller, each such Seller's Pro Rata Share in respect of such Seller's Common Units of an amount equal to the Working Capital Seller Adjustment Amount, and (2) to the Company, for the benefit of and for further distribution to each Optionholder and Phantom Award Recipient through the payroll processing system of the Company and its Subsidiaries in accordance with the Company's payroll processes and procedures, an aggregate amount equal to (x) each such Optionholder's Pro Rata Share in respect of such Optionholder's Options and (y) each such Phantom Award Recipient's Pro Rata Share in respect of such Phantom Award Recipient's Phantom Units, in each case, of the amount equal to the Working Capital Seller Adjustment Amount;
(v) if after taking into account the adjustments required by Section 2.04(g)(i) through Section 2.04(g)(iv) there are any remaining Purchase Price Escrow Funds, then the Purchaser and the Representative shall cause the Escrow Agent to pay (A) to the Representative, for the benefit of and for further distribution to each Seller, each such Seller's Pro Rata Share in respect of such Seller's Common Units of such remaining Purchase Price Adjustment Escrow Funds, and (B) to the Unitholders Company, for the benefit of and for further distribution to each Optionholder and Phantom Award Recipient through the Blocker Sellerspayroll processing system of the Company and its Subsidiaries in accordance with the Company's payroll processes and procedures, an aggregate amount equal to (x) each such Optionholder's Pro Rata Share in respect of such Optionholder's Options and (y) each such Phantom Award Recipient's Pro Rata Share in respect of such Phantom Award Recipient's Phantom Units, in each case, in accordance with the Waterfall Schedule, and the payment instructions set forth in the Letters of Transmittalsuch remaining Purchase Price Adjustment Escrow Funds; provided that, and
(vi) in no event will shall either (A) the Purchasersum of the Purchaser Adjustment Amount and the Working Capital Purchaser Adjustment Amount exceed the amount of the Purchase Price Adjustment Escrow Funds, or (B) the Blocker Purchaser, the Surviving Company or any sum of their respective Affiliates be liable to the Seller Adjustment Amount or any of their Affiliates under this Section 3.05(f) for any amounts in excess of an the Working Capital Seller Adjustment Amount exceed the amount of cash equal to the Purchase Price Adjustment Escrow AmountFunds.
(gh) All payments to be made pursuant to Section 3.05(h2.04(g) shall (x) be treated by all parties for Tax tax purposes as adjustments to the Merger Consideration to the extent permitted by applicable Law Enterprise Value and (y) be made by wire transfer of immediately available funds to the account(s) designated by the Purchaser or the Representative, as applicable.
(h) . The Representative, the Unitholders and the Blocker Sellers each hereby agrees and acknowledges that the right to any payment to be made pursuant to payments described in Section 3.05(h2.04(g) shall be its the sole and exclusive remedy of the Purchaser and the Sellers for any and all claims arising under this Agreement with respect to this Section 3.05. The Purchaser hereby agrees and acknowledges that its right to any payment to be made pursuant to Section 3.05(h) shall be the sole and exclusive remedy of the Purchaser for any and all claims arising under this Agreement with respect to this Section 3.052.04.
Appears in 1 contract
Closing Cash Proceeds Adjustment. (a) At least five three (3) Business Days prior to the Closing Date, the Company shall prepare and deliver to the Purchaser the Waterfall Schedule as determined in accordance with the Company LLC Agreement and a good faith estimate of the consolidated balance sheets of the Blockers and the Company and its Subsidiaries as of the Measurement Time statement (the “Estimated Closing Balance SheetsStatement”) and a setting forth its good faith estimate of the Closing Cash Proceeds (the ”“Estimated Closing Cash Proceeds”), together with a reasonably detailed computation including each of each component thereof (i.e., Cash, Working Capital, Indebtedness and Transaction Expenses) and reasonable supporting documentationthe components thereof, based on the Company’s and its Subsidiaries’ books and records and other information then availableavailable and, as applicable, in accordance with the Accounting Principles. The Following delivery of the Company’s calculation of the Estimated Closing Statement, to the extent reasonably requested by the Purchaser, the Company shall provide make available to the Purchaser supporting documentation used in preparing the Estimated Closing Statement, and the Company shall consider any reasonable comments provided by the Purchaser in good faith based on the Purchaser’s review of the Estimated Closing Statement and such documentation, provided, that if there is a dispute over the Estimated Closing Cash Proceeds, the Estimated Closing Statement delivered by the Company shall govern and the obligation of the Company to consider such reasonable comments of the Purchaser regarding the Estimated Closing Statement shall in no event require that the Company revise its representatives with reasonable opportunity to review and propose comments to calculation of the Estimated Closing Cash Proceeds calculation and shall consider or that the Purchaser’s comments thereon in good faith contemplated Closing Date be postponed or otherwise delayed. In addition to the extent received at least two Business Days prior Estimated Closing Statement provided pursuant to this Section 2.04, the Company shall provide to the ClosingPurchaser an updated version of the Payment Schedule based on the Estimated Closing Cash Proceeds, it being understood that in no event which shall be updated to include the acceptance Closing Series A/C Share for each of Purchaser’s comments Holdings LP and Falcon, and the amounts to be considered a condition paid to Closing or otherwise delay the Closingeach Seller and Falcon pursuant to Section 2.03.
(b) As promptly as practicable after the Closing, but in no event later than seventy-five ninety (7590) days after the Closing Date, the Purchaser shall prepare and deliver to the Seller Representative a statement (the ”“Closing Statement”) setting forth the Purchaser’s good faith calculation of the Closing Cash Proceeds, in including each case in accordance with of the definition components thereof, together with and a reasonably detailed computation of each component thereof (i.e., Cash, Indebtedness and Transaction Expenses) and reasonable supporting documentation and consolidated balance sheets sheet of the Blockers and the Company and its Subsidiaries as of the Measurement Time (the ”“Closing Balance SheetsSheet”).
(c) The calculations set forth on the Estimated Closing Statement, the Closing Statement, and the Closing Balance Sheet (i) shall be prepared, and Cash and the Closing Working Capital (subject to the specific adjustments set forth on the Working Capital Schedule) and shall be determined, in accordance with the Accounting Principles, (ii) shall not include any changes in assets or Liabilities as a result of purchase accounting adjustments, and (iii) except with respect to the Transaction Expenses and the Transaction Bonus Pool, shall not give effect to the transactions contemplated hereby or changes due to events or circumstances occurring or arising following the Closing.
(d) The post-Closing purchase price adjustment as set forth in this Section 2.04 is not intended to permit the introduction of different accounting methods, policies, practices, procedures, conventions, categorizations, definitions, principles, judgments, assumptions, techniques or estimation methods with respect to financial statements, their classification or presentation or otherwise (including with respect to the nature of accounts, level of reserves or level of accruals) from those used to calculate the amounts set forth on the Working Capital Schedule and used in determining the amount of the Target Working Capital, except for any differences between Closing Working Capital and Target Working Capital expressly described on the Working Capital Schedule; it being the intent of the parties hereto that the Closing Working Capital be calculated consistently with the Target Working Capital, except for any differences between Closing Working Capital and Target Working Capital expressly described on the Working Capital Schedule, in order to allow a meaningful comparison of the Closing Working Capital to the Target Working Capital.
