Closing Payment Adjustment. (a) At least five (5) Business Days prior to the Closing Date, Sellers shall deliver to the Buyer a statement (the “Closing Estimates”), including reasonable supporting documentation, setting forth its good faith estimate of: (i) the Closing Net Working Capital; (ii) the Closing Date Cash; (iii) the Closing Date Debt; and (iv) the Closing Date Company Expenses, all determined in accordance with the Accounting Principles. The Buyer shall be entitled to review, comment on, and request reasonable changes to the Closing Estimates and Sellers shall consider the Buyer’s proposed changes in good faith. If the parties are unable to reach agreement on any of the Buyer’s proposed changes, the Closing Estimates as proposed by Sellers shall control solely for the purposes of calculating the Closing Payment, and shall not limit or otherwise affect the Buyer’s remedies under this Agreement or otherwise or constitute an acknowledgment by the Buyer of the accuracy of the Closing Estimates or the accounting methods or policies utilized in the calculation thereof. (b) Within ninety (90) days following the Closing Date, Buyer shall prepare and deliver to the Seller Representative a statement of Bxxxx’s calculations of: (i) the Closing Net Working Capital; (ii) the Closing Date Cash; (iii) the Closing Date Debt; and (iv) the Closing Date Company Expenses (the “Adjustment Calculations”), all determined in accordance with the Accounting Principles. Each Seller and the Buyer agree that the calculation of Closing Net Working Capital shall be prepared in a format consistent with the sample calculations, which have been included for illustrative purposes only, set forth on Schedule 1.3. (c) Within thirty (30) days of the Buyer’s delivery of the Adjustment Calculations, the Seller Representative may deliver a written notice to the Buyer of any disagreement with each item contained within the Adjustment Calculations, if any (an “Objection Statement”). For each disputed item, the Seller Representative shall include: (i) the basis for any disagreement, (ii) the nature and amount of such disagreement, and (iii) reasonable supporting documentation, information and calculations thereof for any disagreement. The Seller Representative shall be deemed to have agreed with all other items and amounts contained in the Adjustment Calculations that are not disputed in the Objection Statement. If the Seller Representative fails to properly deliver an Objection Statement, Sellers will be deemed conclusively to have agreed to the Adjustment Calculations, which shall be final and binding upon Sellers. (d) If the Seller Representative delivers an Objection Statement, Buyer and the Seller Representative (on behalf of Sellers) shall, during the fifteen (15) days following the Seller Representative’s delivery of the Objection Statement, use their commercially reasonable, good faith efforts to reach agreement on the disputed items and amounts in order to determine, as may be required, the Adjustment Calculations, which shall not be more favorable to Buyer than the amount thereof shown in Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to Sellers than the amount thereof shown in the Objection Statement. If, during such period, the Seller Representative and the Buyer are unable to reach such agreement, they shall promptly thereafter cause BDO US LLP (or, if BDO US LLP declines to serve, such other independent accounting firm of national standing mutually agreed to by the parties) (the “Accounting Referee”) to review this Agreement and the disputed items and amounts for the purpose of calculating the Adjustment Calculations. There shall be no ex parte communications between any party and the Accounting Referee. In making such calculation, the Accounting Referee shall consider only those still unresolved items and amounts in Buyer’s calculation of Adjustment Calculations as to which the Sellers duly objected in accordance with Section 1.3(c) and the Accounting Referee shall not consider any settlement offers exchanged between the parties. The Accounting Referee’s calculation shall not be more favorable to the Buyer than the amount thereof shown in the Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to the Sellers than the amount thereof shown in the Objection Statement. The Accounting Referee shall agree that between the time the Sellers delivered the Objection Statement to the Buyer and the date thereof, the Buyer and the Sellers may have exchanged certain proposals relating to the disputed items that were intended solely for purposes of facilitating settlement discussions and such proposals were confidential and were provided solely on the condition and understanding that such proposals would not be permitted to be disclosed in any court or arbitration hearing, including with respect to the Accounting Referee’s engagement in the dispute. The Accounting Referee will be instructed to disregard any evidence of such settlement proposals and negotiations in its consideration of the disputed matters. The Accounting Referee shall deliver to the Seller Representative and the Buyer, as promptly as practicable (but in any case, no later than thirty (30) days from the date of engagement of the Accounting Referee or such longer period as the Accounting Referee may reasonably require), a report setting forth calculations of the disputed amounts, and its reasonable basis for each of its determinations. Absent manifest error, such report shall be final and binding upon the Sellers and the Buyer. The cost of such review and report shall be borne by the party whose determination of the Adjustment Calculations (as set forth in the statement submitted by the Buyer or in the Objection Statement), yielded the final Closing Payment farthest from that based upon the Adjustment Calculations determined by the Accounting Referee, or equally if the final Closing Payment based upon the determination of the Accounting Referee is equidistant between the determinations of the parties. (e) Each party hereto shall, and shall cause their respective representatives to, use commercially reasonable efforts to cooperate and assist, to the extent reasonably requested by another party hereto, in the preparation of the Adjustment Calculations and in the conduct of the review referred to in this Section 1.3, including the making available to the extent reasonably necessary of books, records, work papers and appropriate personnel. If Buyer claims that Sellers have, or Sellers claims that Bxxxx has, as applicable, failed to comply with its obligation under this Section 1.3(e), it may refer such alleged non-compliance to the Accounting Referee. The Accounting Referee shall have the authority to determine if the respective party has complied with its obligations under this Section 1.3(e) and to order any non-compliant party to comply with its obligations under this Section 1.3(e). Each party shall comply with any such determination by such Accounting Referee.
Appears in 3 contracts
Samples: Membership Interest Purchase Agreement (Wellgistics Health, Inc.), Membership Interest Purchase Agreement (Danam Health, Inc), Membership Interest Purchase Agreement (Danam Health, Inc)
Closing Payment Adjustment. The payment described in Section 1.3(b)(ii) shall be subject to adjustment as follows:
(a) At least five Within sixty (5) Business Days prior to the Closing Date, Sellers shall deliver to the Buyer a statement (the “Closing Estimates”), including reasonable supporting documentation, setting forth its good faith estimate of: (i) the Closing Net Working Capital; (ii) the Closing Date Cash; (iii) the Closing Date Debt; and (iv) the Closing Date Company Expenses, all determined in accordance with the Accounting Principles. The Buyer shall be entitled to review, comment on, and request reasonable changes to the Closing Estimates and Sellers shall consider the Buyer’s proposed changes in good faith. If the parties are unable to reach agreement on any of the Buyer’s proposed changes, the Closing Estimates as proposed by Sellers shall control solely for the purposes of calculating the Closing Payment, and shall not limit or otherwise affect the Buyer’s remedies under this Agreement or otherwise or constitute an acknowledgment by the Buyer of the accuracy of the Closing Estimates or the accounting methods or policies utilized in the calculation thereof.
(b) Within ninety (9060) days following the Closing Date, Buyer the Purchaser shall prepare cause to be prepared, in accordance with generally accepted accounting principles ("GAAP"), and, to the extent consistent with GAAP, applied on a basis consistent with past practice and utilizing the same accounting procedures and policies as used in preparing the Balance Sheets and the Latest Balance Sheets (as such terms are defined in Section 3.4), a Draft Closing Balance Sheet (as defined in Section 9.16 hereof) and a statement (the "Draft Closing Working Capital Deficit Statement") setting forth the Purchaser's determination of the Closing Working Capital Deficit (as defined below) of the Companies as of the Closing Date. The cost of preparing the Draft Closing Balance Sheet and the Draft Closing Working Capital Deficit Statement shall be borne by the Purchaser.
(b) Within sixty (60) days following the Closing Date, the Purchaser shall deliver to the Seller Representative a statement of Bxxxx’s calculations of: (i) Stockholder the Draft Closing Net Balance Sheet and the Draft Closing Working Capital; (ii) the Closing Date Cash; (iii) the Closing Date Debt; and (iv) the Closing Date Company Expenses (the “Adjustment Calculations”), all determined in accordance Capital Deficit Statement together with the Accounting Principleswork papers and such other items related thereto as the Stockholder shall reasonably request. Each Seller The Draft Closing Balance Sheet and the Buyer agree that the calculation of Draft Closing Net Working Capital Deficit Statement shall be prepared in a format consistent with become final and binding upon the sample calculations, which have been included for illustrative purposes only, set forth on Schedule 1.3.
(c) Within parties thirty (30) days of after the Buyer’s delivery of Stockholder's receipt thereof (together with the Adjustment Calculationswork papers related thereto), unless the Seller Representative may deliver a Stockholder gives the Purchaser written notice to of its disagreement (a "Notice of Disagreement") within such thirty (30) day period, specifying in detail the Buyer of any Stockholder's disagreement with each item contained within the Adjustment CalculationsDraft Closing Balance Sheet and the Draft Closing Working Capital Deficit Statement. If a Notice of Disagreement is received by the Purchaser in a timely manner, if any (an “Objection Statement”). For each disputed item, then the Seller Representative Draft Closing Balance Sheet and the Draft Closing Working Capital Deficit Statement shall include: become the final Closing Balance Sheet and the final Closing Working Capital Deficit Statement and shall be binding upon the parties on the earlier of (i) the basis for date the parties hereto resolve in writing any disagreement, differences they may have with respect to any matter specified in the Notice of Disagreement and (ii) the date any Disputed Matters (as defined below) are finally resolved in writing by the Arbitrator (as defined below). Any such Notice of Disagreement shall state in reasonable detail the nature and amount of such disagreement, and any disagreement so asserted. During a period of ten (iii) reasonable supporting documentation, information and calculations thereof for any disagreement. The Seller Representative shall be deemed to have agreed with all other items and amounts contained in the Adjustment Calculations that are not disputed in the Objection Statement. If the Seller Representative fails to properly deliver an Objection Statement, Sellers will be deemed conclusively to have agreed to the Adjustment Calculations, which shall be final and binding upon Sellers.
