Determination of Purchase Price. (a) Subject to the terms and conditions of this Agreement and in consideration of the sale, transfer, assignment, conveyance and delivery by Seller and Aerojet (to the extent of their respective ownership interests) of the Purchased Assets to Purchaser, Purchaser shall pay to Seller an aggregate amount equal to One Hundred Fourteen Million Dollars ($114,000,000), which shall be paid at Closing as set forth in Section 3.1(b) and which shall be subject to adjustment pursuant to the terms of this Section 3.1 (as so adjusted, the “Purchase Price”). (b) The Purchase Price shall be paid by Purchaser to Seller at the Closing as follows: (i) by wire transfer of immediately available funds in an aggregate amount of Eighty Eight Million Five Hundred Thousand Dollars ($88,500,000); (ii) by delivery of a subordinated promissory note payable to Seller in the original principal amount of Twenty Five Million Five Hundred Thousand Dollars ($25,500,000) in the form attached hereto as Exhibit D (the “Note”). (c) No later than one (1) Business Day prior to the Closing Date, Seller shall prepare and deliver, or cause to be prepared and delivered, to Purchaser a written estimate (the “Estimated Statement”) of (i) the items of the 2005 Budgeted Capital Expenditures that have been paid by or on behalf of Seller as of the Closing Date (“Completed Capital Expenditures”), and (ii) Working Capital, in each case as of the close of Business on the Closing Date. Subject to further adjustment pursuant to Section 3.1(f) hereof: (A) to the extent that the Estimated Statement reflects (I) Completed Capital Expenditures of less than Nineteen Million Dollars ($19,000,000), the purchase price shall be decreased by the amount of such difference and such decrease shall be applied to the cash portion of the purchase price; and (II) Completed Capital Expenditures of more than Nineteen Million Dollars ($19,000,000), the purchase price shall be increased by the amount of such excess and such increased amount shall be paid in cash within five (5) Business Days of the Closing Date; and (B) to the extent that the Estimated Statement reflects (I) Working Capital of less than Ten Million Dollars ($10,000,000), the purchase price payable at Closing shall be decreased by the amount of such difference and such decrease shall be applied to the cash portion of the purchase price; and (II) Working Capital of more than Ten Million Dollars ($10,000,000), the purchase price shall be increased by the amount of such excess and such increased amount shall be paid in cash within five (5) Business Days of the Closing Date. (d) Within 45 calendar days after the Closing Date, Purchaser shall cause to be prepared and delivered to Seller (i) a balance sheet of the Business as of the Closing Date prepared in accordance with GAAP applied on a consistent basis with the May Balance Sheet and including such items set forth on the May Balance Sheet (the “Closing Balance Sheet”), (ii) a statement (“Capital Expenditures Statement”) of the Completed Capital Expenditures as of the Closing Date, and (iii) a statement (the “Working Capital Statement”) of the Working Capital as of the Closing Date. (e) Following receipt of the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement, Seller will have 45 calendar days to review the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement after which period, if Seller has not disputed in writing (an “Objection”) the Closing Balance Sheet, the Capital Expenditures Statement, or the Working Capital Statement, Seller will be deemed to have accepted and agreed with the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement, and such deliverables shall be final and binding upon the Parties. During such period, Purchaser shall make available its accounting staff and other relevant personnel to respond to questions of Seller relating to the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement at commercially reasonable times and upon commercially reasonable advance notice and shall furnish to Seller such work papers and other documents and information relating to the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement as Seller may commercially reasonably request and are commercially reasonably available to Purchaser or its Affiliates. An Objection shall set forth a general description of the basis of the Objection and the adjustments to the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement that Seller believes should be made, which Objection must be delivered to Purchaser on or before the last day of such 45-day period, in which case each item in the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement that is not disputed in such Objection shall be deemed to be agreed to by Seller and shall be final and binding upon the Parties. Purchaser shall have 30 calendar days from receipt of any Objection to review and respond to such Objection. (f) After all calculations contemplated in Section 3.1(e) have been completed, delivered and responded to, the purchase price shall be adjusted as follows: (A) To the extent that the Estimated Statement reflects (i) Completed Capital Expenditures of more than the amount shown on the Capital Expenditures Statement (such difference a “CAPEX Overpayment”), then the purchase price shall be decreased by the amount of such CAPEX Overpayment, and Seller shall promptly make payment in immediately available funds to Purchaser in the amount of the CAPEX Overpayment; and (ii) Completed Capital Expenditures of less than the amount shown on the Capital Expenditures Statement (such difference a “CAPEX Underpayment”), the purchase price shall be increased by the amount of such CAPEX Underpayment, and Purchaser shall promptly make payment in immediately available funds to Seller in the amount of such CAPEX Underpayment; (B) To the extent that the Estimated Statement reflects (i) Working Capital of more than the amount shown on the Working Capital Statement (such difference a “Working Capital Overpayment”), then the purchase price shall be decreased by the amount of such Working Capital Overpayment, and Seller shall promptly make payment in immediately available funds to Purchaser in the amount of the Working Capital Overpayment; and (ii) Working Capital of less than the amount shown on the Working Capital Statement (such difference a “Working Capital Underpayment”), the purchase price shall be increased by the amount of such Working Capital Underpayment, and Purchaser shall promptly make payment in immediately available funds to Seller in the amount of such Working Capital Underpayment. (g) The Parties shall attempt in good faith to reach an agreement with respect to any matters in dispute regarding the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement. If the Parties are unable to reach agreement with respect to the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement within 30 days following the delivery of Purchaser’s response to an Objection, any remaining disputed items shall be referred for final binding resolution to an accounting firm mutually acceptable to both Parties or, in the absence of such agreement, by an accounting firm (with no existing or prior material business with either Seller or Purchaser) of national reputation selected by lot. The selected accounting firm shall be directed by the Parties to (i) determine each disputed item on the Closing Balance Sheet on the basis consistent with the May Balance Sheet, (ii) determine each disputed item on the Capital Expenditures Statement in accordance with GAAP applied on a consistent basis and in accordance with this Agreement, (iii) determine each disputed item on the Working Capital Statement in accordance with GAAP applied on a consistent basis and in accordance with this Agreement, (iv) render its determination within 30 days after such referral for binding resolution is made, and (v) upon reaching a determination, deliver to both Purchaser and Seller a modified Closing Balance Sheet, Capital Expenditures Statement, and/or Working Capital Statement reflecting the items that have become final and binding upon the Parties and the accounting firm’s determination of each disputed item. The determination by the accounting firm so selected of the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement (with such modifications therein, if any, as reflect such determination) shall be conclusive and binding upon the Parties. The fees and expenses of such accounting firm shall be shared equally by the Seller Parties, on the one hand, and Purchaser, on the other hand. Nothing herein shall be construed to authorize or permit the accounting firm to determine any questions or matters whatsoever under or in connection with this Agreement except for the resolution of the disputed items submitted to them for determination in accordance with this Section 3.1(g). (h) Each Party shall provide the other Parties and their respective representatives reasonable access to the premises of the Business, to their respective books and records and to their respective appropriate personnel for purposes of preparing and confirming the Closing Balance Sheet, the Capital Expenditures Statement, the Working Capital Statement, and the CAPEX Statement. (i) (A) Subject to sub-clause (C) of Section 3.1(i), Seller shall earn, and Purchaser shall pay to Seller, as additional consideration for the Purchased Assets (the “Earn Out”), an amount equal to the product of (i) the amount, if any, by which the Business’s Earn Out EBITDAP, as defined in Schedule 3.1(i), for the 12-month period from October 1, 2005 through and including September 30, 2006 (the “Earn Out Period”) exceeds Eighteen Million Seven Hundred Fifty Thousand Dollars ($18,750,000) and (ii) four (4); provided, that the Parties agree that the amount, if any, payable under this Section 3.1(i)(A) shall not exceed in the aggregate Five Million Dollars ($5,000,000). During the Earn Out Period and until such time as the Earnout amount is paid to Seller, Purchaser shall cause the books and records of the Business to be adequately maintained in a commercially reasonable manner so that any amounts due pursuant to this Section 3.1(i) can be determined. If (i) the amount of the Earn Out that becomes due under this Section 3.1(i)(A) equals Five Million Dollars ($5,000,000), and (ii) any EBITDAP Adjustment previously has been paid by Seller to Purchaser, then Purchaser shall repay Seller, in addition to the Earn Out, and at the same time of such payment, the amount of such previously paid EBITDAP Adjustment.