(e) During the thirty (30)-day period immediately after the Seller Representative’s receipt of the Closing Statement from the Purchaser, the Blocker Purchaser and their respective its Subsidiaries (including the Blockers, the Surviving Company and its Subsidiaries) shall (i) permit the Seller Representative and its representatives Representatives to have reasonable access access, during normal business hours, to the financial books, records and other documents (including work papers, schedules, financial statements, memoranda, etc.) of the Company and its Subsidiaries pertaining to or used in connection with the preparation of the Closing Statement or the Closing Balance Sheets Sheet and the Purchaser’s calculation of the Closing Cash Proceeds and provide the Seller Representative with copies thereof (as reasonably requested in writing by the Seller Representative) and (ii) provide the Seller Representative and its representatives Representatives reasonable access to the Purchaser’s, the Blocker Purchaser ’s and its Subsidiaries’ (including the Blocker’s, the Surviving Company’s and its Subsidiaries’) employees and advisors (including making their the Company’s and its Subsidiaries’ chief financial officer(s) and accountants available to respond to reasonable written or oral inquiries of the Seller Representative or its representativesRepresentatives); provided, that neither the Company nor any of its Subsidiaries shall be required to provide such access to the extent doing so would jeopardize the attorney-client privilege or attorney work-product doctrine or any other applicable privilege to which any such books and records, materials and other information is subject; provided, further, that the Company and its Subsidiaries shall take all reasonable steps to permit such access in a manner or on a basis that does not jeopardize the attorney-client privilege or attorney work-product doctrine or such other applicable privilege. If the Seller Representative disagrees with any part of the Purchaser’s calculation of the Closing Cash Proceeds as set forth on the Closing Statement or the Closing Balance SheetsSheet, the Seller Representative shall, within thirty (30) days after the Seller Representative’s receipt of the Closing Statement and the Closing Balance SheetsStatement, notify the Purchaser in writing of such disagreement by setting forth the Seller Representative’s calculation of the Closing Cash Proceeds, including each of the components thereof, and describing in reasonable detail the basis for such disagreement (an “Objection Notice”). Any items not reasonably specifically identified in the Objection Notice as being in dispute shall be deemed final and conclusive and binding upon all parties in all respects. Any Objection Notice may reference only disagreements based on mathematical errors or based on amounts contained in, or improperly omitted from, the Closing Statement, or from the Closing Statement not being calculated or prepared in accordance with this Agreement. If an Objection Notice is delivered to the Purchaser, then the Purchaser and the Seller Representative shall negotiate in good faith to resolve their disagreements with respect to the computation of the Closing Cash Proceeds. The Purchaser and the Seller Representative each acknowledge and agree that all discussions related to the Objection Notice are are, without prejudice prejudice, communications made in confidence with the intent of attempting to resolve a litigious dispute and are subject to settlement privilege. In the event that the Purchaser and the Seller Representative are unable to resolve all such disagreements within thirty (30) days after the Purchaser’s receipt of such Objection Notice or such longer period as the Purchaser and the Seller Representative may mutually agree in writing, the Purchaser and the Seller Representative shall submit such remaining disagreements to a nationally-recognized valuation or consulting firm as is reasonably acceptable to the Purchaser and the RepresentativeDuff & Xxxxxx, or, if such firm refuses or is otherwise unable to act in such capacity, another a nationally-recognized valuation valuation, accounting or consulting firm as is acceptable to the Purchaser and the Seller Representative that agrees to be engaged for the purposes hereunder (the ”“Valuation Firm”).
(df) The Valuation Firm shall act as an expert and not as an arbitrator, and make a final and binding determination with respect to the Purchaser’s, the Representative’s and the Company’s compliance with this Section 3.05 and the computation of the Closing Cash Proceeds, including each of the components thereof, to the extent such amounts are in dispute, in accordance with the guidelines and procedures set forth in this Agreement and on Exhibit F. D. The Purchaser and the Seller Representative shall cooperate with the Valuation Firm during the term of its engagement and shall use commercially reasonable efforts to cause the Valuation Firm to resolve all remaining disagreements with respect to the computation of the Closing Cash Proceeds, including each of the components thereof, as soon as practicable. The Valuation Firm shall consider only those line items and amounts in the Purchaser’s and the Seller Representative’s respective calculations of the Closing Cash Proceeds, including each of the components thereof, that are in the Objection Notice and identified as being items and amounts to which the Purchaser and the Seller Representative have been unable to agree. In resolving any disputed line item, the Valuation Firm may not assign a value to any line item in dispute higher greater than the highest amount assigned greater value for such line item claimed by either party or lower in its Initial Report (as defined on Exhibit D), which value may not be greater than the lowest corresponding amount asserted in the Closing Statement or Objection Notice, as applicable, or less than the smaller value for such item claimed by either PartyPerson in its Initial Report (as defined on Exhibit D), which value may not be less than the corresponding amount in the Closing Statement or Objection Notice, as applicable. Except as permitted on Exhibit F D hereto in order to clarify or understand any position or argument made by a party in a written submission, the Valuation Firm’s determination of the Closing Cash Proceeds, including each of the components thereof, shall be based solely on written presentations submitted by the Purchaser and the Seller Representative which are in accordance with the guidelines and procedures (including the definitions of each of the components thereof) set forth in this Agreement (i.e., not on the basis of an independent review). The determination of the Valuation Firm shall be conclusive and binding upon the parties hereto and shall not be subject to appeal or further review.
(eg) The fees, costs and expenses of the Valuation Firm incurred in resolving any disputed matter(s) pursuant to Section 2.04(f) shall be ultimately allocated between and borne by the Purchaser, on the one hand, and the Seller Representative (on behalf of the UnitholdersSellers), on the other hand, based upon the percentage which the portion of the dollar value of the disputed amounts (as submitted contested amount not awarded to the Firm) determined in favor of the other each party by the Firm bears to the dollar value amount actually contested by such party in the written presentation to the Valuation Firm. For examplePrior to the Valuation Firm’s determination of the Closing Cash Proceeds, if (i) the Purchaser, on the one hand, and the Seller Representative (on behalf of the UnitholdersSellers), on the other hand, shall retain the Valuation Firm and each pay fifty percent (50%) submits an Objection Notice of any retainer paid to the Firm for $1,000Valuation Firm, and if (ii) during the Purchaser contests to the Firm only $500 engagement of the amount claimed by Valuation Firm, the RepresentativeValuation Firm will xxxx fifty percent (50%) of the total charges to each of the Purchaser, on the one hand, and if the Firm ultimately resolves the dispute by awarding the Unitholders $300 of the $500 contested, then the costs and expenses of the Firm will be allocated 60% (i.e., 300/500) to the Purchaser and 40% (i.e., 200/500) to the Seller Representative (on behalf of the UnitholdersSellers), on the other hand. In connection with the Valuation Firm’s determination of the Closing Cash Proceeds, the Valuation Firm shall also determine, pursuant to the terms of the first sentence of this Section 2.04(g), and taking into account all fees, costs and expenses of the Valuation Firm already paid by each of the Purchaser, on the one hand, and the Seller Representative, on the other hand, as of the date of such determination, the total final allocation of the Valuation Firm’s fees, costs and expenses between the Purchaser and the Seller Representative, which such determination shall be conclusive and binding upon the parties hereto.