(d) If the Seller Representative delivers an Objection Statement, Buyer and the Seller Representative (on behalf of Sellers) shall, during the fifteen (1510) days following the Seller Representative’s delivery of the Objection Statement, use their commercially reasonable, good faith efforts to reach agreement on the disputed items and amounts in order to determine, as may be required, the Adjustment Calculations, which shall not be more favorable to Buyer than the amount thereof shown in Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to Sellers than the amount thereof shown in the Objection Statement. If, during such period, the Seller Representative and the Buyer are unable to reach such agreement, they shall promptly thereafter cause BDO US LLP (or, if BDO US LLP declines to serve, such other independent accounting firm of national standing mutually agreed to by the parties) (the “Accounting Referee”) to review this Agreement and the disputed items and amounts for the purpose of calculating the Adjustment Calculations. There shall be no ex parte communications between any party and the Accounting Referee. In making such calculation, the Accounting Referee shall consider only those still unresolved items and amounts in Buyer’s calculation of Adjustment Calculations as to which the Sellers duly objected in accordance with Section 1.3(c) and the Accounting Referee shall not consider any settlement offers exchanged between the parties. The Accounting Referee’s calculation shall not be more favorable to the Buyer than the amount thereof shown in the Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to the Sellers than the amount thereof shown in the Objection Statement. The Accounting Referee shall agree that between the time the Sellers delivered the Objection Statement to the Buyer and the date thereof, the Buyer and the Sellers may have exchanged certain proposals relating to the disputed items that were intended solely for purposes of facilitating settlement discussions and such proposals were confidential and were provided solely on the condition and understanding that such proposals would not be permitted to be disclosed in any court or arbitration hearing, including with respect to the Accounting Referee’s engagement in the dispute. The Accounting Referee will be instructed to disregard any evidence of such settlement proposals and negotiations in its consideration of the disputed matters. The Accounting Referee shall deliver to the Seller Representative and the Buyer, as promptly as practicable (but in any case, no later than thirty (30) days from the date of engagement of the Accounting Referee or such longer period as the Accounting Referee Purchaser and the Stockholder may reasonably requiremutually agree after the expiration of the aforesaid ten (10) day period), the Purchaser and the Stockholder shall attempt, in good faith, to resolve in writing any differences that they may have with respect to any matter specified in the Notice of Disagreement. If, at the end of such ten (10) day period (or such longer period as the Purchaser and the Stockholder may have mutually agreed), the Purchaser and the Stockholder fail to reach a report setting forth calculations written agreement with respect to all of such matters, then all such matters as specified in the Notice of Disagreement as to which such written agreement has not been reached (the "Disputed Matters") shall be submitted to and reviewed by an arbitrator (the "Arbitrator"). If the Purchaser and the Stockholder are unable to agree upon the identity of the disputed amountsArbitrator within five (5) days, the Stockholder and the Purchaser shall each select within five (5) days thereafter one of the "Big-Five" accounting firms having no other relationship with any party hereto during the past two (2) years to select the Arbitrator. If such accounting firms cannot agree as to the identity of the Arbitrator, then each of such accounting firms shall select one nominee and the Arbitrator shall be chosen by lot from the two (2) nominees. The Arbitrator shall consider only the Disputed Matters and shall be instructed to act promptly to resolve all Disputed Matters and prepare or cause to be prepared a final Closing Balance Sheet and a final Working Capital Deficit Statement consistent with the standards for preparation of the Draft Closing Balance Sheet and the Draft Working Capital Deficit Statement set forth in Section 1.4(a), and its reasonable basis for each of its determinations. Absent manifest error, such report decision with respect to all Disputed Matters shall be final and binding upon the Sellers Purchaser and the BuyerStockholder. The cost Purchaser and the Stockholder agree to provide the Arbitrator in a timely manner any information it reasonably requests and shall use their best efforts to cause the Arbitrator to decide all of such review the Disputed Matters within fifteen (15) days of the date on which the Arbitrator is selected and report provide the Stockholder and the Purchaser with a written decision regarding his determination of the Disputed Matters. The fees and expenses of the Arbitrator with respect to the settlement of all Disputed Matters shall be borne by the party whose determination of Purchaser, on the Adjustment Calculations (one hand, and the Stockholder, on the other hand, in such proportion as set forth in the statement submitted by the Buyer or in the Objection Statement), yielded the final Closing Payment farthest from that based upon the Adjustment Calculations shall be determined by the Accounting RefereeArbitrator, or equally if giving consideration to the final Closing Payment based upon Purchaser's and the determination of Stockholder's initial positions with respect to the Accounting Referee is equidistant between Disputed Matters and how far such positions were from the determinations of the partiesArbitrator's decision.
(ec) Each party hereto shall, and shall cause their respective representatives to, use commercially reasonable efforts to cooperate and assist, to the extent reasonably requested by another party hereto, in the preparation of the Adjustment Calculations and in the conduct of the review referred to in this Section 1.3, including the making available to the extent reasonably necessary of books, records, work papers and appropriate personnel. If Buyer claims that Sellers have, or Sellers claims that Bxxxx has, as applicable, failed to comply with its obligation under this Section 1.3(e), it may refer such alleged non-compliance to the Accounting Referee. The Accounting Referee shall have the authority to determine if the respective party has complied with its obligations under this Section 1.3(e) and to order any non-compliant party to comply with its obligations under this Section 1.3(e). Each party shall comply with any such determination by such Accounting Referee.As used herein,
Appears in 1 contract
Samples: Stock Purchase Agreement (Healthplan Services Corp)
Closing Payment Adjustment. If any of the Closing Indebtedness Amount, the Closing Cash Amount or the Seller Transaction Expenses (aas finally determined pursuant to this Section 2.12 and as set forth in the Final Closing Statement) At least differs from the estimated amount thereof set forth in the Estimated Closing Statement, the following shall occur:
(i) the Closing Payment shall be recalculated using the Closing Indebtedness Amount, the Closing Cash Amount or the Seller Transaction Expenses, as applicable, in the Final Closing Statement in lieu of the Closing Indebtedness Amount, the Closing Cash Amount or the Seller Transaction Expenses (which adjustment shall take into account any recalculations to the Closing Indebtedness Amount or the Closing Cash Amount), as applicable, in the Estimated Closing Statement (such recalculated Closing Payment, the “Final Closing Payment”);
(ii) if the Final Closing Payment exceeds the Closing Payment paid at Closing, Buyer shall, within five (5) Business Days prior Days, deliver or cause to be delivered to the Closing DatePaying Agent by wire transfer of immediately available funds, Sellers shall deliver the amount of such excess for further disbursement to the Buyer a statement Company Holders and the applicable recipients of the Change of Control Payments (pro rata in accordance with their respective Pro Rata Percentages as set forth on the Allocation Schedule); or
(iii) if the Final Closing Payment is less than the Closing Payment paid at Closing (such shortfall, the “Closing EstimatesOverpayment Amount”), including reasonable supporting documentation, setting forth its good faith estimate of: (iA) the Closing Net Working Capital; (ii) the Closing Date Cash; (iii) the Closing Date Debt; and (iv) the Closing Date Company Expenses, all determined in accordance with the Accounting Principles. The Buyer shall be entitled to review, comment on, and request reasonable changes to the Closing Estimates and Sellers shall consider the Buyer’s proposed changes in good faith. If the parties are unable to reach agreement on any of the Buyer’s proposed changes, the Closing Estimates as proposed by Sellers shall control solely for the purposes of calculating the Closing Payment, and shall not limit or otherwise affect the Buyer’s remedies under this Agreement or otherwise or constitute an acknowledgment by the Buyer of the accuracy of the Closing Estimates or the accounting methods or policies utilized in the calculation thereof.
(b) Within ninety (90) days following the Closing Date, Buyer shall prepare and deliver to the Seller Representative a statement of Bxxxx’s calculations of: (i) the Closing Net Working Capital; (ii) the Closing Date Cash; (iii) the Closing Date Debt; and (iv) the Closing Date Company Expenses (the “Adjustment Calculations”), all determined in accordance with the Accounting Principles. Each Seller and the Buyer agree that the calculation of Closing Net Working Capital shall be prepared in a format consistent with the sample calculations, which have been included for illustrative purposes only, set forth on Schedule 1.3.
(c) Within thirty (30) days of the Buyer’s delivery of the Adjustment Calculations, the Seller Representative may deliver a written notice to the Buyer of any disagreement with each item contained within the Adjustment Calculations, if any (an “Objection Statement”). For each disputed item, the Seller Representative shall include: (i) the basis for any disagreement, (ii) the nature and amount of such disagreement, and (iii) reasonable supporting documentation, information and calculations thereof for any disagreement. The Seller Representative shall be deemed to have agreed with all other items and amounts contained in the Adjustment Calculations that are not disputed in the Objection Statement. If the Seller Representative fails to properly deliver an Objection Statement, Sellers will be deemed conclusively to have agreed to the Adjustment Calculations, which shall be final and binding upon Sellers.
(d) If the Seller Representative delivers an Objection Statement, Buyer and the Seller Shareholders’ Representative shall instruct the Escrow Agent to, within five (on behalf of Sellers5) shallBusiness Days, during remit the fifteen (15) days following the Seller Representative’s delivery first $1,000,000 of the Objection Statement, use their commercially reasonable, good faith efforts to reach agreement on Overpayment Amount (or if the disputed items and amounts in order to determine, as may be requiredOverpayment Amount is less than $1,000,000, the Adjustment Calculations, which shall not be more favorable to Buyer than entire amount of the Overpayment Amount) from the amount thereof shown available in the Escrow Account, by wire transfer of immediately available funds to the account designated by Buyer and (B) if the Overpayment Amount is greater than $1,000,000, at Buyer’s calculation delivered option (1) Buyer and the Shareholders’ Representative shall instruct the Escrow Agent to, within five (5) Business Days, remit all or a portion of the Overpayment Amount in excess of $1,000,000 from the amount available in the Escrow Account, by wire transfer of immediately available funds to the account designated by Buyer, (2) Buyer may apply set-off in respect of all or a portion of the Overpayment Amount in excess of $1,000,000 pursuant to Section 1.3(b6.6 or (3) nor more favorable to Sellers than the amount thereof shown in the Objection Statement. If, during such period, the Seller Representative and the Buyer are unable to reach such agreement, they shall promptly thereafter cause BDO US LLP a combination of clauses (or, if BDO US LLP declines to serve, such other independent accounting firm of national standing mutually agreed to by the parties) (the “Accounting Referee”) to review this Agreement and the disputed items and amounts for the purpose of calculating the Adjustment Calculations. There shall be no ex parte communications between any party and the Accounting Referee. In making such calculation, the Accounting Referee shall consider only those still unresolved items and amounts in Buyer’s calculation of Adjustment Calculations as to which the Sellers duly objected in accordance with Section 1.3(c1) and the Accounting Referee shall not consider any settlement offers exchanged between the parties. The Accounting Referee’s calculation shall not be more favorable to the Buyer than the amount thereof shown in the Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to the Sellers than the amount thereof shown in the Objection Statement. The Accounting Referee shall agree that between the time the Sellers delivered the Objection Statement to the Buyer and the date thereof, the Buyer and the Sellers may have exchanged certain proposals relating to the disputed items that were intended solely for purposes of facilitating settlement discussions and such proposals were confidential and were provided solely on the condition and understanding that such proposals would not be permitted to be disclosed in any court or arbitration hearing, including with respect to the Accounting Referee’s engagement in the dispute. The Accounting Referee will be instructed to disregard any evidence of such settlement proposals and negotiations in its consideration of the disputed matters. The Accounting Referee shall deliver to the Seller Representative and the Buyer, as promptly as practicable (but in any case, no later than thirty (30) days from the date of engagement of the Accounting Referee or such longer period as the Accounting Referee may reasonably require2), a report setting forth calculations of the disputed amounts, and its reasonable basis for each of its determinations. Absent manifest error, such report shall be final and binding upon the Sellers and the Buyer. The cost of such review and report shall be borne by the party whose determination of the Adjustment Calculations (as set forth in the statement submitted by the Buyer or in the Objection Statement), yielded the final Closing Payment farthest from that based upon the Adjustment Calculations determined by the Accounting Referee, or equally if the final Closing Payment based upon the determination of the Accounting Referee is equidistant between the determinations of the parties.
