Post-Closing Adjustment. (a) Within 90 days following the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity. (b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a). (c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator. (d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9. (e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected: (i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller. (ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 2 contracts
Samples: Purchase Agreement (Jersey Partners Inc.), Purchase Agreement (Jersey Partners Inc.)
Post-Closing Adjustment. (ai) Within 90 days following If the Closing DatePurchase Price is greater than the Final Purchase Price (such difference, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the “Post-Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"Adjustment Shortfall Amount”), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB then Buyer and the IDB Subsidiaries as Stockholders’ Agent shall, within three (3) Business Days of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation determination of the balance sheet for the fiscal year ended December 31, 2013, included Final Purchase Price in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by accordance with this Section 2.7 is 2.16, jointly instruct the Escrow Agent to measure pay the Post-Closing Adjustment Shortfall Amount to Buyer out of the Purchase Price Adjustment Escrow Fund by wire transfer in immediately available funds. If the amount of Available Cashfunds in the Purchase Price Adjustment Escrow Fund exceeds the Post-Closing Adjustment Shortfall Amount, Working Capital then Buyer and Tangible Common Equity and such processes are not intended the Stockholders’ Agent shall also jointly instruct the Escrow Agent to, after paying the Post-Closing Adjustment Shortfall Amount to permit the introduction of different judgmentsBuyer, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery pay to each Company Stockholder its Pro Rata Portion of the Seller remaining amount of funds in the Purchase Price Adjustment Escrow Fund. If the Purchase Price Adjustment Escrow Fund is insufficient to cover the Post-Closing Balance Sheet Adjustment Shortfall Amount, then Buyer and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer Stockholders’ Agent shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall jointly instruct the Independent Accountant Arbitrator Escrow Agent to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of distribute the Independent Accountant Arbitrator as entire Purchase Price Adjustment Escrow Fund to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Sellerabove.
(ii) if any If the Final Purchase Price is greater than the Closing Purchase Price (such excess amount, the “Post-Closing Adjustment Excess Amount”), then the Company Stockholders shall be entitled to receive such excess amount, and Buyer shall, within five (5) Business Days of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess determination of the corresponding amounts that should have been transferred or retained by Final Purchase Price in accordance with this Section 2.16, pay to the Seller Retained Subsidiaries Paying Agent an amount equal to the Post-Closing Adjustment Excess Amount which shall be distributed to the Company Stockholders as provided Merger Consideration in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyeraccordance with Section 2.8. Notwithstanding the foregoing foregoing, any Post-Closing Adjustment Excess Amount shall be payable in cash and for Buyer Common Shares in proportion to the avoidance total Cash Merger Consideration and the total Stock Merger Consideration; provided, that the portion of doubtthe Additional Consideration payable in Buyer Common Shares shall be calculated based on the Buyer Average Stock Price as of the date of such payment. Concurrently with the payment of the Post-Closing Adjustment Excess Amount, in no event Buyer and the Stockholders’ Agent shall Seller be required also jointly instruct the Escrow Agent to pay an amount in excess to each Company Stockholder its Pro Rata Portion of the Excess Cash Amountremaining amount of funds in the Purchase Price Adjustment Escrow Fund.