(fh) Within five (5) Business Days after the Closing Cash Proceeds, including each of the components thereof, is finally determined pursuant to this Section 3.052.04:
(i) if the Closing Cash Proceeds as finally determined pursuant to this Section 3.05 2.04 are less than the Estimated Closing Cash Proceeds Proceeds, then the Purchaser and the Seller Representative shall cause the Escrow Agent to: (A) pay to the total Purchaser from the Purchase Price Adjustment Escrow Funds an amount (which in no case shall exceed the amount of such deficiency, the Purchase Price Adjustment Escrow Funds) (the “Purchaser Adjustment Amount”) equal to such deficiency; and (B) if the Purchaser Adjustment Amount is less than the amount of the Purchase Price Adjustment Escrow Funds, after disbursement is made to the Purchaser pursuant to clause (A), then the Purchaser and the Representative shall deliver a joint written instruction pay to the Escrow Agent instructing Seller Representative, for the Escrow Agent benefit of and for further distribution to (A) release from the Adjustment Escrow Account to Purchaser each Seller and Falcon of such Seller’s and Falcon’s Pro Rata Share of, an amount equal to the lesser amount (if any) by which the amount of the Purchase Price Adjustment Escrow Funds is greater than the Purchaser Adjustment Amount and the amount in the Adjustment Escrow Account and (B) release any remaining amounts in the Adjustment Escrow Account to the Paying Agent for further distribution to the Unitholders and the Blocker Sellers in accordance with the Waterfall Schedule, and the payment instructions set forth in the Letters of Transmittal; provided that, in no event will the Representative, the Unitholders, the Blocker Sellers, the Direct Seller or any of their respective Affiliates be liable to the Purchaser or any of its Affiliates under this Section 3.05(f) for any amounts in excess of the Adjustment Escrow Amount; and
(ii) if the Closing Cash Proceeds as finally determined pursuant to this Section 3.05 2.04 are greater than the Estimated Closing Cash Proceeds (the total amount of such excess, subject to the limitation set forth in the following parenthetical, the “Seller Adjustment Amount”” (which, notwithstanding anything contained herein to the contrary or the final calculation of the Closing Cash Proceeds in accordance herewith, shall in no case be deemed to exceed the amount of the Purchase Price Adjustment Escrow Funds)), then (A) the Purchaser shall, shall pay or shall cause the Surviving Company or one or more of its Subsidiaries to, pay to be paid to the Paying Agent Seller Representative for the benefit of and for further distribution to each Seller and Falcon of such Seller’s and Falcon’s Pro Rata Share of, an amount equal to the lesser of the Seller Adjustment Amount and an amount equal to the Adjustment Escrow Amount and (B) the Purchaser and the Seller Representative shall deliver a joint written instruction to the Escrow Agent instructing cause the Escrow Agent to release all amounts in pay the Adjustment Escrow Account to Seller Representative, for the Paying Agent, in each case, benefit of and for further distribution to the Unitholders each Seller and the Blocker SellersFalcon of such Seller’s and Falcon’s Pro Rata Share of, in each case, in accordance with the Waterfall Schedule, and the payment instructions set forth in the Letters of Transmittal; provided that, in no event will the Purchaser, the Blocker Purchaser, the Surviving Company or any of their respective Affiliates be liable to the Seller or any of their Affiliates under this Section 3.05(f) for any amounts in excess of an amount of cash equal to all of the Purchase Price Adjustment Escrow AmountFunds.
(gi) All payments to be made pursuant to Section 3.05(h2.04(h) shall (x) be treated by all parties for Tax purposes as adjustments to the Merger Consideration Enterprise Value to the extent permitted by applicable Law Law, and (y) be made by wire transfer of immediately available funds to the account(s) designated in writing by the Purchaser or the Seller Representative, as applicable.
(h) The Representative, the Unitholders . Each party acknowledges and the Blocker Sellers each hereby agrees and acknowledges that the its right to any the payment to be made pursuant to Section 3.05(h2.04(h) shall be its the sole and exclusive remedy of such party for any and all claims arising under this Agreement with respect to this Section 3.05. The Purchaser hereby agrees and acknowledges that its right to any payment to be made pursuant to Section 3.05(h) shall be the sole and exclusive remedy of the Purchaser for any and all claims arising under this Agreement with respect to this Section 3.052.04.
Appears in 1 contract
Samples: Stock Purchase Agreement (Whole Earth Brands, Inc.)
Closing Cash Proceeds Adjustment. (a) At least five Business Days prior to the Closing Date, the Company shall prepare and deliver to the Purchaser the Waterfall Schedule as determined in accordance with the Company LLC Agreement and a good faith estimate of the consolidated balance sheets of the Blockers and the Company and its Subsidiaries as of the Measurement Time (the “Closing Balance Sheets”) and a good faith estimate of the Closing Cash Proceeds (the ”Estimated Closing Cash Proceeds”), together with a reasonably detailed computation of each component thereof (i.e., Cash, Working Capital, Indebtedness and Transaction Expenses) and reasonable supporting documentation, based on the Company’s and its Subsidiaries’ books and records and other information then available. The Company shall provide the Purchaser and its representatives with reasonable opportunity to review and propose comments to the Estimated Closing Cash Proceeds calculation and shall consider the Purchaser’s comments thereon in good faith to the extent received at least two Business Days prior to the Closing, it being understood that in no event shall the acceptance of Purchaser’s comments be considered a condition to Closing or otherwise delay the Closing.
(b) As promptly as practicable after the Closing, but in no event No later than seventy-five one hundred twenty (75120) days after the Closing Datedate hereof, the Purchaser shall prepare and deliver to the Representative Seller a statement (the ”"Closing Statement”") setting forth the Purchaser’s good faith 's calculation of the Closing Cash Proceeds, including each of the components thereof, in each case in accordance with the definition thereof, together with and a reasonably detailed computation of each component thereof (i.e., Cash, Indebtedness and Transaction Expenses) and reasonable supporting documentation and consolidated balance sheets sheet of the Blockers and the Company and its Subsidiaries as of the Measurement Time Closing (the ”"Closing Balance Sheets”Sheet"). The Closing Balance Sheet shall (i) be prepared, and Cash and the Closing Working Capital (subject to the specific adjustments set forth on the Working Capital Schedule) shall be determined, in accordance with the Accounting Principles and (ii) not include any changes in assets or liabilities as a result of purchase accounting adjustments or other changes arising from or resulting as a consequence of the transactions contemplated hereby.
(b) The post‑Closing purchase price adjustment as set forth in this Section 2.04 is not intended to permit the introduction of different accounting methods, policies, practices, procedures, conventions, categorizations, definitions, principles, judgments, assumptions, techniques or estimation methods with respect to financial statements, their classification or presentation or otherwise (including with respect to the nature of accounts, level of reserves or level of accruals) from those used to calculate the amounts set forth on the Working Capital Schedule and used in determining the amount of the Target Working Capital, except for any differences between Closing Working Capital and Target Working Capital expressly described on the Working Capital Schedule; it being the intent of the parties hereto that the Closing Working Capital be calculated consistently with the Target Working Capital, except for any differences between Closing Working Capital and Target Working Capital expressly described on the Working Capital Schedule, in order to allow a meaningful comparison of the Closing Working Capital to the Target Working Capital. Notwithstanding anything else in this Agreement to the contrary, (i) to the extent that the Closing Balance Sheet corrects an error or an inconsistency, or noncompliance with the accounting methods, policies, practices, procedures, conventions, categorizations, definitions, principles, judgments, assumptions, techniques or estimation methods with respect to financial statements, their classification or presentation or otherwise (including with respect to the nature of accounts, level of reserves or level of accruals) that are specified in the calculation of the Target Working Capital as set forth on the Working Capital Schedule, then either the Closing Working Capital or Target Working Capital shall be reduced or increased as a result of such error, inconsistency or noncompliance, as appropriate, to correct such error, inconsistency or noncompliance and (ii) if the same item would be reflected differently on the Closing Balance Sheet than in the calculations of the Target Working Capital as set forth on the Working Capital Schedule, the parties hereto will equitably adjust the calculation of either the Closing Working Capital or the Target Working Capital so as to result in consistent treatment, except for any differences between Closing Working Capital and Target Working Capital expressly described on the Working Capital Schedule.