(e) Each party hereto shall, and shall cause their respective representatives to, use commercially reasonable efforts to cooperate and assist, to the extent reasonably requested by another party hereto, in the preparation of the Adjustment Calculations and in the conduct of the review referred to in this Section 1.3, including the making available to the extent reasonably necessary of books, records, work papers and appropriate personnel. If Buyer claims that Sellers have, or Sellers claims that Bxxxx has, as applicable, failed to comply with its obligation under this Section 1.3(e), it may refer such alleged non-compliance to the Accounting Referee. The Accounting Referee shall have the authority to determine if the respective party has complied with its obligations under this Section 1.3(e) and to order any non-compliant party to comply with its obligations under this Section 1.3(e). Each party shall comply with any such determination by such Accounting Referee.
Appears in 1 contract
Closing Payment Adjustment. (a) At least five (5) Business Days prior to the Closing Date, Sellers shall deliver to the Buyer a statement (the “Closing Estimates”), including reasonable supporting documentation, setting forth its Schedule 1.3 attached hereto is Seller’s good faith estimate of: (i) the Closing Net Working Capital; (ii) the Closing Date Cash; (iii) the Closing Date Debt; and (iv) the Closing Date Company Expenses, all determined in accordance with the Accounting Principles. The Buyer shall be entitled to review, comment on, and request reasonable changes to the Closing Estimates and Sellers shall consider the Buyer’s proposed changes in good faith. If the parties are unable to reach agreement on any calculation of the Buyer’s proposed changesRoll-Forward Amount (such estimate, the Closing Estimates as proposed by Sellers shall control solely for “Estimated Roll-Forward Amount” and such statement, the purposes of calculating the Closing Payment, and shall not limit or otherwise affect the Buyer’s remedies under this Agreement or otherwise or constitute an acknowledgment by the Buyer of the accuracy of the Closing Estimates or the accounting methods or policies utilized in the calculation thereof“Estimated Roll-Forward Amount Statement”).
(b) Within ninety (90) As promptly as possible, but in any event within 30 days following after the Closing Date, Buyer shall prepare and may, at its option, deliver Buyer’s calculation of the Roll-Forward Amount to the Seller Representative a statement of Bxxxx’s calculations of: (i) the Closing Net Working Capital; (ii) the Closing Date Cash; (iii) the Closing Date Debt; and (iv) the Closing Date Company Expenses (the “Adjustment CalculationsClosing Roll-Forward Amount Statement”), all determined in accordance with the Accounting Principles. Each Seller and the Buyer agree that the calculation of Closing Net Working Capital shall be prepared in a format consistent with the sample calculations, which have been included for illustrative purposes only, set forth on Schedule 1.3.
(c) Within thirty If Buyer delivers the Closing Roll-Forward Amount Statement, Buyer will, and will cause the Company to (30i) days assist Seller and its representatives in the review of the Buyer’s Closing Roll-Forward Amount Statement and provide Seller and its representatives with full access during normal business hours to the books, records (including work papers, schedules, memoranda and other documents), supporting data, facilities and employees of the Company for purposes of their review of the Closing Roll-Forward Amount Statement, and (ii) cooperate with Seller and its representatives in connection with such review, including providing on a timely basis all other information necessary or useful in connection with the review of the Closing Roll-Forward Amount Statement as is reasonably requested by Seller or its representatives. If Seller has any objections to the Closing Roll-Forward Amount Statement, Seller will deliver to Buyer a statement setting forth its objections thereto (an “Objections Statement”), which statement will identify in reasonable detail those items and amounts to which Seller objects (the “Disputed Items”). If an Objections Statement is not delivered to Buyer within 30 days after delivery of the Adjustment CalculationsClosing Roll-Forward Amount Statement, the Closing Roll-Forward Amount Statement as prepared by Buyer will be final, binding and non-appealable by the Parties. Seller Representative may deliver and Buyer will negotiate in good faith to resolve any Disputed Items and all such discussions related thereto will (unless otherwise agreed by Buyer and Seller) be governed by Rule 408 of the Federal Rules of Evidence and any applicable similar state rule, but if they do not reach a written notice final resolution within 30 days after the delivery of the Objections Statement to Buyer, Seller and Buyer will submit any unresolved Disputed Items to the Buyer Independent Accountant. In the event the Parties submit any unresolved Disputed Items to the Independent Accountant, each Party will submit its proposed version of any disagreement with the Closing Roll-Forward Amount Statement (each item contained within the Adjustment Calculations, if any (an a “Objection Proposed Roll-Forward Amount Statement”) (which in the case of each Party may be a statement that, with respect to the unresolved Disputed Items (but not with respect to any other items, except to the extent that such other items relate to the Disputed Items), is different than the Closing Roll-Forward Amount Statement initially submitted to Seller or the Objections Statement delivered to Buyer, as applicable) together with such supporting documentation as it deems appropriate, to the Independent Accountant within ten (10) days after the date on which such unresolved Disputed Items were submitted to the Independent Accountant for resolution. Seller and Buyer will use their respective commercially reasonable efforts to cause the Independent Accountant to resolve such dispute as soon as practicable, but in any event within 30 days after the date on which the Independent Accountant receives the Proposed Roll-Forward Amount Statements prepared by Seller and Buyer. The Independent Accountant will resolve such dispute by choosing, in its entirety, the Proposed Roll-Forward Amount Statement proposed by either Seller or Buyer, and will make no other resolution of such dispute (including by combining elements of the Proposed Roll-Forward Amount Statements submitted by both Parties). For each disputed itemThe Proposed Roll-Forward Amount Statement selected by the Independent Accountant will be final, binding and non-appealable by the Seller Representative shall include: (i) Parties. Each Party will bear its own costs and expenses in connection with the basis for any disagreement, (ii) the nature and amount resolution of such disagreement, and (iii) reasonable supporting documentation, information and calculations thereof for any disagreementdispute by the Independent Accountant. The Seller Representative shall be deemed to have agreed with all other items costs and amounts contained in expenses of the Adjustment Calculations that are not disputed in the Objection Statement. If the Seller Representative fails to properly deliver an Objection Statement, Sellers Independent Accountant will be deemed conclusively to have agreed to paid by the Adjustment Calculations, which shall be final and binding upon SellersParty whose Proposed Roll-Forward Amount Statement is not chosen by the Independent Accountant in its resolution of the dispute.
(d) If the Seller Representative delivers an Objection Statement, Buyer and the Seller Representative (on behalf of Sellers) shall, during the fifteen (15) days following the Seller Representative’s delivery of the Objection Statement, use their commercially reasonable, good faith efforts to reach agreement on the disputed items and amounts in order to determine, Roll-Forward Amount as may be required, the Adjustment Calculations, which shall not be more favorable to Buyer than the amount thereof shown in Buyer’s calculation delivered finally determined pursuant to Section 1.3(b) nor more favorable to Sellers than the amount thereof shown in the Objection Statement. If, during such period, the Seller Representative and the Buyer are unable to reach such agreement, they shall promptly thereafter cause BDO US LLP (or, if BDO US LLP declines to serve, such other independent accounting firm of national standing mutually agreed to by the parties1.3(c) (the “Accounting RefereeFinal Roll-Forward Amount”) to review this Agreement and the disputed items and amounts for the purpose of calculating the Adjustment Calculations. There shall be no ex parte communications between any party and the Accounting Referee. In making such calculation, the Accounting Referee shall consider only those still unresolved items and amounts in Buyer’s calculation of Adjustment Calculations as to which the Sellers duly objected in accordance with Section 1.3(c) and the Accounting Referee shall not consider any settlement offers exchanged between the parties. The Accounting Referee’s calculation shall not be more favorable to the Buyer is less than the amount thereof shown in the Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to the Sellers than the amount thereof shown in the Objection Statement. The Accounting Referee shall agree that between the time the Sellers delivered the Objection Statement to the Buyer and the date thereofEstimated Roll-Forward Amount, the Buyer and the Sellers may have exchanged certain proposals relating to the disputed items that were intended solely for purposes of facilitating settlement discussions and such proposals were confidential and were provided solely on the condition and understanding that such proposals would not be permitted to be disclosed in any court or arbitration hearingthen, including with respect to the Accounting Referee’s engagement in the dispute. The Accounting Referee will be instructed to disregard any evidence of such settlement proposals and negotiations in its consideration of the disputed matters. The Accounting Referee shall deliver to the Seller Representative and the Buyer, as promptly as practicable (but in any case, no later than thirty (30) within five business days from the date of engagement of the Accounting Referee or such longer period as the Accounting Referee may reasonably require), a report setting forth calculations of the disputed amounts, and its reasonable basis for each of its determinations. Absent manifest error, such report shall be final and binding upon the Sellers and the Buyer. The cost of such review and report shall be borne by the party whose determination of the Adjustment Calculations (as set forth in the statement submitted by the Buyer or in the Objection Statement), yielded the final Closing Payment farthest from that based upon the Adjustment Calculations determined by the Accounting Referee, or equally if the final Closing Payment based upon after the determination of the Accounting Referee is equidistant between Final Roll-Forward Amount, Seller will pay an amount equal to such shortfall to the determinations Company by wire transfer of immediately available funds to an account or accounts designated by the partiesCompany to Seller.
(e) Each party hereto shallIf the Final Roll-Forward Amount is greater than the Estimated Roll-Forward Amount, and shall cause their respective representatives tothen, use commercially reasonable efforts within five business days after the determination of the Final Roll-Forward Amount, the Company will pay an amount equal to cooperate and assist, such excess to the extent reasonably requested Seller by another party hereto, in the preparation wire transfer of the Adjustment Calculations and in the conduct of the review referred immediately available funds to in this Section 1.3, including the making available an account or accounts designated by Seller to the extent reasonably necessary of books, records, work papers Company.
(f) All payments required pursuant to Section 1.3(d) and appropriate personnel. If Buyer claims that Sellers have, or Sellers claims that Bxxxx has, as applicable, failed to comply with its obligation under this Section 1.3(e), it may refer such alleged non-compliance to the Accounting Referee. The Accounting Referee shall have the authority to determine if the respective party has complied with its obligations under this Section 1.3(e) and will be deemed to order any non-compliant party be adjustments for Tax purposes to comply with its obligations under this Section 1.3(e). Each party shall comply with any such determination the Closing Payment, unless otherwise required by such Accounting RefereeLaw.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (Borgwarner Inc)
Closing Payment Adjustment. (a) At least five As soon as reasonably practicable, but not later than ninety (590) Business Days prior to calendar days after the Closing Date, Sellers Company shall deliver to the Buyer (i) prepare a statement of the calculation of Member Equity as of the Closing Date together with any additional components contained in the determination of the Estimated Closing Payment (the “Closing EstimatesDate Statement”), including reasonable supporting documentation, setting forth its good faith estimate of: (i) the Closing Net Working Capital; and (ii) deliver the Closing Date Cash; (iii) Statement to Selling Member. The Closing Date Statement shall be prepared on a good faith basis and shall include a reconciliation of any differences between the calculations used in the determination of the Estimated Closing Payment and those set forth in the Closing Date Debt; and (iv) Statement, together with reasonable supporting materials used in the preparation of the Closing Date Company Expenses, all determined in accordance with the Accounting Principles. The Buyer shall be entitled to review, comment on, and request reasonable changes to the Closing Estimates and Sellers shall consider the Buyer’s proposed changes in good faith. If the parties are unable to reach agreement on any of the Buyer’s proposed changes, the Closing Estimates as proposed by Sellers shall control solely for the purposes of calculating the Closing Payment, and shall not limit or otherwise affect the Buyer’s remedies under this Agreement or otherwise or constitute an acknowledgment by the Buyer of the accuracy of the Closing Estimates or the accounting methods or policies utilized in the calculation thereofStatement.