Appears in 2 contracts
Samples: Merger Agreement (LiveXLive Media, Inc.), Merger Agreement (Snap Interactive, Inc)
Post-Closing Adjustment. (a) Within 90 days following Promptly after the Closing Date, Seller shall will prepare and and, within 30 days of the Closing Date, deliver to IDB Buyer a consolidated calculation of the Cash Portion of the Purchase Price based on a balance sheet of the Seller Retained Subsidiaries relevant items as of the Closing (giving effect to the Estimated Available Cash Allocation) Date (the "Seller Closing Final Balance Sheet"), which together with Supporting Schedules thereto. The Final Balance Sheet shall be prepared in conformity accordance with GAAP generally accepted accounting principles consistently applied on a basis consistent with and as though the preparation ofparties had not consummated the transactions contemplated by this Agreement. Following the Closing, and using either (i) Seller shall pay Buyer an amount equal to the same accounting methodsdecrease, policiesif any, practices, procedures and estimation methods as those used in between the preparation Cash Portion of the balance sheet for Purchase Price as reflected on the fiscal year ended December 31, 2013, included in Final Balance Sheet or the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Adjusted Final Balance Sheet, as the "Closing Balance Sheets")case may be, which shall be prepared in conformity with GAAP applied on a basis consistent as compared with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation Cash Portion of the balance sheet for Purchase Price as reflected on the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or (ii) Buyer shall pay Seller an amount equal to the IDB Buyer Closing increase, if any, between the Cash Portion of the Purchase Price as reflected on the Final Balance Sheet or the Adjusted Final Balance Sheet, as applicable. Each of Seller and IDB Buyer the case may be (the payment referred to in clause (i) or (ii) above shall have 45 days after be referred to as the later delivery "Post-Closing Adjustment") as compared with the Cash Portion of the Seller Purchase Price as reflected on the Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item")Sheet. Other than the Disputed Items, each Party Such payments shall be deemed to have accepted all items and amounts contained in made by wire transfer or certified or bank cashier's check within ten (10) business days of adoption of the Seller Closing Final Balance Sheet or the IDB Buyer Closing notice from the Accounting Firm of the Adjusted Final Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Itemscase may be. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection No payment shall be made pursuant to by either party if the rules Cash Portion of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position Purchase Price as reflected on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet is equal to the Cash Portion of the Purchase Price as reflected on the Final Balance Sheet or IDB Buyer Closing the Adjusted Final Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and case may be entered and enforced as provided in Section 9.9be.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 2 contracts
Samples: Asset Purchase Agreement (Penn National Gaming Inc), Asset Purchase Agreement (Penn National Gaming Inc)
Post-Closing Adjustment. (ai) Within 90 If the Closing Net Working Capital, as finally determined under Section 2.08(b), is more than the Estimated Closing Net Working Capital, Parent shall, within three (3) business days following the Closing DateNet Working Capital becoming final and binding pursuant to Section 2.08(b), Seller shall prepare and deliver based upon such final determination, pay the excess by wire transfer of immediately available funds to IDB Buyer a consolidated balance sheet the SFC Equityholders to the accounts and in proportion to their respective Percentage Interests set forth on Section 2.06(c) of the Seller Retained Subsidiaries as of Company Disclosure Schedule. If the Closing (giving effect to Net Working Capital, as finally determined under Section 2.08(b), is less than the Estimated Available Cash AllocationClosing Net Working Capital, within three (3) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 business days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Net Working Capital becoming final and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party binding pursuant to Section 2.7(a2.08(b).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not based upon such final determination, Parent and the Escrow Agent shall debit the Escrow Account by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicabledeficiency, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Sellera dollar for dollar basis.
(ii) if In addition, any outstanding principal balance on all receivables of the amounts Company as the Effective Time (the “Acquired Receivables”), net of any reserves for doubtful or uncollectible accounts, that were transferred or retained by the Seller Retained Subsidiaries as provided are included in the Estimated Available Cash Allocation were Closing Net Working Capital that are not in excess fact collected as of the corresponding amounts date that should the Closing Net Working Capital and have not previously been transferred or retained by deducted in calculating the Seller Retained Subsidiaries Closing Net Working Capital, as provided finally determined under Section 2.08(b), shall be deducted from the Closing Net Working Capital (any such Acquired Receivables, a “Deducted Receivable”). The Surviving Corporation shall use commercially reasonable efforts to collect all the Acquired Receivables. When payments are received on account of any obligor under any such Acquired Receivable, the Surviving Corporation shall apply such payments first, to any invoice(s) referenced in connection with such payments, second, to the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay oldest invoice where the amount of the payment matches the amount set forth on the invoice, and third to the oldest unpaid invoices. To the extent that Surviving Corporation receives any payment in respect of a Deducted Receivable, Surviving Corporation shall promptly remit such excess(espayments by wire transfer of immediately available funds to the SFC Equityholders to the accounts and in proportion their respective Percentage Interests set forth on Section 2.06(c) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash AmountCompany Disclosure Schedule.
