Common use of Closing Working Capital Adjustment Clause in Contracts

Closing Working Capital Adjustment. a. Purchaser shall be entitled, within 75 days after the Closing, to prepare and deliver to Sellers’ Agent a statement (the “Purchaser Working Capital Statement”) setting forth Purchaser’s calculation of the Acquired Companies Working Capital at the Closing, including each respective component thereof (the “Purchaser Working Capital Determination”). b. If Purchaser delivers a Purchaser Working Capital Statement in accordance with Section 4.3(a) within 75 days after the Closing, (i) Sellers’ Agent shall have a period of 30 days after delivery of the Purchaser Working Capital Statement (the “Working Capital Objection Period”), to deliver to Purchaser a statement (the “Working Capital Objection Statement”) setting forth any objections that Sellers’ Agent may have to the Purchaser Working Capital Determination, including a reasonably detailed explanation of the basis for each such objection along with reasonably detailed supporting calculations. If Sellers’ Agent does not deliver to Purchaser a Working Capital Objection Statement by the end of the Working Capital Objection Period, or if during the Working Capital Objection Period Sellers’ Agent delivers to Purchaser written notice that Sellers’ Agent accepts the Purchaser Working Capital Statement and the Purchaser Working Capital Determination, then the Purchaser Working Capital Statement and the Purchaser Working Capital Determination shall be considered final, conclusive and binding. If Sellers’ Agent does deliver a Working Capital Objection Statement by the end of the Working Capital Objection Period, Sellers’ Agent and Purchaser shall attempt in good faith to resolve any disputed items. Purchaser and Sellers’ Agent shall reasonably cooperate with and assist each other in resolving any items disputed by Sellers’ Agent in good faith, including by making available and granting reasonable access (during normal business hours and subject to Purchaser’s reasonable security measures and insurance requirements) to records and employees of the Company (provided that Sellers’ Agent is bound by a duty of a confidentiality satisfactory to Purchaser and Sellers’ Agent is not, in Purchaser’s judgment, intrusive or disruptive). If Sellers’ Agent and Purchaser are unable to resolve all or any of the disputed items within 60 days after delivery of the Working Capital Objection Statement, then the remaining disputed items shall be submitted to the Neutral Auditor. The Neutral Auditor shall be instructed that, (A) with respect to each disputed item, the Neutral Auditor shall either accept the position taken by Purchaser or the position taken by Sellers’ Agent, but the Neutral Auditor shall not make another determination of the disputed item; and (B) the Neutral Auditor shall, based solely on its determination of the disputed items, prepare and deliver to Sellers’ Agent and Purchaser the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing, as soon as reasonably practicable (and in any event within 60 days after its engagement), and such Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall be final, conclusive and binding. The Party whose amount of Acquired Companies Working Capital claimed by such Party at the time of submission of the dispute to the Neutral Auditor differs the most from the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall pay the fees and disbursements of the Neutral Auditor, unless otherwise determined by the Neutral Auditor. Each of Purchaser and Sellers’ Agent shall cooperate with and assist the Neutral Auditor to resolve disputed items, including by making available and granting reasonable access to records and employees. c. If Purchaser delivers a Purchaser Working Capital Statement, the Acquired Companies Working Capital at the Closing as finally determined by (i) failure of Sellers’ Agent to object to the Purchaser Working Capital Statement; or (ii) agreement of Sellers’ Agent and Purchaser (including pursuant to a notice by Sellers’ Agent that the Purchaser Working Capital Statement is acceptable); or (iii) the Neutral Auditor, shall be the “Final Working Capital.” The date of the determination of the Final Working Capital shall be referred to herein as the “Working Capital Determination Date.” d. If the Working Capital Estimate is greater than the Final Working Capital, Purchaser shall be entitled to receive, from the Escrow Account, an amount equal to the excess of the Working Capital Estimate over the Final Working Capital (any such excess, the “Working Capital Deficit”). Sellers’ Agent and Purchaser shall immediately deliver joint written instructions to the Escrow Agent to pay and deliver such amount to Purchaser out of the Escrow Account. If the Escrow Account does not have sufficient funds to cover the Working Capital Deficit, the Sellers shall severally (and not jointly) on a pro rata basis based on their Participation Percentages pay Purchaser the portion of the Working Capital Deficit not fully paid from the Escrow Account.

Appears in 2 contracts

Samples: Share Purchase Agreement, Share Purchase Agreement (Yelp Inc)

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Closing Working Capital Adjustment. a. (i) Within ninety (90) days following the Closing Date, the Purchaser shall be entitled, within 75 days after the Closing, to will prepare and deliver to Sellers’ Agent the Company, a reasonably detailed statement (the “Purchaser Closing Working Capital Statement”) setting forth Purchaser’s calculation of the Acquired Companies Working Capital at the Closing, including each respective component thereof (the “Purchaser Working Capital Determination”). b. If Purchaser delivers a Purchaser Working Capital Statement in accordance with Section 4.3(a) within 75 days after the Closing, (i) Sellers’ Agent shall have a period of 30 days after delivery of the Purchaser Working Capital Statement (the “Working Capital Objection Period”), to deliver to Purchaser a statement (the “Working Capital Objection Statement”) setting forth any objections that Sellers’ Agent may have to the Purchaser Working Capital Determination, including a reasonably detailed explanation of the basis for each such objection along with reasonably detailed supporting calculations. If Sellers’ Agent does not deliver to Purchaser a Working Capital Objection Statement by the end of the Working Capital Objection Periodas of the close of business on the day prior to the Closing Date (the “Closing Working Capital”). Following the Closing Date, or if during the Purchaser agrees that it will cooperate with the Company and its advisors in making available to the Company and its advisors such books, records, financial information, work papers, and supporting data, as reasonably requested, in connection with the Company’s review of the Closing Working Capital Objection Period Sellers’ Agent delivers to Purchaser Capital. (ii) The Company may deliver a written notice that Sellers’ Agent accepts to the Purchaser within forty-five (45) days of the Company’s receipt of the Closing Working Capital Statement stating whether the Company has any objections to the Closing Working Capital, describing in reasonable detail any objections thereto. Failure to give a timely objection notice (or written notification from the Company that it has no objection to the Closing Working Capital Statement) will constitute acceptance and approval of the Closing Working Capital set forth therein, and such Closing Working Capital will be final and binding upon the parties. (iii) If the Company notifies the Purchaser Working Capital Determination, then of any objection to the Purchaser Closing Working Capital Statement within the time period set forth in Section 1.7(c)(ii), the Purchaser and the Purchaser Working Capital Determination shall be considered final, conclusive and binding. If Sellers’ Agent does deliver a Working Capital Objection Statement by the end of the Working Capital Objection Period, Sellers’ Agent and Purchaser shall Company will attempt in good faith to reach an agreement as to the matter in dispute. If such parties have failed to resolve any such disputed item within thirty (30) days after receipt of timely notice of such objection, then any such disputed item will be submitted to and determined by an independent accounting firm selected by the Purchaser and the Company (the “Independent Accounting Firm”); provided, however, the parties may mutually agree on an extended period to resolve any such dispute before submitting it to the Independent Accounting Firm. The Independent Accounting Firm will be given reasonable access to all of the records of the Company and the Purchaser to resolve any disputed items. item regarding the Closing Working Capital Statement, and will be instructed to submit its determination in writing with respect to any disputed matters to the Purchaser and Sellers’ Agent shall reasonably cooperate the Company within twenty (20) days. The Independent Accounting Firm will address only those items properly disputed in accordance with Section 1.7(c)(ii) and assist each the Independent Accounting Firm may not assign a value greater than the greatest value or lower than the lowest value for any such item claimed by the Purchaser, on the one hand, or the Company, on the other hand. The Company and the Purchaser will be entitled to present any materials they deem appropriate to the Independent Accounting Firm, and to request a meeting, with all parties present (to the extent such parties desire to be present in such meeting), to discuss their position. The fees and expenses of the Independent Accounting Firm incurred in resolving any items the disputed matter will be equitably apportioned by Sellers’ Agent such accountants based on the extent to which the Purchaser, on the one hand, or the Company, on the other hand, is determined by the Independent Accounting Firm to be the prevailing party in good faiththe resolution of each such disputed matter so that the non-prevailing party pays a greater share of such fees and expenses. The Closing Working Capital Statement properly disputed under this Section 1.7(c)(iii) will, including by making available after resolution of such dispute pursuant to this Section 1.7(c)(iii), be final, binding and granting reasonable access conclusive on all parties. (during normal business hours and subject iv) If the Closing Working Capital as finally determined is greater than the Estimated Working Capital, the Purchaser will pay such excess on a dollar for dollar basis to Purchaser’s reasonable security measures and insurance requirements) to records and employees of the Company (provided that Sellers’ Agent in immediately available funds, and if the Estimated Working Capital is bound by a duty of a confidentiality satisfactory greater than the Closing Working Capital, such excess amount will be released to the Purchaser and Sellers’ Agent is notfrom the Working Capital Escrow Amount, in Purchaser’s judgment, intrusive or disruptive). If Sellers’ Agent and Purchaser are unable to resolve all or any of with the disputed items within 60 days after delivery balance of the Working Capital Objection StatementEscrow Amount, then the remaining disputed items shall to be submitted to the Neutral Auditor. The Neutral Auditor shall be instructed that, (A) with respect to each disputed item, the Neutral Auditor shall either accept the position taken paid by Purchaser or the position taken by Sellers’ Agent, but the Neutral Auditor shall not make another determination of the disputed item; and (B) the Neutral Auditor shall, based solely on its determination of the disputed items, prepare and deliver to Sellers’ Agent and Purchaser the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing, as soon as reasonably practicable (and in any event within 60 days after its engagement), and such Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall be final, conclusive and binding. The Party whose amount of Acquired Companies Working Capital claimed by such Party at the time of submission of the dispute to the Neutral Auditor differs the most from the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall pay the fees and disbursements of the Neutral Auditor, unless otherwise determined by the Neutral Auditor. Each of Purchaser and Sellers’ Agent shall cooperate with and assist the Neutral Auditor to resolve disputed items, including by making available and granting reasonable access to records and employees. c. If Purchaser delivers a Purchaser Working Capital Statement, the Acquired Companies Working Capital at the Closing as finally determined by (i) failure of Sellers’ Agent to object to the Purchaser Working Capital Statement; or (ii) agreement of Sellers’ Agent and Purchaser (including pursuant to a notice by Sellers’ Agent that the Purchaser Working Capital Statement is acceptable); or (iii) the Neutral Auditor, shall be the “Final Working Capital.” The date of the determination of the Final Working Capital shall be referred to herein as the “Working Capital Determination Date.” d. If the Working Capital Estimate is greater than the Final Working Capital, Purchaser shall be entitled to receive, from the Escrow Account, an amount equal to the excess of the Working Capital Estimate over the Final Working Capital (any such excess, the “Working Capital Deficit”). Sellers’ Agent and Purchaser shall immediately deliver joint written instructions to the Escrow Agent to pay and deliver such amount to Purchaser out of the Escrow Account. If Company; provided, however, that in the Escrow Account does not have sufficient funds to cover event the Working Capital DeficitEscrow Amount is less than such excess amount, Sellers, jointly and severally, will pay such deficient amount on a dollar for dollar basis to the Purchaser in immediately available funds (such final adjustment, the Sellers shall severally “Closing Working Capital Adjustment”). All payments pursuant to this Section 1.7(c) (and not jointlyiv) on a pro rata basis based on their Participation Percentages pay Purchaser the portion of will be made from the Working Capital Deficit not fully paid from Escrow Amount within five (5) days after the Escrow Accountdetermination of Closing Working Capital becomes final and binding.

Appears in 1 contract

Samples: Asset Purchase Agreement (Isun, Inc.)