(b) Within ninety (90) days following In connection with the Closing Date, Buyer shall prepare and deliver to the Seller Representative a statement review of Bxxxx’s calculations of: (i) the Closing Net Working Capital; (ii) the Closing Date Cash; (iii) Statement by Selling Member, Company shall provide Selling Member with prompt and reasonable access to the Closing Date Debt; books and (iv) records of the Closing Date Company Expenses (the “Adjustment Calculations”), all determined during normal business hours and in accordance a manner so as to not unreasonably interfere with the Accounting Principles. Each Seller operation of the Company and the Buyer agree that the calculation of Closing Net Working Capital shall be prepared in a format consistent with the sample calculations, which have been included for illustrative purposes only, set forth on Schedule 1.3its Subsidiaries.
(c) Within forty-five (45) calendar days after its receipt of the Closing Date Statement, Selling Member shall inform Company in writing either (i) that the Closing Date Statement is acceptable or (ii) of any good faith objection to the Closing Date Statement, setting forth in reasonable detail the basis for such objection and the specific adjustment to amounts, determinations and calculations set forth on the Closing Date Statement that Selling Member believes should be made (an “Objection Notice”). If Selling Member does not timely deliver an Objection Notice with respect to the Closing Date Statement within such forty-five (45) calendar day period, the Closing Date Statement will be final, conclusive and binding on the parties hereto. If an Objection Notice is timely delivered within such forty-five (45) calendar day period, Company and Selling Member shall negotiate in good faith to resolve each dispute raised therein (each, a “Disputed Item”) and any resolution by them as to any such Disputed Item shall be final, conclusive and binding. If Company and Selling Member, notwithstanding such good faith efforts, fail to resolve any Disputed Item within thirty (30) calendar days of the Buyer’s delivery of the Adjustment Calculations, the Seller Representative may deliver a written notice to the Buyer of any disagreement with each item contained within the Adjustment Calculations, if any (an “Objection Statement”). For each disputed item, the Seller Representative shall include: (i) the basis for any disagreement, (ii) the nature and amount of such disagreement, and (iii) reasonable supporting documentation, information and calculations thereof for any disagreement. The Seller Representative shall be deemed to have agreed with all other items and amounts contained in the Adjustment Calculations that are not disputed in the Objection Statement. If the Seller Representative fails to properly deliver an Objection Statement, Sellers will be deemed conclusively to have agreed to the Adjustment Calculations, which shall be final and binding upon Sellers.
(d) If the Seller Representative after Selling Member timely delivers an Objection Statement, Buyer and the Seller Representative (on behalf of Sellers) shall, during the fifteen (15) days following the Seller Representative’s delivery of the Objection Statement, use their commercially reasonable, good faith efforts to reach agreement on the disputed items and amounts in order to determine, as may be required, the Adjustment Calculations, which shall not be more favorable to Buyer than the amount thereof shown in Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to Sellers than the amount thereof shown in the Objection Statement. If, during such period, the Seller Representative and the Buyer are unable to reach such agreement, they shall promptly thereafter cause BDO US LLP (or, if BDO US LLP declines to serve, such other independent accounting firm of national standing mutually agreed to by the parties) (the “Accounting Referee”) to review this Agreement and the disputed items and amounts for the purpose of calculating the Adjustment Calculations. There shall be no ex parte communications between any party and the Accounting Referee. In making such calculation, the Accounting Referee shall consider only those still unresolved items and amounts in Buyer’s calculation of Adjustment Calculations as to which the Sellers duly objected in accordance with Section 1.3(c) and the Accounting Referee shall not consider any settlement offers exchanged between the parties. The Accounting Referee’s calculation shall not be more favorable to the Buyer than the amount thereof shown in the Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to the Sellers than the amount thereof shown in the Objection Statement. The Accounting Referee shall agree that between the time the Sellers delivered the Objection Statement to the Buyer and the date thereof, the Buyer and the Sellers may have exchanged certain proposals relating to the disputed items that were intended solely for purposes of facilitating settlement discussions and such proposals were confidential and were provided solely on the condition and understanding that such proposals would not be permitted to be disclosed in any court or arbitration hearing, including with respect to the Accounting Referee’s engagement in the dispute. The Accounting Referee will be instructed to disregard any evidence of such settlement proposals and negotiations in its consideration of the disputed matters. The Accounting Referee shall deliver to the Seller Representative and the Buyer, as promptly as practicable (but in any case, no later than thirty (30) days from the date of engagement of the Accounting Referee Notice or such longer period as the Accounting Referee Parties mutually agree in writing, then Company and Selling Member shall jointly engage [●] or, if such firm is unable or unwilling to act, such other nationally recognized, mutually agreeable independent public accounting firm capable as serving as an accounting expert with relevant experience in resolving such disputes, which firm is not the regular auditing firm of Company or Selling Member (the “Referral Firm”), to resolve only any remaining Disputed Items as soon as practicable thereafter (but in any event, within thirty (30) calendar days after engagement of the Referral Firm or such longer period as the Referral Firm may reasonably require), a report setting which resolution must be in writing and set forth calculations in reasonable detail the basis therefor. All Disputed Items that are resolved between the parties in writing or are determined by the Referral Firm will be final, conclusive and binding on the parties, absent manifest error. Upon the agreement of the disputed amountsparties with respect to all Disputed Items, the decision of the Referral Firm with respect to all Disputed Items or Selling Member’s failure to deliver an Objection Notice to Company within the 45-day period referred to above, the Closing Date Statement, as it may be adjusted (the “Final Closing Date Statement”), shall be final, conclusive and binding against the parties hereto.
(d) In resolving any Disputed Item, the Referral Firm (i) shall act as an expert and not as an arbitrator, (ii) shall be bound by the provisions of this Section 5, (iii) may not assign a value to any Disputed Item greater than the greatest value claimed for such Disputed Item or less than the smallest value for such Disputed Item claimed by either Company in the Closing Date Statement or Selling Member in the Objection Notice, (iv) shall limit its decision to each Disputed Item and (v) shall make its determination based solely on presentations by Company and Selling Member which are in accordance with the guidelines and procedures set forth in this Agreement (i.e. not on the basis of independent review). For purposes of complying with this Section 5, Company and Selling Member shall furnish to each other and to the Referral Firm such work papers and other documents and information relating to the Disputed Items as the Referral Firm may require and that are available to the party (or its independent public accountants) from whom such documents or information are requested. The Referral Firm shall deliver its determination of the Disputed Items to Company and Selling Member in writing, together with a reasonable basis for its determination of each Disputed Item. Neither Company nor Selling Member shall engage in ex parte communications with the Referral Firm with respect to any Disputed Item until the Referral Firm issues its final determination in accordance with this Section 5(d). The fees and expenses of the Referral Firm incurred pursuant to this Section 5(d) shall be allocated between Company and Selling Member in inverse proportion to their success on the Disputed Items, i.e. (A) Company shall be responsible for that portion of the fees and expenses multiplied by a fraction, the numerator of which is the aggregate dollar value of the Disputed Items submitted to the Referral Firm that are resolved against Company (as finally determined by the Referral Firm) and the denominator of which is the total dollar value of the Disputed Items so submitted and (B) Selling Member shall be responsible for the remaining amount of fees and expenses. In the event of any dispute regarding such allocation, the Referral Firm shall determine the allocation of its determinations. Absent manifest errorfees and expenses as between Company and Selling Member in accordance with such allocation methodology, such report shall determination to be final and binding upon on both Company and Selling Member. Except as otherwise set forth in this Section 5(d), the Sellers fees and expenses of Selling Member incurred in connection with the Buyer. The cost of such review Closing Date Statement and report any Disputed Items shall be borne by Selling Member, and the party whose determination fees and expenses of Company incurred in connection with the Adjustment Calculations (as set forth in the statement submitted Closing Date Statement and any Disputed Items shall be borne by the Buyer or in the Objection Statement), yielded the final Closing Payment farthest from that based upon the Adjustment Calculations determined by the Accounting Referee, or equally if the final Closing Payment based upon the determination of the Accounting Referee is equidistant between the determinations of the partiesCompany.
(e) Each party hereto shallPromptly after their receipt of the Final Closing Date Statement, Selling Member and the Company shall cause their respective representatives tocompute the difference, use commercially reasonable efforts if any, between the Estimated Closing Payment and the Final Closing Payment. If the Estimated Closing Payment is less than the Final Closing Payment, then the Company shall pay, promptly and in any event within three (3) business days, an amount in cash equal to cooperate such deficiency to Selling Member by wire transfer of immediately available funds to an account designated by Selling Member. If the Estimated Closing Payment exceeds the Final Closing Payment, then Selling Member shall pay, promptly and assistin any event within three (3) business days, an amount in cash equal to such deficiency to the extent reasonably requested Company by another party hereto, in wire transfer of immediately available funds to an account designated by the preparation of the Adjustment Calculations and in the conduct of the review referred to in this Section 1.3, including the making available to the extent reasonably necessary of books, records, work papers and appropriate personnel. If Buyer claims that Sellers have, or Sellers claims that Bxxxx has, as applicable, failed to comply with its obligation under this Section 1.3(e), it may refer such alleged non-compliance to the Accounting Referee. The Accounting Referee shall have the authority to determine if the respective party has complied with its obligations under this Section 1.3(e) and to order any non-compliant party to comply with its obligations under this Section 1.3(e). Each party shall comply with any such determination by such Accounting RefereeCompany.
Appears in 1 contract
Closing Payment Adjustment. If any Adjustable Financial Amount as set forth in the Final Closing Statement differs from the estimated amounts thereof set forth in the Estimated Closing Statements, the Adjusted Equity Value shall be recalculated and using such final figures in lieu of such estimated figures:
(ai) At least If the Adjusted Equity Value calculated as set forth in Section 2.3 using the Adjustable Financial Amounts as set forth in the Final Closing Statement is greater than or equal to the Adjusted Equity Value calculated pursuant to Section 2.5(b) (such difference a “Purchase Price Underpayment”), then Buyer shall be required to pay the Company Sellers, within five (5) Business Days prior following the final determination of the Adjusted Equity Value, an amount in cash equal to such Purchase Price Underpayment. Such amount shall be allocated among the Closing Date, Company Sellers shall deliver based on their respective Adjustment Pro Rata Portion and paid by wire transfer of immediately available funds to an account of such Company Seller designated in writing by the Buyer a statement (the “Closing Estimates”), including reasonable supporting documentation, setting forth its good faith estimate of: (i) the Closing Net Working CapitalSellers’ Representative to Buyer; and
(ii) the Closing Date Cash; (iii) the Closing Date Debt; and (iv) the Closing Date Company Expenses, all determined in accordance with the Accounting Principles. The Buyer shall be entitled to review, comment on, and request reasonable changes to the Closing Estimates and Sellers shall consider the Buyer’s proposed changes in good faith. If the parties are unable to reach agreement on any of the Buyer’s proposed changes, the Closing Estimates Adjusted Equity Value calculated as proposed by Sellers shall control solely for the purposes of calculating the Closing Payment, and shall not limit or otherwise affect the Buyer’s remedies under this Agreement or otherwise or constitute an acknowledgment by the Buyer of the accuracy of the Closing Estimates or the accounting methods or policies utilized in the calculation thereof.
