Common use of Closing Net Working Capital Adjustment Clause in Contracts

Closing Net Working Capital Adjustment. (a) Delivery and Review of Closing Net Working Capital Certificate. As promptly as practicable, but not later than sixty (60) days after the Closing Date, Cognitronics will prepare and deliver or cause to be prepared and delivered to the Securityholders' Representative a statement (the "Closing Net Working Capital Certificate") that sets forth the total current assets of the Business minus the total current liabilities of the Business as of 12:01 a.m. on the Closing Date (the "Closing Net Working Capital"). The Closing Net Working Capital shall be determined in accordance with United States generally accepted accounting principles ("GAAP"), provided that (i) deferred revenue, deferred tax assets and deferred tax liabilities shall not be taken into account and (ii) no liability or obligation under any of the Company Notes shall be taken into account. The Securityholders' Representative shall have thirty (30) days from the date on which the Closing Net Working Capital Certificate is delivered (the "Review Period") to review such document. In connection with such review, Cognitronics shall grant the Securityholders' Representative (and any agents and other representatives designated by the Securityholders' Representative) reasonable access to its records and to any work papers of Cognitronics' independent auditors and any other relevant information reasonably requested by the Securityholders' Representative. If the Securityholders' Representative shall disagree with any item or amount shown or reflected in the Closing Net Working Capital Certificate, the Securityholders' Representative may, on or prior to the last day of the Review Period, deliver a notice to Cognitronics setting forth, in reasonable detail, each disputed item or amount and the basis for the Securityholders' Representative's disagreement therewith, together with supporting calculations (the "Dispute Notice"). If no Dispute Notice is received by Cognitronics on or prior to the last day of the Review Period, the Closing Net Working Capital Certificate shall be deemed accepted by the Securityholders' Representative. The rights of the parties to indemnification pursuant to Article VIII shall not be deemed to limit, supersede or otherwise affect the rights to an adjustment of the Initial Principal Amount pursuant to this Section 1.4.

Closing Net Working Capital Adjustment. (ai) Delivery and Review of Closing Net Working Capital Certificate. As promptly as practicable, but not later than sixty Within ninety (6090) days after the Closing Date, Cognitronics will Parent shall prepare and deliver or cause to be prepared and delivered to the Securityholders' Stockholders’ Representative a pro forma balance sheet of the Company together with a statement (of the "Closing Net Working Capital Certificate") that sets forth the total current assets of the Business minus the total current liabilities of the Business as of 12:01 a.m. on the Closing Date (the "“Statement of Closing Net Working Capital")”) and a copy of all work papers relating primarily to the preparation of the Statement of Closing Net Working Capital. The Statement of Closing Net Working Capital shall be determined based upon the books and records of the Company and shall be prepared on a basis consistent with the methodology to be employed in accordance the calculation of the Estimated Net Working Capital pursuant to Section 1.09(a). The Stockholders’ Representative, and any accountants or advisors retained by the Stockholders’ Representative, shall be permitted reasonable access to the books and records of the Company and to the personnel familiar with United States generally accepted accounting principles ("GAAP"), provided that (i) deferred revenue, deferred tax assets and deferred tax liabilities shall not be taken into account and the preparation of the Statement of Closing Net Working Capital for the purpose of reviewing the Statement of Closing Net Working Capital. (ii) no liability or obligation under any The Statement of the Company Notes Closing Net Working Capital shall be taken into account. The Securityholders' final and binding on the Parties unless the Stockholders’ Representative shall have shall, within thirty (30) days after the delivery of the Statement of Closing Net Working Capital, deliver to Parent written notice of any disagreement with the Statement of Closing Net Working Capital, which notice