Closing Working Capital Adjustment. a. (a) AVE has delivered to Purchaser its good faith written estimate of the Closing Working Capital (with any adjustment thereto proposed by Purchaser and agreed to by AVE prior to the Closing Date (the "Estimated Closing Working Capital")). AVE has made available to Purchaser all workpapers and other books and records utilized in preparing the Estimated Closing Working Capital. The Estimated Closing Working Capital is set forth on Schedule 2.3. (b) As promptly as practicable, but in no event later than 90 days, after the Closing Date, Purchaser shall notify AVE in writing of its determination of Closing Working Capital ("Purchaser's Closing Schedule") which determination shall set forth in reasonable detail Purchaser's calculation of Closing Working Capital. Purchaser's Closing Schedule shall also set forth, and explain, in reasonable detail, any differences between Purchaser's calculation of Closing Working Capital and the Estimated Closing Working Capital. A copy of all workpapers and other books and records utilized in the preparation of Purchaser's Closing Schedule shall be entitled, made available to AVE at such time. AVE will notify Purchaser in writing ("AVE's Dispute Notice") within 75 30 days after the Closing, to prepare and deliver to Sellers’ Agent a statement (the “Purchaser Working Capital Statement”) setting forth receiving Purchaser’s 's Closing Schedule if AVE disagrees with Purchaser's calculation of the Acquired Companies Closing Working Capital at the Closingas set forth in Purchaser's Closing Schedule, including each respective component thereof (the “Purchaser Working Capital Determination”). b. If Purchaser delivers a Purchaser Working Capital Statement which notice shall set forth in accordance with Section 4.3(a) within 75 days after the Closing, (i) Sellers’ Agent shall have a period of 30 days after delivery of the Purchaser Working Capital Statement (the “Working Capital Objection Period”), to deliver to Purchaser a statement (the “Working Capital Objection Statement”) setting forth any objections that Sellers’ Agent may have to the Purchaser Working Capital Determination, including a reasonably detailed explanation of reasonable detail the basis for each such objection along with reasonably detailed supporting calculationsdisagreement, the dollar amounts involved and AVE's calculation of the Closing Working Capital. Purchaser will give AVE and its representatives reasonable access during the normal business hours of Purchaser to the personnel, books and records of the Business to assist AVE in the preparation of AVE's Dispute Notice. If Sellers’ Agent does not deliver to no AVE's Dispute Notice is received by Purchaser a within such 30-day period, Purchaser's calculation of Closing Working Capital Objection Statement by the end of the Working Capital Objection Period, or if during the Working Capital Objection Period Sellers’ Agent delivers to Purchaser written notice that Sellers’ Agent accepts the Purchaser Working Capital Statement and the Purchaser Working Capital Determination, then the Purchaser Working Capital Statement and the Purchaser Working Capital Determination as set forth in Purchaser's Closing Schedule shall be considered finalfinal and binding upon the parties hereto. (c) Upon receipt by Purchaser of AVE's Dispute Notice, conclusive and binding. If Sellers’ Agent does deliver a Working Capital Objection Statement by the end of the Working Capital Objection Period, Sellers’ Agent AVE and Purchaser shall attempt negotiate in good faith to resolve any disputed itemsdisagreement with respect to Closing Working Capital set forth in AVE's Dispute Notice. To the extent Purchaser and Sellers’ Agent shall reasonably cooperate with and assist each other in resolving any items disputed by Sellers’ Agent in good faith, including by making available and granting reasonable access (during normal business hours and subject to Purchaser’s reasonable security measures and insurance requirements) to records and employees of the Company (provided that Sellers’ Agent is bound by a duty of a confidentiality satisfactory to Purchaser and Sellers’ Agent is not, in Purchaser’s judgment, intrusive or disruptive). If Sellers’ Agent and Purchaser AVE are unable to resolve all or any of the disputed items within 60 days after delivery of the Working Capital Objection Statement, then the remaining disputed items shall be submitted to the Neutral Auditor. The Neutral Auditor shall be instructed that, (A) agree with respect to each disputed item, the Neutral Auditor shall either accept the position taken Closing Working Capital within 30 days after receipt by Purchaser of AVE's Dispute Notice, Purchaser and AVE shall promptly select a mutually acceptable nationally recognized accounting firm with no material relationship to Purchaser, AVE or the position taken by Sellers’ Agent, but the Neutral Auditor shall not make another determination of the disputed item; Marisa Chrixxxxx 3 or their affiliates and (B) the Neutral Auditor shall, based solely on its determination of the disputed items, prepare and deliver submit their dispute to Sellers’ Agent and Purchaser the Neutral Auditor’s determination of the Acquired Companies such accounting firm for a binding resolution. Closing Working Capital at the Closingas agreed upon by AVE and Purchaser, as soon deemed agreed upon pursuant to the last sentence of Section 2.3(b) or as reasonably practicable (and in any event within 60 days after its engagement), and such Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall be final, conclusive and binding. The Party whose amount of Acquired Companies Working Capital claimed determined by such Party at the time of submission of the dispute to the Neutral Auditor differs the most from the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall pay the fees and disbursements of the Neutral Auditoraccounting firm, unless otherwise determined by the Neutral Auditor. Each of Purchaser and Sellers’ Agent shall cooperate with and assist the Neutral Auditor to resolve disputed items, including by making available and granting reasonable access to records and employees. c. If Purchaser delivers a Purchaser Working Capital Statement, the Acquired Companies Working Capital at the Closing as finally determined by (i) failure of Sellers’ Agent to object to the Purchaser Working Capital Statement; or (ii) agreement of Sellers’ Agent and Purchaser (including pursuant to a notice by Sellers’ Agent that the Purchaser Working Capital Statement is acceptable); or (iii) the Neutral Auditorin accordance herewith, shall be termed the "Final Closing Working Capital". The fees and expenses of such accounting firm shall be paid by the party hereto whose determination of Closing Working Capital as initially submitted to such accounting firm is furthest away from the Final Closing Working Capital.” The date of (d) Following Closing and upon the determination of the Final Closing Working Capital pursuant to Section 2.3(c), the "Final Purchase Price" shall be referred to herein determined by reducing or increasing the Base Purchase Payment dollar for dollar as follows: (i) if the Final Closing Working Capital Determination Date.” d. If the Working Capital Estimate is greater than the Final Working Capital, $900,000 then Purchaser shall be entitled pay to receive, from the Escrow Account, an amount equal to the excess of the Working Capital Estimate over the Final Working Capital (any AVE such excess, or (ii) if the Final Closing Working Capital Deficit”). Sellers’ Agent and is less than $800,000 then AVE shall pay to Purchaser such deficiency, plus, in either case, interest on such deficiency or excess, as the case may be, for the period from the Closing Date through (but excluding) the date of such payment at the Prime Rate. (e) The payment to be made pursuant to Section 2.3(d) shall be made by wire transfer of immediately deliver joint written instructions available funds to a bank account designated by AVE or Purchaser, as the case may be, to the Escrow Agent to pay and deliver such amount to Purchaser out of other party within five business days Business Days after the Escrow Account. If the Escrow Account does not have sufficient funds to cover the Final Closing Working Capital Deficit, becomes final and binding on the Sellers shall severally (and not jointly) on a pro rata basis based on their Participation Percentages pay Purchaser the portion of the Working Capital Deficit not fully paid from the Escrow Accountparties hereto.

Appears in 1 contract

Samples: Asset Purchase Agreement (Marisa Christina Inc)

Closing Working Capital Adjustment. a. Purchaser (a) No later than five Business Days prior to the scheduled Closing Date, the Sellers’ Representative shall deliver to the Buyer a statement, substantially in the form attached hereto as Exhibit A (the “Preliminary Closing Statement”), together with reasonably detailed supporting information, setting forth the Sellers’ reasonable and good faith estimates of: (i) the Closing Indebtedness (the “Estimated Closing Indebtedness”), which shall include the aggregate amount of Indebtedness specified in the Payoff Letters, (ii) the Closing Working Capital, (iii) either the resulting Closing Date Working Capital Excess or Closing Date Working Capital Shortfall, as the case may be, (iv) the Cash Balances, (v) the Outstanding Check Balances, (vi) either the resulting Cash Balance Excess or Cash Balance Shortfall, as the case may be, (vii) (x) the Transaction Expenses (the “Estimated Transaction Expenses”) and (y) the wire transfer instructions for each payee thereof and the portion of the Transaction Expenses payable to such payee, (viii) the Escrow Amount and (ix) the Closing Payment, using the amounts of the Estimated Closing Indebtedness, the Closing Date Working Capital Excess or Closing Date Working Capital Shortfall, as applicable, the Cash Balance Excess or Cash Balance Shortfall, as applicable, and the Estimated Transaction Expenses, in each case, as provided in the Preliminary Closing Statement (the estimated amount determined pursuant to this Section 1.6(a), the “Estimated Closing Payment”). Prior to the Closing Date, the Sellers shall review and consider in good faith any reasonable comments proposed by the Buyer in good faith with respect to the Preliminary Closing Statement. To the extent the Sellers and the Buyer are unable to resolve any disputes with respect to any item set forth on the Preliminary Closing Statement prior to the Closing Date, for purposes of the payment to be made by the Buyer pursuant to Section 1.7, the amount of such item shall be entitledequal to an amount that is the arithmetic average of the amount of such item proposed by the Buyer and the amount of such item set forth in the Preliminary Closing Statement. The Buyer shall have the right to rely on the information set forth in the Preliminary Closing Statement, within 75 including with respect to the allocation and payment of the Transaction Expenses. (b) Within 90 days after the ClosingClosing Date, to the Buyer shall prepare and deliver to the Sellers’ Agent Representative a statement prepared in good faith, together with reasonably detailed supporting information, substantially in the form attached hereto as Exhibit A (the “Purchaser Adjusted Closing Statement”), setting forth the Buyer’s determination of: (i) the Closing Indebtedness, (ii) the Closing Working Capital, (iii) either the resulting Closing Date Working Capital Statement”Excess or Closing Date Working Capital Shortfall, as the case may be, (iv) setting forth Purchaserthe Cash Balances, (v) the Outstanding Check Balances, (vi) either the resulting Cash Balance Excess or Cash Balance Shortfall, as the case may be, (vii) the Transaction Expenses, (viii) the Escrow Amount and (ix) the Closing Payment, using the amounts of Closing Indebtedness, Transaction Expenses, the Closing Date Working Capital Excess or Closing Date Working Capital Shortfall, as applicable, and the Cash Balance Excess or Cash Balance Shortfall, as applicable. (c) At all reasonable times during the 60 days immediately following the Sellers’ Representative’s calculation receipt of the Acquired Companies Working Capital at the Closing, including each respective component thereof Adjusted Closing Statement (the “Purchaser Working Capital DeterminationObjection Deadline”). b. If Purchaser delivers , the Sellers’ Representative and its Representatives shall be permitted, at the sole cost and expense of the Sellers, to review the records of the Business (solely to the extent relating to the Adjusted Closing Statement and/or the adjustment of the Purchase Price set forth in this Section 1.6) reasonably requested by the Sellers’ Representative in connection with its review of the Adjusted Closing Statement. The Buyer shall cooperate (and shall cause its Representatives to cooperate) with the Sellers’ Representative to enable him and the Representatives of the Sellers to review the Adjusted Closing Statement, including, without limitation, making reasonably available books, records, work papers and personnel relating to the Adjusted Closing Statement and any amounts reflected on the Adjusted Closing Statement or reasonably required in order to verify such amounts, in each case, subject to customary confidentiality protection and solely to the extent needed to review the Adjusted Closing Statement; provided that such access shall only be afforded during normal business hours, under the supervision of the Buyer’s personnel and in such a Purchaser Working Capital Statement manner as not to interfere with the Buyer’s operations. Notwithstanding the foregoing, if the Sellers file a lawsuit seeking to require the Buyer to comply with its obligations under this Section 1.6 to provide the Sellers with prompt reasonable access to books and records so that the Sellers may adequately and thoroughly review the Adjusted Closing Statement, the Objection Deadline shall be extended for a period of 60 days following the date such lawsuit is filed (the “Objection Deadline Extension Period”). To the extent that such lawsuit to require the Buyer to comply with its obligations to provide access to books and records under this Section 1.6 is not finally resolved or dismissed within the Objection Deadline Extension Period, the Objection Deadline Extension Period shall be automatically extended until such time as the lawsuit is finally resolved or dismissed. Notwithstanding anything to the contrary in accordance with Section 4.3(a) within 75 days after this Agreement, the ClosingBuyer shall not be required to disclose any information to the Sellers’ Representative or any Representative of a Seller if such disclosure would, in the Buyer’s sole discretion, (i) result in the forfeiture or waiver of any attorney-client or other legal privilege or (ii) contravene any applicable Laws, fiduciary duty or binding agreement; provided that the Buyer shall use commercially reasonable efforts to share any portion of information withheld pursuant to clauses (i) and (ii) in a manner so as to prevent any competitive harm or preserve any applicable privilege or compliance with Law. When accessing any of the Buyer’s properties, the Sellers’ Agent Representative, each Seller and any of their respective authorized Representatives shall have comply with all of the Buyer’s safety and security requirements for the applicable property. (d) The Sellers’ Representative shall deliver to the Buyer by the Objection Deadline either a period notice indicating that the Sellers accept the Adjusted Closing Statement (“Notice of 30 Acceptance”) or a statement describing in reasonable detail its objections to the Adjusted Closing Statement (“Notice of Disagreement”). Any Notice of Disagreement shall specify those items or amounts to which the Sellers object and shall set forth the Sellers’ calculation of such amounts based on such objections. If the Sellers’ Representative delivers to the Buyer a Notice of Acceptance, or the Sellers’ Representative does not deliver a Notice of Disagreement by the Objection Deadline, then, effective as of either the date of delivery of such Notice of Acceptance or as of the end of the Objection Deadline, as the case may be, the Adjusted Closing Statement shall be deemed to be the Final Closing Statement. If the Sellers’ Representative timely delivers a Notice of Disagreement, only those matters specified in such Notice of Disagreement shall be deemed to be in dispute, and all other matters included in the Adjusted Closing Statement shall be final and binding upon the Buyer and the Sellers; provided, however, that if the resolution of any matter specified in the Notice of Disagreement affects an undisputed component of the Adjusted Closing Statement, such undisputed component shall, notwithstanding the failure to object to such component in the Notice of Disagreement, be deemed to be in dispute to the extent so affected. (e) The Sellers’ Representative and the Buyer shall first use commercially reasonable efforts to resolve any objection set forth on a Notice of Disagreement. Any resolution by the Sellers’ Representative and the Buyer as to such objections shall be final and binding on the parties hereto. If the Sellers’ Representative and the Buyer do not reach a resolution of all objections set forth on the Notice of Disagreement within 45 days after delivery of such Notice of Disagreement, the Purchaser Working Capital Statement Sellers and the Buyer shall, within 45 days following the expiration of such 45-day period, engage a Neutral Accountant, pursuant to an engagement agreement executed by the Sellers’ Representative, the Buyer and the Neutral Accountant, to resolve any unresolved objections. The Neutral Accountant shall be instructed to review this Agreement (the “Working Capital Objection Period”including this Section 1.6), to deliver to Purchaser a statement (as well as the “Working Capital Objection Statement”) setting forth any objections that Sellers’ Agent may have to the Purchaser Working Capital Determination, including a reasonably detailed explanation of the basis for each such objection along with reasonably detailed supporting calculations. If Sellers’ Agent does not deliver to Purchaser a Working Capital Objection Statement by the end of the Working Capital Objection Period, or if during the Working Capital Objection Period Sellers’ Agent delivers to Purchaser written notice that Sellers’ Agent accepts the Purchaser Working Capital Adjusted Closing Statement and the Purchaser Working Capital DeterminationNotice of Disagreement and any other materials requested by the Neutral Accountant, then and to only resolve the Purchaser Working Capital Statement unresolved objections in accordance with the terms of this Agreement. The Neutral Accountant shall be instructed to base its determination solely on written submissions by the Buyer and the Purchaser Working Capital Determination Sellers’ Representative and the terms of this Agreement, and not to otherwise investigate such matters independently. The Buyer and the Sellers’ Representative shall direct the Neutral Accountant to make a final determination (which determination shall be considered final, conclusive and binding. If Sellers’ Agent does deliver a Working Capital Objection Statement by binding on the end parties hereto) of the Working Capital Objection Period, Sellers’ Agent unresolved objections and Purchaser shall attempt in good faith to resolve any disputed items. Purchaser and Sellers’ Agent shall reasonably cooperate with and assist each other in resolving any items disputed by Sellers’ Agent in good faith, including by making available and granting reasonable access (during normal business hours and subject to Purchaser’s reasonable security measures and insurance requirements) to records and employees the calculation of the Company (provided that Sellers’ Agent is bound by a duty of a confidentiality satisfactory to Purchaser and Sellers’ Agent is not, in Purchaser’s judgment, intrusive or disruptive). If Sellers’ Agent and Purchaser are unable to resolve all or any of Purchase Price within 45 days from the disputed items within 60 days after delivery of date the Working Capital Objection Statement, then the remaining disputed items shall be unresolved objections were submitted to the Neutral AuditorAccountant, and such final determination of the Neutral Accountant of any unresolved objections, together with any undisputed component of the Adjusted Closing Statement, taking into account any adjustment thereto as a result of any determination by the Neutral Accountant, shall be deemed the Final Closing Statement. During the 45-day review by the Neutral Accountant, the Buyer and the Sellers shall, and shall cause each other member of the Seller Group to, make available to the Neutral Accountant such individuals, information, books and records as may be reasonably required by the Neutral Accountant to make its final determination. In resolving any unresolved objections, the Neutral Accountant (i) shall be bound by the terms of this Agreement (including the provisions of this Section 1.6 and the definitions of Closing Working Capital, Closing Indebtedness and Transaction Expenses and the definitions of any other terms set forth herein and relevant to resolving the unresolved objections), (ii) shall limit its review to the unresolved objections submitted to the Neutral Accountant for resolution and not otherwise investigate matters independently and (iii) shall further limit its review of the unresolved objections solely to whether the Adjusted Closing Statement has been prepared in accordance with the terms of this Section 1.6 or contains any mathematical or clerical error. The determination of any unresolved objections cannot, however, be in excess of, or less than, the greatest or lowest value, respectively, claimed for any such item in the Adjusted Closing Statement or the Notice of Disagreement. The resolution by the Neutral Auditor Accountant of the unresolved objections shall be instructed that, (A) final and binding upon the Sellers and the Buyer. The Sellers and the Buyer agree that the procedure set forth in this Section 1.6 for resolving disputes with respect to each disputed item, the Neutral Auditor shall either accept the position taken by Purchaser or the position taken by Sellers’ Agent, but the Neutral Auditor shall not make another determination of the disputed item; and (B) the Neutral Auditor shall, based solely on its determination of the disputed items, prepare and deliver to Sellers’ Agent and Purchaser the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing, as soon as reasonably practicable (and in any event within 60 days after its engagement), and such Neutral Auditor’s determination of the Acquired Companies Working Capital at the Adjusted Closing Statement shall be final, conclusive the sole and bindingexclusive method for resolving any such disputes. The Party whose amount of Acquired Companies Working Capital claimed by such Party at the time of submission of the dispute to the Neutral Auditor differs the most from the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall pay the fees and disbursements expenses of the Neutral AuditorAccountant shall be allocated between the Sellers and the Buyer based upon the percentage that the portion of the aggregate contested amount not awarded to each party bears to the aggregate amount actually contested by such party, unless otherwise as determined by the Neutral Auditor. Each Accountant. (f) The Adjusted Closing Statement shall be deemed to be the Final Closing Statement for the purposes of Purchaser and this Section 1.6 upon the earliest of (x) the delivery by the Sellers’ Agent shall cooperate with and assist Representative of the Neutral Auditor to resolve disputed items, including by making available and granting reasonable access to records and employees. c. If Purchaser delivers a Purchaser Working Capital Statement, Notice of Acceptance or the Acquired Companies Working Capital at the Closing as finally determined by (i) failure of the Sellers’ Agent Representative to object deliver the Notice of Disagreement by the Objection Deadline pursuant to Section 1.6(c), (y) the Purchaser Working Capital Statement; or (ii) agreement resolution of all disputes by the Sellers’ Agent Representative and Purchaser (including the Buyer pursuant to a notice by Sellers’ Agent that the Purchaser Working Capital Statement is acceptable); or Section 1.6(e) and (iiiz) the Neutral Auditor, shall be the “Final Working Capital.” The date resolution of the determination of the Final Working Capital shall be referred all disputes pursuant to herein as the “Working Capital Determination Date.” d. If the Working Capital Estimate is greater than the Final Working Capital, Purchaser shall be entitled to receive, from the Escrow Account, an amount equal to the excess of the Working Capital Estimate over the Final Working Capital (any such excess, the “Working Capital Deficit”Section 1.6(e). Sellers’ Agent and Purchaser shall immediately deliver joint written instructions to the Escrow Agent to pay and deliver such amount to Purchaser out of the Escrow Account. If the Escrow Account does not have sufficient funds to cover the Working Capital Deficit, the Sellers shall severally (and not jointly) on a pro rata basis based on their Participation Percentages pay Purchaser the portion of the Working Capital Deficit not fully paid from the Escrow Account.