Appears in 2 contracts
Samples: Merger Agreement (Navarre Corp /Mn/), Merger Agreement (Navarre Corp /Mn/)
Post-Closing Adjustment. (ai) Within 90 Not later than ninety (90) days following after the Closing Date, Seller Buyer shall prepare and deliver to IDB Buyer Seller a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) statement (the "Seller “Closing Balance Sheet"Working Capital Statement”), which statement shall be prepared in conformity accordance with Canadian GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation calculation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Estimated Closing Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated contain:
(A) an unaudited balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing Seller (without giving effect to the Estimated Available Cash Allocationtransactions contemplated hereby) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for close of business on the fiscal year ended December 31, 2013, included in day immediately prior to the GFI Financial Statements, and which shall include Closing Date; and
(B) a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and as of the related adjustment contemplated by this Section 2.7 is close of business on the day immediately prior to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquityDate.
(bii) Following delivery of The Post-Closing Adjustment, if any, shall be as follows:
(A) If the Post-Closing Adjustment is a Positive Adjustment Amount:
(1) but the Positive Adjustment Amount is less than the Excess Amount, Seller Closing Balance Sheet and shall pay to Buyer the IDB amount by which the Excess Amount exceeds the Positive Adjustment Amount; or
(2) Section 2.06(b)(i)(A)(1) does not apply, then Buyer Closing Balance Sheet and prior shall pay to Seller an amount equal to the deadline for delivering a Dispute NoticePositive Adjustment Amount, each of Seller and IDB Buyer will provide minus the other Party and its Representatives with reasonable access to Excess Amount, if any, or plus the books and recordsShortfall Amount, personnel and related work papers of Seller or IDB Buyer, if any (as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(cB) For 30 days after If the later delivery of Post-Closing Adjustment is a Negative Adjustment Amount:
(1) but the Dispute Notice by Seller or IDB BuyerShortfall Amount is greater than the Negative Adjustment Amount, Seller and IDB then Buyer shall endeavor in good faith pay to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion amount equal to the amount by which the aggregate calculation of Shortfall Amount exceeds the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.Negative Adjustment Amount; or
(d2) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator Section 2.06(b)(ii)(B)(1) does not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocationapply, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay Buyer an amount in excess of equal to the Negative Adjustment Amount, minus the Shortfall Amount, if any, or plus the Excess Amount, if any (as applicable).
(C) If the Closing Working Capital is an amount which falls on or between the Working Capital Upper Target and the Working Capital Lower Target, and:
(1) the Cash Consideration paid to Seller was increased by the Excess Amount pursuant to Section 2.06(a)(ii), then Seller shall pay to Buyer an amount equal to such Excess Amount;
(2) the Cash Consideration paid to Seller was reduced by the Shortfall Amount pursuant to Section 2.06(a)(ii), then Buyer shall pay to Seller an amount equal to such Shortfall Amount; or
(3) there was no adjustment to the Cash Consideration paid to Seller pursuant to Section 2.06(a)(ii), then no Post-Closing Adjustment shall be required.
Appears in 2 contracts
Samples: Asset Purchase Agreement (Smart Sand, Inc.), Asset Purchase Agreement (Smart Sand, Inc.)