Appears in 2 contracts
Samples: Purchase Agreement (American Pacific Corp), Purchase Agreement (Gencorp Inc)
Determination of Purchase Price. For a period of ten (a10) Subject to days following the terms and conditions of this Agreement and in consideration effective date of the saleBuy/Sell Election Notice or the receipt of a decree notice, transferas applicable, assignment, conveyance and delivery by Seller and Aerojet the Selling Party (to the extent of their respective ownership interests) of the Purchased Assets to Purchaser, Purchaser shall pay to Seller an aggregate amount equal to One Hundred Fourteen Million Dollars ($114,000,000as defined below), which Company and the Non-Defaulting Founding Stockholders, as applicable, shall attempt to agree upon a purchase price for the Selling Party's Stock (the "Purchase Price"), which, if agreed to, shall constitute the Purchase Price for the Selling Party's Stock. If the Selling Party, Company, and the Non-Defaulting Founding Stockholders, as applicable, are unable to agree on the Purchase Price within such ten (10)-day period, then the Purchase Price for the Selling Party's Stock shall be paid at Closing as set forth determined in Section 3.1(b) and which shall be subject to adjustment pursuant to accordance with the terms following provisions of this Section 3.1 3.5(a). Within fifteen (as so adjusted15) days after the determination of the Enterprise Value of the Company pursuant to Section 3.5(a)(i) below, the “Purchase Price”).
(b) The Purchase Price accountants regularly employed by the Company shall be paid by Purchaser to Seller at determine the Closing as follows:
(i) by wire transfer of immediately available funds in an aggregate amount of Eighty Eight Million Five Hundred Thousand Dollars ($88,500,000);
(ii) by delivery of a subordinated promissory note payable cash that would be distributed to Seller in the original principal amount of Twenty Five Million Five Hundred Thousand Dollars ($25,500,000) in the form attached hereto as Exhibit D (the “Note”).
(c) No later than one (1) Business Day prior to the Closing Date, Seller shall prepare and deliver, or cause to be prepared and delivered, to Purchaser a written estimate (the “Estimated Statement”) of each Stockholder if (i) the items of Company were sold for the 2005 Budgeted Capital Expenditures that have been paid by or on behalf of Seller Enterprise Value, as of the Closing Date (“Completed Capital Expenditures”), and date of the Buy/Sell Event; (ii) Working Capital, in each case as the liabilities of the close of Business on the Closing Date. Subject to further adjustment pursuant to Section 3.1(f) hereof:
(A) to the extent that the Estimated Statement reflects (I) Completed Capital Expenditures of less than Nineteen Million Dollars ($19,000,000), the purchase price shall be decreased by the amount of such difference and such decrease shall be applied to the cash portion of the purchase priceCompany were paid; and (II) Completed Capital Expenditures of more than Nineteen Million Dollars ($19,000,000), the purchase price shall be increased by the amount of such excess and such increased amount shall be paid in cash within five (5) Business Days of the Closing Date; and
(B) to the extent that the Estimated Statement reflects (I) Working Capital of less than Ten Million Dollars ($10,000,000), the purchase price payable at Closing shall be decreased by the amount of such difference and such decrease shall be applied to the cash portion of the purchase price; and (II) Working Capital of more than Ten Million Dollars ($10,000,000), the purchase price shall be increased by the amount of such excess and such increased amount shall be paid in cash within five (5) Business Days of the Closing Date.
(d) Within 45 calendar days after the Closing Date, Purchaser shall cause to be prepared and delivered to Seller (i) a balance sheet of the Business as of the Closing Date prepared in accordance with GAAP applied on a consistent basis with the May Balance Sheet and including such items set forth on the May Balance Sheet (the “Closing Balance Sheet”), (ii) a statement (“Capital Expenditures Statement”) of the Completed Capital Expenditures as of the Closing Date, and (iii) a statement (the “Working Capital Statement”) reasonable reserve for any contingent, conditional or unmatured liabilities or obligations of the Working Capital as Company was established by the Board of Directors of the Closing Date.
(e) Following receipt of the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement, Seller will have 45 calendar days to review the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement after which period, if Seller has not disputed in writing (an “Objection”) the Closing Balance Sheet, the Capital Expenditures Statement, or the Working Capital Statement, Seller will be deemed to have accepted and agreed with the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement, and such deliverables shall be final and binding upon the Parties. During such period, Purchaser shall make available its accounting staff and other relevant personnel to respond to questions of Seller relating to the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement at commercially reasonable times and upon commercially reasonable advance notice and shall furnish to Seller such work papers and other documents and information relating to the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement as Seller may commercially reasonably request and are commercially reasonably available to Purchaser or its Affiliates. An Objection shall set forth a general description of the basis of the Objection and the adjustments to the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement that Seller believes should be made, which Objection must be delivered to Purchaser on or before the last day of such 45-day period, in which case each item in the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement that is not disputed in such Objection shall be deemed to be agreed to by Seller and shall be final and binding upon the Parties. Purchaser shall have 30 calendar days from receipt of any Objection to review and respond to such Objection.
(f) After all calculations contemplated in Section 3.1(e) have been completed, delivered and responded to, the purchase price shall be adjusted as follows:
(A) To the extent that the Estimated Statement reflects (i) Completed Capital Expenditures of more than the amount shown on the Capital Expenditures Statement (such difference a “CAPEX Overpayment”), then the purchase price shall be decreased by the amount of such CAPEX Overpayment, and Seller shall promptly make payment in immediately available funds to Purchaser in the amount of the CAPEX OverpaymentCompany; and (iiiv) Completed Capital Expenditures of less than the amount shown on the Capital Expenditures Statement (Company was liquidated. Upon such difference a “CAPEX Underpayment”)determination, the purchase price accountants shall be increased by give the amount of such CAPEX UnderpaymentSelling Party, Company, and Purchaser shall promptly make payment in immediately available funds to Seller in the amount of such CAPEX Underpayment;
each Non-Defaulting Founding Stockholder (Bif applicable) To the extent that the Estimated Statement reflects written notice (i"Accountant's Notice") Working Capital of more than the amount shown on the Working Capital Statement (such difference a “Working Capital Overpayment”), then the purchase price shall be decreased by the amount of such Working Capital Overpayment, and Seller shall promptly make payment in immediately available funds to Purchaser in the amount of the Working Capital Overpayment; and (ii) Working Capital of less than the amount shown on the Working Capital Statement (such difference a “Working Capital Underpayment”), the purchase price shall be increased by the amount of such Working Capital Underpayment, and Purchaser shall promptly make payment in immediately available funds to Seller in the amount of such Working Capital Underpayment.