Appears in 1 contract

Samples: Asset Purchase Agreement (SpartanNash Co)

Closing Working Capital Adjustment. a. (a) At least five Business Days prior to the Closing Date, the Company shall deliver to Purchaser its good faith written estimate of the Closing Working Capital, which Purchaser shall have the right to approve (the "ESTIMATED CLOSING WORKING CAPITAL"). The Company shall make available to Purchaser all workpapers and other books and records utilized in preparing the Estimated Closing Working Capital and shall make available to Purchaser the appropriate personnel involved in the preparation of such estimate. If the Estimated Closing Working Capital is less than the greater of (i) $4,659,987 or (ii) the net working capital, excluding cash and payables to Shareholders, as shown on the audited balance sheet of the Company as of December 31, 2000 referred to in Section 5.5 (the "TARGET WORKING CAPITAL"), the Closing Cash Consideration shall be entitleddecreased by the amount of such deficiency (the "DEFICIENCY"). In all other cases, there shall be no adjustment of the Closing Cash Consideration at the Closing. (b) As promptly as practicable, but in no event later than 90 days, after the Closing Date, Purchaser shall notify the Company in writing of its determination of Closing Working Capital ("PURCHASER'S CLOSING SCHEDULE"), which determination shall set forth in reasonable detail Purchaser's calculation of Closing Working Capital. Purchaser's Closing Schedule shall also set forth, and explain, in reasonable detail, any differences between Purchaser's calculation of Closing Working Capital and the Estimated Closing Working Capital. A copy of all workpapers and other books and records utilized in the preparation of Purchaser's Closing Schedule shall be made available to the Company at such time. The Company will notify Purchaser in writing (the "WORKING CAPITAL DISPUTE NOTICE") within 75 30 days after receiving Purchaser's Closing Schedule if the Closing, to prepare and deliver to Sellers’ Agent a statement (the “Purchaser Working Capital Statement”) setting forth Company disagrees with Purchaser’s 's calculation of the Acquired Companies Closing Working Capital at the Closingas set forth in Purchaser's Closing Schedule, including each respective component thereof (the “Purchaser Working Capital Determination”). b. If Purchaser delivers a Purchaser Working Capital Statement which notice shall set forth in accordance with Section 4.3(a) within 75 days after the Closing, (i) Sellers’ Agent shall have a period of 30 days after delivery of the Purchaser Working Capital Statement (the “Working Capital Objection Period”), to deliver to Purchaser a statement (the “Working Capital Objection Statement”) setting forth any objections that Sellers’ Agent may have to the Purchaser Working Capital Determination, including a reasonably detailed explanation of reasonable detail the basis for each such objection along with reasonably detailed supporting calculationsdisagreement, the dollar amounts involved and the Company's calculation of the Closing Working Capital. If Sellers’ Agent does not deliver Purchaser will give the Company and its representatives reasonable access during the normal business hours of Purchaser to Purchaser a Working Capital Objection Statement by the end personnel, books and records of the Business to assist the Company in the preparation of the Working Capital Objection Period, or if during the Dispute Notice. If no Working Capital Objection Period Sellers’ Agent delivers to Dispute Notice is received by Purchaser written notice that Sellers’ Agent accepts the Purchaser within such 30-day period, Purchaser's calculation of Closing Working Capital Statement and the Purchaser Working Capital Determination, then the Purchaser Working Capital Statement and the Purchaser Working Capital Determination as set forth in Purchaser's Closing Schedule shall be considered final, conclusive final and binding. If Sellers’ Agent does deliver a Working Capital Objection Statement binding upon the parties hereto. (c) Upon receipt by the end Purchaser of the Working Capital Objection PeriodDispute Notice, Sellers’ Agent the Company and Purchaser shall attempt negotiate in good faith to resolve any disputed itemsdisagreement with respect to Closing Working Capital set forth in the Working Capital Dispute Notice. To the extent Purchaser and Sellers’ Agent shall reasonably cooperate with and assist each other in resolving any items disputed by Sellers’ Agent in good faith, including by making available and granting reasonable access (during normal business hours and subject to Purchaser’s reasonable security measures and insurance requirements) to records and employees of the Company (provided that Sellers’ Agent is bound by a duty of a confidentiality satisfactory to Purchaser and Sellers’ Agent is not, in Purchaser’s judgment, intrusive or disruptive). If Sellers’ Agent and Purchaser are unable to resolve all or any of the disputed items agree with respect to Closing Working Capital within 60 30 days after delivery receipt by Purchaser of the Working Capital Objection StatementDispute Notice, then Purchaser and the remaining disputed items Company shall be submitted promptly select a mutually acceptable nationally recognized accounting firm with no material relationship to Purchaser, the Company or the Shareholders and submit their dispute to such accounting firm for a binding resolution. Closing Working Capital as agreed upon by the Company and Purchaser, as deemed agreed upon pursuant to the Neutral Auditor. The Neutral Auditor shall be instructed that, (Alast sentence of Section 1.4(b) with respect to each disputed item, the Neutral Auditor shall either accept the position taken by Purchaser or the position taken by Sellers’ Agent, but the Neutral Auditor shall not make another determination of the disputed item; and (B) the Neutral Auditor shall, based solely on its determination of the disputed items, prepare and deliver to Sellers’ Agent and Purchaser the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing, as soon as reasonably practicable (and in any event within 60 days after its engagement), and such Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall be final, conclusive and binding. The Party whose amount of Acquired Companies Working Capital claimed determined by such Party at the time of submission of the dispute to the Neutral Auditor differs the most from the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall pay the fees and disbursements of the Neutral Auditoraccounting firm, unless otherwise determined by the Neutral Auditor. Each of Purchaser and Sellers’ Agent shall cooperate with and assist the Neutral Auditor to resolve disputed items, including by making available and granting reasonable access to records and employees. c. If Purchaser delivers a Purchaser Working Capital Statement, the Acquired Companies Working Capital at the Closing as finally determined by (i) failure of Sellers’ Agent to object to the Purchaser Working Capital Statement; or (ii) agreement of Sellers’ Agent and Purchaser (including pursuant to a notice by Sellers’ Agent that the Purchaser Working Capital Statement is acceptable); or (iii) the Neutral Auditorin accordance herewith, shall be termed the "FINAL CLOSING WORKING CAPITAL". The fees and expenses of such accounting firm shall be paid by the party hereto whose determination of Closing Working Capital as initially submitted to such accounting firm is furthest away from the Final Closing Working Capital.” The date of the determination of (d) If the Final Closing Working Capital shall be referred to herein as the “Working Capital Determination Date.” d. If the Working Capital Estimate is greater than the Final Estimated Closing Working Capital, Purchaser shall be entitled Parent shall, on behalf of Purchaser, pay to receive, from the Escrow Account, an amount equal to Company the lesser of (i) the excess of the Final Closing Working Capital Estimate over the Final Estimated Closing Working Capital or (any such excess, the “Working Capital Deficit”ii). Sellers’ Agent and Purchaser shall immediately deliver joint written instructions to the Escrow Agent to pay and deliver such amount to Purchaser out of the Escrow Account. If the Escrow Account does not have sufficient funds to cover the Working Capital Deficit, the Sellers shall severally (and not jointly) on a pro rata basis based on their Participation Percentages pay Purchaser the portion of the Working Capital Deficit not fully paid from the Escrow Account.