Post-Closing Adjustment. (ai) Within 90 days following If the DBC Net Book Value (calculated using the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Date Balance Sheet")) is less than the Minimum DBC Net Book Value, which then Purchasers shall be prepared in conformity with GAAP applied on a basis consistent with entitled to receive the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and amount by which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure DBC Net Book Value was less than the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for Minimum DBC Net Book Value (“Purchaser Post-Closing Net Book Value Adjustment”). If the purpose of preparing DBC Net Book Value (calculated using the Closing Date Balance Sheets or determining Available CashSheet) is greater than the Minimum DBC Net Book Value, Working Capital and Tangible Common Equity.
(b) Following delivery then Sellers shall be entitled to receive the amount by which such DBC Net Book Value was greater than the amount of the Minimum DBC Net Book Value (“Seller Post-Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(aNet Book Value Adjustment”).
(cii) For 30 days after If the later delivery of Statutory Surplus Amount is less than the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP Minimum Statutory Surplus Amount (calculated using the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacityClosing Date Balance Sheet), then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection Purchasers shall be made pursuant entitled to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to receive the amount by which the aggregate calculation Statutory Surplus Amount was less than the amount of the Disputed Items Minimum Statutory Surplus Amount (“Purchaser Post- Closing Statutory Surplus Adjustment”). If the Statutory Surplus Amount is greater than the Minimum Statutory Surplus Amount (calculated using the Closing Date Balance Sheet), then Sellers shall be entitled to receive the amount by each which the Statutory Surplus Amount was greater than the amount of them differs from the calculation to be made by the Independent Accountant ArbitratorMinimum Statutory Surplus Amount (“Seller Post-Closing Statutory Surplus Adjustment”).
(diii) Any Post-Closing Adjustment shall be due and payable in cash within three (3) Business Days of the date on which the Closing Date Balance Sheet (together with the DBC Net Book Value and the Statutory Surplus Amount) is either accepted or otherwise finally determined pursuant to this Section 2.8 (“Post-Closing Adjustment Payment”). Any Post-Closing Adjustment attributable to NORDIC shall be adjusted by a factor of 0.75 to account for the Moda’s 75% ownership of NORDIC; provided, if Moda’s ownership of NORDIC changes prior to Closing then such adjustment factor shall be revised to reflect such ownership.
(iv) If there is Purchasers are owed a referral Post-Closing Adjustment Payment, then at Purchaser Representative’s sole election and upon Purchaser Representative sending a request to Seller Representative, Purchaser Representative and Seller Representative shall promptly deliver to Escrow Agent joint written instructions to the Independent Accountant Arbitrator, each Escrow Agent instructing the Escrow Agent to disburse to Purchasers the full amount or any portion of Seller and IDB Buyer agrees, if requested by such Post-Closing Adjustment Payment from the Independent Accountant Arbitrator, Standard Escrow Amount (with any balance to execute a reasonable engagement letter and shall submit be paid in cash pursuant to clause (iii) above).
(v) Notwithstanding anything to the Independent Accountant Arbitrator not later than ten Business Days after its appointmentcontrary contained herein, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller of any Post-Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and Adjustment Payment payable hereunder shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided the limitations set forth in Section 9.9.
(e7.4. Any Post-Closing Adjustment Payment made pursuant to this Section 2.8(b) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect shall be treated as an adjustment to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined Purchase Price by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation")parties for Tax purposes, the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained unless otherwise required by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerLaw.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 2 contracts
Post-Closing Adjustment. (a) Within 90 days following If the sum of (i) the difference between the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used Adjusted Statutory Capital set forth in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure Final Statement minus the amount of Available Estimated Adjusted Regulatory Capital, plus (ii) the difference between the Closing Insolvency Protection Reserve Capital set forth in the Final Statement minus the amount of Estimated Insolvency Regulatory Reserve Requirement, plus (iii) the difference between the Closing Net Working Capital set forth in the Final Statement minus the amount of Estimated Net Working Capital, plus (iv) the difference between the Closing Net Asset Value set forth in the Final Statement minus the amount of Estimated Net Asset Value, plus (v) the difference between the Closing Date Cash set forth in the Final Statement minus the amount of Estimated Closing Date Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit plus (vi) the introduction difference between the amount of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing Estimated Closing Date Indebtedness minus the Closing Balance Sheets Date Indebtedness set forth in the Final Statement, plus (vii) the difference between the amount of Estimated Seller Transaction Expenses minus the Seller Transaction Expenses set forth in the Final Statement equals (A) a positive amount, then the Purchaser shall pay such amount in cash to the Seller, or determining Available Cash(B) a negative amount, Working Capital and Tangible Common Equitythen the Seller shall pay the absolute value of such amount in cash to the Purchaser (such amount, if any, that either the Purchaser is obligated to pay to the Seller, or the Seller is obligated to pay to the Purchaser, being herein referred to as the “Post-Closing Adjustment”) or, in the Purchaser’s sole discretion, the Purchaser may satisfy such amounts from the Escrow Funds. Payment of the Post-Closing Adjustment shall be made within five (5) Business Days after the Final Statement becomes such.