(g) The Parties shall attempt in good faith to reach an agreement with respect to any matters in dispute regarding the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement. If the Parties are unable to reach agreement with respect to the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement within 30 days following the delivery of Purchaser’s response to an Objection, any remaining disputed items shall be referred for final binding resolution to an accounting firm mutually acceptable to both Parties or, in the absence of such agreement, by an accounting firm (with no existing or prior material business with either Seller or Purchaser) of national reputation selected by lot. The selected accounting firm shall be directed by the Parties to (i) determine each disputed item on the Closing Balance Sheet on the basis consistent with the May Balance Sheet, (ii) determine each disputed item on the Capital Expenditures Statement in accordance with GAAP applied on a consistent basis and in accordance with this Agreement, (iii) determine each disputed item on the Working Capital Statement in accordance with GAAP applied on a consistent basis and in accordance with this Agreement, (iv) render its determination within 30 days after such referral for binding resolution is made, and (v) upon reaching a determination, deliver to both Purchaser and Seller a modified Closing Balance Sheet, Capital Expenditures Statement, and/or Working Capital Statement reflecting the items that have become final and binding upon the Parties and the accounting firm’s determination of each disputed itemthereof. The determination by the accounting firm so selected such accountants of the Closing Balance Sheetsuch amounts, the Capital Expenditures Statementincluding all components thereof, and/or the Working Capital Statement (with such modifications therein, if any, as reflect such determination) shall be conclusive (and binding upon on the Partiesrelevant parties), absent any material computational error, and each of the Stockholders and the Company agree to hold such accountants harmless from such determination. The fees and expenses of such accounting firm aggregate amount which would be distributed to the Selling Party, shall be shared equally by constitute the Seller Parties, on the one hand, and Purchaser, on the other hand. Nothing herein shall be construed to authorize or permit the accounting firm to determine any questions or matters whatsoever under or in connection with this Agreement except Purchase Price for the resolution of the disputed items submitted to them for determination in accordance with this Section 3.1(g)Defaulting Stockholder's Offered Stock.
(h) Each Party shall provide the other Parties and their respective representatives reasonable access to the premises of the Business, to their respective books and records and to their respective appropriate personnel for purposes of preparing and confirming the Closing Balance Sheet, the Capital Expenditures Statement, the Working Capital Statement, and the CAPEX Statement.
(i) (A) Subject to sub-clause (C) of Section 3.1(i), Seller shall earn, and Purchaser shall pay to Seller, as additional consideration for the Purchased Assets (the “Earn Out”), an amount equal to the product of (i) the amount, if any, by which the Business’s Earn Out EBITDAP, as defined in Schedule 3.1(i), for the 12-month period from October 1, 2005 through and including September 30, 2006 (the “Earn Out Period”) exceeds Eighteen Million Seven Hundred Fifty Thousand Dollars ($18,750,000) and (ii) four (4); provided, that the Parties agree that the amount, if any, payable under this Section 3.1(i)(A) shall not exceed in the aggregate Five Million Dollars ($5,000,000). During the Earn Out Period and until such time as the Earnout amount is paid to Seller, Purchaser shall cause the books and records of the Business to be adequately maintained in a commercially reasonable manner so that any amounts due pursuant to this Section 3.1(i) can be determined. If (i) the amount of the Earn Out that becomes due under this Section 3.1(i)(A) equals Five Million Dollars ($5,000,000), and (ii) any EBITDAP Adjustment previously has been paid by Seller to Purchaser, then Purchaser shall repay Seller, in addition to the Earn Out, and at the same time of such payment, the amount of such previously paid EBITDAP Adjustment.
Appears in 2 contracts
Samples: Stockholder Agreement (Acme Atronomatic Inc), Stockholder Agreement (Howloo, Inc.)
Determination of Purchase Price. (a) Subject to the terms and conditions of this Agreement and in consideration of the sale, transfer, assignment, conveyance and delivery by Seller and Aerojet (to the extent of their respective ownership interests) of the Purchased Assets to Purchaser, Purchaser shall pay to Seller an aggregate amount equal to One Hundred Fourteen Nineteen Million Dollars ($114,000,000119,000,000), which shall be paid at Closing as set forth in Section 3.1(b) and which shall be subject to adjustment pursuant to the terms of this Section 3.1 (as so adjusted, the “Purchase Price”).
(b) The Purchase Price shall be paid by Purchaser to Seller at the Closing as follows:
(i) by wire transfer of immediately available funds in an aggregate amount of Eighty Eight One Hundred Million Five Hundred Thousand Dollars ($88,500,000100,000,000);; and
(ii) by delivery of a subordinated promissory note payable to Seller in the original principal amount of Twenty Five Nineteen Million Five Hundred Thousand Dollars ($25,500,00019,000,000) in on substantially the form attached hereto as terms and conditions set forth on Exhibit D (the “Note”).
(c) No later than one three (13) Business Day Days prior to the Closing Date, Seller shall prepare and deliver, or cause to be prepared and delivered, to Purchaser a written estimate (the “Estimated Statement”) of (i) the items of the 2005 Budgeted Capital Expenditures that have been both incurred and paid by or on behalf of Seller as of the Closing Date (“Completed Capital Expenditures”), and (ii) Working Capital, in each case as of the close of Business on the Closing Date. Subject to further adjustment pursuant to Section 3.1(f) hereof:
, (A) to the extent that the Estimated Statement reflects (I) Completed Capital Expenditures of less than Nineteen Million Dollars ($19,000,000), the cash portion of the purchase price payable at Closing shall be decreased by the amount of such difference and such decrease shall be applied to the cash portion of the purchase pricedifference; and (IIB) to the extent that the Estimated Statement reflects Completed Capital Expenditures of more than Nineteen Million Dollars ($19,000,000), the cash portion of the purchase price payable at Closing shall be increased by the amount of such excess and such increased amount shall be paid in cash within five (5) Business Days of the Closing Date; and
(B) to the extent that the Estimated Statement reflects (I) Working Capital of less than Ten Million Dollars ($10,000,000), the purchase price payable at Closing shall be decreased by the amount of such difference and such decrease shall be applied to the cash portion of the purchase price; and (II) Working Capital of more than Ten Million Dollars ($10,000,000), the purchase price shall be increased by the amount of such excess and such increased amount shall be paid in cash within five (5) Business Days of the Closing Dateexcess.
(d) Within 45 calendar days after the Closing Date, Purchaser shall cause to be prepared and delivered to Seller (i) a balance sheet of the Business as of the Closing Date prepared in accordance with GAAP applied on a consistent basis with the May Balance Sheet and including such items set forth on the May Balance Sheet (the “Closing Balance Sheet”), and (ii) a statement (“Capital Expenditures Statement”) of the Completed Capital Expenditures as of the Closing Date, and (iii) a statement (the “Working Capital Statement”) of the Working Capital as of the Closing DateExpenditures.
(e) Following receipt of the Closing Balance Sheet, Sheet and the Capital Expenditures Statement, and the Working Capital Statement, Seller will have 45 calendar days to review both the Closing Balance Sheet, Sheet and the Capital Expenditures Statement, and the Working Capital Statement after which period, if Seller has not disputed in writing (an “Objection”) the Closing Balance Sheet, Sheet or the Capital Expenditures Statement, or the Working Capital Statement, Seller will be deemed to have accepted and agreed with the Closing Balance Sheet, Sheet and the Capital Expenditures Statement, and the Working Closing Balance Sheet and the Capital Statement, and such deliverables Expenditures Statement shall be final and binding upon the Parties. During such period, Purchaser shall make available its accounting staff and other relevant personnel internal auditors to respond to questions of Seller relating to the Closing Balance Sheet, Sheet and the Capital Expenditures Statement, and the Working Capital Statement at commercially reasonable times and upon commercially reasonable advance notice and shall furnish to Seller such work papers and other documents and information relating to the Closing Balance Sheet, Sheet and the Capital Expenditures Statement, and the Working Capital Statement as Seller may commercially reasonably request and are commercially reasonably available to Purchaser or its Affiliates. An Objection shall set forth a general description of the basis of the Objection and the adjustments to the Closing Balance Sheet, Sheet or the Capital Expenditures Statement, and/or the Working Capital Statement or both that Seller believes should be made, which Objection must be delivered to Purchaser on or before the last day of such 45-day period, in which case each item in the Closing Balance Sheet, Sheet and the Capital Expenditures Statement, and the Working Capital Statement that is not disputed in such Objection shall be deemed to be agreed to by Seller and shall be final and binding upon the Parties. Purchaser shall have 30 calendar days from receipt of any Objection to review and respond to such the Objection.