(b) Within ninety (90) days following the Closing Date, Buyer shall prepare and deliver to the Seller Representative a statement of Bxxxx’s calculations of: (i) the Closing Net Working Capital; (ii) the Closing Date Cash; (iii) the Closing Date Debt; and (iv) the Closing Date Company Expenses (the “Adjustment Calculations”), all determined in accordance with the Accounting Principles. Each Seller and the Buyer agree that the calculation of Closing Net Working Capital shall be prepared in a format consistent with the sample calculations, which have been included for illustrative purposes only, set forth on Schedule 1.3.
(c) Within thirty (30) days of in Section 2.3 using the Buyer’s delivery of the Adjustment Calculations, the Seller Representative may deliver a written notice to the Buyer of any disagreement with each item contained within the Adjustment Calculations, if any (an “Objection Statement”). For each disputed item, the Seller Representative shall include: (i) the basis for any disagreement, (ii) the nature and amount of such disagreement, and (iii) reasonable supporting documentation, information and calculations thereof for any disagreement. The Seller Representative shall be deemed to have agreed with all other items and amounts contained in the Adjustment Calculations that are not disputed in the Objection Statement. If the Seller Representative fails to properly deliver an Objection Statement, Sellers will be deemed conclusively to have agreed to the Adjustment Calculations, which shall be final and binding upon Sellers.
(d) If the Seller Representative delivers an Objection Statement, Buyer and the Seller Representative (on behalf of Sellers) shall, during the fifteen (15) days following the Seller Representative’s delivery of the Objection Statement, use their commercially reasonable, good faith efforts to reach agreement on the disputed items and amounts in order to determine, as may be required, the Adjustment Calculations, which shall not be more favorable to Buyer than the amount thereof shown in Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to Sellers than the amount thereof shown in the Objection Statement. If, during such period, the Seller Representative and the Buyer are unable to reach such agreement, they shall promptly thereafter cause BDO US LLP (or, if BDO US LLP declines to serve, such other independent accounting firm of national standing mutually agreed to by the parties) (the “Accounting Referee”) to review this Agreement and the disputed items and amounts for the purpose of calculating the Adjustment Calculations. There shall be no ex parte communications between any party and the Accounting Referee. In making such calculation, the Accounting Referee shall consider only those still unresolved items and amounts in Buyer’s calculation of Adjustment Calculations as to which the Sellers duly objected in accordance with Section 1.3(c) and the Accounting Referee shall not consider any settlement offers exchanged between the parties. The Accounting Referee’s calculation shall not be more favorable to the Buyer than the amount thereof shown in the Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to the Sellers than the amount thereof shown in the Objection Statement. The Accounting Referee shall agree that between the time the Sellers delivered the Objection Statement to the Buyer and the date thereof, the Buyer and the Sellers may have exchanged certain proposals relating to the disputed items that were intended solely for purposes of facilitating settlement discussions and such proposals were confidential and were provided solely on the condition and understanding that such proposals would not be permitted to be disclosed in any court or arbitration hearing, including with respect to the Accounting Referee’s engagement in the dispute. The Accounting Referee will be instructed to disregard any evidence of such settlement proposals and negotiations in its consideration of the disputed matters. The Accounting Referee shall deliver to the Seller Representative and the Buyer, as promptly as practicable (but in any case, no later than thirty (30) days from the date of engagement of the Accounting Referee or such longer period as the Accounting Referee may reasonably require), a report setting forth calculations of the disputed amounts, and its reasonable basis for each of its determinations. Absent manifest error, such report shall be final and binding upon the Sellers and the Buyer. The cost of such review and report shall be borne by the party whose determination of the Adjustment Calculations (Adjustable Financial Amounts as set forth in the statement submitted by Final Closing Statement is less than the Buyer or in the Objection StatementAdjusted Equity Value calculated pursuant to Section 2.5(b) (such difference, a “Purchase Price Overpayment”), yielded then Buyer shall be paid such Purchase Price Overpayment, which shall be satisfied (A) first, from the final Closing Payment farthest Holdback Consideration (initially from that based upon the Adjustment Calculations determined by the Accounting Referee, or equally if the final Closing Payment based upon the determination of the Accounting Referee is equidistant between the determinations of the parties.
(e) Each party hereto shall, 1st Anniversary Holdback Shares and shall cause their respective representatives to, use commercially reasonable efforts to cooperate and assistthen, to the extent reasonably requested by another party heretosuch Purchase Price Overpayment is greater than the 1st Anniversary Holdback Shares Amount available, in from the preparation of the Adjustment Calculations 2nd Anniversary Holdback Shares), and in the conduct of the review referred to in this Section 1.3(B) second, including the making available if and to the extent reasonably necessary the Purchase Price Overpayment is greater than the Holdback Consideration available, from each Company Seller, severally, in accordance with each such Company Seller’s respective Adjustment Pro Rata Portion; provided, however, that if the Purchase Price Overpayment is any amount greater than $1,000,000, then Buyer may recover the Purchase Price Overpayment directly from each Company Seller, severally, in accordance with each such Company Seller’s respective Adjustment Pro Rata Portion, without any requirement to first recover any amounts of books, records, work papers and appropriate personnelthe Purchase Price Overpayment from the Holdback Consideration. If Any amounts directly paid to Buyer claims that Sellers have, or Sellers claims that Bxxxx has, as applicable, failed by a Company Seller pursuant to comply with its obligation under this Section 1.3(e), it may refer such alleged non-compliance 2.5(f)(ii) shall be made by wire transfer of immediately available funds to the Accounting Referee. The Accounting Referee shall have the authority to determine if the respective party has complied with its obligations under this Section 1.3(e) and to order any non-compliant party to comply with its obligations under this Section 1.3(e). Each party shall comply with any such determination by such Accounting RefereeBuyer.
Appears in 1 contract
Samples: Acquisition Agreement (Realpage Inc)
Closing Payment Adjustment. (aSubject to the provisions of Section 7.5(a) At least hereof, within five (5) Business Days prior after the final determination of the Final Balance Sheet pursuant to Section 1.6(b) of this Agreement, the Closing DatePayment will be adjusted (the amount of any such adjustment, Sellers shall deliver to the Buyer a statement (the “Closing EstimatesPayment Adjustment”)) and the Parent, including reasonable supporting documentationthe Company Stockholders or the Escrow Agent, setting forth its good faith estimate of: as the case may be, will make whatever payments to each other as are necessary, if any, such that the Closing Payment is what it would have been had (i) the Closing Net Working CapitalEstimated Debt equaled the Debt reflected on such Final Balance Sheet; and (ii) the Estimated Working Capital equaled the Closing Date Cash; Working Capital reflected on such Final Balance Sheet. In the event a Closing Payment Adjustment becomes payable to the Parent hereunder, the Parent shall seek such payment (i) first out of the Escrow Shares (using the Parent Share Price calculated as of the Closing Date), (ii) to the extent the Escrow Shares is insufficient to pay in full such Closing Payment Adjustment, out of any other amounts of the Aggregate Merger Consideration payable to the Company Stockholders hereunder, whether by right of setoff (as contemplated under Section 7.5(a) and Section 8.8) or otherwise or (iii) the Closing Date Debt; only if (i) and (ivii) are insufficient, from the Closing Date Company ExpensesStockholders. Notwithstanding the foregoing sentence, all determined in accordance with if legal counsel for the Accounting Principles. The Buyer shall be entitled to review, comment on, and request reasonable changes Stockholder Representative determines that an adjustment to the Closing Estimates and Sellers shall consider the Buyer’s proposed changes in good faith. If the parties are unable to reach agreement on any method of the Buyer’s proposed changes, the Closing Estimates as proposed by Sellers shall control solely for the purposes of calculating the Closing Payment, and shall not limit or otherwise affect the Buyer’s remedies under this Agreement or otherwise or constitute an acknowledgment by the Buyer of the accuracy payment of the Closing Estimates or Payment Adjustment is necessary in order to preserve the accounting methods or policies utilized treatment of the Merger as a “reorganization” under Section 368 of the Code, the Stockholder Representative shall have the option (to be exercised in the calculation thereof.
(bwriting delivered to Parent) Within ninety (90) days following the of tendering Cash in payment of a Closing Date, Buyer shall prepare and deliver Payment Adjustment to the Seller Representative a statement of Bxxxx’s calculations of: (i) the Closing Net Working Capital; (ii) the Closing Date Cash; (iii) the Closing Date Debt; and (iv) the Closing Date Company Expenses (the “Adjustment Calculations”), all determined in accordance with the Accounting Principles. Each Seller and the Buyer agree that the calculation of Closing Net Working Capital shall be prepared in a format consistent with the sample calculations, which have been included for illustrative purposes only, set forth on Schedule 1.3.
(c) Within paid to Parent by wire transfer within thirty (30) days of after the Buyer’s delivery of the Adjustment Calculations, the Seller Representative may deliver a written notice to the Buyer of any disagreement with each item contained within the Adjustment Calculations, if any (an “Objection Statement”). For each disputed item, the Seller Representative shall include: (i) the basis for any disagreement, (ii) the nature and amount of such disagreement, and (iii) reasonable supporting documentation, information and calculations thereof for any disagreement. The Seller Representative shall be deemed to have agreed with all other items and amounts contained in the Adjustment Calculations that are not disputed in the Objection Statement. If the Seller Representative fails to properly deliver an Objection Statement, Sellers will be deemed conclusively to have agreed to the Adjustment Calculations, which shall be Final Balance Sheet has become final and binding upon Sellers.