Appears in 1 contract

Samples: Asset Purchase Agreement (Nautica Enterprises Inc)

Closing Working Capital Adjustment. a. Purchaser (a) No later than five Business Days prior to the scheduled Closing Date, the Sellers’ Representative shall deliver to the Buyer a statement, substantially in the form attached hereto as Exhibit A (the “Preliminary Closing Statement”), together with reasonably detailed supporting information, setting forth the Sellers’ reasonable and good faith estimates of: (i) the Closing Indebtedness (the “Estimated Closing Indebtedness”), which shall include the aggregate amount of Indebtedness specified in the Payoff Letters, (ii) the Closing Working Capital, (iii) either the resulting Closing Date Working Capital Excess or Closing Date Working Capital Shortfall, as the case may be, (iv) the Cash Balances, (v) the Outstanding Check Balances, (vi) either the resulting Cash Balance Excess or Cash Balance Shortfall, as the case may be, (vii) (x) the Transaction Expenses (the “Estimated Transaction Expenses”) and (y) the wire transfer instructions for each payee thereof and the portion of the Transaction Expenses payable to such payee, (viii) the Escrow Amount and (ix) the Closing Payment, using the amounts of the Estimated Closing Indebtedness, the Closing Date Working Capital Excess or Closing Date Working Capital Shortfall, as applicable, the Cash Balance Excess or Cash Balance Shortfall, as applicable, and the Estimated Transaction Expenses, in each case, as provided in the Preliminary Closing Statement (the estimated amount determined pursuant to this Section 1.6(a), the “Estimated Closing Payment”). Prior to the Closing Date, the Sellers shall review and consider in good faith any reasonable comments proposed by the Buyer in good faith with respect to the Preliminary Closing Statement. To the extent the Sellers and the Buyer are unable to resolve any disputes with respect to any item set forth on the Preliminary Closing Statement prior to the Closing Date, for purposes of the payment to be made by the Buyer pursuant to Section 1.7, the amount of such item shall be entitledequal to an amount that is the arithmetic average of the amount of such item proposed by the Buyer and the amount of such item set forth in the Preliminary Closing Statement. The Buyer shall have the right to rely on the information set forth in the Preliminary Closing Statement, within 75 including with respect to the allocation and payment of the Transaction Expenses. (b) Within 90 days after the ClosingClosing Date, to the Buyer shall prepare and deliver to the Sellers’ Agent Representative a statement prepared in good faith, together with reasonably detailed supporting information, substantially in the form attached hereto as Exhibit A (the “Purchaser Adjusted Closing Statement”), setting forth the Buyer’s determination of: (i) the Closing Indebtedness, (ii) the Closing Working Capital, (iii) either the resulting Closing Date Working Capital Statement”Excess or Closing Date Working Capital Shortfall, as the case may be, (iv) setting forth Purchaserthe Cash Balances, (v) the Outstanding Check Balances, (vi) either the resulting Cash Balance Excess or Cash Balance Shortfall, as the case may be, (vii) the Transaction Expenses, (viii) the Escrow Amount and (ix) the Closing Payment, using the amounts of Closing Indebtedness, Transaction Expenses, the Closing Date Working Capital Excess or Closing Date Working Capital Shortfall, as applicable, and the Cash Balance Excess or Cash Balance Shortfall, as applicable. (c) At all reasonable times during the 60 days immediately following the Sellers’ Representative’s calculation receipt of the Acquired Companies Working Capital at the Closing, including each respective component thereof Adjusted Closing Statement (the “Purchaser Working Capital DeterminationObjection Deadline”). b. If Purchaser delivers , the Sellers’ Representative and its Representatives shall be permitted, at the sole cost and expense of the Sellers, to review the records of the Business (solely to the extent relating to the Adjusted Closing Statement and/or the adjustment of the Purchase Price set forth in this Section 1.6) reasonably requested by the Sellers’ Representative in connection with its review of the Adjusted Closing Statement. The Buyer shall cooperate (and shall cause its Representatives to cooperate) with the Sellers’ Representative to enable him and the Representatives of the Sellers to review the Adjusted Closing Statement, including, without limitation, making reasonably available books, records, work papers and personnel relating to the Adjusted Closing Statement and any amounts reflected on the Adjusted Closing Statement or reasonably required in order to verify such amounts, in each case, subject to customary confidentiality protection and solely to the extent needed to review the Adjusted Closing Statement; provided that such access shall only be afforded during normal business hours, under the supervision of the Buyer’s personnel and in such a Purchaser Working Capital Statement manner as not to interfere with the Buyer’s operations. Notwithstanding the foregoing, if the Sellers file a lawsuit seeking to require the Buyer to comply with its obligations under this Section 1.6 to provide the Sellers with prompt reasonable access to books and records so that the Sellers may adequately and thoroughly review the Adjusted Closing Statement, the Objection Deadline shall be extended for a period of 60 days following the date such lawsuit is filed (the “Objection Deadline Extension Period”). To the extent that such lawsuit to require the Buyer to comply with its obligations to provide access to books and records under this Section 1.6 is not finally resolved or dismissed within the Objection Deadline Extension Period, the Objection Deadline Extension Period shall be automatically extended until such time as the lawsuit is finally resolved or dismissed. Notwithstanding anything to the contrary in accordance with Section 4.3(a) within 75 days after this Agreement, the ClosingBuyer shall not be required to disclose any information to the Sellers’ Representative or any Representative of a Seller if such disclosure would, in the Buyer’s sole discretion, (i) result in the forfeiture or waiver of any attorney-client or other legal privilege or (ii) contravene any applicable Laws, fiduciary duty or binding agreement; provided that the Buyer shall use commercially reasonable efforts to share any portion of information withheld pursuant to clauses (i) and (ii) in a manner so as to prevent any competitive harm or preserve any applicable privilege or compliance with Law. When accessing any of the Buyer’s properties, the Sellers’ Agent Representative, each Seller and any of their respective authorized Representatives shall have comply with all of the Buyer’s safety and security requirements for the applicable property. (d) The Sellers’ Representative shall deliver to the Buyer by the Objection Deadline either a period notice indicating that the Sellers accept the Adjusted Closing Statement (“Notice of 30 Acceptance”) or a statement describing in reasonable detail its objections to the Adjusted Closing Statement (“Notice of Disagreement”). Any Notice of Disagreement shall specify those items or amounts to which the Sellers object and shall set forth the Sellers’ calculation of such amounts based on such objections. If the Sellers’ Representative delivers to the Buyer a Notice of Acceptance, or the Sellers’ Representative does not deliver a Notice of Disagreement by the Objection Deadline, then, effective as of either the date of delivery of such Notice of Acceptance or as of the end of the Objection Deadline, as the case may be, the Adjusted Closing Statement shall be deemed to be the Final Closing Statement. If the Sellers’ Representative timely delivers a Notice of Disagreement, only those matters specified in such Notice of Disagreement shall be deemed to be in dispute, and all other matters included in the Adjusted Closing Statement shall be final and binding upon the Buyer and the Sellers; provided, however, that if the resolution of any matter specified in the Notice of Disagreement affects an undisputed component of the Adjusted Closing Statement, such undisputed component shall, notwithstanding the failure to object to such component in the Notice of Disagreement, be deemed to be in dispute to the extent so affected. (e) The Sellers’ Representative and the Buyer shall first use commercially reasonable efforts to resolve any objection set forth on a Notice of Disagreement. Any resolution by the Sellers’ Representative and the Buyer as to such objections shall be final and binding on the parties hereto. If the Sellers’ Representative and the Buyer do not reach a resolution of all objections set forth on the Notice of Disagreement within 45 days after delivery of such Notice of Disagreement, the Purchaser Working Capital Statement Sellers and the Buyer shall, within 45 days following the expiration of such 45-day period, engage a Neutral Accountant, pursuant to an engagement agreement executed by the Sellers’ Representative, the Buyer and the Neutral Accountant, to resolve any unresolved objections. The Neutral Accountant shall be instructed to review this Agreement (the “Working Capital Objection Period”including this Section 1.6), to deliver to Purchaser a statement (as well as the “Working Capital Objection Statement”) setting forth any objections that Sellers’ Agent may have to the Purchaser Working Capital Determination, including a reasonably detailed explanation of the basis for each such objection along with reasonably detailed supporting calculations. If Sellers’ Agent does not deliver to Purchaser a Working Capital Objection Statement by the end of the Working Capital Objection Period, or if during the Working Capital Objection Period Sellers’ Agent delivers to Purchaser written notice that Sellers’ Agent accepts the Purchaser Working Capital Adjusted Closing Statement and the Purchaser Working Capital DeterminationNotice of Disagreement and any other materials requested by the Neutral Accountant, then and to only resolve the Purchaser Working Capital Statement unresolved objections in accordance with the terms of this Agreement. The Neutral Accountant shall be instructed to base its determination solely on written submissions by the Buyer and the Purchaser Working Capital Determination Sellers’ Representative and the terms of this Agreement, and not to otherwise investigate such matters independently. The Buyer and the Sellers’ Representative shall direct the Neutral Accountant to make a final determination (which determination shall be considered final, conclusive and binding. If Sellers’ Agent does deliver a Working Capital Objection Statement by binding on the end parties hereto) of the Working Capital Objection Period, Sellers’ Agent unresolved objections and Purchaser shall attempt in good faith to resolve any disputed items. Purchaser and Sellers’ Agent shall reasonably cooperate with and assist each other in resolving any items disputed by Sellers’ Agent in good faith, including by making available and granting reasonable access (during normal business hours and subject to Purchaser’s reasonable security measures and insurance requirements) to records and employees the calculation of the Company (provided that Sellers’ Agent is bound by a duty of a confidentiality satisfactory to Purchaser and Sellers’ Agent is not, in Purchaser’s judgment, intrusive or disruptive). If Sellers’ Agent and Purchaser are unable to resolve all or any of Purchase Price within 45 days from the disputed items within 60 days after delivery of date the Working Capital Objection Statement, then the remaining disputed items shall be unresolved objections were submitted to the Neutral AuditorAccountant, and such final determination of the Neutral Accountant of any unresolved objections, together with any undisputed component of the Adjusted Closing Statement, taking into account any adjustment thereto as a result of any determination by the Neutral Accountant, shall be deemed the Final Closing Statement. During the 45-day review by the Neutral Accountant, the Buyer and the Sellers shall, and shall cause each other member of the Seller Group to, make available to the Neutral Accountant such individuals, information, books and records as may be reasonably required by the Neutral Accountant to make its final determination. In resolving any unresolved objections, the Neutral Accountant (i) shall be bound by the terms of this Agreement (including the provisions of this Section 1.6 and the definitions of Closing Working Capital, Closing Indebtedness and Transaction Expenses and the definitions of any other terms set forth herein and relevant to resolving the unresolved objections), (ii) shall limit its review to the unresolved objections submitted to the Neutral Accountant for resolution and not otherwise investigate matters independently and (iii) shall further limit its review of the unresolved objections solely to whether the Adjusted Closing Statement has been prepared in accordance with the terms of this Section 1.6 or contains any mathematical or clerical error. The determination of any unresolved objections cannot, however, be in excess of, or less than, the greatest or lowest value, respectively, claimed for any such item in the Adjusted Closing Statement or the Notice of Disagreement. The resolution by the Neutral Auditor Accountant of the unresolved objections shall be instructed that, (A) final and binding upon the Sellers and the Buyer. The Sellers and the Buyer agree that the procedure set forth in this Section 1.6 for resolving disputes with respect to each disputed item, the Neutral Auditor shall either accept the position taken by Purchaser or the position taken by Sellers’ Agent, but the Neutral Auditor shall not make another determination of the disputed item; and (B) the Neutral Auditor shall, based solely on its determination of the disputed items, prepare and deliver to Sellers’ Agent and Purchaser the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing, as soon as reasonably practicable (and in any event within 60 days after its engagement), and such Neutral Auditor’s determination of the Acquired Companies Working Capital at the Adjusted Closing Statement shall be final, conclusive the sole and bindingexclusive method for resolving any such disputes. The Party whose amount of Acquired Companies Working Capital claimed by such Party at the time of submission of the dispute to the Neutral Auditor differs the most from the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall pay the fees and disbursements expenses of the Neutral AuditorAccountant shall be allocated between the Sellers and the Buyer based upon the percentage that the portion of the aggregate contested amount not awarded to each party bears to the aggregate amount actually contested by such party, unless otherwise as determined by the Neutral Auditor. Each Accountant. (f) The Adjusted Closing Statement shall be deemed to be the Final Closing Statement for the purposes of Purchaser and this Section 1.6 upon the earliest of (x) the delivery by the Sellers’ Agent shall cooperate with Representative of the Notice of Acceptance or the failure of the Sellers’ Representative to deliver the Notice of Disagreement by the Objection Deadline pursuant to Section 1.6(c), (y) the resolution of all disputes by the Sellers’ Representative and assist the Buyer pursuant to Section 1.6(e) and (z) the resolution of all disputes pursuant to Section 1.6(e) by the Neutral Auditor Accountant. Within five Business Days after the Final Closing Statement becomes or is deemed final and binding on the parties hereto, an adjustment to resolve disputed items, including by making available and granting reasonable access to records and employees. c. If Purchaser delivers a Purchaser Working Capital Statement, the Acquired Companies Working Capital at the Closing Payment and a payment by wire transfer in respect thereof described below shall be made as finally determined by follows: (i) failure If the Estimated Closing Payment is less than the Closing Payment as shown on the Final Closing Statement (such difference, the “Deficiency”), the Buyer shall pay to each Seller an amount equal to (1) such Seller’s Pro-Rata Share multiplied by (2) the amount of Sellers’ Agent to object to the Purchaser Working Capital Statement; or such Deficiency, by wire transfer of immediately available funds. (ii) agreement of Sellers’ Agent and Purchaser (including pursuant to a notice by Sellers’ Agent that the Purchaser Working Capital Statement is acceptable); or (iii) the Neutral Auditor, shall be the “Final Working Capital.” The date of the determination of the Final Working Capital shall be referred to herein as the “Working Capital Determination Date.” d. If the Working Capital Estimate Estimated Closing Payment is greater than the Final Working Capital, Purchaser shall be entitled to receive, from the Escrow Account, an amount equal to the excess of the Working Capital Estimate over Closing Payment as shown on the Final Working Capital Closing Statement (any such excessdifference, the “Working Capital DeficitExcess”). Sellers’ Agent and Purchaser shall immediately deliver joint written instructions to the Escrow Agent to pay and deliver such amount to Purchaser out of the Escrow Account. If the Escrow Account does not have sufficient funds to cover the Working Capital Deficit, the Sellers shall severally pay to the Buyer the amount of such Excess, by wire transfer of immediately available funds. (and not jointlyiii) on a pro rata basis based on their Participation Percentages pay Purchaser Any payment required to be made by the portion of Sellers or the Working Capital Deficit not fully paid Buyer pursuant to this Section 1.6(f) shall bear interest from the Escrow AccountClosing Date through the date of payment at the interest rate per annum equal to the prime rate as published in The Wall Street Journal on the Closing Date. (iv) If the delivery deadline date for the Adjusted Closing Statement or the Objection Deadline is a day that is not a Business Day, the applicable delivery deadline date shall be the immediately following Business Day.