(b) Following delivery In the event that, following determination of the Seller Post-Closing Balance Sheet and Adjustment, the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each Purchaser or any of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet Affiliates (including the calculations Transferred Entities) actually collect any portion of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including Provider Advances Receivable that was not included in the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of Closing Net Asset Value, the Purchaser shall promptly remit such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as payment to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 2 contracts
Samples: Stock and Asset Purchase Agreement (Magellan Health Inc), Stock and Asset Purchase Agreement (Molina Healthcare, Inc.)
Post-Closing Adjustment. (a) Within 90 days following The Final Purchase Price shall be calculated based upon the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as final calculation of the Closing Net Assets (giving effect as determined pursuant to Section 2.07 below). If the Closing Net Assets, as determined as provided in Section 2.07 below: (i) exceeds the Estimated Available Net Assets plus or minus the Net Cash Allocation) (Balance, then the "Seller Closing Balance Sheet"), which Final Purchase Price shall be prepared in conformity with GAAP applied on a basis consistent with equal to: (A) the preparation of, and using Estimated Purchase Price plus (B) the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and amount by which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing DateNet Assets exceeds the Estimated Net Assets plus or minus the Net Cash Balance; or (ii) is less than the Estimated Net Assets plus or minus the Net Cash Balance, IDB Buyer then the Final Purchase Price shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and be equal to: (A) the IDB Subsidiaries as of Estimated Purchase Price minus (B) the amount by which the Closing (giving effect to Net Assets is less than the Estimated Available Net Assets plus or minus the Net Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquityBalance.
(b) Following delivery of If the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior Final Purchase Price as calculated pursuant to the deadline for delivering a Dispute Noticeprovisions of Section 2.06(a) above exceeds the Estimated Purchase Price, each of Seller and IDB the amount by which the Final Purchase Price exceeds the Estimated Purchase Price shall be paid by Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, Seller. If the Final Purchase Price as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party calculated pursuant to Section 2.7(a)2.06(a) above is less than the Estimated Purchase Price, the amount by which the Estimated Purchase Price exceeds the Final Purchase Price shall be paid by the Seller to the Buyer.