(d) If the Seller Representative delivers an Objection Statement, Buyer and the Seller Representative (on behalf of Sellers) shall, during the fifteen (15) days following the Seller Representative’s delivery of the Objection Statement, use their commercially reasonable, good faith efforts to reach agreement on the disputed items and amounts in order to determine, as may be required, the Adjustment Calculations, which shall not be more favorable to Buyer than the amount thereof shown in Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to Sellers than the amount thereof shown in the Objection Statementall Parties. If, during such period, the Seller Representative and the Buyer are unable to reach such agreement, they shall promptly thereafter cause BDO US LLP (or, if BDO US LLP declines to serve, such other independent accounting firm of national standing mutually agreed to by the parties) (the “Accounting Referee”) to review this Agreement and the disputed items and amounts for the purpose of calculating the Adjustment Calculations. There shall be no ex parte communications between any party and the Accounting Referee. In making such calculation, the Accounting Referee shall consider only those still unresolved items and amounts in Buyer’s calculation of Adjustment Calculations as to which the Sellers duly objected in accordance with Section 1.3(c) and the Accounting Referee shall not consider any settlement offers exchanged between the parties. The Accounting Referee’s calculation shall not be more favorable to the Buyer than the amount thereof shown in the Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to the Sellers than the amount thereof shown in the Objection Statement. The Accounting Referee shall agree that between the time the Sellers delivered the Objection Statement to the Buyer and the date thereof, the Buyer and the Sellers may have exchanged certain proposals relating to the disputed items that were intended solely for purposes of facilitating settlement discussions and such proposals were confidential and were provided solely on the condition and understanding that such proposals would not be permitted to be disclosed in any court or arbitration hearing, including with respect to the Accounting Referee’s engagement in the dispute. The Accounting Referee will be instructed to disregard any evidence of such settlement proposals and negotiations in its consideration of the disputed matters. The Accounting Referee shall deliver to the Seller Representative and the Buyer, as promptly as practicable (but in any case, no later than thirty (30) days from the date of engagement of the Accounting Referee or such longer period as the Accounting Referee may reasonably require), a report setting forth calculations of the disputed amounts, and its reasonable basis for each of its determinations. Absent manifest error, such report shall be final and binding upon the Sellers and the Buyer. The cost of such review and report shall be borne by the party whose determination of the Adjustment Calculations (as set forth in the statement submitted by the Buyer or in the Objection Statement), yielded the final Closing Payment farthest from that based upon the Adjustment Calculations determined by the Accounting Referee, or equally if the final Closing Payment based upon the determination of the Accounting Referee is equidistant between the determinations of the parties.
(e) Each party hereto shall, and shall cause their respective representatives to, use commercially reasonable efforts to cooperate and assist, to the extent reasonably requested by another party hereto, in the preparation of the Adjustment Calculations and in the conduct of the review referred to in this Section 1.3, including the making available to the extent reasonably necessary of books, records, work papers and appropriate personnel. If Buyer claims that Sellers have, or Sellers claims that Bxxxx has, as applicable, failed to comply with its obligation under this Section 1.3(e), it may refer such alleged non-compliance to the Accounting Referee. The Accounting Referee shall have the authority to determine if the respective party has complied with its obligations under this Section 1.3(e) and to order any non-compliant party to comply with its obligations under this Section 1.3(e). Each party shall comply with any such determination by such Accounting Referee.AGREEMENT AND PLAN OF MERGER
Appears in 1 contract
Samples: Merger Agreement (Tvi Corp)
Closing Payment Adjustment. (a) At least five Within one hundred twenty (5120) Business Days prior to days after the Closing Date, Sellers Parent shall prepare and deliver to Buyer an unaudited balance sheet of the Buyer Business as of the Closing (the “Closing Balance Sheet”) and a statement (the “Closing EstimatesWorking Capital Statement”), including reasonable supporting documentation, setting forth its good faith estimate of: ) of Parent’s calculation of (i) the Closing Net Working Capital; Capital and (ii) the amount, if any, by which the Net Working Capital is greater than Target Net Working Capital or the amount, if any, by which Target Net Working Capital is less than Net Working Capital (in either case, the “Net Working Capital Adjustment”, and as finally determined pursuant to Section 1.4(b), the “Final Closing Date Cash; (iii) the Closing Date Debt; and (iv) the Closing Date Company Expenses, all determined Adjustment”). The Working Capital Statement shall be prepared in accordance with GAAP and the Accounting Principles. The Buyer shall be entitled to review, comment on, provisions of this Section 1.4 and request reasonable changes to the Closing Estimates and Sellers shall consider the Buyer’s proposed changes in good faith. If the parties are unable to reach agreement on any of the Buyer’s proposed changes, the Closing Estimates as proposed by Sellers shall control solely for the purposes of calculating the Closing Payment, and shall not limit or otherwise affect the Buyer’s remedies under this Agreement or otherwise or constitute an acknowledgment by the Buyer of the accuracy of the Closing Estimates or a manner consistent with the accounting methods or policies utilized principles reflected in the calculation thereofSchedule 1.4.
(b) Within ninety Until the Net Working Capital is finally determined pursuant to this Section 1.4, Buyer may review the work papers used in the preparation of the Working Capital Statement and Buyer’s calculation of the Net Working Capital and Parent shall make available to Buyer and its accountants all such work papers or other documents and information related thereto as may be reasonably requested by Buyer or its accountants, subject to the execution by Buyer and its accountants of any non-disclosure agreement reasonably requested by Parent. Parent’s calculation of the Net Working Capital delivered to Buyer shall become final for all purposes of this Agreement unless, within sixty (9060) days following after the Closing Datereceipt of such calculation by Buyer, Buyer shall prepare and deliver Parent receives written notice of Buyer’s objections to Parent’s calculation of the Seller Representative a statement of Bxxxx’s calculations of: (i) the Closing Net Working Capital; (ii) Capital along with the Closing Date Cash; (iii) determination of Buyer of the Closing Date Debt; and (iv) the Closing Date Company Expenses Net Working Capital Adjustment (the “Adjustment CalculationsObjection Notice”), all determined in accordance with the Accounting Principles. Each Seller and the Buyer agree that the calculation of Closing Net Working Capital shall be prepared in a format consistent with the sample calculationsterms of Section 1.4 and a detailed explanation as to the reasons for such objections. If Buyer properly delivers an Objection Notice, which have been included for illustrative purposes only, set forth on Schedule 1.3.
(c) Within Buyer and Parent shall attempt in good faith to resolve the objections within thirty (30) days of the Buyer’s delivery of the Adjustment Calculations, the Seller Representative may deliver a written notice to the Buyer of any disagreement with each item contained within the Adjustment Calculations, if any (an “Objection Statement”). For each disputed item, the Seller Representative shall include: (i) the basis for any disagreement, (ii) the nature and amount of such disagreement, and (iii) reasonable supporting documentation, information and calculations thereof for any disagreement. The Seller Representative shall be deemed to have agreed with all other items and amounts contained in the Adjustment Calculations that are not disputed in the Objection Statement. If the Seller Representative fails to properly deliver an Objection Statement, Sellers will be deemed conclusively to have agreed to the Adjustment Calculations, which shall be final and binding upon Sellers.
(d) If the Seller Representative delivers an Objection Statement, Buyer and the Seller Representative (on behalf of Sellers) shall, during the fifteen (15) days following the Seller Representative’s delivery after receipt of the Objection Statement, use their commercially reasonable, good faith efforts to reach agreement on Notice. If Buyer and Parent resolve the disputed items and amounts in order to determine, as may be required, the Adjustment Calculations, which shall not be more favorable to Buyer than the amount thereof shown in Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to Sellers than the amount thereof shown in the Objection Statement. If, during such objections within that time period, the Seller Representative and the Buyer are unable to reach such agreement, they shall promptly thereafter cause BDO US record the resolution in a writing signed by each of them, and the resolution shall be final, conclusive, binding and non-appealable on each of them. If Buyer and Parent are unable to agree on the Net Working Capital and the Net Working Capital Adjustment within thirty (30) days after such Objection Notice is delivered (or such longer period of time as the parties may mutually agree), Buyer and Parent shall submit such dispute to Deloitte & Touche LLP (oror if Deloitte & Touche LLP is unwilling or unable to act in such capacity, if BDO US LLP declines to serve, then such other nationally recognized independent accounting firm of national standing firm, acting through such an office, as is mutually agreed agreeable to by the parties) (the “Accounting RefereeIndependent Auditor”) to review this Agreement and the disputed items and amounts for Independent Auditor shall make the purpose final determination of calculating the Adjustment Calculations. There shall be no ex parte communications between any party Net Working Capital and the Accounting RefereeNet Working Capital Adjustment. In making such calculationSubmissions to the Independent Auditor must be written and delivered to Buyer and Parent. Buyer and Parent shall use reasonable best efforts to cause the Independent Auditor to resolve all disagreements as soon as practicable. The Independent Auditor shall act as a neutral arbitrator and, to the Accounting Referee extent that GAAP leaves room for discretion, shall exercise that discretion independently, but within the range of differences between the parties. Buyer and Parent shall cause the Independent Auditor to consider only those still unresolved items and amounts in Buyerthe Working Capital Statement set forth in the Objection Notice which Buyer and Parent are unable to resolve. In resolving any disputed item, the Independent Auditor may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. The Independent Auditor’s calculation of Adjustment Calculations as to which the Sellers duly objected determination shall be made in accordance with Section 1.3(c) and the Accounting Referee shall not consider any settlement offers exchanged between provisions hereof, including the partiesdefinition of Net Working Capital included herein. The Accounting Referee’s calculation Independent Auditor shall not be more favorable revise the Working Capital Statement as appropriate to the Buyer than the amount thereof shown in the Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to the Sellers than the amount thereof shown in the Objection Statement. The Accounting Referee shall agree that between the time the Sellers delivered the Objection Statement to the Buyer and the date thereof, the Buyer and the Sellers may have exchanged certain proposals relating to the disputed items that were intended solely for purposes of facilitating settlement discussions and such proposals were confidential and were provided solely on the condition and understanding that such proposals would not be permitted to be disclosed in any court or arbitration hearing, including with respect to the Accounting Referee’s engagement in the dispute. The Accounting Referee will be instructed to disregard any evidence of such settlement proposals and negotiations in reflect its consideration resolution of the disputed matters, which resolution shall be final, conclusive, binding and non-appealable on the parties, and may be enforced in a court of competent jurisdiction. The Accounting Referee Working Capital Statement, in the form that is final, conclusive, binding and non-appealable on the parties in accordance with the terms of this Section 1.4(b), is referred to in this Agreement as the “Final Working Capital Statement.” The determination by the Independent Auditor of the Net Working Capital and the Final Closing Adjustment shall deliver be final, conclusive, binding and non-appealable on the parties. Parent and Buyer shall each pay one-half of the Independent Auditor’s fees and expenses in connection with this Section 1.4(b); provided, however, if the Independent Auditor determines all issues entirely in favor of either Parent or Buyer, then (i) the party in whose favor the award is made shall also be awarded its own reasonable costs incurred in connection with the dispute resolution, which award shall be paid by the party against whom the award is made, and (ii) the Independent Auditor’s fees and expenses will be paid by the party against whom the award is made.
(i) If the Net Working Capital as determined pursuant to Section 1.4(b) is greater than the Target Net Working Capital, then Buyer shall pay Seller an amount equal to such excess, and (ii) if the Target Net Working Capital is greater than the Net Working Capital as determined pursuant to Section 1.4(b), then Seller shall pay Buyer an amount equal to the amount of such excess; provided, however, in the case of clauses (i) or (ii), if the absolute value of the difference between Net Working Capital and Target Net Working Capital is less than or equal to Three Hundred Thousand Dollars ($300,000), then there shall be no payment by Seller Representative and the or Buyer, as promptly as practicable (but in any casethe case may be, no later than thirty (30required under this Section 1.4(c). Any payment required pursuant to this Section 1.4(c) days from the date of engagement of the Accounting Referee or such longer period as the Accounting Referee may reasonably require), a report setting forth calculations of the disputed amounts, and its reasonable basis for each of its determinations. Absent manifest error, such report shall be final and binding upon the Sellers and the Buyer. The cost made within three (3) business days of such review and report shall be borne by the party whose determination of the Adjustment Calculations (as set forth in the statement submitted by the Buyer or in the Objection Statement), yielded the final Closing Payment farthest from that based upon the Adjustment Calculations determined by the Accounting Referee, or equally if the final Closing Payment based upon the determination of the Accounting Referee is equidistant between Final Closing Adjustment, by wire transfer of immediately available funds, as directed by the determinations of recipient in writing, accompanied by interest on such amount from the parties.