(c) The Purchaser, the Blocker Purchaser and their respective its Subsidiaries (including the Blockers, the Surviving Company and its Subsidiaries) shall (i) permit the Representative Seller and its representatives to have reasonable access to the books, records and other documents (including work papers, schedules, financial statements, memoranda, etc.) of the Company and its Subsidiaries pertaining to or used in connection with the preparation of the Closing Statement or the Closing Balance Sheets Sheet and the Purchaser’s 's calculation of the Closing Cash Proceeds and provide the Representative Seller with copies thereof (as reasonably requested by the RepresentativeSeller) and (ii) provide the Representative Seller and its representatives reasonable access during normal business hours to the Purchaser’s, the Blocker Purchaser 's and its Subsidiaries’ ' (including the Blocker’s, the Surviving Company’s Company and its Subsidiaries’') employees and advisors (including making their chief financial officer(s) and accountants available to respond to reasonable written or oral inquiries who were involved in the preparation of the Representative Closing Statement or its representatives)the Closing Balance Sheet for purposes of the Seller's review of such materials. If the Representative Seller disagrees with any part of the Purchaser’s 's calculation of the Closing Cash Proceeds as set forth on the Closing Statement or the Closing Balance SheetsSheet, the Representative Seller shall, within thirty sixty (3060) days after the Representative’s Seller's receipt of the Closing Statement and the Closing Balance SheetsSheet, notify the Purchaser in writing of such disagreement by setting forth the Representative’s Seller's calculation of the Closing Cash Proceeds, including each of the components thereof, and describing in reasonable detail the basis for such disagreement (an “"Objection Notice”"). If the Seller fails to deliver an Objection Notice to the Purchaser within such 60-day period, the Seller shall be deemed to have accepted the Purchaser's calculation of the Closing Cash Proceeds, including each of the components thereof. If an Objection Notice is delivered to the Purchaser, then the Purchaser and the Representative Seller shall negotiate in good faith to resolve their disagreements with respect to the computation of the Closing Cash Proceeds. The Purchaser and ; provided, however, that the Representative acknowledge and agree that all discussions related Seller shall be deemed to have accepted any components of the Purchaser's calculation of the Closing Cash Proceeds not specifically objected to by the Seller in the Objection Notice are without prejudice communications made in confidence with the intent of attempting to resolve a litigious dispute and are subject to settlement privilegeNotice. In the event that the Purchaser and the Representative Seller are unable to resolve all such disagreements within thirty (30) days after the Purchaser’s 's receipt of such Objection Notice or such longer period as the Purchaser and the Representative Seller may mutually agree in writing, the Purchaser and the Representative Seller shall submit such remaining disagreements to Berkeley Research Group, LLC, or a nationally-recognized valuation or consulting firm as is reasonably acceptable to the Purchaser and the Representative, or, if such firm refuses or is otherwise unable to act in such capacity, another nationally-recognized nationally‑recognized valuation or consulting firm as is acceptable to the Purchaser and the Representative that agrees to be engaged for the purposes hereunder Seller (the ”"Valuation Firm”").
(d) The Valuation Firm shall act as an expert and not as an arbitrator, and make a final and binding determination with respect to the Purchaser’s, the Representative’s 's and the Company’s Seller's compliance with this Section 3.05 2.04 and the computation of the Closing Cash Proceeds, including each of the components thereof, to the extent such amounts are in dispute, in accordance with the guidelines and procedures set forth in this Agreement and on Exhibit F. The Purchaser and the Representative Seller shall cooperate with the Valuation Firm during the term of its engagement and shall use commercially reasonable efforts to cause the Valuation Firm to resolve all remaining disagreements with respect to the computation of the Closing Cash Proceeds, including each of the components thereof, as soon as practicable. The Valuation Firm shall consider only those items and amounts in the Purchaser’s 's and the Representative’s Seller's respective calculations of the Closing Cash Proceeds, including each of the components thereof, that are in the Objection Notice and identified as being items and amounts to which the Purchaser and the Representative Seller have been unable to agree. In resolving any disputed item, and the Valuation Firm may not assign a value to any item in dispute higher greater than the highest amount assigned greatest value or less than the smallest value for such item calculated by either party in the Closing Statement or lower than the lowest amount asserted by either PartyObjection Notice. Except as permitted on Exhibit F hereto in order to clarify or understand any position or argument made by a party in a written submission, the Valuation Firm’s 's determination of the Closing Cash Proceeds, including each of the components thereof, shall be based solely on written presentations submitted by the Purchaser and the Representative Seller which are in accordance with the guidelines and procedures (including the definitions of each of the components thereof) set forth in this Agreement (i.e., not on the basis of an independent review). The determination of the Valuation Firm shall be conclusive and binding upon the parties hereto and shall not be subject to appeal or further review.
(e) The fees, costs and expenses of the Valuation Firm will be allocated to, and borne by, the non-prevailing party. If there are multiple items in the Objection Notice that have been identified as being items and amounts to which the Purchaser and the Seller have been unable to agree and a party prevailed with respect to some but not all of such disputed items, then the party whose non-prevailing positions exceeded, in the aggregate, such party's prevailing positions, shall be the non-prevailing party. The Purchaser, on the one hand, and the Seller, on the other hand, shall retain the Valuation Firm and each pay fifty percent (50%) of any retainer. During such engagement, the Valuation Firm will xxxx fifty percent (50%) of the total charges to the Purchaser, on the one hand, and fifty percent (50%) of the total charges to the Seller, on the other hand. In connection with the Valuation Firm's determination of Closing Cash Proceeds, the Valuation Firm shall be allocated between also determine, pursuant to the terms of the first and second sentences of this Section 2.04(e), and taking into account all fees, costs and expenses of the Valuation Firm already paid by each of the Purchaser, on the one hand, and the Representative (on behalf of the Unitholders)Seller, on the other hand, based upon the percentage as of the dollar value date of such determination, the allocation of the disputed amounts (as submitted to the Valuation Firm) determined in favor of the other party by the Firm bears to the dollar value contested by such party in the written presentation to the Firm. For example's fees, if the Representative (on behalf of the Unitholders) submits an Objection Notice to the Firm for $1,000, and if the Purchaser contests to the Firm only $500 of the amount claimed by the Representative, and if the Firm ultimately resolves the dispute by awarding the Unitholders $300 of the $500 contested, then the costs and expenses of the Firm will be allocated 60% (i.e., 300/500) to between the Purchaser and 40% (i.e.the Seller, 200/500) to which such determination shall be conclusive and binding upon the Representative (on behalf of the Unitholders)parties hereto.
(f) Within five (5) Business Days after the later to occur of (i) the final determination of the Uncollected AR Amount pursuant to Section 6.06, and (ii) the final determination of the Closing Cash Proceeds, including each of the components thereof, is finally determined pursuant to this Section 3.052.04:
(i) if the Closing Cash Proceeds as finally determined pursuant to this Section 3.05 2.04 are less than the sum of the Estimated Closing Cash Proceeds and the Uncollected AR Amount (the total amount of such deficiencydifference, the “"Purchaser Adjustment Amount”"), then the Purchaser and the Representative Seller shall deliver a joint written instruction to the Escrow Agent instructing (A) cause the Escrow Agent to (A) release pay to the Purchaser solely and exclusively from the Purchase Price Adjustment Escrow Account to Purchaser Funds an amount (which in no case shall exceed the amount of the Purchase Price Adjustment Escrow Funds) equal to the lesser of the Purchaser Adjustment Amount and the amount in the Adjustment Escrow Account such deficiency, and (B) release any remaining amounts in pay to the Seller from the Purchase Price Adjustment Escrow Account to Funds the Paying Agent for further distribution to amount (if any) by which the Unitholders and amount of the Blocker Sellers in accordance with the Waterfall Schedule, and the payment instructions set forth in the Letters of Transmittal; provided that, in no event will the Representative, the Unitholders, the Blocker Sellers, the Direct Seller or any of their respective Affiliates be liable to Purchase Price Adjustment Escrow Funds is greater than the Purchaser or any of its Affiliates under this Section 3.05(f) for any amounts in excess of the Adjustment Escrow Amount; and
(ii) if the Closing Cash Proceeds as finally determined pursuant to this Section 3.05 2.04 are greater than the sum of the Estimated Closing Cash Proceeds and the Uncollected AR Amount (the total amount of such excess, the “"Seller Adjustment Amount”"), then (A) the Purchaser shall, shall pay or shall cause the Surviving Company or one or more of its Subsidiaries to, pay to be paid to the Paying Agent Seller an amount equal to the lesser of the Seller Adjustment Amount and an amount equal to the Adjustment Escrow Amount Amount, and (B) the Purchaser and the Representative Seller shall deliver a joint written instruction to the Escrow Agent instructing cause the Escrow Agent to release all amounts in the Adjustment Escrow Account to the Paying Agent, in each case, for further distribution to the Unitholders and the Blocker Sellers, in each case, in accordance with the Waterfall Schedule, and the payment instructions set forth in the Letters of Transmittal; provided that, in no event will the Purchaser, the Blocker Purchaser, the Surviving Company or any of their respective Affiliates be liable pay to the Seller or any of their Affiliates under this Section 3.05(f) for any amounts in excess of an amount of cash equal to all of the Purchase Price Adjustment Escrow Amount.