Appears in 1 contract

Samples: Asset Purchase Agreement

Closing Working Capital Adjustment. a. Purchaser (a) At least five ---------------------------------- Business Days prior to the Closing Date, Seller shall deliver to Buyer its good faith written estimate of the Closing Working Capital (with any adjustment thereto proposed by Buyer and agreed to by Seller prior to the Closing Date (the "Estimated Closing Working Capital")). Seller shall make available to Buyer all workpapers and other books and records utilized in preparing the Estimated Closing Working Capital and shall make available to Buyer the appropriate personnel involved in the preparation of such estimate. If the Estimated Closing Working Capital is greater than the Working Capital Upper Limit, the Base Purchase Price shall be entitled, within 75 days after increased by the Closing, to prepare and deliver to Sellers’ Agent a statement (amount of such excess. If the “Purchaser Estimated Closing Working Capital Statement”) setting forth Purchaser’s calculation is less than the Working Capital Lower Limit, the Base Purchase Price shall be decreased by the amount of such deficiency. In all other cases, there shall be no adjustment of the Acquired Companies Working Capital Base Purchase Price at the Closing, including each respective component thereof (the “Purchaser Working Capital Determination”). b. If Purchaser delivers a Purchaser Working Capital Statement (b) As promptly as practicable, but in accordance with Section 4.3(a) within 75 days no event later than 90 days, after the ClosingClosing Date, Seller shall cause its independent auditors, KPMG Peat Marwick LLP (i) Sellers’ Agent shall have a period of 30 days after delivery of the Purchaser Working Capital Statement (the “Working Capital Objection Period”"Seller's Accountant"), to deliver to Purchaser a statement Buyer and Seller in writing its calculation of Closing Working Capital (the "Final Closing Working Capital"), together with a written report and certificate of Seller's Accountant to the effect that the Final Closing Working Capital Objection Statement”) setting forth any objections that Sellers’ Agent may have to has been prepared in compliance with the Purchaser Working Capital Determination, including a reasonably detailed explanation requirements of the basis for each such objection along with reasonably detailed supporting calculations. If Sellers’ Agent does not deliver to Purchaser a Working Capital Objection Statement by the end of the Working Capital Objection Period, or if during the Working Capital Objection Period Sellers’ Agent delivers to Purchaser written notice that Sellers’ Agent accepts the Purchaser Working Capital Statement this Section 2.3 and the Purchaser Working Capital Determinationother applicable provisions of this Agreement (the "Closing Accountant's Report"). During the 90- day period following the Closing, then the Purchaser Working Capital Statement Seller and the Purchaser Working Capital Determination Buyer shall be considered final, conclusive and binding. If Sellers’ Agent does deliver a Working Capital Objection Statement by the end of the Working Capital Objection Period, Sellers’ Agent and Purchaser shall attempt in good faith make available to resolve any disputed items. Purchaser and Sellers’ Agent shall reasonably cooperate with and assist each other in resolving any items disputed by Sellers’ Agent in good faith, including by making available and granting reasonable access (Seller's Accountant during normal business hours the appropriate personnel and subject the books and records of Seller and Buyer to Purchaser’s reasonable security measures and insurance requirements) to records and employees assist in the preparation of the Company (provided that Sellers’ Agent is bound by a duty Closing Accountant's Report. Seller's Accountant will provide Seller and Buyer and Buyer's firm of a confidentiality satisfactory to Purchaser and Sellers’ Agent is not, in Purchaser’s judgment, intrusive or disruptive). If Sellers’ Agent and Purchaser are unable to resolve all or any independent certified public accountants with copies of drafts of the disputed items within 60 days after delivery Closing Accountant's Report and access to Seller's Accountant and their working papers related thereto at least 10 Business Days prior to issuance of such report and will consider any comments and questions raised by Seller or Buyer prior to rendering the Closing Accountant's Report. In no event shall Seller's Accountant provide drafts of the Closing Accountant's Report or provide information with respect thereto to one party unless substantially contemporaneous therewith such drafts or information are provided to the other party. Seller's Accountant's calculation of the Final Closing Working Capital Objection Statement, then as set forth in the remaining disputed items Closing Accountant's Report shall be submitted to final and binding upon the Neutral Auditor. The Neutral Auditor shall be instructed that, parties hereto absent manifest error (A) it being understood that manifest error means error that is solely evident on the face of the Closing Accountant's Report or in tying the related working papers and the books and records of Buyer and Seller with respect to each disputed item, the Neutral Auditor shall either accept Business to the position taken by Purchaser or Closing Accountant's Report). The fees and expenses of Seller's Accountant in connection with the position taken by Sellers’ Agent, but the Neutral Auditor shall not make another determination preparation of the disputed item; and (B) the Neutral Auditor shall, based solely on its determination of the disputed items, prepare and deliver to Sellers’ Agent and Purchaser the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing, as soon as reasonably practicable (and in any event within 60 days after its engagement), and such Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing Accountant's Report shall be finalsplit equally by the parties hereto. (c) If the Final Purchase Price is greater than the Initial Cash Payment, conclusive and binding. The Party whose Buyer shall pay to Seller the amount of Acquired Companies Working Capital claimed by such Party at excess, or if the time of submission of the dispute to the Neutral Auditor differs the most from the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall pay the fees and disbursements of the Neutral Auditor, unless otherwise determined by the Neutral Auditor. Each of Purchaser and Sellers’ Agent shall cooperate with and assist the Neutral Auditor to resolve disputed items, including by making available and granting reasonable access to records and employees. c. If Purchaser delivers a Purchaser Working Capital Statement, the Acquired Companies Working Capital at the Closing as finally determined by (i) failure of Sellers’ Agent to object to the Purchaser Working Capital Statement; or (ii) agreement of Sellers’ Agent and Purchaser (including pursuant to a notice by Sellers’ Agent that the Purchaser Working Capital Statement is acceptable); or (iii) the Neutral Auditor, shall be the “Final Working Capital.” The date of the determination of the Final Working Capital shall be referred to herein as the “Working Capital Determination Date.” d. If the Working Capital Estimate Initial Cash Payment is greater than the Final Working CapitalPurchase Price, Purchaser Seller shall be entitled pay to receive, from Buyer the Escrow Account, an amount equal to the excess of the Working Capital Estimate over the Final Working Capital (any such excess, plus in either case interest on such excess for the period from the Closing Date through (but excluding) the date of such payment at the Prime Rate. (d) The payment to be made pursuant to Section 2.3(c) shall be made by wire transfer of immediately available funds to a bank account designated by Seller or Buyer, as the case may be, to the other party within five Business Days after the Final Closing Working Capital Deficit”). Sellers’ Agent becomes final and Purchaser shall immediately deliver joint written instructions to binding on the Escrow Agent to pay and deliver such amount to Purchaser out of the Escrow Account. If the Escrow Account does not have sufficient funds to cover the Working Capital Deficit, the Sellers shall severally (and not jointly) on a pro rata basis based on their Participation Percentages pay Purchaser the portion of the Working Capital Deficit not fully paid from the Escrow Accountparties hereto.

Appears in 1 contract

Samples: Asset Purchase Agreement (Arco Chemical Co)