(e) Each party hereto shall, and shall cause their respective representatives to, use commercially reasonable efforts to cooperate and assist, Closing Date to the extent reasonably requested by another party hereto, in date of payment computed at the preparation rate of the Adjustment Calculations and in the conduct of the review referred to in this Section 1.3, including the making available to the extent reasonably necessary of books, records, work papers and appropriate personnel. If Buyer claims that Sellers have, or Sellers claims that Bxxxx has, as applicable, failed to comply with its obligation under this Section 1.3(e), it may refer such alleged non-compliance to the Accounting Referee. The Accounting Referee shall have the authority to determine if the respective party has complied with its obligations under this Section 1.3(efive percent (5.00%) and to order any non-compliant party to comply with its obligations under this Section 1.3(e). Each party shall comply with any such determination by such Accounting Refereeper annum.
Appears in 1 contract
Samples: Stock Purchase Agreement (Gentiva Health Services Inc)
Closing Payment Adjustment. (a) At least five (5) Business Days prior to the Closing Date, Sellers shall deliver to the Buyer a statement (the “Closing Estimates”), including reasonable supporting documentation, setting forth its good faith estimate of: (i) the Closing Net Working Capital; (ii) the Closing Date Cash; (iii) the Closing Date Debt; and (iv) the Closing Date Company Expenses, all determined in accordance with the Accounting Principles. The Buyer shall be entitled to review, comment on, and request reasonable changes to the Closing Estimates and Sellers shall consider the Buyer’s proposed changes in good faith. If the parties are unable to reach agreement on any of the Buyer’s proposed changes, the Closing Estimates as proposed by Sellers shall control solely for the purposes of calculating the Closing Payment, and shall not limit or otherwise affect the Buyer’s remedies under this Agreement or otherwise or constitute an acknowledgment by the Buyer of the accuracy of the Closing Estimates or the accounting methods or policies utilized in the calculation thereof.
(b) Within ninety (90) 90 days following after the Closing Date, Buyer shall prepare and deliver to the Seller Representative a statement of Bxxxx’s calculations of: (i) a statement (the “Statement”), setting forth Adjusted Working Capital as of the close of business on the business day immediately preceding the Closing Net Date, except as otherwise provided for in the proviso to Section 2.04(i) (“Closing Adjusted Working Capital; ”) and (ii) an updated schedule setting forth the Closing Date Cash; (iii) final amounts payable pursuant to the Closing Date Debt; and (iv) the Closing Date Company Expenses (the “Adjustment Calculations”), all determined in accordance with the Accounting Principles. Each Seller and the Buyer agree that the calculation of Closing Net Working Capital shall be prepared in a format consistent with the sample calculations, which have been included for illustrative purposes only, retention awards set forth on Schedule 1.38.01(o)(ii) based on the closing price of U.S. Seller’s common stock on the New York Stock Exchange as of the Closing Date, such schedule to be used to determine whether any adjustment to the Bonus Adjustment Amount is required, and such adjusted value is referred to herein as the “Final Bonus Adjustment Amount”.
(ca) Within thirty (30) days of the Buyer’s delivery of the Adjustment Calculations, the Seller Representative may deliver a written notice to the Buyer of any disagreement with each item contained within the Adjustment Calculations, if any (an “Objection Statement”). For each disputed item, the Seller Representative The Statement shall include: (i) the basis for any disagreement, (ii) the nature and amount of such disagreement, and (iii) reasonable supporting documentation, information and calculations thereof for any disagreement. The Seller Representative shall be deemed to have agreed with all other items and amounts contained in the Adjustment Calculations that are not disputed in the Objection Statement. If the Seller Representative fails to properly deliver an Objection Statement, Sellers will be deemed conclusively to have agreed to the Adjustment Calculations, which shall be become final and binding upon Sellersthe parties on the 90th day following delivery thereof, unless Seller gives written notice of its disagreement with the Statement (a “Notice of Disagreement”) to Buyer prior to such date. Any Notice of Disagreement shall (i) specify in reasonable detail the nature of any disagreement so asserted and (ii) only include disagreements based on mathematical errors or based on Closing Adjusted Working Capital not being calculated in accordance with this Section 2.04. If a Notice of Disagreement is received by Buyer during such 90-day period, then the Statement (as revised in accordance with this sentence) shall become final and binding upon Seller and Buyer on the earlier of (A) the date Seller and Buyer resolve in writing any differences they have with respect to the matters specified by Seller in the Notice of Disagreement and (B) the date any disputed matters are finally resolved by the Accounting Firm (as defined below). During the 30-day period following the delivery of a Notice of Disagreement, Seller and Buyer shall seek in good faith to resolve any differences that they may have with respect to the matters specified by Seller in the Notice of Disagreement. During such period Buyer and its independent accountants shall have access to the working papers of Seller’s independent accountants prepared in connection with the Notice of Disagreement. At the end of such 30-day period, Seller and Buyer shall submit to an independent accounting firm (the “Accounting Firm”) for resolution any and all matters that were included by Seller in the Notice of Disagreement and that remain in dispute. The Accounting Firm shall be Deloitte & Touche LLP or, if such firm is unable or unwilling to act, such other nationally recognized independent public accounting firm as shall be agreed upon in writing by Seller and Buyer (such agreement not to be unreasonably withheld).
(db) If Seller and Buyer shall use reasonable efforts to cause the Accounting Firm to render a written decision resolving the matters submitted to it within 30 days of such submission. In resolving matters submitted to it pursuant to Section 2.04(b), the Accounting Firm (i) shall base its decision based solely on written submissions by Seller Representative delivers an Objection Statement, and Buyer and the Seller Representative their respective representatives and not by independent review and (on behalf of Sellersii) shallwith respect to each matter submitted to it, during the fifteen (15) days following the Seller Representative’s delivery of the Objection Statement, use their commercially reasonable, good faith efforts to reach agreement on the disputed items and amounts in order to determine, as may be required, the Adjustment Calculations, which shall not be resolve such matter in a manner that is more favorable to Buyer than the amount thereof shown in Buyer’s calculation delivered pursuant to Section 1.3(b) nor Statement or more favorable to Sellers Seller than the amount thereof shown Notice of Disagreement.
(c) The scope of the disputes to be resolved by the Accounting Firm shall be limited to whether there were mathematical errors in the Objection StatementStatement or whether the Statement was prepared in accordance with the Adjusted Accounting Principles with respect to the matters submitted for resolution to the Accounting Firm. If, during such period, Any disputes not within the Seller Representative and the Buyer are unable scope of disputes to reach such agreement, they shall promptly thereafter cause BDO US LLP (or, if BDO US LLP declines to serve, such other independent accounting firm of national standing mutually agreed to be resolved by the partiesAccounting Firm pursuant to this Section 2.04(d) (as well as any disputes about the “scope of disputes to be resolved by the Accounting Referee”Firm pursuant to this Section 2.04(d) to review this Agreement and the disputed items and amounts for the purpose of calculating the Adjustment Calculations. There shall be no ex parte communications between any party and the Accounting Referee. In making such calculation, the Accounting Referee shall consider only those still unresolved items and amounts in Buyer’s calculation of Adjustment Calculations as to which the Sellers duly objected resolved in accordance with Section 1.3(c11.12.
(d) and The final determination by the Accounting Referee shall not consider any settlement offers exchanged between Firm of the parties. The Accounting Referee’s calculation shall not be more favorable matters submitted to the Buyer than the amount thereof shown in the Buyer’s calculation delivered it pursuant to Section 1.3(b2.04(b) nor more favorable to the Sellers than the amount thereof shown shall: (i) be in the Objection Statement. The Accounting Referee shall agree that between the time the Sellers delivered the Objection Statement to the Buyer and the date thereof, the Buyer and the Sellers may have exchanged certain proposals relating to the disputed items that were intended solely for purposes of facilitating settlement discussions and such proposals were confidential and were provided solely on the condition and understanding that such proposals would not be permitted to be disclosed in any court or arbitration hearing, including with respect to writing; (ii) include the Accounting RefereeFirm’s engagement in the dispute. The Accounting Referee will be instructed to disregard any evidence of such settlement proposals and negotiations in its consideration calculation of the disputed matters. The Adjusted Closing Payment; (iii) include the Accounting Referee shall deliver Firm’s determination of each matter submitted to the Seller Representative it pursuant to Section 2.04(b); and the Buyer, as promptly as practicable (but in any case, no later than thirty (30iv) days from the date of engagement include a brief summary of the Accounting Referee or such longer period as Firm’s reasons for its determination of each issue.
(e) The dispute resolution by the Accounting Referee may reasonably require), a report setting forth calculations Firm under this Section 2.04 shall constitute an expert determination under New York CPLR Article 76 and shall not constitute an arbitration. The determinations of the disputed amounts, and its reasonable basis for each of its determinations. Absent manifest error, such report Accounting Firm shall be final and binding upon the Sellers and the Buyerbinding, absent fraud, bad faith or manifest error. The cost of such review and report shall Judgment may be borne by the party whose determination of the Adjustment Calculations (as set forth in the statement submitted by the Buyer or in the Objection Statement), yielded the final Closing Payment farthest from that based upon the Adjustment Calculations determined by the Accounting Referee, or equally if the final Closing Payment based entered upon the determination of the Accounting Referee Firm in New York State Supreme Court or any other court having jurisdiction over the party against which such determination is equidistant between to be enforced. The cost of any dispute resolution (including the determinations fees and expenses of the Accounting Firm and reasonable attorney fees and expenses of the parties) pursuant to this Section 2.04 shall be borne by Seller and Buyer in inverse proportion as they may prevail on matters resolved by the Accounting Firm, which proportionate allocations shall also be determined by the Accounting Firm at the time the determination of the Accounting Firm is rendered on the merits of the matters submitted.
(ef) Each party hereto The Closing Payment shall be increased by the sum of the amount by which Closing Adjusted Working Capital exceeds the Target Amount, and the amount by which the Bonus Adjustment Amount exceeds the Final Bonus Adjustment Amount, and the Closing Payment shall be decreased by the sum of the amount by which Closing Adjusted Working Capital is less than the Target Amount and the amount by which the Bonus Adjustment Amount is less than the Final Bonus Adjustment Amount (the Closing Payment as so increased or decreased shall hereinafter be referred to as the “Adjusted Closing Payment”). If the Closing Date Amount is less than the Adjusted Closing Payment, Buyer shall, and if the Closing Date Amount is more than the Adjusted Closing Payment, Seller shall, within 10 business days after the Statement becomes final and binding on the parties, make payment by wire transfer in immediately available funds of the amount of such difference to an account designated in writing by the receiving party.