(g) Funds. All payments to be made pursuant to Section 3.05(h2.04(f) shall (x) be treated by all parties for Tax tax purposes as adjustments to the Merger Consideration Closing Cash Proceeds to the extent permitted by applicable Law and (y) be made by wire transfer of immediately available funds to the account(s) designated by the Purchaser or the RepresentativeSeller, as applicable.
(h) The Representative, the Unitholders and the Blocker Sellers each hereby agrees and acknowledges that the right to any payment to be made pursuant to Section 3.05(h) shall be its sole and exclusive remedy for any and all claims arising under this Agreement with respect to this Section 3.05. The Purchaser hereby agrees and acknowledges that its right to any payment to be made pursuant to Section 3.05(h) shall be the sole and exclusive remedy of the Purchaser for any and all claims arising under this Agreement with respect to this Section 3.05.
Appears in 1 contract
Closing Cash Proceeds Adjustment. (a) At least five three (3) Business Days prior to the Closing Date, the Company shall prepare and deliver to the Purchaser the Waterfall Schedule as determined in accordance with the Company LLC Agreement and a good faith estimate of the consolidated balance sheets of the Blockers and the Company and its Subsidiaries as of the Measurement Time (the “Closing Balance Sheets”) and a good faith estimate of the Closing Cash Proceeds (the ”“Estimated Closing Cash Proceeds”), together with a reasonably detailed computation including each of each component thereof (i.e., Cash, Working Capital, Indebtedness and Transaction Expenses) and reasonable supporting documentationthe components thereof, based on the Company’s and its Subsidiaries’ books and records and other information then available. The Following delivery of the Company’s calculation of the Estimated Closing Cash Proceeds, to the extent reasonably requested by the Purchaser, the Company shall provide make available to the Purchaser supporting documentation used in preparing the Estimated Closing Cash Proceeds. In the event that the Purchaser notifies the Company of any objection to the Company’s initial calculation of the Estimated Closing Cash Proceeds, no later than one (1) Business Day prior to the Closing Date, the Purchaser and the Company shall discuss such objection(s) in good faith and the Company will, in good faith after considering the discussion between the Purchaser and the Company, revise and re-deliver its representatives with reasonable opportunity to review and propose comments to calculation of the Estimated Closing Cash Proceeds calculation to the Purchaser to reflect the results of such discussion if and shall consider as the Purchaser’s comments thereon Company determines appropriate in good faith to (which redelivered Estimated Closing Cash Proceeds, if any, shall serve as the extent received at least two Business Days prior to the Closing, Estimated Closing Cash Proceeds for all purposes under this Agreement); it being understood and agreed, that without limiting the parties’ rights and obligations under Section 2.04(b) through Section 2.04(h), if there is any remaining dispute over the Estimated Closing Cash Proceeds or the Company’s determination pursuant to the foregoing clause, the Estimated Closing Cash Proceeds as finally determined and delivered by the Company hereunder shall constitute the Estimated Closing Cash Proceeds and in no event shall the acceptance of Purchaser’s comments Closing Date be considered a condition to Closing postponed or otherwise delay the Closingdelayed as a result thereof.
(b) As promptly soon as reasonably practicable after the Closing, but in no event later than seventy-five (75) days after the Closing Date, the Purchaser shall prepare and deliver to the Representative Seller a statement (the ”“Closing Statement”) setting forth the Purchaser’s good faith calculation of the Closing Cash Proceeds, including each of the components thereof, in each case in accordance with the definition thereof, together with and a reasonably detailed computation of each component thereof (i.e., Cash, Indebtedness and Transaction Expenses) and reasonable supporting documentation and consolidated balance sheets sheet of the Blockers and the Company and its Subsidiaries as of the Measurement Time (the ”“Closing Balance SheetsSheet”).
(c) The PurchaserClosing Balance Sheet shall (i) be prepared, and Cash and the Closing Working Capital (subject to the specific adjustments set forth on Schedule 1.01(d)) shall be determined, in accordance with the Accounting Principles and (ii) not include any changes in assets or liabilities as a result of purchase accounting adjustments or changes arising from or resulting as a consequence of the (x) Debt Financing or Alternative Debt Financing or (y) transactions contemplated hereby.
(d) The Closing Balance Sheet and the calculation of the Closing Cash Proceeds as set forth in this Section 2.04 is not intended to permit the introduction of different accounting methods, policies, practices, procedures, conventions, categorizations, definitions, principles, judgments, assumptions, techniques or estimation methods with respect to financial statements, their classification or presentation or otherwise (including with respect to the nature of accounts, reserves or accruals) from those set forth in the Accounting Principles.
(e) During the Review Period, the Blocker Purchaser and their respective its Subsidiaries (including the Blockers, the Surviving Company and its Subsidiaries) shall (i) permit the Representative Seller and its representatives to have reasonable access to the books, records and other documents (including work papers, schedules, financial statements, memoranda, etc.) pertaining to or used in connection with the preparation of the Closing Statement or the Closing Balance Sheets Sheet and the Purchaser’s calculation of the Closing Cash Proceeds and provide the Representative Seller with copies thereof (as reasonably requested by the RepresentativeSeller) and (ii) provide the Representative Seller and its representatives reasonable access to the Purchaser’s, the Blocker Purchaser ’s and its Subsidiaries’ (including the Blocker’s, the Surviving Company’s and its Subsidiaries’) employees and advisors (including making their the Company’s and its Subsidiaries’ chief financial officer(sofficer) and accountants (subject to customary access letters) available to respond to reasonable written or oral inquiries of the Representative Seller or its representatives), during normal business hours and upon reasonable prior notice as reasonably required; provided, however, that the Purchaser and its Subsidiaries (including the Company and its Subsidiaries) shall not be required to provide such access or copies if doing so would (i) cause a loss of attorney-client, work product or other similar protection or privilege of such Person, (ii) cause a violation of an obligation of confidentiality of such Person pursuant to an agreement to which such Person is a party (so long as such Person shall have used commercially reasonable efforts to obtain the consent of such third party to the provision of such access or copies) or (iii) constitute a violation of applicable Law. If the Representative Seller disagrees with any part of the Purchaser’s calculation of the Closing Cash Proceeds as set forth on the Closing Statement or the Closing Balance SheetsSheet, the Representative Seller shall, within thirty (30) days after the RepresentativeSeller’s receipt of the Closing Statement and the Closing Balance SheetsSheet (the “Review Period”), notify the Purchaser in writing of such disagreement by setting forth the RepresentativeSeller’s calculation of the Closing Cash Proceeds, including each of the components thereof, and describing in reasonable detail the basis for such disagreement (an “Objection Notice”). If the Seller does not deliver an Objection Notice prior to the expiration of the Review Period, the Purchaser’s calculation of the Closing Cash Proceeds set forth on the Closing Statement and the Closing Balance Sheet shall be conclusive and binding upon the parties hereto and shall not be subject to appeal or further review. If an Objection Notice is delivered to the Purchaser, then the Purchaser and the Representative Seller shall negotiate in good faith to resolve their disagreements with respect to the computation of the Closing Cash Proceeds. The Purchaser and the Representative Seller acknowledge and agree that all discussions related to the Objection Notice are without prejudice communications made in confidence with the intent of attempting to resolve a litigious dispute and are subject to settlement privilege. If the Purchaser and the Seller are able to resolve their disagreement with respect to the calculation of the Closing Cash Proceeds, such agreed calculation of the Closing Cash Proceeds shall be conclusive and binding upon the parties hereto and shall not be subject to appeal or further review. In the event that the Purchaser and the Representative Seller are unable to resolve all such disagreements within thirty (30) days after the Purchaser’s receipt of such Objection Notice or such longer period as the Purchaser and the Representative Seller may mutually agree in writing, the Purchaser and the Representative Seller shall submit such remaining disagreements to a nationally-recognized valuation or consulting firm as is reasonably acceptable to the Purchaser and the RepresentativeHxxxxxxx Valuation Advisors, or, if such firm refuses or is otherwise unable to act in such capacity, another a nationally-recognized valuation or consulting firm that is not presently providing the parties or the parties’ Affiliates with services and as is acceptable to the Purchaser and the Representative that agrees to be engaged for the purposes hereunder Seller (the ”“Valuation Firm”).