Closing Working Capital Adjustment. a. Purchaser shall be entitled, within 75 days (a) As promptly as practicable after the ClosingClosing Date, to but in no event later than sixty (60) days thereafter, Buyer shall prepare and deliver to Sellers’ Agent Cenveo Corp a statement schedule (the “Purchaser Working Capital StatementBuyer’s Closing Schedule”) setting forth Purchaserin reasonable detail Buyer’s calculation of the Acquired Companies Closing Working Capital at along with a copy of the Closingcomputations used in connection therewith. Buyer shall give Cenveo Corp and its representatives reasonable access to the work papers used in connection with the preparation of the Buyer’s Closing Schedule; provided that if Buyer employs a firm of independent accountants in connection with the preparation of the Buyer’s Closing Schedule, including then Buyer shall cause such independent accountants to give Cenveo Corp and its representatives reasonable access to any computations and work papers used in the preparation of the Buyer’s Closing Schedule (provided, that Cenveo Corp and any of its representatives requesting any computations or work papers prepared by any independent accounting firm shall have executed and delivered any non-reliance release or other agreements reasonably required by the independent accounting firm that has prepared such computations or work papers). Buyer and its representatives will also give, upon reasonable prior notice, Cenveo Corp and its representatives reasonable access, during the normal business hours of Buyer and the Companies and Company Subsidiaries, to personnel responsible for, or with knowledge regarding, information used in the preparation of the Buyer’s Closing Schedule and books and records of the Companies and Company Subsidiaries used in the preparation or reasonably related to the calculation of Closing Working Capital, in each respective component thereof case, as reasonably requested by Cenveo Corp to assist it (if necessary) in the preparation of the Sellers’ Dispute Notice. Cenveo Corp will notify Buyer in writing (the “Purchaser Sellers’ Dispute Notice”) within thirty (30) days after receiving the Buyer’s Closing Schedule if Cenveo Corp disagrees with Buyer’s calculation of the Closing Working Capital Determination”). b. If Purchaser delivers a Purchaser Working Capital Statement as set forth in accordance with Section 4.3(a) within 75 days after the ClosingBuyer’s Closing Schedule, (i) Sellers’ Agent which notice shall have a period of 30 days after delivery set forth in reasonable detail the name of the Purchaser Working Capital Statement (Company(ies) or Company Subsidiary(ies) to which the “Working Capital Objection Period”)disputed calculation relates, to deliver to Purchaser a statement (the “Working Capital Objection Statement”) setting forth any objections that Sellers’ Agent may have to the Purchaser Working Capital Determination, including a reasonably detailed explanation of the basis for such disagreement and dollar amount of each such objection along with reasonably detailed supporting calculationsdispute and Cenveo Corp’s calculation of the Closing Working Capital. If no Sellers’ Agent does not deliver to Purchaser a Dispute Notice is received by Buyer within such thirty (30)-day period, then Buyer’s calculation of the Closing Working Capital Objection Statement as set forth in the Buyer’s Closing Schedule shall be final and binding upon the parties hereto. (b) Upon receipt by the end Buyer of the Working Capital Objection Period, or if during the Working Capital Objection Period Sellers’ Agent delivers to Purchaser written notice that Sellers’ Agent accepts the Purchaser Working Capital Statement Dispute Notice, Cenveo Corp and the Purchaser Working Capital Determination, then the Purchaser Working Capital Statement and the Purchaser Working Capital Determination Buyer shall be considered final, conclusive and binding. If Sellers’ Agent does deliver a Working Capital Objection Statement by the end of the Working Capital Objection Period, Sellers’ Agent and Purchaser shall attempt negotiate in good faith to resolve any disputed items. Purchaser and disagreement with respect to Closing Working Capital as set forth in the Sellers’ Agent Dispute Notice (each such disagreement being referred to as a “Disputed Item”). Any Disputed Item resolved and agreed to in writing by Buyer and Cenveo Corp shall reasonably cooperate be deemed final and binding when such writing is executed by Buyer and Cenveo Corp. To the extent Buyer and Cenveo Corp are unable to agree with and assist each other in resolving any items disputed respect to the Closing Working Capital within thirty (30) days after receipt by Buyer of the Sellers’ Agent in good faithDispute Notice, including by making available Buyer and granting reasonable access Cenveo Corp shall promptly engage McGladrey LLP or, if McGladrey LLP is unable or unwilling to accept such engagement, then an internationally recognized independent accounting firm mutually and reasonably acceptable to Buyer and Cenveo Corp (during normal business hours the “Accounting Firm”), and subject submit their dispute to Purchaser’s reasonable security measures the Accounting Firm for a binding resolution. The fees and insurance requirements) to records and employees expenses of the Company Accounting Firm pursuant to this Section 1.4 shall be borne, in their entirety, by the party whose calculation of the Final Purchase Price based upon its calculation of Closing Working Capital as initially submitted to the Accounting Firm (provided that in accordance with Section 1.4(c) below) is furthest away from the Final Purchase Price based upon the Closing Working Capital as determined by the Accounting Firm. The fees and expenses of Buyer’s independent auditors (if any), attorneys (if any) or any other advisors incurred in connection with the issuance of the Buyer’s Closing Schedule and any dispute resolution procedure relating thereto shall be borne by Buyer, and the fees and expenses of the independent auditors (if any), attorneys (if any) or any other advisors of Cenveo Corp incurred in connection with their review of the Buyer’s Closing Schedule and issuance of the Sellers’ Agent is bound Dispute Notice and any dispute resolution procedure relating thereto shall be borne by Cenveo Corp. (c) Not later than thirty (30) days after the engagement of the Accounting Firm (as evidenced by its written acceptance by facsimile or otherwise to the parties), unless other procedures are agreed upon at such time, Cenveo Corp and Buyer shall submit simultaneous briefs to the Accounting Firm (with a duty copy to the other party or parties) setting forth their respective positions regarding any Disputed Item, and not later than thirty (30) days after the submission of such briefs, Cenveo Corp and Buyer shall submit simultaneous reply briefs (with a confidentiality satisfactory copy to Purchaser and Sellers’ Agent is not, in Purchaser’s judgment, intrusive the other party or disruptiveparties). If an additional briefing, a hearing or other information is required by the Accounting Firm, the Accounting Firm shall give notice thereof to the parties as soon as practicable before the expiration of such thirty (30)-day period, and the applicable parties shall promptly respond with a view to minimizing any delay in the decision date. Cenveo Corp and Buyer shall instruct the Accounting Firm to render its decision resolving such dispute within thirty (30) days after submission of the reply briefs or, in the event an additional briefing, a hearing or other information is required, within thirty (30) days after the completion of such additional briefing, the completion of such hearing, or the submission of such additional information, as the case may be. In resolving any Disputed Item, the Accounting Firm: (i) shall act as an accounting expert and not as an arbitrator; (ii) shall be bound by the provisions of this Section 1.4 and the definitions of Closing Working Capital and the definitions included therein; (iii) shall limit its review to matters still in dispute as specifically set forth in the Sellers’ Agent Dispute Notice (and Purchaser only to the extent such matters are unable to resolve all or any still in dispute at the commencement of the disputed items within 60 days after delivery of the Working Capital Objection Statementsuch thirty (30)-day period, then the remaining disputed items it being understood that matters covered in offers made in proposed settlement shall be submitted treated as in “dispute” unless the proposed settlement offer specifies otherwise at the time made); and (iv) shall further limit its review solely to whether the Buyer’s Closing Schedule has been prepared in accordance with this Section 1.4. The determination of any item that is a component of Closing Working Capital, and is the subject of a dispute cannot, however, be in excess of, or less than, the greatest or lowest value, respectively, claimed for any particular item in the Buyer’s Closing Schedule or the Sellers’ Dispute Notice (or, if closer to the Neutral Auditor. The Neutral Auditor shall be instructed thatvalue claimed in the Sellers’ Dispute Notice or the Buyer’s Closing Schedule, respectively, the value claimed by the relevant party at the commencement of such thirty (A) 30)- day period (it being understood and agreed that any value for any item proposed in an effort to reach an agreement with respect to each disputed item, the Neutral Auditor shall either accept the position taken by Purchaser or the position taken by Sellers’ Agent, but the Neutral Auditor value of such item shall not make another determination be deemed to be “claimed” for purposes of this sentence if the disputed item; and (B) the Neutral Auditor shall, based solely on its determination of the disputed items, prepare and deliver to Sellers’ Agent and Purchaser the Neutral Auditor’s determination of the Acquired Companies Working Capital proposing party specifies so at the Closing, as soon as reasonably practicable (and in any event within 60 days after its engagementsuch time), and such Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall be final, conclusive and binding. The Party whose amount of Acquired Companies Working Capital claimed by such Party at the time of submission of the dispute to the Neutral Auditor differs the most from the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall pay the fees Sellers and disbursements of the Neutral Auditor, unless otherwise determined by the Neutral Auditor. Each of Purchaser and Sellers’ Agent shall cooperate with and assist the Neutral Auditor to resolve disputed items, including by making available and granting reasonable access to records and employees. c. If Purchaser delivers a Purchaser Working Capital Statement, the Acquired Companies Working Capital at the Closing as finally determined by (i) failure of Sellers’ Agent to object to the Purchaser Working Capital Statement; or (ii) agreement of Sellers’ Agent and Purchaser (including pursuant to a notice by Sellers’ Agent Buyer each agree that the Purchaser Working Capital Statement is acceptable); or (iii) the Neutral Auditor, shall judgment may be the “Final Working Capital.” The date of entered upon the determination of the Final Accounting Firm in any court having jurisdiction over the party against which such determination is to be enforced. Closing Working Capital as agreed upon by Cenveo Corp and Buyer, as deemed agreed upon pursuant to the last sentence of Section 1.4(a) or as determined by the Accounting Firm in accordance with Sections 1.4(b) and 1.4(c), shall be termed the “Final Closing Working Capital.” (d) Buyer and Cenveo Corp agree to make the payments, as applicable, set forth below in Section 1.4(d)(i) or 1.4(d)(ii), as the case may be. Buyer and Cenveo Corp agree that any payment required to be made pursuant to Section 1.4(d)(i) or 1.4(d)(ii), as the case may be, shall be made within five (5) Business Days after the Final Closing Working Capital becomes final and binding on the parties hereto (the date the Final Closing Working Capital becomes final and binding being referred to herein as the “Final Closing Working Capital Determination Date”) by wire transfer in immediately available funds to a bank account or bank accounts designated by Cenveo Corp or Buyer, as the case may be, to the other party or parties, as applicable. (i) Cenveo Corp shall pay to Buyer the excess, if any, of the Estimated Closing Working Capital over the Final Closing Working Capital together with interest at the Applicable Rate compounded daily beginning on the date that is five (5) Business Days after the Final Closing Working Capital Date. d. If (ii) Buyer shall pay to Cenveo Corp the excess, if any, of the Final Closing Working Capital Estimate over the Estimated Closing Working Capital together with interest at the Applicable Rate compounded daily beginning on the date that is greater than five (5) Business Days after the Final Closing Working Capital Date. (iii) Any interest payable pursuant to subsections (d)(i) and (d)(ii) hereof shall be due and payable at the same time as the payment as to which it relates is paid and shall be calculated daily based on a year of three hundred sixty-five (365) days and the actual number of days elapsed. (e) Buyer agrees that, following the Closing through the Final Closing Working Capital Date, it shall not, and will cause each such Company and Company Subsidiary, not to, take any actions with respect to any accounting books, records, policies or procedures on which the Closing Working Capital is to be based that would make it impossible or impracticable to calculate the Closing Working Capital in the manner and utilizing the methods required hereby. Without limiting the generality of the foregoing, for purposes of calculating the Closing Working Capital, Purchaser no changes shall be entitled to receivemade in any reserve or other account existing as of the Interim Balance Sheet Date except (i) as a result of events occurring after such date and, from in such event, only in a manner consistent with practices of the Escrow Account, an amount equal applicable Companies or Company Subsidiaries prior to the excess of Closing Date and (ii) as necessary to correct any computational error or errors in applying the Working Capital Estimate over the Final Working Capital (any such excess, the “Working Capital Deficit”). Sellers’ Agent and Purchaser shall immediately deliver joint written instructions to the Escrow Agent to pay and deliver such amount to Purchaser out of the Escrow Account. If the Escrow Account does not have sufficient funds to cover the Working Capital Deficit, the Sellers shall severally (and not jointly) on a pro rata basis based on their Participation Percentages pay Purchaser the portion of the Working Capital Deficit not fully paid from the Escrow AccountAccounting Principles.

Appears in 1 contract

Samples: Stock and Membership Interest Purchase Agreement (Cenveo, Inc)