(f) After all calculations contemplated in Section 3.1(e) have been completed, delivered and responded to, the purchase price shall be adjusted as follows:
(A) To the extent that the Estimated Statement reflects (i) Completed Capital Expenditures of more than the amount shown on the Capital Expenditures Statement (such difference a an “CAPEX Overpayment”), then the purchase price shall be decreased by the amount of such CAPEX Overpayment, and Seller shall promptly make payment in immediately available funds to Purchaser in the amount of the CAPEX Overpayment; and (ii) . To the extent that the Estimated Statement reflects Completed Capital Expenditures of less than the amount shown on the Capital Expenditures Statement (such difference a an “CAPEX Underpayment”), the purchase price shall be increased by the amount of such CAPEX Underpayment, and Purchaser shall promptly make payment in immediately available funds to Seller in the amount of such CAPEX Underpayment;
(B) To the extent that the Estimated Statement reflects (i) Working Capital of more than the amount shown on the Working Capital Statement (such difference a “Working Capital Overpayment”), then the purchase price shall be decreased by the amount of such Working Capital Overpayment, and Seller shall promptly make payment in immediately available funds to Purchaser in the amount of the Working Capital Overpayment; and (ii) Working Capital of less than the amount shown on the Working Capital Statement (such difference a “Working Capital Underpayment”), the purchase price shall be increased by the amount of such Working Capital Underpayment, and Purchaser shall promptly make payment in immediately available funds to Seller in the amount of such Working Capital Underpayment.
(g) The Parties shall attempt in good faith to reach an agreement with respect to any matters in dispute regarding the Closing Balance Sheet, Sheet and/or the Capital Expenditures Statement, and/or the Working Capital Statement. If the Parties are unable to reach agreement with respect to the Closing Balance Sheet, Sheet and/or the Capital Expenditures Statement, and/or the Working Capital Statement within 30 days following the delivery of Purchaser’s response to an Objection, any remaining disputed items shall be referred for final binding resolution to an accounting firm mutually acceptable to both Parties or, in the absence of such agreement, by an accounting firm (with no existing or prior material business with either Seller or Purchaser) of national reputation selected by lot. The selected accounting firm shall be directed by the Parties to (i) determine each disputed item on the Closing Balance Sheet on the basis consistent with the May Balance Sheet, (ii) determine each disputed item on the Capital Expenditures Statement in accordance with GAAP applied on a consistent basis and in accordance with this AgreementGAAP, (iii) determine each disputed item on the Working Capital Statement in accordance with GAAP applied on a consistent basis and in accordance with this Agreement, (iv) render its determination within 30 days after such referral for binding resolution is made, and (viv) upon reaching a determination, deliver to both Purchaser and Seller a modified Closing Balance Sheet, Sheet and/or Capital Expenditures Statement, and/or Working Capital Statement reflecting the items that have become final and binding upon the Parties and the accounting firm’s determination of each disputed item. The determination by the accounting firm so selected of the Closing Balance Sheet, Sheet and/or the Capital Expenditures Statement, and/or the Working Capital Statement (with such modifications therein, if any, as reflect such determination) shall be conclusive and binding upon the Parties. The fees and expenses of such accounting firm shall be shared equally by the Seller Parties, on the one hand, and Purchaser, on the other hand. Nothing herein shall be construed to authorize or permit the accounting firm to determine any questions or matters whatsoever under or in connection with this Agreement except for the resolution of the disputed items submitted to them for determination in accordance with this Section 3.1(g).
(h) Each Party shall provide the other Parties and their respective representatives reasonable access to the premises of the Business, to their respective books and records and to their respective appropriate personnel for purposes of preparing and confirming the Closing Balance Sheet, the Capital Expenditures Statement, the Working Capital Statement, Statement and the CAPEX Statement.
(i) (A) Subject to sub-clause (C) of Section 3.1(i), Seller shall earn, and Purchaser shall pay to Seller, as additional consideration for the Purchased Assets (the “Earn Out”), an amount equal to the product of (i) the amount, if any, by which the Business’s Earn Out EBITDAP, as defined in Schedule 3.1(i), for the 12-month period from October 1, 2005 through and including September 30, 2006 (the “Earn Out Period”) exceeds Eighteen Million Seven Hundred Fifty Thousand Dollars ($18,750,000) and (ii) four (4); provided, that the Parties agree that the amount, if any, payable under this Section 3.1(i)(A) shall not exceed in the aggregate Five Million Dollars ($5,000,000). During the Earn Out Period and until such time as the Earnout amount is paid to Seller, Purchaser shall cause the books and records of the Business to be adequately maintained in a commercially reasonable manner so that any amounts due pursuant to this Section 3.1(i) can be determined. If (i) the amount of the Earn Out that becomes due under this Section 3.1(i)(A) equals Five Million Dollars ($5,000,000), and (ii) any EBITDAP Adjustment previously has been paid by Seller to Purchaser, then Purchaser shall repay Seller, in addition to the Earn Out, and at the same time of such payment, the amount of such previously paid EBITDAP Adjustment.
Appears in 2 contracts
Samples: Purchase Agreement (Gencorp Inc), Purchase Agreement (American Pacific Corp)
Determination of Purchase Price. (a) Subject to the terms and conditions of this Agreement and in consideration of the sale, transfer, assignment, conveyance and delivery by Seller and Aerojet (to the extent of their respective ownership interests) of the Purchased Assets to Purchaser, Purchaser shall pay to Seller an aggregate amount equal to One Hundred Fourteen Million Dollars ($114,000,000), which shall be paid at Closing as set forth in Section 3.1(b) and which shall be subject to adjustment pursuant to the terms provisions of this Section 3.1 2.2, on the Closing Date, the Sellers will be entitled to receive aggregate consideration in the transactions contemplated by this Agreement (as so adjusted, the “Purchase Price”) equal to the sum of (i) $655,000,000.00, plus (ii) the Estimated Closing Cash Amount (which may be a negative number), plus (iii) the Estimated Net Working Capital Adjustment Amount (which may be a negative number), minus (iv) the Estimated Closing Indebtedness Amount, minus (v) the Estimated Transaction Expenses, minus (vi) the Estimated Closing Income Taxes.
(b) The Purchase Price shall be paid by Purchaser to Seller at the Closing as follows:
(i) by wire transfer of immediately available funds in an aggregate amount of Eighty Eight Million Five Hundred Thousand Dollars ($88,500,000);
(ii) by delivery of a subordinated promissory note payable to Seller in the original principal amount of Twenty Five Million Five Hundred Thousand Dollars ($25,500,000) in the form attached hereto as Exhibit D (the “Note”).
(c) No later than one (1) three Business Day Days prior to the anticipated Closing Date, the Sellers will prepare and deliver to the Purchaser an unaudited consolidated balance sheet of the Acquired Companies prepared on an estimated basis as of 11:59 p.m. local time in each applicable jurisdiction on the day immediately prior to the Closing Date, Seller shall prepare and deliver, or cause to be prepared and delivered, to Purchaser a written estimate Date (the “Estimated Statement”) of (i) the items of the 2005 Budgeted Capital Expenditures that have been paid by or on behalf of Seller as of the Closing Date (“Completed Capital Expenditures”), and (ii) Working Capital, in each case as of the close of Business on the Closing Date. Subject to further adjustment pursuant to Section 3.1(f) hereof:
(A) to the extent that the Estimated Statement reflects (I) Completed Capital Expenditures of less than Nineteen Million Dollars ($19,000,000), the purchase price shall be decreased by the amount of such difference and such decrease shall be applied to the cash portion of the purchase price; and (II) Completed Capital Expenditures of more than Nineteen Million Dollars ($19,000,000), the purchase price shall be increased by the amount of such excess and such increased amount shall be paid in cash within five (5) Business Days of the Closing Date; and
(B) to the extent that the Estimated Statement reflects (I) Working Capital of less than Ten Million Dollars ($10,000,000), the purchase price payable at Closing shall be decreased by the amount of such difference and such decrease shall be applied to the cash portion of the purchase price; and (II) Working Capital of more than Ten Million Dollars ($10,000,000), the purchase price shall be increased by the amount of such excess and such increased amount shall be paid in cash within five (5) Business Days of the Closing Date.