(df) The Valuation Firm shall act as an expert and not as an arbitrator, and make a final and binding determination with respect to the Purchaser’s, the Representative’s and the Company’s compliance with this Section 3.05 and the computation of the Closing Cash Proceeds, including each of the components thereof, to the extent such amounts are in dispute, in accordance with the guidelines and procedures set forth in this Agreement and on Exhibit F. B. The Purchaser and the Representative Seller shall cooperate with the Valuation Firm during the term of its engagement and shall use commercially reasonable efforts to cause the Valuation Firm to resolve all remaining disagreements with respect to the computation of the Closing Cash Proceeds, including each of the components thereof, as soon as practicable. The Valuation Firm shall consider only those items and amounts set forth in the Purchaser’s and the Representative’s respective calculations of the Closing Cash ProceedsObjection Notice, including each of the components thereof, that are in the Objection Notice and identified as being items and amounts to which the Purchaser and the Representative Seller have been unable to agree. In resolving any disputed item, the Valuation Firm may not assign a value to any item in dispute higher greater than the highest amount assigned greatest value for such item claimed by either party or lower less than the lowest amount asserted smallest value for such item claimed by either Partyparty. Except as permitted on Exhibit F B hereto in order to clarify or understand any position or argument made by a party in a written submission, the Valuation Firm’s determination of the Closing Cash Proceeds, including each of the components thereof, shall be based solely on written presentations submitted by the Purchaser and the Representative Seller which are in accordance with the guidelines and procedures (including the definitions of each of the components thereof) set forth in this Agreement (i.e., not on the basis of an independent review). The determination of the Valuation Firm shall be conclusive and binding upon the parties hereto and shall not be subject to appeal or further review.
(eg) The fees, costs and expenses of the Valuation Firm in determining the Closing Cash Proceeds, including each of the components thereof, shall be borne by the Purchaser, on one hand, the Seller, on the other hand, based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party. For example, if the Purchaser claims the Closing Cash Proceeds are one thousand dollars ($1,000) less than the amount determined by the Seller, and the Seller contests only five hundred dollars ($500) of the amount claimed by the Purchaser, and if the Valuation Firm ultimately resolves the dispute by awarding the Purchaser three hundred dollars ($300) of the five hundred dollars ($500) contested, then the costs and expenses of the Valuation Firm will be allocated between sixty percent (60%) (i.e., 300 ÷ 500) to the Seller and forty percent (40%) (i.e., 200 ÷ 500) to the Purchaser. Prior to the Valuation Firm’s determination of the Closing Cash Proceeds, the Purchaser, on the one hand, and the Representative (on behalf of the Unitholders)Seller, on the other hand, based upon shall each pay fifty percent (50%) of any retainer paid to the percentage Valuation Firm. In connection with the Valuation Firm’s determination of the dollar value Closing Cash Proceeds, the Valuation Firm shall also determine, pursuant to the terms of the disputed amounts (as submitted to the Firm) determined in favor first and second sentences of the other party by the Firm bears to the dollar value contested by such party in the written presentation to the Firm. For example, if the Representative (on behalf of the Unitholders) submits an Objection Notice to the Firm for $1,000this Section 2.04(g), and if the Purchaser contests to the Firm only $500 of the amount claimed by the Representative, and if the Firm ultimately resolves the dispute by awarding the Unitholders $300 of the $500 contested, then the costs taking into account all fees and expenses of the Valuation Firm will be allocated 60% (i.e.previously paid by each of the Purchaser, 300/500) to on the one hand, and the Seller, on the other hand, as of the date of such determination, the allocation of its fees and expenses between the Purchaser and 40% (i.e.the Seller, 200/500) which such determination shall be conclusive and binding upon the parties hereto and shall not be subject to the Representative (on behalf of the Unitholders)appeal or further review.
(fh) Within five (5) Business Days after the Closing Cash Proceeds, including each of the components thereof, is finally determined pursuant to this Section 3.052.04:
(i) if the Closing Cash Proceeds as finally determined pursuant to this Section 3.05 2.04 are less than the Estimated Closing Cash Proceeds Proceeds, then the Purchaser and the Seller shall cause the Escrow Agent to: (A) pay to the total Purchaser solely and exclusively from the Purchase Price Adjustment Escrow Funds an amount (which in no case shall exceed the amount of such deficiency, the Purchase Price Adjustment Escrow Funds) (the “Purchaser Adjustment Amount”)) equal to such deficiency, then the Purchaser and the Representative shall deliver a joint written instruction (B) pay to the Escrow Agent instructing the Escrow Agent to (A) release from the Adjustment Escrow Account to Purchaser Seller, an amount equal to the lesser amount (if any) by which the amount of the Purchase Price Adjustment Escrow Funds is greater than the Purchaser Adjustment Amount and the amount in the Adjustment Escrow Account and (B) release any remaining amounts in the Adjustment Escrow Account to the Paying Agent for further distribution to the Unitholders and the Blocker Sellers in accordance with the Waterfall Schedule, and the payment instructions set forth in the Letters of Transmittal; provided that, in no event will the Representative, the Unitholders, the Blocker Sellers, the Direct Seller or any of their respective Affiliates be liable to the Purchaser or any of its Affiliates under this Section 3.05(f) for any amounts in excess of the Adjustment Escrow Amount; and
(ii) if the Closing Cash Proceeds as finally determined pursuant to this Section 3.05 2.04 are equal to or greater than the Estimated Closing Cash Proceeds (the total amount of such excessProceeds, the “Seller Adjustment Amount”), then then: (A) the Purchaser shallshall pay, or shall cause the Surviving Company or one or more of its Subsidiaries toto be paid, pay to the Paying Agent Seller, an amount (which in no case shall exceed an aggregate amount equal to the lesser amount of the Seller Purchase Price Adjustment Amount and an amount Escrow Funds plus $3,000,000) equal to the Adjustment Escrow Amount such excess, and (B) the Purchaser and the Representative Seller shall deliver a joint written instruction to the Escrow Agent instructing cause the Escrow Agent to release all amounts in the Adjustment Escrow Account to the Paying Agent, in each case, for further distribution to the Unitholders and the Blocker Sellers, in each case, in accordance with the Waterfall Schedule, and the payment instructions set forth in the Letters of Transmittal; provided that, in no event will the Purchaser, the Blocker Purchaser, the Surviving Company or any of their respective Affiliates be liable pay to the Seller or any all of their Affiliates under this Section 3.05(f) for any amounts in excess of an amount of cash equal to the Purchase Price Adjustment Escrow AmountFunds.