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Closing Working Capital Adjustment. a. (a) Immediately prior to the Closing Seller has prepared and delivered to Purchaser the Preliminary Closing Working Capital Statement, which reflects the Preliminary Closing Working Capital and the Preliminary Closing Working Capital Adjustment. (b) No later than the ninety-third (93rd) day following the Closing Date, Purchaser shall be entitled, within 75 days after the Closing, to prepare and deliver to Sellers’ Agent Seller a statement (the “Purchaser "Closing Working Capital Statement") setting forth Purchaser’s consisting of an internally prepared unaudited consolidated balance sheet of Seller as of the Closing Date ("Closing Balance Sheet") and a good faith calculation of the Acquired Companies Closing Working Capital, in each case in accordance with the Agreed Upon Closing Working Capital at the Closing, including each respective component thereof (the “Purchaser Calculation Principles. The Closing Working Capital Determination”Statement, shall identify the amount of the Purchased Accounts Receivable which have not been collected as of the ninetieth (90th) day after the Closing ("Uncollected Purchased Accounts Receivable Amount"), along with a breakdown of the individual uncollected Purchased Accounts Receivable ("Uncollected Purchased Accounts Receivable"). The Uncollected Purchased Accounts Receivable Amount shall be deducted in full from the Accounts Receivable amount reflected on the Closing Working Capital Statement. b. If Purchaser delivers a Purchaser (d) The Closing Working Capital Statement shall become final, binding and conclusive upon, and non-appealable by, the Parties on the thirtieth (30th) day after the receipt by Seller of the Closing Working Capital Statement, unless before such thirtieth (30th) day Seller, reasonably and in good faith, delivers to Purchaser a written notice ("Closing Working Capital Dispute Notice") stating that Seller believes the Closing Working Capital Statement contains mathematical errors or the Closing Balance Sheet was not prepared in accordance with Section 4.3(a) within 75 days after the ClosingAgreed Upon Closing Working Capital Calculation Principles, and specifying in reasonable detail each item that Seller disputes (i) Sellers’ Agent each, a "Closing Working Capital Disputed Item"), the amount in dispute for each Closing Working Capital Disputed Item and the reasons supporting Seller's position. Seller shall have a period of 30 days after delivery of not challenge the Purchaser Closing Working Capital Statement (on any other basis, and Seller shall be deemed to have finally and conclusively agreed with all other items and amounts contained in the “Working Capital Objection Period”), to deliver to Purchaser a statement (the “Working Capital Objection Statement”) setting forth any objections that Sellers’ Agent may have to the Purchaser Working Capital Determination, including a reasonably detailed explanation of the basis for each such objection along with reasonably detailed supporting calculations. If Sellers’ Agent does not deliver to Purchaser a Working Capital Objection Statement by the end of the Working Capital Objection Period, or if during the Working Capital Objection Period Sellers’ Agent delivers to Purchaser written notice that Sellers’ Agent accepts the Purchaser Closing Working Capital Statement and the Purchaser which are not Closing Working Capital DeterminationDisputed Items. (e) If Seller delivers a Closing Working Capital Dispute Notice before the thirtieth (30th) day after Seller's receipt of the Closing Working Capital Statement, then the Purchaser Working Capital Statement and the Purchaser Working Capital Determination Parties shall be considered final, conclusive and binding. If Sellers’ Agent does deliver a Working Capital Objection Statement by the end of the Working Capital Objection Period, Sellers’ Agent and Purchaser shall attempt seek in good faith to resolve any disputed items. the Closing Working Capital Disputed Items during the thirty (30)-day period beginning on the date Purchaser and Sellers’ Agent shall reasonably cooperate with and assist each other in resolving any items disputed by Sellers’ Agent in good faith, including by making available and granting reasonable access receives the Closing Working Capital Dispute Notice (during normal business hours and subject to Purchaser’s reasonable security measures and insurance requirements) to records and employees of the Company (provided that Sellers’ Agent is bound by a duty of a confidentiality satisfactory to Purchaser and Sellers’ Agent is not, in Purchaser’s judgment, intrusive or disruptive"Closing Working Capital Dispute Resolution Period"). If Sellers’ Agent the Parties reach agreement with respect to any Closing Working Capital Disputed Items, Purchaser shall revise the Closing Working Capital Statement to reflect such agreement and Purchaser the Closing Working Capital Statement, as so revised, shall become final, binding and conclusive upon, and non-appealable by, the Parties, except to the extent of any unresolved Closing Working Capital Disputed Items. (f) If the Parties are unable to resolve all or any of the disputed items within 60 days after delivery of the Closing Working Capital Objection StatementDisputed Items during the Closing Working Capital Dispute Resolution Period, then the remaining disputed items Parties shall jointly engage and submit the unresolved Closing Working Capital Disputed Items ("Unresolved Closing Working Capital Disputed Items") to the Independent Accountant, provided that if the Independent Accountant does not accept such appointment within ten days after the end of the Closing Working Capital Dispute Resolution Period, then any Party may request the Arbitration Organization to appoint as the Independent Accountant a partner in the Orange County, California office of a nationally recognized independent registered public accounting firm that has not had a material relationship with the Purchaser (or its Affiliates) or Seller (or its Affiliates) within the preceding two years, and such appointment shall be submitted to final, binding and conclusive on, and non-appealable by, the Neutral AuditorParties. The Neutral Auditor Independent Accountant shall be instructed that, (A) with respect act as an arbitrator to each disputed item, the Neutral Auditor shall either accept the position taken by Purchaser or the position taken by Sellers’ Agent, but the Neutral Auditor shall not make another determination of the disputed item; and (B) the Neutral Auditor shalldetermine, based solely on written submissions by Purchaser and Seller and not by independent review, only the Unresolved Closing Working Capital Disputed Items still in dispute and shall be limited to those adjustments, if any, required to be made for the Closing Working Capital Statement to comply with the provisions of this Agreement (and the Independent Accountant may not ascribe to any item a value greater than the greatest value ascribed by Purchaser, on the one hand, or Seller, on the other hand, or less than the lowest value ascribed by Purchaser, on the one hand, or Seller, on the other hand). The Parties shall use commercially reasonable efforts to cause the Independent Accountant to issue its written determination regarding the Unresolved Closing Working Capital Disputed Items within thirty days after such items are submitted for review. The Independent Accountant shall make a determination with respect to the Unresolved Closing Working Capital Disputed Items only and in a manner consistent with this Section 2.8(f) and the Agreed Upon Closing Working Capital Calculation Principles, and in no event shall the Independent Accountant's determination of the disputed items, prepare Unresolved Closing Working Capital Disputed Items be for an amount that is outside the range of Purchaser's and deliver Seller's disagreement. Each Party shall use commercially reasonable efforts to Sellers’ Agent furnish to the Independent Accountant such work papers and Purchaser other documents and information pertaining to the Neutral Auditor’s Unresolved Items as the Independent Accountant may reasonably request. The determination of the Acquired Companies Working Capital at the Closing, as soon as reasonably practicable (and in any event within 60 days after its engagement), and such Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing Independent Accountant shall be final, binding and conclusive upon, and bindingnon-appealable by, the Parties absent fraud or manifest error, and Purchaser shall revise the Closing Working Capital Statement (including the Closing Balance Sheet) to reflect such determination upon receipt thereof. The Party whose fees, expenses and costs of the Independent Accountant shall be allocated between Purchaser, on the one hand, and Seller, on the other hand, as follows: (i) Seller shall pay a portion of such fees and expenses, the amount of Acquired Companies which shall be calculated by multiplying the total amount of such fees and expenses by a fraction, the numerator of which is the aggregate amount of the Unresolved Working Capital claimed by such Party at Disputed Items submitted to the time Independent Accountant that are resolved in favor of submission Purchaser, and the denominator of which is the total amount of the dispute Unresolved Working Capital Disputed Items submitted to the Neutral Auditor differs Independent Accountant (as determined by the most from the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing Independent Accountant); and (ii) Purchaser shall pay the portion of the fees and disbursements expenses of the Neutral Auditor, unless otherwise determined by the Neutral Auditor. Each of Purchaser and Sellers’ Agent shall cooperate with and assist the Neutral Auditor Independent Accountant that Seller is not required to resolve disputed items, including by making available and granting reasonable access to records and employeespay hereunder. c. If Purchaser delivers a Purchaser (g) The Closing Working Capital Statement, as it is finally determined pursuant to this Section 2.8 is referred to herein as the Acquired Companies "Final Closing Working Capital Statement." (h) If the amount of the Closing Working Capital shown in the Final Closing Working Capital Statement ("Final Closing Working Capital") is: (A) greater than the amount of the Preliminary Closing Working Capital, the Purchaser shall pay or cause to be paid to Seller an aggregate dollar amount equal to the amount by which the amount of the Final Closing Working Capital exceeds the amount of the Preliminary Closing Working Capital, plus interest on such amount at the Federal Funds Rate then in effect from the Closing Date through the date of payment; or (B) less than the amount of the Preliminary Closing Working Capital, Seller shall pay or cause to be paid to the Purchaser an aggregate dollar amount equal to the amount by which the amount of the Final Closing Working Capital is less than the amount of the Preliminary Closing Working Capital, plus interest on such amount at the Federal Funds Rate then in effect from the Closing Date through the date of payment; or (C) the same as finally determined by the amount of the Preliminary Closing Working Capital, there shall be no further Closing Working Capital Adjustment to the Purchase Consideration. (i) failure of Sellers’ Agent Any amounts to object be paid to the Purchaser Working Capital Statement; or (ii) agreement of Sellers’ Agent and Purchaser (including a Party pursuant to a notice by Sellers’ Agent that the Purchaser Working Capital Statement is acceptable); or (iii) the Neutral Auditor, this Section 2.8 shall be paid on or before the “Final Working Capital.” The date of fifth Business Day after the determination of the Final Closing Working Capital shall be referred Statement by wire transfer of immediately available funds to herein as an account or accounts specified by the applicable payee(s) in writing to the payor(s), or by check if no such instructions are provided before such fifth Business Day. (j) After determination of the Final Closing Working Capital Determination Date.” d. If the Working Capital Estimate and, if any payment is greater than the Final Working Capitaldue Purchaser under this Section 2.8, upon Seller's payment of such amount due, Purchaser shall shall, as promptly as reasonably practicable, cause the Uncollected Purchased Accounts Receivable to be entitled transferred to receive, from the Escrow Account, an amount equal to the excess of the Working Capital Estimate over the Final Working Capital Seller or Seller Parent (any such excess, the “Working Capital Deficit”as directed by Seller and Seller Parent). Sellers’ Agent and Purchaser shall immediately deliver joint written instructions to the Escrow Agent to pay and deliver such amount to Purchaser out of the Escrow Account. If the Escrow Account does not have sufficient funds to cover the Working Capital Deficit, the Sellers shall severally (and not jointly) on a pro rata basis based on their Participation Percentages pay Purchaser the portion of the Working Capital Deficit not fully paid from the Escrow Account.

Appears in 1 contract

Samples: Asset Purchase Agreement (Autobytel Inc)

Closing Working Capital Adjustment. a. Purchaser shall be entitled, within 75 days (a) On or before the ten (10th) day after the ClosingClosing Date, to Buyer or its representatives shall calculate the Closing Working Capital and Closing Inventory Valuation and prepare and deliver to Sellers’ Agent Sellers a statement (the “Purchaser Working Capital Statement”) setting forth Purchaserin reasonable detail Buyer’s calculation of the Acquired Companies Net Working Capital at and Closing Inventory Valuation. (b) If Sellers agree with Buyer’s calculation and accepts the Closing, including each respective component thereof (the “Purchaser amount of Closing Working Capital Determination”). b. If Purchaser delivers a Purchaser and Closing Inventory Valuation set forth in Buyer’s statement, Sellers may give to Buyer written notice to such effect and such amount shall be the Final Working Capital Statement in accordance with Section 4.3(aand Final Inventory Valuation. Within thirty (30) within 75 days after the Closing, (i) Sellers’ Agent shall have a period of 30 days after Buyer’s delivery of its calculation of the Purchaser Closing Working Capital Statement and Closing Inventory Valuation, Sellers may deliver a written notice (the a Working Capital Objection Period”), to deliver to Purchaser a statement (the “Working Capital Objection StatementNWC Protest Notice”) setting forth to Buyer of any objections that Sellers’ Agent good faith objections, specifying in reasonable detail any contested amounts and the basis therefore, which Sellers may have to the Purchaser Closing Working Capital Determinationand Closing Inventory Valuation calculation, including a reasonably detailed explanation and setting forth Sellers’ determination of Closing Working Capital and Closing Inventory Valuation. The failure of Sellers to deliver such NWC Protest Notice within the prescribed time period will constitute Sellers’ acceptance of the basis Closing Working Capital and Closing Inventory Valuation calculation delivered by Buyer as final. Any amounts not disputed in the NWC Protest Notice (if one is delivered) shall be deemed to be accepted by Sellers as final. From and after the delivery of the NWC Protest Notice until the Final Net Working Capital and Final Inventory Valuation is finally determined pursuant to this Section 2.04, Sellers shall provide Buyer and any representatives retained by Buyer such information and detail and access to personnel, books and records as Buyer shall reasonably request for each such objection along with reasonably detailed supporting calculationsthe purpose of enabling Buyer and its representatives to calculate, and to review Seller’s calculation of, the Closing Working Capital and Closing Inventory Valuation set forth in the NWC Protest Notice; provided, that, in no event shall Seller be required to provide any documents or other information covered by attorney-client privilege, the attorney work product doctrine or other similar protection. If Sellers’ Agent does not deliver to Purchaser a Working Capital Objection Statement by the end of the Working Capital Objection Period, or if during the Working Capital Objection Period Sellers’ Agent delivers to Purchaser written notice that Sellers’ Agent accepts the Purchaser Working Capital Statement Buyer and the Purchaser Working Capital Determination, then the Purchaser Working Capital Statement and the Purchaser Working Capital Determination shall be considered final, conclusive and binding. If Sellers’ Agent does deliver a Working Capital Objection Statement by the end of the Working Capital Objection Period, Sellers’ Agent and Purchaser shall attempt in good faith to resolve any disputed items. Purchaser and Sellers’ Agent shall reasonably cooperate with and assist each other in resolving any items disputed by Sellers’ Agent in good faith, including by making available and granting reasonable access (during normal business hours and subject to Purchaser’s reasonable security measures and insurance requirements) to records and employees of the Company (provided that Sellers’ Agent is bound by a duty of a confidentiality satisfactory to Purchaser and Sellers’ Agent is not, in Purchaser’s judgment, intrusive or disruptive). If Sellers’ Agent and Purchaser Sellers are unable to resolve all or any of the disputed items within 60 days after delivery of the Working Capital Objection Statement, then the remaining disputed items shall be submitted to the Neutral Auditor. The Neutral Auditor shall be instructed that, (A) disagreement with respect to each disputed item, the Neutral Auditor shall either accept the position taken by Purchaser or the position taken by Sellers’ Agent, but the Neutral Auditor shall not make another determination Closing Working Capital and Closing Inventory Valuation calculation within ten (10) days following Buyer’s receipt of the disputed item; and (B) NWC Protest Notice, then only the Neutral Auditor shall, amounts in dispute set forth in the NWC Protest Notice will be referred to the Arbitration Panel in accordance with the procedures set forth in Section 9.14 for final determination. The determination by the Arbitration Panel of the amounts in dispute shall be based solely on its presentations by Buyer and Sellers, and shall not involve the Arbitration Panel’s independent review. Any determination of by the disputed items, prepare Arbitration Panel shall not be outside the range defined by the respective amounts in the Closing Working Capital and deliver to Closing Inventory Valuation calculation proposed by Buyer and Sellers’ Agent and Purchaser the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing, as soon as reasonably practicable (and in any event within 60 days after its engagement)proposed adjustments thereto, and such Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall be final, conclusive binding and binding. The Party whose amount of Acquired Companies Working Capital claimed by such Party at non-appealable upon the time of submission of the dispute to the Neutral Auditor differs the most from the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall pay the fees and disbursements of the Neutral Auditor, unless otherwise determined by the Neutral Auditorparties. Each of Purchaser Buyer and Sellers’ Agent Seller shall cooperate pay for their own respective third party, out-of-pocket fees and expenses incurred in connection with obtaining and assist utilizing the Neutral Auditor to resolve disputed itemsservices of the Arbitration Panel. For purposes of this Agreement, including by making available “Final Net Working Capital” and granting reasonable access to records and employees. c. If Purchaser delivers a Purchaser “Final Inventory Valuation” means Closing Working Capital Statementand Closing Inventory Valuation, the Acquired Companies Working Capital at the Closing respectively, as finally determined by (i) failure of Sellers’ Agent to object to the Purchaser Working Capital Statement; or (ii) agreement of Sellers’ Agent and Purchaser (including pursuant to a notice by Sellers’ Agent that the Purchaser Working Capital Statement is acceptable); or (iii) the Neutral Auditor, shall be the “Final Working Capitalthis Section 2.05.” The date of the determination of the Final Working Capital shall be referred to herein as the “Working Capital Determination Date.” d. If the Working Capital Estimate is greater than the Final Working Capital, Purchaser shall be entitled to receive, from the Escrow Account, an amount equal to the excess of the Working Capital Estimate over the Final Working Capital (any such excess, the “Working Capital Deficit”). Sellers’ Agent and Purchaser shall immediately deliver joint written instructions to the Escrow Agent to pay and deliver such amount to Purchaser out of the Escrow Account. If the Escrow Account does not have sufficient funds to cover the Working Capital Deficit, the Sellers shall severally (and not jointly) on a pro rata basis based on their Participation Percentages pay Purchaser the portion of the Working Capital Deficit not fully paid from the Escrow Account.