(d) Within 45 calendar days after the Closing Date, Purchaser shall cause to be prepared and delivered to Seller (i) a balance sheet of the Business as of the Closing Date prepared in accordance with GAAP applied on a consistent basis with the May Balance Sheet and including such items set forth on the May Balance Sheet (the “Closing Balance Sheet”), (ii) with a statement (“Capital Expenditures Statement”) that will set forth the Sellers’ good faith, reasonable estimate of the Completed Capital Expenditures as each of the Closing Date, and (iii) a statement Cash Amount (the “Working Capital Statement”) of the Working Capital as of the Estimated Closing Date.
(e) Following receipt of the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement, Seller will have 45 calendar days to review the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement after which period, if Seller has not disputed in writing (an “Objection”) the Closing Balance Sheet, the Capital Expenditures Statement, or the Working Capital Statement, Seller will be deemed to have accepted and agreed with the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement, and such deliverables shall be final and binding upon the Parties. During such period, Purchaser shall make available its accounting staff and other relevant personnel to respond to questions of Seller relating to the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement at commercially reasonable times and upon commercially reasonable advance notice and shall furnish to Seller such work papers and other documents and information relating to the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement as Seller may commercially reasonably request and are commercially reasonably available to Purchaser or its Affiliates. An Objection shall set forth a general description of the basis of the Objection and the adjustments to the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement that Seller believes should be made, which Objection must be delivered to Purchaser on or before the last day of such 45-day period, in which case each item in the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement that is not disputed in such Objection shall be deemed to be agreed to by Seller and shall be final and binding upon the Parties. Purchaser shall have 30 calendar days from receipt of any Objection to review and respond to such Objection.
(f) After all calculations contemplated in Section 3.1(e) have been completed, delivered and responded to, the purchase price shall be adjusted as follows:
(A) To the extent that the Estimated Statement reflects (i) Completed Capital Expenditures of more than the amount shown on the Capital Expenditures Statement (such difference a “CAPEX Overpayment”), then the purchase price shall be decreased by the amount of such CAPEX Overpayment, and Seller shall promptly make payment in immediately available funds to Purchaser in the amount of the CAPEX Overpayment; and (ii) Completed Capital Expenditures of less than the amount shown on the Capital Expenditures Statement (such difference a “CAPEX UnderpaymentCash Amount”), the purchase price shall be increased by the amount of such CAPEX Underpayment, and Purchaser shall promptly make payment in immediately available funds to Seller in the amount of such CAPEX Underpayment;
(B) To the extent that the Estimated Statement reflects (i) Net Working Capital of more than Adjustment Amount (the amount shown on the “Estimated Net Working Capital Statement (such difference a “Working Capital Overpayment”), then the purchase price shall be decreased by the amount of such Working Capital Overpayment, and Seller shall promptly make payment in immediately available funds to Purchaser in the amount of the Working Capital Overpayment; and (ii) Working Capital of less than the amount shown on the Working Capital Statement (such difference a “Working Capital UnderpaymentAdjustment Amount”), the purchase price Closing Indebtedness Amount (which shall be increased by equal to or greater than the amount of such Working Capital UnderpaymentPayoff Amount) (the “Estimated Closing Indebtedness Amount”), the Transaction Expenses (the “Estimated Transaction Expenses”) and the Closing Income Taxes (the “Estimated Closing Income Taxes”), and Purchaser shall promptly make payment in immediately available funds to Seller in the amount of such Working Capital Underpayment.
Purchase Price determined based on the foregoing amounts (g) The Parties shall attempt in good faith to reach an agreement with respect to any matters in dispute regarding the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement. If the Parties are unable to reach agreement with respect to the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement within 30 days following the delivery of Purchaser’s response to an Objection, any remaining disputed items shall be referred for final binding resolution to an accounting firm mutually acceptable to both Parties or“Estimated Purchase Price”), in the absence of such agreement, by an accounting firm (with no existing or prior material business with either Seller or Purchaser) of national reputation selected by lot. The selected accounting firm shall be directed by the Parties to (i) determine each disputed item case determined based on the Estimated Closing Balance Sheet on the basis consistent with the May Balance Sheet, (ii) determine each disputed item on the Capital Expenditures Statement and prepared in accordance with GAAP applied on a consistent basis and in accordance with this Agreement, (iii) determine each disputed item on the Working Capital Statement in accordance with GAAP applied on a consistent basis and in accordance with this Agreement, (iv) render its determination within 30 days after such referral for binding resolution is made, and (v) upon reaching a determination, deliver to both Purchaser and Seller a modified Closing Balance Sheet, Capital Expenditures Statement, and/or Working Capital Statement reflecting the items that have become final and binding upon the Parties and the accounting firm’s determination of each disputed item. The determination by the accounting firm so selected of the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement (with such modifications therein, if any, as reflect such determination) shall be conclusive and binding upon the Parties. The fees and expenses of such accounting firm shall be shared equally by the Seller Parties, on the one hand, and Purchaser, on the other hand. Nothing herein shall be construed to authorize or permit the accounting firm to determine any questions or matters whatsoever under or in connection with this Agreement except for the resolution of the disputed items submitted to them for determination in accordance with this Section 3.1(g2.2(g).
(h) Each Party shall provide the other Parties and their respective representatives reasonable access to the premises of the Business, to their respective books and records and to their respective appropriate personnel for purposes of preparing and confirming the Closing Balance Sheet, the Capital Expenditures Statement, the Working Capital Statement, and the CAPEX Statement.
(i) (A) Subject to sub-clause (C) of Section 3.1(i), Seller shall earn, and Purchaser shall pay to Seller, as additional consideration for the Purchased Assets (the “Earn Out”), an amount equal to the product of (i) the amount, if any, by which the Business’s Earn Out EBITDAP, as defined in Schedule 3.1(i), for the 12-month period from October 1, 2005 through and including September 30, 2006 (the “Earn Out Period”) exceeds Eighteen Million Seven Hundred Fifty Thousand Dollars ($18,750,000) and (ii) four (4); provided, that the Parties agree that the amount, if any, payable under this Section 3.1(i)(A) shall not exceed in the aggregate Five Million Dollars ($5,000,000). During the Earn Out Period and until such time as the Earnout amount is paid to Seller, Purchaser shall cause the books and records of the Business to be adequately maintained in a commercially reasonable manner so that any amounts due pursuant to this Section 3.1(i) can be determined. If (i) the amount of the Earn Out that becomes due under this Section 3.1(i)(A) equals Five Million Dollars ($5,000,000), and (ii) any EBITDAP Adjustment previously has been paid by Seller to Purchaser, then Purchaser shall repay Seller, in addition to the Earn Out, and at the same time of such payment, the amount of such previously paid EBITDAP Adjustment.
Appears in 1 contract
Determination of Purchase Price. (a) Subject The amount to the terms and conditions of this Agreement and be paid by Buyer to Seller at Closing in consideration of the sale, transfer, assignment, conveyance sale and delivery of the Assets to Buyer in accordance with this Agreement shall be determined by adding to or subtracting from the Base Purchase Price, as applicable, each adjustment to be made to the Base Purchase Price at Closing pursuant to Sections 2.3(a) and (b), as proposed by Seller and Aerojet (to the extent of their respective ownership interests) of the Purchased Assets to Purchaser, Purchaser shall pay to Seller an aggregate amount equal to One Hundred Fourteen Million Dollars ($114,000,000), which shall be paid at Closing as set forth not disputed by Buyer in Section 3.1(b) and which shall be subject to adjustment pursuant to the terms of accordance with this Section 3.1 (as so adjusted, the “Purchase Price”)2.4.