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith All payments required to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm Section 2.06(b) above shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion paid to the amount by which party entitled to receive the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitratorsame in cash or immediately available funds promptly, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not but in no event later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e10) No later than 30 business days following the later of the final determination of the Seller Closing Balance Sheet (and Net Assets as contemplated in Section 2.07 below, by delivery to such account as the calculations party entitled to payment shall specify in writing, of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect an amount equal to the items sum of any such payment together with interest thereon from, and amounts accepted or deemed including the Closing Date to, but excluding, the date of such payment at a variable rate per annum equal to have been accepted the rate announced publicly by either Seller or IDB Buyer, Disputed Items settled by negotiation Bank of America National Trust and Disputed Items finally determined by the Independent Accountant Arbitrator; Savings Association from time to time as its "base rate". The date on which such final calculations being payment shall occur is referred to herein as the "Final Available Cash AllocationSupplemental Closing"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 2 contracts
Samples: Purchase Agreement (Arvin Industries Inc), Purchase Agreement (Mark Iv Industries Inc)
Post-Closing Adjustment. (a) Within 90 75 days following after the Closing Date, Seller shall Purchaser may prepare and deliver to IDB Buyer the Stockholder Representative a consolidated balance sheet written statement (the “Post-Closing Statement”) setting forth Parent’s calculation of (i) the Seller Retained Subsidiaries actual Net Working Capital as of the Closing Closing, (giving effect ii) the estimated amount of all cash of the Company held in Company bank accounts as of the Closing, indicating the bank accounts in which such cash is (or was) held, (iii) the actual amount of all Transaction Costs of the Company, in the aggregate and itemized to show the amount paid or payable to each Person that is (or was) owed a portion of such Transaction Costs; (iv) the actual amount of all outstanding Debt of the Company as of the Closing, in the aggregate and with respect to each Person entitled to payment of a portion of such Debt (with reference to the Estimated Available Cash AllocationContract pursuant to which such Debt is owed) and (v) the Merger Consideration resulting from the foregoing. Unless within the 30-day period following Parent’s delivery of the Post-Closing Statement, the Stockholder Representative has tendered a written notice to Parent (the "Seller “Dispute Notice”) to the effect that the items contained in the Post-Closing Balance Sheet"Statement are erroneous or have not been prepared in accordance with this Section 1.9(a), which setting forth in reasonable detail any such objection (each such item, an “Item of Dispute”), the Post-Closing Statement, including the Merger Consideration and each of the other items set forth therein, shall be prepared in conformity with GAAP applied conclusive and binding upon the Parent and the Stockholder Representative (on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation behalf of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, Company Escrow Parties). If Parent does not elect to prepare and which shall include deliver a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 Closing Adjustment Statement within 75 days following after the Closing Date, IDB Buyer then the Estimated Merger Consideration as set forth in the Estimated Closing Statement shall prepare be the final Merger Consideration and deliver to Seller a consolidated balance sheet of IDB Buyer shall be conclusive and binding upon the Parent and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquityStockholder Representative.
(b) Following If the Stockholder Representative delivers a Dispute Notice to Parent within the 30-day period following Parent’s delivery of the Seller Post-Closing Balance Sheet Statement, Parent and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with Stockholder Representative shall use reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet efforts (including the calculations provision by Parent to the Stockholder Representative of Available Cash and Working Capital set forth thereinsuch relevant information as the Stockholder Representative may reasonably request) or to resolve their differences concerning the IDB Buyer Closing Balance Sheet (including the calculations Items of Available Cash and Tangible Common Equity set forth therein), as applicableDispute, and if any Item of Dispute is so resolved, the basis for Post-Closing Statement shall be modified if necessary to reflect such dispute together with such Party's calculation resolution. If any Item of such item or amount in dispute (the "Dispute Notice", and each item or amount on remains unresolved after 30 days from Parent’s receipt of the Dispute Notice, Parent and the Stockholder Representative shall jointly retain a "Disputed Item"mutually acceptable national or regional accounting firm with no formal relationship with either the Company or the Parent (the “Accounting Firm”) to resolve such remaining Items of Dispute. Parent and the Stockholder Representative shall request that the Accounting Firm render a determination as to each unresolved Item of Dispute (and as to no other matter) within 30 days of its retention, and Parent and the Stockholder Representative shall cooperate with the Accounting Firm so as to enable it to make such determination as quickly and as accurately as practicable. The Accounting Firm’s determination as to each Item of Dispute submitted to it shall be in writing, shall conform with this Section 1.9(b) and shall be conclusive and binding upon Parent and the Stockholder Representative (on behalf of the Company Escrow Parties). Other than the Disputed Items, each Party The Post-Closing Statement shall be deemed modified if necessary to have accepted reflect such determination. The Accounting Firm shall allocate its costs and expenses to the Non-Prevailing Party or, if there is not a single Non-Prevailing Party, equally to Parent and the Stockholder Representative (on behalf of the Company Escrow Parties). For purposes of the preceding sentence, the “Non-Prevailing Party” is the party whose proposed calculation of all items and amounts contained Items of Dispute submitted to the Accounting Firm, in the Seller Closing Balance Sheet or aggregate, was further from the IDB Buyer Closing Balance Sheetcalculation of the Items of Dispute determined by the Accounting Firm and differed from that calculation by more than 10% of the Items of Dispute, in the aggregate, as applicable, delivered determined by the other Party pursuant to Section 2.7(a)Accounting Firm.