Appears in 1 contract

Samples: Stock Purchase Agreement (Denim LA, Inc.)

Closing Working Capital Adjustment. a. Purchaser (a) Not later than two (2) Business Days prior to the Closing Date, Seller shall be entitled, within 75 days after the Closing, to prepare and deliver to Sellers’ Agent Buyer a statement certificate (the “Purchaser Working Capital Preliminary Closing Statement”) signed by an officer of Seller or the Company setting forth Purchaser’s calculation a projected consolidated balance sheet for the Company and the Continuing Subsidiaries as of the Acquired Companies Working Capital at close of business on the Closing, including each respective component thereof day immediately preceding the Closing Date (the “Purchaser Working Capital DeterminationPreliminary Closing Balance Sheet). b. If Purchaser delivers a Purchaser Working Capital Statement ) as well as the Company’s good faith best estimates (shown in accordance with Section 4.3(areasonably detailed calculations) within 75 days after the Closing, of (i) Sellers’ Agent shall have a period the Company’s Working Capital, as derived from the Preliminary Closing Balance Sheet, as well as the calculation of 30 days after delivery of the Purchaser any resulting Estimated Working Capital Statement (the “Surplus or Estimated Working Capital Objection Period”), to deliver to Purchaser a statement (the “Working Capital Objection Statement”) setting forth any objections that Sellers’ Agent may have to the Purchaser Working Capital Determination, including a reasonably detailed explanation of the basis for each such objection along with reasonably detailed supporting calculations. If Sellers’ Agent does not deliver to Purchaser a Working Capital Objection Statement by the end of the Working Capital Objection Period, or if during the Working Capital Objection Period Sellers’ Agent delivers to Purchaser written notice that Sellers’ Agent accepts the Purchaser Working Capital Statement and the Purchaser Working Capital Determination, then the Purchaser Working Capital Statement and the Purchaser Working Capital Determination shall be considered final, conclusive and binding. If Sellers’ Agent does deliver a Working Capital Objection Statement by the end of the Working Capital Objection Period, Sellers’ Agent and Purchaser shall attempt in good faith to resolve any disputed items. Purchaser and Sellers’ Agent shall reasonably cooperate with and assist each other in resolving any items disputed by Sellers’ Agent in good faith, including by making available and granting reasonable access (during normal business hours and subject to Purchaser’s reasonable security measures and insurance requirements) to records and employees of the Company (provided that Sellers’ Agent is bound by a duty of a confidentiality satisfactory to Purchaser and Sellers’ Agent is not, in Purchaser’s judgment, intrusive or disruptive). If Sellers’ Agent and Purchaser are unable to resolve all or any of the disputed items within 60 days after delivery of the Working Capital Objection Statement, then the remaining disputed items shall be submitted to the Neutral Auditor. The Neutral Auditor shall be instructed that, (A) with respect to each disputed item, the Neutral Auditor shall either accept the position taken by Purchaser or the position taken by Sellers’ Agent, but the Neutral Auditor shall not make another determination of the disputed item; and (B) the Neutral Auditor shall, based solely on its determination of the disputed items, prepare and deliver to Sellers’ Agent and Purchaser the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing, as soon as reasonably practicable (and in any event within 60 days after its engagement), and such Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall be final, conclusive and binding. The Party whose amount of Acquired Companies Working Capital claimed by such Party at the time of submission of the dispute to the Neutral Auditor differs the most from the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall pay the fees and disbursements of the Neutral Auditor, unless otherwise determined by the Neutral Auditor. Each of Purchaser and Sellers’ Agent shall cooperate with and assist the Neutral Auditor to resolve disputed items, including by making available and granting reasonable access to records and employees.Deficit, c. If Purchaser delivers a Purchaser Working Capital Statement, the Acquired Companies Working Capital at the Closing as finally determined by (i) failure of Sellers’ Agent to object to the Purchaser Working Capital Statement; or (ii) agreement of Sellers’ Agent the Net Closing Date Cash, and Purchaser (including pursuant to a notice by Sellers’ Agent that the Purchaser Working Capital Statement is acceptable); or (iii) the Neutral Auditor, resulting Estimated Purchase Price. The Preliminary Closing Balance Sheet and the determinations and calculations contained in the Preliminary Closing Statement shall be prepared in accordance with this Agreement and the “Final Working Capital.” The date Balance Sheet Principles. Along with the Preliminary Closing Statement, the Company shall, upon Buyer’s request, promptly deliver to Buyer backup materials and schedules reasonably requested by Buyer demonstrating the compliance of the determination Preliminary Closing Balance Sheet with the Balance Sheet Principles, provided, Seller shall not be required to prepare any materials or schedules beyond those used in its preparation of the Final Working Capital shall be referred to herein as the “Working Capital Determination DatePreliminary Closing Statement. d. (b) If the Working Capital Estimate Target is greater less than the Final Company’s Working Capital, Purchaser as derived from the Preliminary Closing Balance Sheet, then the excess of the Company’s Working Capital, as derived from the Preliminary Closing Balance Sheet, over the Working Capital Target shall be entitled to receivedeemed an “Estimated Working Capital Surplus.” If the Company’s Working Capital, as derived from the Escrow AccountPreliminary Closing Balance Sheet, an amount equal to is less than the Working Capital Target, then the excess of the Working Capital Estimate Target over the Final Company’s Working Capital (any such excessCapital, as derived from the Preliminary Closing Balance Sheet, shall be deemed an Estimated Working Capital Deficit.). Sellers’ Agent and Purchaser shall immediately deliver joint written instructions to the Escrow Agent to pay and deliver such amount to Purchaser out of the Escrow Account. If the Escrow Account does not have sufficient funds to cover the Working Capital Deficit, the Sellers shall severally (and not jointly) on a pro rata basis based on their Participation Percentages pay Purchaser the portion of the Working Capital Deficit not fully paid from the Escrow Account.

Appears in 1 contract

Samples: Membership Interest Purchase Agreement (Alere Inc.)

Closing Working Capital Adjustment. a. Purchaser The determination of the Closing Working Capital Adjustment shall be entitled, within 75 days after made as follows: (i) During the seventy-five (75) day period following the Closing, or as soon after the Closing as is practicable, Purchaser, in cooperation with a representative appointed by Seller, will prepare a draft of a “Working Capital Statement” as of the Closing Date, setting forth the calculation of working capital transferred to prepare Purchaser hereunder. Seller shall notify Purchaser of their acceptance or rejection of the Working Capital Statement within thirty (30) days of receipt of the Working Capital Statement. (ii) Seller’s failure to deliver notice of acceptance or rejection within the 30 day period shall be deemed to constitute acceptance. Upon acceptance, whether in writing or by passage of time, the Working Capital Statement shall become final and deliver to Sellers’ Agent a statement binding upon the Parties (the “Purchaser Final Working Capital Statement”). (iii) setting forth Purchaser’s calculation of In the Acquired Companies event a Party rejects the Working Capital at Statement, the ClosingParties shall, including each respective component thereof within 15 days (or another period as the Parties may agree) following the notice (the “Purchaser Working Capital Determination”). b. If Purchaser delivers a Purchaser Working Capital Statement in accordance with Section 4.3(a) within 75 days after the Closing, (i) Sellers’ Agent shall have a period of 30 days after delivery of the Purchaser Working Capital Statement (the “Working Capital Objection Resolution Period”), attempt to deliver resolve their differences, and any resolution by the Parties as to Purchaser a statement any disputed amounts shall be final, binding and conclusive on the Parties. (iv) If, at the “Working Capital Objection Statement”) setting forth any objections that Sellers’ Agent may have to the Purchaser Working Capital Determination, including a reasonably detailed explanation conclusion of the basis for each such objection along with reasonably detailed supporting calculations. If Sellers’ Agent does not deliver Resolution Period, there are any amounts remaining in dispute as to Purchaser a Working Capital Objection Statement by the end of the Working Capital Objection Period, or if during the Working Capital Objection Period Sellers’ Agent delivers to Purchaser written notice that Sellers’ Agent accepts the Purchaser Working Capital Statement and the Purchaser Working Capital Determination, then the Purchaser Working Capital Statement and the Purchaser Working Capital Determination shall be considered final, conclusive and binding. If Sellers’ Agent does deliver a Working Capital Objection Statement by the end of the Working Capital Objection Period, Sellers’ Agent and Purchaser shall attempt in good faith to resolve any disputed items. Purchaser and Sellers’ Agent shall reasonably cooperate with and assist each other in resolving any items disputed by Sellers’ Agent in good faith, including by making available and granting reasonable access (during normal business hours and subject to Purchaser’s reasonable security measures and insurance requirements) to records and employees of the Company (provided that Sellers’ Agent is bound by a duty of a confidentiality satisfactory to Purchaser and Sellers’ Agent is not, in Purchaser’s judgment, intrusive or disruptive). If Sellers’ Agent and Purchaser are unable to resolve all or any of the disputed items within 60 days after delivery of the Working Capital Objection Statement, then the all amounts remaining disputed items shall in dispute will be submitted to the accounting firm of Xxxxx Xxxxxxxx (the “Neutral Auditor”). The Neutral Auditor shall be instructed thatEach Party agrees to execute, (A) with respect to each disputed item, the Neutral Auditor shall either accept the position taken if requested by Purchaser or the position taken by Sellers’ Agent, but the Neutral Auditor shall not make another determination of the disputed item; and (B) the Neutral Auditor shall, based solely on its determination of the disputed items, prepare and deliver to Sellers’ Agent and Purchaser the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing, as soon as reasonably practicable (and in any event within 60 days after its engagement), and such Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall be final, conclusive and binding. The Party whose amount of Acquired Companies Working Capital claimed by such Party at the time of submission of the dispute to the Neutral Auditor differs the most from the Neutral Auditor’s determination of the Acquired Companies Working Capital at the Closing shall pay the fees and disbursements of the Neutral Auditor, unless otherwise a reasonable engagement letter. All fees and expenses relating to the work, if any, to be performed by the Neutral Auditor, will be paid by the Party not prevailing with respect to the calculation in dispute between Seller and Purchaser as determined by the Neutral Auditor, such that the prevailing Party is reimbursed for any fees and expenses incurred. Each The Neutral Auditor will act as an arbitrator to determine, based solely on the provisions of this section and the related exhibits, only those issues still in dispute and only as to whether the amounts were arrived at in accordance with this Agreement. The Neutral Auditor’s determination must be made within 30 days of its engagement, must be set forth in a written statement delivered to Seller and the Purchaser and Sellers’ Agent shall cooperate with is final, binding and assist conclusive on the Neutral Auditor to resolve disputed items, including by making available and granting reasonable access to records and employeesParties. c. If Purchaser delivers a Purchaser Working Capital Statement(v) Upon resolution of any dispute, the Acquired Companies Working Capital at the Closing as finally determined whether by (i) failure of Sellers’ Agent to object to the Purchaser Working Capital Statement; acceptance, agreement or (ii) agreement of Sellers’ Agent and Purchaser (including pursuant to a notice by Sellers’ Agent that the Purchaser Working Capital Statement is acceptable); or (iii) resolution through the Neutral Auditor, the result shall be the “Final Working Capital.” The date of the determination of the Final Working Capital shall be referred to herein as the “Working Capital Determination DateStatement.” d. If the Working Capital Estimate is greater than the Final Working Capital, Purchaser shall be entitled to receive, from the Escrow Account, an amount equal to the excess of the Working Capital Estimate over the Final Working Capital (any such excess, the “Working Capital Deficit”). Sellers’ Agent and Purchaser shall immediately deliver joint written instructions to the Escrow Agent to pay and deliver such amount to Purchaser out of the Escrow Account. If the Escrow Account does not have sufficient funds to cover the Working Capital Deficit, the Sellers shall severally (and not jointly) on a pro rata basis based on their Participation Percentages pay Purchaser the portion of the Working Capital Deficit not fully paid from the Escrow Account.

Appears in 1 contract

Samples: Purchase and Sale Agreement (Golden Oval Eggs LLC)

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