shall describe the nature of any such disagreement and the proposed calculation of Closing Net Working Capital. Failure to give such timely objection notice (or written notification from the date Stockholders’ Representative that it has no such objection) shall constitute acceptance and approval of the Statement of Closing Net Working Capital and the Statement of Closing Net Working Capital shall be final and binding upon the Parties. If the Stockholders’ Representative raises any objections within the aforesaid thirty (30) day period, then the Stockholders’ Representative and Parent shall in good faith attempt to resolve the disputed matter. If the Stockholders’ Representative and Parent are unable to resolve all disagreements within thirty (30) days after receipt by Parent of a written notice of disagreement, then, within ten (10) days thereafter, the Stockholders’ Representative and Parent shall jointly select an arbiter from a nationally recognized independent public accounting firm that is not the independent auditor of any of Parent or the Company or their Affiliates or any firm that has provided services to Parent or the Company since December 31, 2007. If Parent and the Stockholders’ Representative are unable to select an arbiter within such time period, the American Arbitration Association shall make such selection (the Person so selected to be referred to herein as the “Accounting Arbitrator”). (iii) The Accounting Arbitrator shall consider only those matters set forth in the Statement of Closing Net Working Capital upon which Parent and the Stockholders’ Representative have disagreed and shall be required to resolve the matters in accordance with the terms and provisions of this Agreement. In submitting a dispute to the Accounting Arbitrator, each of Parent and the Stockholders’ Representative shall concurrently furnish, at its own respective expense, to the Accounting Arbitrator and the other Party (or the Stockholders’ Representative, as the case may be) such documents and information as the Accounting Arbitrator may reasonably request. Each of Parent and the Stockholders’ Representative may also furnish to the Accounting Arbitrator such other information and documents as it deems relevant, with copies of such submission and all such documents and information being concurrently given to the other Party (or the Stockholders’ Representative, as the case may be). Neither Parent nor the Stockholders’ Representative shall have or conduct any communication with the Accounting Arbitrator without the other Party’s (or the Stockholders’ Representative’s, as the case may be) either being present or receiving a concurrent copy of any written or email communication. The Accounting Arbitrator may conduct a conference concerning the objections of, and disagreements between, the Stockholders’ Representative and Parent, at which conference each of Parent and the Stockholders’ Representative shall have the right to (i) present its documents, materials and other evidence (previously provided to the Accounting Arbitrator and the other Party (or to the Stockholders’ Representative, as the case may be)), and (ii) have present its advisors, accountants, counsel and other representatives. (iv) The Accounting Arbitrator shall resolve each item of disagreement based solely on which the presentations and supporting material provided by Parent and the Stockholders’ Representative and not pursuant to any independent review (the foregoing, however, shall not preclude the Accounting Arbitrator from determining proper application of Modified GAAP with respect to the subject matter of the objections and disagreement between Parent and the Stockholders’ Representative). The Accounting Arbitrator shall issue a detailed written report that sets forth the resolution of all items in dispute and that contains a final Statement of Closing Net Working Capital. Such report shall be final and binding upon the Parties and the Stockholders’ Representative. The fees and expenses of the Accounting Arbitrator incurred in connection with the determination of the disputed items by the Accounting Arbitrator shall be borne by the Company Stockholders on a pro rata basis and Parent in an amount proportionate to the dollar amount contested and not awarded to such Party as a percentage of the total dollar amount contested by the Parties (or the Stockholders’ Representative, as the case may be), as determined by the Accounting Arbitrator; provided, however, Parent shall have the right to