(g) In connection with the determination of Closing Adjusted Working Capital pursuant to this Section 2.04, from the Closing Date through the resolution of any adjustment to the Closing Payment contemplated by this Section 2.04, Buyer shall, and shall cause their respective representatives its Affiliates to, use commercially afford to Seller and its independent accountants reasonable efforts to cooperate and assist, access to the extent reasonably requested by another party heretopersonnel, in the preparation properties, books and records of the Adjustment Calculations and in the conduct of the review referred to in this Section 1.3Business, including the making available Transferred Companies and their Subsidiaries, for any purpose reasonably related to the extent reasonably necessary of books, records, work papers and appropriate personnel. If Buyer claims that Sellers have, or Sellers claims that Bxxxx has, as applicable, failed to comply with its obligation under adjustment contemplated by this Section 1.3(e), it may refer such alleged non-compliance 2.04 (subject to the Accounting Referee. The Accounting Referee shall have the authority to determine if the respective party has complied with its obligations under this Section 1.3(e) reasonable confidentiality restrictions and to order any non-compliant party to comply with its obligations under providing such assurances, releases, indemnities or other agreements as accountants may customarily require in such circumstances).
(h) In this Section 1.3(e). Each party shall comply with any such determination by such Accounting Referee.Agreement:
Appears in 1 contract
Samples: Stock Purchase Agreement (Factset Research Systems Inc)
Closing Payment Adjustment. The payment described in Section 1.3(b)(ii) shall be subject to adjustment as follows:
(a) At least five Within sixty (5) Business Days prior to the Closing Date, Sellers shall deliver to the Buyer a statement (the “Closing Estimates”), including reasonable supporting documentation, setting forth its good faith estimate of: (i) the Closing Net Working Capital; (ii) the Closing Date Cash; (iii) the Closing Date Debt; and (iv) the Closing Date Company Expenses, all determined in accordance with the Accounting Principles. The Buyer shall be entitled to review, comment on, and request reasonable changes to the Closing Estimates and Sellers shall consider the Buyer’s proposed changes in good faith. If the parties are unable to reach agreement on any of the Buyer’s proposed changes, the Closing Estimates as proposed by Sellers shall control solely for the purposes of calculating the Closing Payment, and shall not limit or otherwise affect the Buyer’s remedies under this Agreement or otherwise or constitute an acknowledgment by the Buyer of the accuracy of the Closing Estimates or the accounting methods or policies utilized in the calculation thereof.
(b) Within ninety (9060) days following the Closing Date, Buyer the Purchaser shall prepare cause to be prepared, in accordance with generally accepted accounting principles ("GAAP"), and, to the extent consistent with GAAP, applied on a basis consistent with past practice and utilizing the same accounting procedures and policies as used in preparing the Balance Sheets and the Latest Balance Sheets (as such terms are defined in Section 3.4), a Draft Closing Balance Sheet (as defined in Section 9.16 hereof) and a statement (the "DRAFT CLOSING WORKING CAPITAL DEFICIT STATEMENT") setting forth the Purchaser's determination of the Closing Working Capital Deficit (as defined below) of the Companies as of the Closing Date. The cost of preparing the Draft Closing Balance Sheet and the Draft Closing Working Capital Deficit Statement shall be borne by the Purchaser.
(b) Within sixty (60) days following the Closing Date, the Purchaser shall deliver to the Seller Representative a statement of Bxxxx’s calculations of: (i) Stockholder the Draft Closing Net Balance Sheet and the Draft Closing Working Capital; (ii) the Closing Date Cash; (iii) the Closing Date Debt; and (iv) the Closing Date Company Expenses (the “Adjustment Calculations”), all determined in accordance Capital Deficit Statement together with the Accounting Principleswork papers and such other items related thereto as the Stockholder shall reasonably request. Each Seller The Draft Closing Balance Sheet and the Buyer agree that the calculation of Draft Closing Net Working Capital Deficit Statement shall be prepared in a format consistent with become final and binding upon the sample calculations, which have been included for illustrative purposes only, set forth on Schedule 1.3.
(c) Within parties thirty (30) days of after the Buyer’s delivery of Stockholder's receipt thereof (together with the Adjustment Calculationswork papers related thereto), unless the Seller Representative may deliver a Stockholder gives the Purchaser written notice to of its disagreement (a "NOTICE OF Disagreement") within such thirty (30) day period, specifying in detail the Buyer of any Stockholder's disagreement with each item contained within the Adjustment CalculationsDraft Closing Balance Sheet and the Draft Closing Working Capital Deficit Statement. If a Notice of Disagreement is received by the Purchaser in a timely manner, if any (an “Objection Statement”). For each disputed item, then the Seller Representative Draft Closing Balance Sheet and the Draft Closing Working Capital Deficit Statement shall include: become the final Closing Balance Sheet and the final Closing Working Capital Deficit Statement and shall be binding upon the parties on the earlier of (i) the basis for date the parties hereto resolve in writing any disagreement, differences they may have with respect to any matter specified in the Notice of Disagreement and (ii) the date any Disputed Matters (as defined below) are finally resolved in writing by the Arbitrator (as defined below). Any such Notice of Disagreement shall state in reasonable detail the nature and amount of such disagreement, and any disagreement so asserted. During a period of ten (iii) reasonable supporting documentation, information and calculations thereof for any disagreement. The Seller Representative shall be deemed to have agreed with all other items and amounts contained in the Adjustment Calculations that are not disputed in the Objection Statement. If the Seller Representative fails to properly deliver an Objection Statement, Sellers will be deemed conclusively to have agreed to the Adjustment Calculations, which shall be final and binding upon Sellers.
(d) If the Seller Representative delivers an Objection Statement, Buyer and the Seller Representative (on behalf of Sellers) shall, during the fifteen (1510) days following the Seller Representative’s delivery of the Objection Statement, use their commercially reasonable, good faith efforts to reach agreement on the disputed items and amounts in order to determine, as may be required, the Adjustment Calculations, which shall not be more favorable to Buyer than the amount thereof shown in Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to Sellers than the amount thereof shown in the Objection Statement. If, during such period, the Seller Representative and the Buyer are unable to reach such agreement, they shall promptly thereafter cause BDO US LLP (or, if BDO US LLP declines to serve, such other independent accounting firm of national standing mutually agreed to by the parties) (the “Accounting Referee”) to review this Agreement and the disputed items and amounts for the purpose of calculating the Adjustment Calculations. There shall be no ex parte communications between any party and the Accounting Referee. In making such calculation, the Accounting Referee shall consider only those still unresolved items and amounts in Buyer’s calculation of Adjustment Calculations as to which the Sellers duly objected in accordance with Section 1.3(c) and the Accounting Referee shall not consider any settlement offers exchanged between the parties. The Accounting Referee’s calculation shall not be more favorable to the Buyer than the amount thereof shown in the Buyer’s calculation delivered pursuant to Section 1.3(b) nor more favorable to the Sellers than the amount thereof shown in the Objection Statement. The Accounting Referee shall agree that between the time the Sellers delivered the Objection Statement to the Buyer and the date thereof, the Buyer and the Sellers may have exchanged certain proposals relating to the disputed items that were intended solely for purposes of facilitating settlement discussions and such proposals were confidential and were provided solely on the condition and understanding that such proposals would not be permitted to be disclosed in any court or arbitration hearing, including with respect to the Accounting Referee’s engagement in the dispute. The Accounting Referee will be instructed to disregard any evidence of such settlement proposals and negotiations in its consideration of the disputed matters. The Accounting Referee shall deliver to the Seller Representative and the Buyer, as promptly as practicable (but in any case, no later than thirty (30) days from the date of engagement of the Accounting Referee or such longer period as the Accounting Referee Purchaser and the Stockholder may reasonably requiremutually agree after the expiration of the aforesaid ten (10) day period), the Purchaser and the Stockholder shall attempt, in good faith, to resolve in writing any differences that they may have with respect to any matter specified in the Notice of Disagreement. If, at the end of such ten (10) day period (or such longer period as the Purchaser and the Stockholder may have mutually agreed), the Purchaser and the Stockholder fail to reach a report setting forth calculations written agreement with respect to all of such matters, then all such matters as specified in the Notice of Disagreement as to which such written agreement has not been reached (the "DISPUTED MATTERS") shall be submitted to and reviewed by an arbitrator (the "ARBITRATOR"). If the Purchaser and the Stockholder are unable to agree upon the identity of the disputed amountsArbitrator within five (5) days, the Stockholder and the Purchaser shall each select within five (5) days thereafter one of the "Big-Five" accounting firms having no other relationship with any party hereto during the past two (2) years to select the Arbitrator. If such accounting firms cannot agree as to the identity of the Arbitrator, then each of such accounting firms shall select one nominee and the Arbitrator shall be chosen by lot from the two (2) nominees. The Arbitrator shall consider only the Disputed Matters and shall be instructed to act promptly to resolve all Disputed Matters and prepare or cause to be prepared a final Closing Balance Sheet and a final Working Capital Deficit Statement consistent with the standards for preparation of the Draft Closing Balance Sheet and the Draft Working Capital Deficit Statement set forth in Section 1.4(a), and its reasonable basis for each of its determinations. Absent manifest error, such report decision with respect to all Disputed Matters shall be final and binding upon the Sellers Purchaser and the BuyerStockholder. The cost Purchaser and the Stockholder agree to provide the Arbitrator in a timely manner any information it reasonably requests and shall use their best efforts to cause the Arbitrator to decide all of such review the Disputed Matters within fifteen (15) days of the date on which the Arbitrator is selected and report provide the Stockholder and the Purchaser with a written decision regarding his determination of the Disputed Matters. The fees and expenses of the Arbitrator with respect to the settlement of all Disputed Matters shall be borne by the party whose determination of Purchaser, on the Adjustment Calculations (one hand, and the Stockholder, on the other hand, in such proportion as set forth in the statement submitted by the Buyer or in the Objection Statement), yielded the final Closing Payment farthest from that based upon the Adjustment Calculations shall be determined by the Accounting RefereeArbitrator, or equally if giving consideration to the final Closing Payment based upon Purchaser's and the determination of Stockholder's initial positions with respect to the Accounting Referee is equidistant between Disputed Matters and how far such positions were from the determinations of the partiesArbitrator's decision.
(ec) Each party hereto shall, and shall cause their respective representatives to, use commercially reasonable efforts to cooperate and assist, to the extent reasonably requested by another party hereto, in the preparation of the Adjustment Calculations and in the conduct of the review referred to in this Section 1.3, including the making available to the extent reasonably necessary of books, records, work papers and appropriate personnel. If Buyer claims that Sellers have, or Sellers claims that Bxxxx has, as applicable, failed to comply with its obligation under this Section 1.3(e), it may refer such alleged non-compliance to the Accounting Referee. The Accounting Referee shall have the authority to determine if the respective party has complied with its obligations under this Section 1.3(e) and to order any non-compliant party to comply with its obligations under this Section 1.3(e). Each party shall comply with any such determination by such Accounting Referee.As used herein,
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Samples: Stock Purchase Agreement (Healthplan Services Corp)