(gi) All payments to be made pursuant to Section 3.05(h2.04(h) shall (x) be treated by all parties for Tax purposes as adjustments to the Merger Consideration purchase price to the extent permitted by applicable Law and (y) be made by wire transfer of immediately available funds to the account(s) designated by the Purchaser or the RepresentativeSeller, as applicable.
(h) The Representative, the Unitholders and the Blocker Sellers each hereby agrees and acknowledges that the right to any payment to be made pursuant to Section 3.05(h) shall be its sole and exclusive remedy for any and all claims arising under this Agreement with respect to this Section 3.05. The Purchaser hereby agrees and acknowledges that its right to any payment to be made pursuant to Section 3.05(h2.04(h)(i) shall be the sole and exclusive remedy of the Purchaser for any and all claims arising under this Agreement with respect to this Section 3.052.04.
Appears in 1 contract
Closing Cash Proceeds Adjustment. (a) At least five three (3) Business Days prior to the Closing Date, the Company shall prepare and deliver to the Purchaser the Waterfall Schedule as determined in accordance with the Company LLC Agreement and a good faith estimate of the consolidated balance sheets of the Blockers and the Company and statement setting forth its Subsidiaries as of the Measurement Time (the “Closing Balance Sheets”) and a good faith estimate of the Closing Cash Proceeds (the ”"Estimated Closing Cash Proceeds”"), together with a reasonably detailed computation including each of each component thereof (i.e., Cash, Working Capital, Indebtedness and Transaction Expenses) and reasonable supporting documentationthe components thereof, based on the Company’s 's and its Subsidiaries’ ' books and records and other information then availableavailable and in accordance with the Accounting Principles and the Working Capital Schedule. The Following delivery of the Company's calculation of the Estimated Closing Cash Proceeds, to the extent reasonably requested by the Purchaser, the Company shall provide make available to the Purchaser and its representatives with reasonable opportunity to review and propose comments to supporting documentation used in preparing the Estimated Closing Cash Proceeds calculation and the Company shall consider any reasonable comments provided by the Purchaser’s comments thereon Purchaser in good faith based on the Purchaser's review of the Estimated Closing Cash Proceeds and such documentation, provided, that if there is a dispute over the Estimated Closing Cash Proceeds, the Estimated Closing Cash Proceeds delivered by the Company shall govern and the obligation of the Company to consider such reasonable comments of the extent received at least two Business Days prior to Purchaser regarding the Closing, it being understood that Estimated Closing Cash Proceeds shall in no event shall require that the acceptance Company revise its calculation of Purchaser’s comments the Estimated Closing Cash Proceeds or that the contemplated Closing Date be considered a condition to Closing postponed or otherwise delay the Closingdelayed.
(b) As promptly as practicable after the Closing, but in no event later than seventy-five (75) days after the Closing Date, the Purchaser shall prepare and deliver to the Representative Seller a statement (the ”"Closing Statement”") setting forth the Purchaser’s 's good faith calculation of the Closing Cash Proceeds, including each of the components thereof, in each case in accordance with the definition definitions thereof, together with a reasonably detailed computation of each component thereof (i.e., Cash, Indebtedness and Transaction Expenses) and reasonable supporting documentation and consolidated balance sheets of the Blockers and the Company and its Subsidiaries as of the Measurement Time (the ”Closing Balance Sheets”).
(c) The Purchasercalculation of the Estimated Closing Cash Proceeds and the Closing Statement shall be prepared, and Cash and the Closing Working Capital (subject to the specific adjustments set forth on the Working Capital Schedule) shall be determined, in accordance with the Accounting Principles and, except for Transaction Expenses, without giving effect to the transactions contemplated hereby.
(d) The post-Closing purchase price adjustment as set forth in this Section 2.04 shall (1) exclude the impact of any actions taken or omitted by Purchaser following the Closing, (2) shall not reflect changes in assets or liabilities as a result of purchase accounting adjustments and (3) shall be based on facts and circumstances as they exist on or prior to Closing.
(e) Until the date that is forty-five (45) days after the Seller's receipt of the Closing Statement, the Blocker Purchaser and their respective its Subsidiaries (including the Blockers, the Surviving Company and its Subsidiaries) shall (i) permit the Representative Seller and its representatives Representatives to have reasonable access access, during normal business hours, to the financial books, records and other documents (including work papersworkpapers, schedules, financial statements, memoranda, etc.) of the Company and its Subsidiaries pertaining to or used in connection with the preparation of the Closing Statement or the Closing Balance Sheets and the Purchaser’s 's calculation of the Closing Cash Proceeds and provide the Representative Seller with copies thereof (as reasonably requested by the RepresentativeSeller) and (ii) provide the Representative Seller and its representatives reasonable access to the Purchaser’s, the Blocker Purchaser 's and its Subsidiaries’ ' (including the Blocker’s, the Surviving Company’s 's and its Subsidiaries’') employees and advisors (including making their the Company's and its Subsidiaries' chief financial officer(s) officer and accountants available to respond to reasonable written or oral inquiries of the Representative Seller or its representatives); provided, that neither the Company nor any of its Subsidiaries shall be required to provide such access to the extent doing so would reasonably be expected to (A) result in the waiver of any attorney-client privilege or other legal privilege (provided, further, that the Company shall use commercially reasonable efforts to make alternative arrangements to disclose such information in a manner that does not waive or violate such privilege) or (B) contravene any applicable contracts or Laws. If the Representative Seller disagrees with any part of the Purchaser’s 's calculation of the Closing Cash Proceeds as set forth on the Closing Statement or the Closing Balance SheetsStatement, the Representative Seller shall, within thirty forty-five (3045) days after the Representative’s Seller's receipt of the Closing Statement and the Closing Balance SheetsStatement, notify the Purchaser in writing of such disagreement by setting forth the Representative’s Seller's calculation of the Closing Cash Proceeds, including each of the components thereof, and describing in reasonable detail the basis for such disagreement (an “"Objection Notice”"). Any items not specifically identified in the Objection Notice as being in dispute shall be deemed final and conclusive and binding upon all parties in all respects. Any Objection Notice may reference only disagreements based on mathematical errors or based on amounts of Cash, Indebtedness, Transaction Expenses or Working Capital as reflected on the Closing Statement not being calculated or prepared in accordance with this Agreement and the Accounting Principles (if applicable). If an Objection Notice is delivered to the Purchaser, then the Purchaser and the Representative Seller shall negotiate in good faith to resolve their disagreements with respect to the computation of the Closing Cash Proceeds. The Purchaser and the Representative Seller acknowledge and agree that all discussions related to the Objection Notice are without prejudice communications made in confidence with the intent of attempting to resolve a litigious dispute and are subject to settlement privilege. In the event that the Purchaser and the Representative Seller are unable to resolve all such disagreements within thirty (30) days after the Purchaser’s 's receipt of such Objection Notice or such longer period as the Purchaser and the Representative Seller may mutually agree in writing, the Purchaser and the Representative Seller shall submit such remaining disagreements to a nationally-recognized valuation or consulting firm as is reasonably acceptable to the Purchaser and the Representativepurchase price disputes group of AlixPartners, or, if such firm refuses or is otherwise unable to act in such capacity, another a nationally-recognized valuation or consulting accounting firm as is acceptable to the Purchaser and the Representative that agrees to be engaged for the purposes hereunder Seller (the ”"Valuation Firm”") (provided any such valuation firm has a division or group devoted to settling purchase price disputes).