have the Company Stockholders’ portion of the fees and expenses of the Accounting Arbitrator paid from the Indemnity Escrow Deposit, and if Parent elects to have such fees and expenses paid from the Indemnity Escrow Deposit, then the Stockholders’ Representative and Parent shall send joint written instructions to the Escrow Agent instructing the Escrow Agent to distribute such fees and expenses to the Accounting Arbitrator. Parent, the Company and the Stockholders’ Representative shall cooperate fully with the Accounting Arbitrator and respond on a timely basis to all requests for information or access to documents or personnel made by the Accounting Arbitrator or by other Parties or the Stockholders’ Representative, all with the intent to fairly and in good faith resolve all disputes relating to the Statement of Closing Net Working Capital as promptly as reasonably practicable. (v) If the amount representing Closing Net Working Capital as reflected in the Statement of Closing Net Working Capital as finally determined in accordance with this Section 1.09 is at least One Hundred Thousand Dollars ($100,000) less than the Estimated Net Working Capital, the Merger Consideration shall be decreased on a dollar-for-dollar basis by the amount of such shortfall (but only to the extent that such decrease exceeds such One Hundred Thousand Dollar ($100,000) amount). If the amount representing Closing Net Working Capital as reflected in the Statement of Closing Net Working Capital as finally determined in accordance with this Section 1.09 is at least One Hundred Thousand Dollars ($100,000) greater than the Estimated Net Working Capital, the Merger Consideration shall be increased on a dollar-for-dollar basis by the amount of such excess (but only to the extent that such increase exceeds such One Hundred Thousand Dollar ($100,000) amount). (vi) If any adjustment under this Section 1.09 results in an aggregate increase in the Merger Consideration, within five (5) Business Days after the final determination of the Closing Net Working Capital Certificate is delivered (i) Parent shall remit to the "Review Period"Escrow Agent the amount of such increase in immediately available funds and (ii) the Stockholders’ Representative and Parent shall send joint written instructions to the Escrow Agent instructing the Escrow Agent to distribute the Working Capital Escrow Deposit (and all interest or other income attributable to and arising from the investment of such amounts) to review such documentthe Company Stockholders pursuant to Section 1.06(b)(i) and the Stockholder Escrow Agreement. In connection with such reviewConversely, Cognitronics if any adjustment under this Section 1.09 results in an aggregate reduction in the Merger Consideration, the Stockholders’ Representative and Parent shall grant send, within five (5) Business Days after the Securityholders' Representative (and any agents and other representatives designated by the Securityholders' Representative) reasonable access to its records and to any work papers final determination of Cognitronics' independent auditors and any other relevant information reasonably requested by the Securityholders' Representative. If the Securityholders' Representative shall disagree with any item or amount shown or reflected in the Closing Net Working Capital CertificateCapital, the Securityholders' Representative may, on or prior joint written instructions to the last day Escrow Agent, instructing the Escrow Agent to distribute to Parent the amount of such reduction from the Working Capital Escrow Deposit and to release the remainder, if any, of the Review Period, deliver a notice Working Capital Escrow Deposit (and all interest or other income attributable to Cognitronics setting forth, in reasonable detail, each disputed item or amount and arising from the investment of such amounts) to the Company Stockholders pursuant to Section 1.06(b)(i) and the basis for the Securityholders' Representative's disagreement therewith, together with supporting calculations (the "Dispute Notice"). If no Dispute Notice is received by Cognitronics on or prior to the last day of the Review Period, the Closing Net Working Capital Certificate shall be deemed accepted by the Securityholders' Representative. The rights of the parties to indemnification pursuant to Article VIII shall not be deemed to limit, supersede or otherwise affect the rights to an adjustment of the Initial Principal Amount pursuant to this Section 1.4Stockholder Escrow Agreement.