(b) The Seller shall prepare and deliver to Buyer at least five (5) Business Days before the Closing Date a statement (the "Preliminary Settlement Statement") setting forth Seller's good faith estimate of each adjustment to be made in accordance with Sections 2.3(a) and (b). Buyer may dispute in good faith Seller's estimate of the amount of such adjustments by delivery to Seller by written notice thereof within three (3) Business Days after receipt of such estimate. Buyer and Seller shall use commercially reasonable efforts to resolve any such dispute prior to Closing; provided, that any and all amounts so disputed or other adjustments claimed by Seller and not resolved by mutual agreement of Buyer and Seller prior to Closing shall be resolved in accordance with Section 2.4(d) and the Closing shall occur with payment of the Base Purchase Price less the amount of the disputed items, notwithstanding any such dispute; provided, however Title Defects and Environmental Defects shall be paid by Purchaser to Seller at the Closing addressed as follows:
(iset forth in Sections 2.3(b)(iv) by wire transfer of immediately available funds in an aggregate amount of Eighty Eight Million Five Hundred Thousand Dollars ($88,500,000);
(ii) by delivery of a subordinated promissory note payable to Seller in the original principal amount of Twenty Five Million Five Hundred Thousand Dollars ($25,500,000) in the form attached hereto as Exhibit D (the “Note”and 2.3(b)(v).
(c) No later than one (1) Business Day prior to After the Closing DateClosing, Seller the Purchase Price shall prepare and deliver, or cause to be prepared and delivered, to Purchaser a written estimate (the “Estimated Statement”) of (i) the items of the 2005 Budgeted Capital Expenditures that have been paid by or on behalf of Seller as of the Closing Date (“Completed Capital Expenditures”), and (ii) Working Capital, in each case as of the close of Business on the Closing Date. Subject subject to further adjustment pursuant to Section 3.1(f2.4(d) hereof:of this Agreement, and neither Seller's delivery of an estimate of adjustments pursuant to this Section 2.4, the delivery of a dispute notice by Buyer pursuant to this Section 2.4, nor the failure to deliver any such dispute notice shall bar any such further adjustments.
(Ai) On or before the ninetieth (90th) day after the Closing, Seller shall prepare and deliver to Buyer in accordance with this Agreement, a statement (the "Final Settlement Statement") setting forth Seller's calculation of the final adjustments and showing the calculation of such adjustments. Within thirty (30) days after receipt of the Final Settlement Statement, Buyer shall deliver to Seller a written report containing any changes that Buyer proposes be made to the extent that Final Settlement Statement and the Estimated Statement reflects (I) Completed Capital Expenditures of less than Nineteen Million Dollars ($19,000,000reasons for those changes. The parties shall attempt to agree to the amounts due pursuant to such adjustments, including any amounts disputed under Section 2.4(b), no later than ninety (90) days after Buyer's receipt of the purchase price Final Settlement Statement. The date upon which such agreement is reached shall be decreased by herein called the amount of such difference and such decrease shall be applied to the cash portion of the purchase price; and (II) Completed Capital Expenditures of more than Nineteen Million Dollars ($19,000,000), the purchase price shall be increased by the amount of such excess and such increased amount shall be paid in cash within "Final Settlement Date". Within five (5) Business Days of from the Closing Final Settlement Date; and
(B) to the extent that the Estimated Statement reflects (I) Working Capital of less than Ten Million Dollars ($10,000,000), the purchase price payable at Closing party owing any amount for additional adjustments shall be decreased by the amount of pay such difference and such decrease shall be applied to the cash portion of the purchase price; and (II) Working Capital of more than Ten Million Dollars ($10,000,000)amount, the purchase price shall be increased by the amount of such excess and such increased amount shall be paid in cash within five (5) Business Days of the Closing Dateimmediately available funds.
(dii) Within 45 calendar days If Seller and Buyer are unable to agree upon the Final Settlement Statement by the ninetieth (90th) day after Buyer's receipt of same, KPMG LLP (or, if such firm is unable or unwilling to act, such other nationally recognized independent public accounting firm as shall be agreed upon by Buyer and Seller in writing) (the Closing Date"Referral Firm") shall review Seller's Final Settlement Statement and the records relating to the Leases and determine the final adjustments, Purchaser shall cause other then adjustments determined under the mechanism regarding Title Defects set forth in Exhibit A. With respect to any matters under this Agreement to be prepared resolved by the Referral Firm, neither the Referral Firm nor any person employed by the Referral Firm will interpret the provisions of this Agreement unless otherwise agreed by Seller and delivered Buyer. With respect to any matters for which interpretation of this Agreement is required, and for which Buyer and Seller (i) cannot agree on such interpretation, such matter shall be submitted to arbitration in a balance sheet similar manner as set forth in Exhibit A, paragraph 6 regarding Title Defect disputes and the Referral Firm shall decide all other matters specified in this Section 2.4(d)(ii). The decision of the Business as Referral Firm shall be binding on Buyer and Seller, and the fees and expenses of the Closing Date prepared in accordance with GAAP applied on a consistent basis with the May Balance Sheet Referral Firm shall be borne one-half each by Buyer and including such items set forth on the May Balance Sheet (the “Closing Balance Sheet”), (ii) a statement (“Capital Expenditures Statement”) Seller. The Referral Firm shall deliver its final calculation of the Completed Capital Expenditures Purchase Price in writing to Buyer and Seller as soon as is practicable, and the parties shall pay and receive the final adjustment amount, no later than the fifth (5th) business day following the paying person's receipt from the Referral Firm of the Closing Date, and (iii) a statement (the “Working Capital Statement”) of the Working Capital as of the Closing Datefinal Purchase Price determination.
(e) Following receipt The parties will, and will cause their representatives to, cooperate and assist in the preparation of the Closing Balance Sheet, the Capital Expenditures Statement, Final Settlement Statement and the Working Capital Statement, Seller will have 45 calendar days to review the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement after which period, if Seller has not disputed in writing (an “Objection”) the Closing Balance Sheet, the Capital Expenditures Statement, or the Working Capital Statement, Seller will be deemed to have accepted and agreed with the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement, and such deliverables shall be final and binding upon the Parties. During such period, Purchaser shall make available its accounting staff and other relevant personnel to respond to questions of Seller relating to the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement at commercially reasonable times and upon commercially reasonable advance notice and shall furnish to Seller such work papers and other documents and information relating to the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement as Seller may commercially reasonably request and are commercially reasonably available to Purchaser or its Affiliates. An Objection shall set forth a general description conduct of the basis of the Objection reviews and the adjustments audits referred to the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement that Seller believes should be made, which Objection must be delivered to Purchaser on or before the last day of such 45-day period, in which case each item in the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement that is not disputed in such Objection shall be deemed to be agreed to by Seller and shall be final and binding upon the Parties. Purchaser shall have 30 calendar days from receipt of any Objection to review and respond to such Objection.
(f) After all calculations contemplated in Section 3.1(e) have been completed, delivered and responded to, the purchase price shall be adjusted as follows:
(A) To the extent that the Estimated Statement reflects (i) Completed Capital Expenditures of more than the amount shown on the Capital Expenditures Statement (such difference a “CAPEX Overpayment”), then the purchase price shall be decreased by the amount of such CAPEX Overpayment, and Seller shall promptly make payment in immediately available funds to Purchaser in the amount of the CAPEX Overpayment; and (ii) Completed Capital Expenditures of less than the amount shown on the Capital Expenditures Statement (such difference a “CAPEX Underpayment”), the purchase price shall be increased by the amount of such CAPEX Underpayment, and Purchaser shall promptly make payment in immediately available funds to Seller in the amount of such CAPEX Underpayment;
(B) To the extent that the Estimated Statement reflects (i) Working Capital of more than the amount shown on the Working Capital Statement (such difference a “Working Capital Overpayment”), then the purchase price shall be decreased by the amount of such Working Capital Overpayment, and Seller shall promptly make payment in immediately available funds to Purchaser in the amount of the Working Capital Overpayment; and (ii) Working Capital of less than the amount shown on the Working Capital Statement (such difference a “Working Capital Underpayment”), the purchase price shall be increased by the amount of such Working Capital Underpayment, and Purchaser shall promptly make payment in immediately available funds to Seller in the amount of such Working Capital Underpayment.