(df) The Valuation Firm shall act as an expert and not as an arbitrator, and make a final and binding determination with respect to the Purchaser’s, the Representative’s and the Company’s compliance with this Section 3.05 and the computation of the Closing Cash Proceeds, including each of the components thereof, to the extent such amounts are in dispute, in accordance with the guidelines and procedures set forth in this Agreement and on Exhibit F. B. The Purchaser and the Representative Seller shall cooperate with the Valuation Firm during the term of its engagement and shall use commercially reasonable efforts to cause the Valuation Firm to resolve all remaining disagreements with respect to the computation of the Closing Cash Proceeds, including each of the components thereof, as soon as practicable. The Valuation Firm shall consider only those line items and amounts in the Purchaser’s 's and the Representative’s Seller's respective calculations of the Closing Cash Proceeds, including each of the components thereof, that are in the Objection Notice and identified as being line items and amounts to which the Purchaser and the Representative Seller have been unable to agree. In resolving any disputed line item, the Valuation Firm may not assign a value to any line item in dispute higher other than either (A) the highest amount assigned by either party Purchaser's proposed value for such disputed line item as set forth in the Closing Statement, or lower than (B) the lowest amount asserted by either PartySeller's proposed value for such disputed line item as set forth in the Objection Notice (i.e., a "baseball arbitration"), based on whether the Purchaser's or the Seller's proposed value of such disputed line item is closer to the Valuation Firm's own calculations for such disputed line item. Except as permitted on Exhibit F B hereto in order to clarify or understand any position or argument made by a party in a written submission, the Valuation Firm’s 's determination of the Closing Cash Proceeds, including each of the components thereof, shall be based solely on written presentations submitted by the Purchaser and the Representative Seller which are in accordance with the guidelines and procedures (including the definitions of each of the components thereof) set forth in this Agreement (i.e., not on the basis of an independent review). The determination of the Valuation Firm shall be conclusive and binding upon the parties hereto and shall not be subject to appeal or further review.
(eg) The costs and expenses of the Valuation Firm in determining the Closing Cash Proceeds, including each of the components thereof, shall be borne by the Purchaser, on one hand, the Seller, on the other hand, based upon the percentage which the portion of the aggregate contested amount not awarded to each party bears to the aggregate amount actually contested by such party. For example, if the Purchaser claims the Closing Cash Proceeds are one thousand dollars ($1,000) less than the amount determined by the Seller, and the Seller contests only five hundred dollars ($500) of the amount claimed by the Purchaser, and if the Valuation Firm ultimately resolves the dispute by awarding the Purchaser three hundred dollars ($300) of the five hundred dollars ($500) contested, then the costs and expenses of the Valuation Firm will be allocated between sixty percent (60%) (i.e., 300 ÷ 500) to the Seller and forty percent (40%) (i.e., 200 ÷ 500) to the Purchaser. Prior to the Valuation Firm's determination of the Closing Cash Proceeds, (i) the Purchaser, on the one hand, and the Representative (on behalf of the Unitholders)Seller, on the other hand, based upon shall each pay fifty percent (50%) of any retainer paid to the percentage Valuation Firm and (ii) during the engagement of the dollar value Valuation Firm, the Valuation Firm will xxxx fifty percent (50%) of the disputed amounts (as submitted total charges to each of the Purchaser, on the one hand, and the Seller, on the other hand. In connection with the Valuation Firm's determination of the Closing Cash Proceeds, the Valuation Firm shall also determine, pursuant to the Firm) determined in favor terms of the other party first and second sentences of this Section 2.04(g), and taking into account all fees and expenses already paid by the Firm bears to the dollar value contested by such party in the written presentation to the Firm. For example, if the Representative (on behalf each of the Unitholders) submits an Objection Notice to Purchaser, on the Firm for $1,000one hand, and if the Purchaser contests to Seller, on the Firm only $500 other hand, as of the amount claimed by date of such determination, the Representative, and if the Firm ultimately resolves the dispute by awarding the Unitholders $300 allocation of the $500 contested, then the costs its fees and expenses of the Firm will be allocated 60% (i.e., 300/500) to between the Purchaser and 40% (i.e.the Seller, 200/500) to which such determination shall be conclusive and binding upon the Representative (on behalf of the Unitholders)parties hereto.
(fh) Within five (5) Business Days after the Closing Cash Proceeds, including each of the components thereof, is finally determined pursuant to this Section 3.052.04:
(i) if the Closing Cash Proceeds as finally determined pursuant to this Section 3.05 2.04 are less than the Estimated Closing Cash Proceeds (the total amount of such deficiency, the “Purchaser Adjustment Amount”)Proceeds, then the Purchaser and the Representative Seller shall deliver a joint written instruction to cause the Escrow Agent instructing the Escrow Agent to to: (A) release pay to the Purchaser solely and exclusively from the Purchase Price Adjustment Escrow Account Funds an amount (which in no case shall exceed the amount of the Purchase Price Adjustment Escrow Funds) (the "Purchaser Adjustment Amount") equal to such deficiency; and (B), if the Purchaser Adjustment Amount is less than the amount of the Purchase Price Adjustment Escrow Funds, following payment to Purchaser of the amount required pursuant to clause (A), pay to the Seller, an amount equal to the lesser amount (if any) by which the amount of the Purchase Price Adjustment Escrow Funds is greater than the Purchaser Adjustment Amount and the amount in the Adjustment Escrow Account and (B) release any remaining amounts in the Adjustment Escrow Account to the Paying Agent for further distribution to the Unitholders and the Blocker Sellers in accordance with the Waterfall Schedule, and the payment instructions set forth in the Letters of Transmittal; provided that, in no event will the Representative, the Unitholders, the Blocker Sellers, the Direct Seller or any of their respective Affiliates be liable to the Purchaser or any of its Affiliates under this Section 3.05(f) for any amounts in excess of the Adjustment Escrow Amount; and
(ii) if the Closing Cash Proceeds as finally determined pursuant to this Section 3.05 2.04 are greater than the Estimated Closing Cash Proceeds Proceeds, then the Purchaser and the Seller shall cause the Escrow Agent to: (A) pay to the Seller solely and exclusively from the Purchase Price Adjustment Escrow Funds an amount (which in no case shall exceed the amount of the Purchase Price Adjustment Escrow Funds) (the total amount of such excess, the “"Seller Adjustment Amount”)") equal to such deficiency, then and (AB) the Purchaser shall, or shall cause the Surviving Company or one or more of its Subsidiaries to, pay to the Paying Agent Purchaser an amount equal to the lesser amount (if any) by which the amount of the Purchase Price Adjustment Escrow Funds is greater than the Seller Adjustment Amount and an amount equal to the Adjustment Escrow Amount and (B) the Purchaser and the Representative shall deliver a joint written instruction to the Escrow Agent instructing the Escrow Agent to release all amounts in the Adjustment Escrow Account to the Paying Agent, in each case, for further distribution to the Unitholders and the Blocker Sellers, in each case, in accordance with the Waterfall Schedule, and the payment instructions set forth in the Letters of Transmittal; provided that, in no event will the Purchaser, the Blocker Purchaser, the Surviving Company or any of their respective Affiliates be liable to the Seller or any of their Affiliates under this Section 3.05(f) for any amounts in excess of an amount of cash equal to the Adjustment Escrow Amount.
(gi) All payments to be made pursuant to Section 3.05(h2.04(h) shall (x) be treated by all parties for Tax purposes as adjustments to the Merger Consideration purchase price to the extent permitted by applicable Law and (y) be made by wire transfer of immediately available funds to the account(s) designated by the Purchaser or the RepresentativeSeller, as applicable.
(h) The Representative, the Unitholders and the Blocker Sellers each hereby agrees and acknowledges that the right to any payment to be made pursuant to Section 3.05(h) shall be its sole and exclusive remedy for any and all claims arising under this Agreement with respect to this Section 3.05. The Purchaser Each party hereby agrees and acknowledges that its right to any payment to be made pursuant to Section 3.05(h2.04(h) shall be the sole and exclusive remedy of the Purchaser such party for any and all claims arising under this Agreement with respect to this Section 3.052.04.
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