Closing Net Working Capital Adjustment. (a) Delivery and Review of Closing Net Working Capital Certificate. As promptly soon as practicablepracticable after the Closing, but not later than in any event within sixty (60) days after following the Closing Date, Cognitronics will Purchaser shall prepare at its expense, in accordance with GAAP and deliver or cause to be prepared on a basis consistent with the UC Parties’ past practice, a consolidated balance sheet for the UC Parties as of the Closing Date and delivered to its determination of the Securityholders' Representative a statement (the "Closing Net Working Capital Certificate"(“Purchaser’s Calculation”) that sets forth the total current assets of the Business minus the total current liabilities of the Business as of 12:01 a.m. on the and shall deliver in writing such Closing Date balance sheet and Purchaser’s Calculation to the Shareholder Representative (the "Closing Net Working Capital"“Adjustment Notice”). The Closing Net Working Capital Adjustment Notice shall be determined include all supporting schedules, analyses, working papers, and other reasonably necessary supporting documentation. Purchaser shall give the Shareholder Representative such assistance and access to the financial books and records, employees and advisors of Purchaser and the UC Parties as the Shareholder Representative may reasonably request in accordance with United States generally accepted accounting principles ("GAAP"), provided that (i) deferred revenue, deferred tax assets and deferred tax liabilities shall not be taken into account and (ii) no liability or obligation under any its review of the Company Notes shall be taken into accountAdjustment Notice. The Securityholders' Shareholder Representative shall have thirty (30) days from receipt of the date on which Adjustment Notice to notify Purchaser if the Shareholder Representative disputes the Purchaser’s Calculation (the “Dispute Notice”). If the Shareholder Representative does not send a timely Dispute Notice, the Shareholder Representative will be deemed to have accepted Purchaser’s Calculation as the Closing Net Working Capital Certificate is delivered (and the "Review Period") to review such document. In connection with such review, Cognitronics Purchaser’s Calculation shall grant the Securityholders' Representative (be final and any agents and other representatives designated by the Securityholders' Representative) reasonable access to its records and to any work papers of Cognitronics' independent auditors and any other relevant information reasonably requested by the Securityholders' Representativebinding on all Parties. If the Securityholders' Shareholder Representative sends a Dispute Notice, the Dispute Notice shall specify the Shareholder Representative’s determination of the Closing Net Working Capital, shall specify in reasonable detail the nature of any disagreement with the Purchaser’s Calculation, and shall include all supporting schedules, analyses, working papers, and other reasonably necessary supporting documentation. Upon receipt of a timely Dispute Notice, Purchaser and the Shareholder Representative shall disagree in good faith and with any item or amount shown or reflected in reasonable efforts attempt to agree on the Closing Net Working Capital. If Purchaser and the Shareholder Representative cannot agree upon the Closing Net Working Capital Certificatewithin ten (10) days after the Dispute Notice was provided, the Securityholders' Representative may, on or prior to the last day of the Review Period, deliver a notice to Cognitronics setting forth, in reasonable detail, each disputed item or amount then Purchaser and the basis for Shareholder Representative shall retain Deloitte & Touche LLP, and if such firm refuses to accept such engagement, then such other independently, nationally recognized accounting firm as chosen by mutual agreement of Purchaser and the Securityholders' Shareholder Representative's disagreement therewith, together with supporting calculations (the "Dispute Notice"). If no Dispute Notice is received by Cognitronics on or prior to the last day of the Review Period, determine the Closing Net Working Capital Certificate (either such firm, the “Accounting Firm”) who shall be deemed accepted by instructed to make such determination within thirty (30) calendar days of its engagement. The Accounting Firm’s determination of Closing Net Working Capital shall be final and binding on the Securityholders' Parties. Such determination shall be reflected in a written report, which will be promptly delivered to Purchaser and the Shareholder Representative. The rights cost of the parties to indemnification pursuant to Article VIII Accounting Firm shall not be deemed to limit, supersede borne by the Party (either Purchaser or otherwise affect the rights to an adjustment Shareholder Representative) whose determination of the Initial Principal Amount pursuant to this Section 1.4Closing Net Working Capital was furthest from the determination of the Accounting Firm, provided if Purchaser’s and the Shareholder Representative’s determination of Closing Net Working Capital were each within plus or minus 10% of the Accounting Firm’s determination, the cost shall be borne equally by Purchaser and the Shareholder Representative.