(g) The Parties shall attempt in good faith to reach an agreement with respect to any matters in dispute regarding the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement. If the Parties are unable to reach agreement with respect to the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement within 30 days following the delivery of Purchaser’s response to an Objection, any remaining disputed items shall be referred for final binding resolution to an accounting firm mutually acceptable to both Parties or, in the absence of such agreement, by an accounting firm (with no existing or prior material business with either Seller or Purchaser) of national reputation selected by lot. The selected accounting firm shall be directed by the Parties to (i) determine each disputed item on the Closing Balance Sheet on the basis consistent with the May Balance Sheet, (ii) determine each disputed item on the Capital Expenditures Statement in accordance with GAAP applied on a consistent basis and in accordance with this Agreement, (iii) determine each disputed item on the Working Capital Statement in accordance with GAAP applied on a consistent basis and in accordance with this Agreement, (iv) render its determination within 30 days after such referral for binding resolution is made, and (v) upon reaching a determination, deliver to both Purchaser and Seller a modified Closing Balance Sheet, Capital Expenditures Statement, and/or Working Capital Statement reflecting the items that have become final and binding upon the Parties and the accounting firm’s determination of each disputed item. The determination by the accounting firm so selected of the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement (with such modifications therein, if any, as reflect such determination) shall be conclusive and binding upon the Parties. The fees and expenses of such accounting firm shall be shared equally by the Seller Parties, on the one hand, and Purchaser, on the other hand. Nothing herein shall be construed to authorize or permit the accounting firm to determine any questions or matters whatsoever under or in connection with this Agreement except for the resolution of the disputed items submitted to them for determination in accordance with this Section 3.1(g).
(h) Each Party shall provide the other Parties and their respective representatives reasonable access 2.4, including but not limited to the premises of the Businessmaking available books, to their respective books and records and to their respective appropriate personnel for purposes of preparing and confirming the Closing Balance Sheet, the Capital Expenditures Statement, the Working Capital Statement, and the CAPEX Statementas required.
(i) (A) Subject to sub-clause (C) of Section 3.1(i), Seller shall earn, and Purchaser shall pay to Seller, as additional consideration for the Purchased Assets (the “Earn Out”), an amount equal to the product of (i) the amount, if any, by which the Business’s Earn Out EBITDAP, as defined in Schedule 3.1(i), for the 12-month period from October 1, 2005 through and including September 30, 2006 (the “Earn Out Period”) exceeds Eighteen Million Seven Hundred Fifty Thousand Dollars ($18,750,000) and (ii) four (4); provided, that the Parties agree that the amount, if any, payable under this Section 3.1(i)(A) shall not exceed in the aggregate Five Million Dollars ($5,000,000). During the Earn Out Period and until such time as the Earnout amount is paid to Seller, Purchaser shall cause the books and records of the Business to be adequately maintained in a commercially reasonable manner so that any amounts due pursuant to this Section 3.1(i) can be determined. If (i) the amount of the Earn Out that becomes due under this Section 3.1(i)(A) equals Five Million Dollars ($5,000,000), and (ii) any EBITDAP Adjustment previously has been paid by Seller to Purchaser, then Purchaser shall repay Seller, in addition to the Earn Out, and at the same time of such payment, the amount of such previously paid EBITDAP Adjustment.
Appears in 1 contract
Determination of Purchase Price. (a) Subject to the terms and conditions of this Agreement and in consideration of the sale, transfer, assignment, conveyance and delivery by Seller and Aerojet (to the extent of their respective ownership interests) of the Purchased Assets to Purchaser, Purchaser shall pay to Seller an aggregate amount equal to One Hundred Fourteen Million Dollars ($114,000,000), which shall be paid at Closing as set forth in Section 3.1(b) and which shall be subject to adjustment pursuant to the terms of this Section 3.1 (as so adjusted, the “Purchase Price”).
(b) The Purchase Price shall be paid by Purchaser to Seller at the Closing as follows:
(i) by wire transfer of immediately available funds in an aggregate amount of Eighty Eight Million Five Hundred Thousand Dollars ($88,500,000);
(ii) by delivery of a subordinated promissory note payable to Seller in the original principal amount of Twenty Five Million Five Hundred Thousand Dollars ($25,500,000) in the form attached hereto as Exhibit D (the “Note”).
(c) No later than one fifteen (115) Business Day days prior to the Closing Date, Seller shall will prepare and deliver, or cause deliver to be prepared and delivered, to Purchaser a written estimate (the “Estimated Statement”) of Buyer (i) the items a good faith estimate of the 2005 Budgeted Capital Expenditures that have been paid by or on behalf amount of the Seller Accounts Receivable as of the Closing Date (the “Completed Capital ExpendituresSeller A/R Payment Amount”), which amount shall be paid to Seller following the Closing in accordance with Section 3.2(b), and (ii) Working Capital, in each case as a good faith estimate of the close Purchase Price less the Seller A/R Payment Amount, calculated in accordance with Exhibit 3.1(A) (such estimated Purchase Price, less such estimate of Business on the Seller A/R Amount, being referred to herein as the “Closing Date. Subject to further adjustment pursuant to Section 3.1(f) hereof:
(A) to the extent that the Estimated Statement reflects (I) Completed Capital Expenditures of less than Nineteen Million Dollars ($19,000,000Payment Amount”), the purchase price shall be decreased by the amount of such difference and such decrease shall be applied to the cash portion of the purchase price; and (II) Completed Capital Expenditures of more than Nineteen Million Dollars ($19,000,000), the purchase price shall be increased by the amount of such excess and such increased which amount shall be paid in cash within five (5) Business Days to Seller at the Closing. Such estimates shall be delivered together with all worksheets and supporting documentation. Buyer shall have a reasonable right of consultation with Seller with respect to the estimate of the Closing Date; andPurchase Price, including with respect to the balances used and the calculations thereof.
(Bb) Following the Closing, Buyer shall remit and pay to Seller (as part of the extent that the Estimated Statement reflects Purchase Price) one-hundred percent (I100%) Working Capital of less than Ten Million Dollars ($10,000,000), the purchase price payable at Closing shall be decreased by the amount of such difference and such decrease shall be applied to the cash portion of the purchase price; and all remittances from customers received by Buyer (II) Working Capital of more than Ten Million Dollars ($10,000,000or by Seller, on Buyer’s behalf), until the purchase price shall be increased aggregate amount so paid equals the Seller A/R Payment Amount or, if earlier, the date on which the payment required by the amount of such excess and such increased amount Section 3.2(f) is paid. Such amounts shall be paid to Seller in cash within five (5) Business Days of the Closing Dateperiodic installments, no less frequently than weekly, as such remittances are received and processed.
(dc) Within 45 calendar one hundred and twenty (120) days after the Closing Date, Purchaser shall cause Seller will prepare and deliver to be prepared and delivered to Seller Buyer a revised Purchase Price (i) a balance sheet of such Purchase Price being referred as the Business as of the Closing Date prepared “Final Purchase Price”), calculated in good faith in accordance with GAAP applied on a consistent basis Exhibit 3.1(B) together with the May Balance Sheet worksheets and including such items set forth on the May Balance Sheet supporting documentation (the “Post-Closing Balance SheetAdjustment Statement”). Seller agrees that Buyer shall have a reasonable right of consultation with Seller in connection with Seller’s preparation of the Post-Closing Adjustment Statement and related information, and will provide Buyer with access to its books, records, information, and employees as Buyer may reasonably request. In the event that Buyer raises any objections or disagreements with any methodology used or determination made by Seller during the preparation of the Post-Closing Adjustment Statement, the Parties will attempt in good faith to resolve such objection or disagreement prior to delivery of the Post-Closing Adjustment Statement by Seller to Buyer. No action or inaction by Buyer under this Section 3.2(c) shall prejudice any rights of Buyer under Section 3.2(d) or otherwise.
(iid) a statement The amounts determined by Seller as set forth in the Post-Closing Adjustment Statement will be final, binding, and conclusive for all purposes unless, and only to the extent, that within sixty (60) days after Seller has delivered the Post-Closing Adjustment Statement Buyer notifies Seller of any dispute with respect to matters set out in the Post-Closing Adjustment Statement. Any such notice of dispute delivered by Buyer (an “Capital Expenditures StatementAdjustment Dispute Notice”) will identify with specificity each item in the Post-Closing Adjustment Statement with respect to which Buyer disagrees, the basis of the Completed Capital Expenditures as of the Closing Datesuch disagreement, and (iii) a statement (the “Working Capital Statement”) of the Working Capital as of the Closing DateBuyer’s position with respect to such disputed item.
(e) Following receipt If Buyer delivers an Adjustment Dispute Notice in compliance with Section 3.2(d) and Seller and Buyer are unable to reach a resolution with respect to all disputed items within forty-five (45) days of delivery of the Closing Balance SheetAdjustment Dispute Notice, Seller and Buyer will submit any items remaining in dispute for determination and resolution to the Capital Expenditures StatementIndependent Accounting Firm, which will be instructed to determine in accordance with GAAP or FERC accounting principles, as appropriate depending on the item at issue, and report to the Working Capital StatementParties, Seller within thirty (30) days after such submission, upon such remaining disputed items. The report of the Independent Accounting Firm will have 45 calendar days to review the Closing Balance Sheetbe final, the Capital Expenditures Statementbinding, and conclusive on the Working Capital Statement after which period, if Seller has not disputed in writing (an “Objection”) Parties for all purposes. The fees and disbursements of the Closing Balance Sheet, the Capital Expenditures Statement, or the Working Capital Statement, Seller Independent Accounting Firm will be deemed to have accepted allocated between Seller and agreed with Buyer so that Buyer’s share of such fees and disbursements will be in the Closing Balance Sheet, same proportion that the Capital Expenditures Statement, and the Working Capital Statement, and aggregate amount of any such deliverables shall be final and binding upon the Parties. During such period, Purchaser shall make available its accounting staff and other relevant personnel to respond to questions of Seller relating remaining disputed items so submitted to the Closing Balance Sheet, Independent Accounting Firm that is unsuccessfully disputed by Buyer (as finally determined by the Capital Expenditures Statement, and the Working Capital Statement at commercially reasonable times and upon commercially reasonable advance notice and shall furnish to Seller such work papers and other documents and information relating Independent Accounting Firm) bears to the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement as Seller may commercially reasonably request and are commercially reasonably available to Purchaser or its Affiliates. An Objection shall set forth a general description total amount of the basis of the Objection and the adjustments such disputed amounts initially submitted to the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement that Seller believes should be made, which Objection must be delivered to Purchaser on or before the last day of such 45-day period, in which case each item in the Closing Balance Sheet, the Capital Expenditures Statement, and the Working Capital Statement that is not disputed in such Objection shall be deemed to be agreed to by Seller and shall be final and binding upon the Parties. Purchaser shall have 30 calendar days from receipt of any Objection to review and respond to such ObjectionIndependent Accounting Firm.
(f) After all calculations contemplated in Within five (5) days following the final determination of the Final Purchase Price pursuant to Section 3.1(e3.2(d) have been completedor Section 3.2(e), delivered and responded to, the purchase price shall be adjusted as follows:
(A) To the extent that the Estimated Statement reflects (i) Completed Capital Expenditures of more if the Final Purchase Price is greater than the amount shown on sum of the Capital Expenditures Statement (such difference a “CAPEX Overpayment”), then the purchase price shall be decreased by the amount of such CAPEX Overpayment, and Seller shall promptly make payment in immediately available funds to Purchaser in Closing Payment Amount plus the amount of the CAPEX OverpaymentSeller A/R Payment Amount paid pursuant to Section 3.2(b) prior to the date of payment under this Section 3.2(f), Buyer will pay the difference to Seller; and or (ii) Completed Capital Expenditures of if the Final Purchase Price is less than the amount shown on sum of the Capital Expenditures Statement (such difference a “CAPEX Underpayment”), the purchase price shall be increased by the amount of such CAPEX Underpayment, and Purchaser shall promptly make payment in immediately available funds to Seller in the amount of such CAPEX Underpayment;
(B) To the extent that the Estimated Statement reflects (i) Working Capital of more than the amount shown on the Working Capital Statement (such difference a “Working Capital Overpayment”), then the purchase price shall be decreased by the amount of such Working Capital Overpayment, and Seller shall promptly make payment in immediately available funds to Purchaser in Closing Payment Amount plus the amount of the Working Capital Overpayment; and (iiSeller A/R Payment Amount paid pursuant to Section 3.2(b) Working Capital of less than the amount shown on the Working Capital Statement (such difference a “Working Capital Underpayment”), the purchase price shall be increased by the amount of such Working Capital Underpayment, and Purchaser shall promptly make payment in immediately available funds to Seller in the amount of such Working Capital Underpayment.
(g) The Parties shall attempt in good faith to reach an agreement with respect to any matters in dispute regarding the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement. If the Parties are unable to reach agreement with respect prior to the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement within 30 days following the delivery date of Purchaser’s response to an Objection, any remaining disputed items shall be referred for final binding resolution to an accounting firm mutually acceptable to both Parties or, in the absence of such agreement, by an accounting firm (with no existing or prior material business with either Seller or Purchaser) of national reputation selected by lot. The selected accounting firm shall be directed by the Parties to (i) determine each disputed item on the Closing Balance Sheet on the basis consistent with the May Balance Sheet, (ii) determine each disputed item on the Capital Expenditures Statement in accordance with GAAP applied on a consistent basis and in accordance with this Agreement, (iii) determine each disputed item on the Working Capital Statement in accordance with GAAP applied on a consistent basis and in accordance with this Agreement, (iv) render its determination within 30 days after such referral for binding resolution is made, and (v) upon reaching a determination, deliver to both Purchaser and Seller a modified Closing Balance Sheet, Capital Expenditures Statement, and/or Working Capital Statement reflecting the items that have become final and binding upon the Parties and the accounting firm’s determination of each disputed item. The determination by the accounting firm so selected of the Closing Balance Sheet, the Capital Expenditures Statement, and/or the Working Capital Statement (with such modifications therein, if any, as reflect such determination) shall be conclusive and binding upon the Parties. The fees and expenses of such accounting firm shall be shared equally by the Seller Parties, on the one hand, and Purchaser, on the other hand. Nothing herein shall be construed to authorize or permit the accounting firm to determine any questions or matters whatsoever payment under or in connection with this Agreement except for the resolution of the disputed items submitted to them for determination in accordance with this Section 3.1(g).
(h) Each Party shall provide the other Parties and their respective representatives reasonable access to the premises of the Business, to their respective books and records and to their respective appropriate personnel for purposes of preparing and confirming the Closing Balance Sheet, the Capital Expenditures Statement, the Working Capital Statement, and the CAPEX Statement.
(i) (A) Subject to sub-clause (C) of Section 3.1(i), Seller shall earn, and Purchaser shall pay to Seller, as additional consideration for the Purchased Assets (the “Earn Out”), an amount equal to the product of (i) the amount, if any, by which the Business’s Earn Out EBITDAP, as defined in Schedule 3.1(i), for the 12-month period from October 1, 2005 through and including September 30, 2006 (the “Earn Out Period”) exceeds Eighteen Million Seven Hundred Fifty Thousand Dollars ($18,750,000) and (ii) four (4); provided, that the Parties agree that the amount, if any, payable under this Section 3.1(i)(A) shall not exceed in the aggregate Five Million Dollars ($5,000,000). During the Earn Out Period and until such time as the Earnout amount is paid to Seller, Purchaser shall cause the books and records of the Business to be adequately maintained in a commercially reasonable manner so that any amounts due pursuant to this Section 3.1(i) can be determined. If (i) the amount of the Earn Out that becomes due under this Section 3.1(i)(A) equals Five Million Dollars ($5,000,000), and (ii) any EBITDAP Adjustment previously has been paid by Seller to Purchaser, then Purchaser shall repay Seller, in addition to the Earn Out, and at the same time of such payment, the amount of such previously paid EBITDAP Adjustment.this
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