Closing Net Working Capital Adjustment. (a) Delivery and Review of Closing Net Working Capital Certificate. As promptly as practicable, but not later than sixty Within one hundred twenty (60120) days after the Closing Date, Cognitronics will Parent shall prepare and deliver or cause to be prepared and delivered to the Securityholders' Representative a statement (of the "Closing Net Working Capital Certificate") that sets forth the total current assets of the Business minus the total current liabilities of the Business as of 12:01 a.m. on the Closing Date (the "“Statement of Closing Net Working Capital"”). The Statement of Closing Net Working Capital shall be determined based upon the books and records of the Company and its Subsidiaries and shall be prepared in accordance with United States generally accepted accounting principles ("GAAP")the principles, provided that (i) deferred revenuepolicies, deferred tax assets estimates and deferred tax liabilities shall not be taken into account and (ii) no liability or obligation under any procedures set forth on Schedule 2.09 of the Company Notes Disclosure Schedules. The Representative, and any accountants or advisors retained by the Representative, shall be taken into account. permitted to review Parent’s working papers related to the preparation of such statements and the books and records of the Company and its Subsidiaries for the purposes of reviewing such statement. (b) The Securityholders' Statement of Closing Net Working Capital shall be final and binding on the Parties unless the Representative shall have shall, within thirty (30) days following the delivery of the Statement of Closing Net Working Capital, deliver to Parent written notice of any disagreement with such statement, which notice(s) shall describe the nature of any such disagreement in reasonable detail. If the Representative raises any objections within the aforesaid thirty (30) day period, then the Representative, on behalf of the Company Stockholders, and Parent shall attempt to resolve the disputed matter. If the Representative and Parent are unable to resolve all disagreements within thirty (30) days of receipt by Parent of a written notice of disagreement, or such longer period as may be agreed by Parent and the Representative, then, within ten (10) days thereafter, the Representative and Parent shall jointly select an arbiter from a nationally recognized independent public accounting firm that is not the date on which independent auditor of any of Parent, the Company, the Surviving Corporation or any of their Subsidiaries; if Parent and the Representative are unable to select an arbiter within such time period, the American Arbitration Association shall make such selection (the Person so selected shall be referred to herein as the “Accounting Arbitrator”). The Accounting Arbitrator so selected shall consider only those matters set forth in the Statement of Closing Net Working Capital Certificate is delivered as to which Parent and the Representative have disagreed and must resolve such matters in accordance with the terms and provisions of this Agreement. In submitting a dispute to the Accounting Arbitrator, each of Parent and the Representative shall concurrently furnish, at its own respective expense, to each other and the Accounting Arbitrator such documents and information as the Accounting Arbitrator may request. Each of Parent and the Representative may also furnish to the Accounting Arbitrator such other information and documents as it deems relevant, with copies of such submission and all such documents and information being concurrently given to Parent or the Representative, as the case may be. Neither Parent nor the Representative shall have or conduct any communication, either written or oral, with the Accounting Arbitrator without the other of them either being present or receiving a concurrent copy of any written communication. The Accounting Arbitrator may conduct a conference concerning the objections and disagreements between the Representative and Parent, at which conference each of them shall have the right to (i) present its documents, materials and other evidence (previously provided to the Accounting Arbitrator and the other of them), and (ii) have present its advisors, accountants, counsel and other representatives. The Accounting Arbitrator shall resolve each item of disagreement based solely on the presentations and supporting material provided by Parent and the Representative and not pursuant to any independent review (the "Review Period") foregoing, however, shall not preclude the Accounting Arbitrator from independent research of facts or determining proper application of GAAP or the terms of this Agreement with respect to review such documentthe subject matter of the objections and disagreement between Parent and the Representative). In connection with such review, Cognitronics The Accounting Arbitrator shall grant issue a reasonably detailed written report that sets forth the Securityholders' Representative (resolution of all items in dispute and any agents and other representatives designated by the Securityholders' Representative) reasonable access to its records and to any work papers that contains a final Statement of Cognitronics' independent auditors and any other relevant information reasonably requested by the Securityholders' Representative. If the Securityholders' Representative shall disagree with any item or amount shown or reflected in the Closing Net Working Capital CertificateCapital, the Securityholders' Representative may, on or prior according to the last day of the Review Period, deliver a notice to Cognitronics setting forth, in reasonable detail, each disputed item or amount and the basis for the Securityholders' Representative's disagreement therewith, together with supporting calculations (the "Dispute Notice"dispute(s). If no Dispute Notice is received by Cognitronics on or prior to the last day of the Review Period, the Closing Net Working Capital Certificate shall be deemed accepted by the Securityholders' Representative. The rights of the parties to indemnification pursuant to Article VIII shall not be deemed to limit, supersede or otherwise affect the rights to an adjustment of the Initial Principal Amount pursuant to this Section 1.4.