(c) For 30 At such time as the Merger Consideration shall become final in accordance with this Section 1.9, the Estimated Merger Consideration shall be compared to the final Merger Consideration. If the final Merger Consideration is greater than the Estimated Merger Consideration, then within two (2) business days after the later delivery determination of the Dispute Notice by Seller or IDB Buyerfinal Merger Consideration, Seller and IDB Buyer Parent shall endeavor in good faith cause to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable be deposited the amount of the difference with the Exchange Agent to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as be immediately distributed to the Disputed Items; provided that if Company Escrow Parties in accordance with each Company Escrow Party’s Pro Rata Share. If the Independent Accountant Arbitrator final Merger Consideration is unable or unwilling to serve in this capacityless than the Estimated Merger Consideration, then Seller and IDB Buyer shall within 14 two (2) business days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules determination of the American Arbitration Associationfinal Merger Consideration, which accounting firm the Stockholder Representative and Parent shall be cause the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion Escrow Agent to the pay to Parent an amount by which the aggregate calculation of the Disputed Items by each of them differs equal to such difference from the calculation to be made by the Independent Accountant Arbitrator.
(d) Escrow Account. If there is a referral difference between the finally determined Merger Consideration and the Estimated Merger Consideration then, within three (3) days of finalizing the Merger Consideration pursuant to this Section 1.9, the Independent Accountant ArbitratorStockholder Representative shall, each in consultation with Purchaser, cause the Merger Consideration Spreadsheet to be updated as a result of Seller and IDB Buyer agrees, if requested by such difference (substituting the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to final Merger Consideration for the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, Estimated Merger Consideration as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9).
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 2 contracts
Samples: Agreement and Plan of Merger, Merger Agreement (Zillow Inc)
Post-Closing Adjustment. (ai) Within 90 days following the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect Subject to the Estimated Available Cash Allocationdispute resolution provisions of Section 2.06(e) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheetbelow, the "Post-Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant ArbitratorAdjustment" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within equal to the range established with respect Closing Inventory Value minus the Estimated Inventory Value. If the Post-Closing Adjustment is a positive number, Buyer shall pay to such Disputed Item Seller an amount equal to the Post-Closing Adjustment. If the Post-Closing Adjustment is a negative number, Seller shall waive part of the Post-Closing Forecast Inventory Payment due from Buyer by Seller's or IDB Buyer's calculation an amount equal to the Post-Closing Adjustment, and, in the event the Post-Closing Adjustment exceeds the amount waived by Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as in relation to the Disputed Items shall be final Post-Closing Forecast Inventory Payment, pay to Buyer and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect amount equal to the items difference between the amount waived in relation to the Post-Closing Forecast Inventory Payment and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Sellerthe Post-Closing Adjustment.
(ii) if Except as otherwise provided herein, any payment of the amounts that were transferred Post-Closing Adjustment, together with interest calculated as set forth below, shall (A) be due within five (5) Business Days of Seller’s acceptance of the Closing Inventory Value Statement or, if there are Disputed Amounts (defined below), then within five (5) Business Days of the resolution described in Section 2.06(e)(ii) or retained Section 2.06(e)(v) below; and (B) be paid by wire transfer of immediately available funds to such account as is directed by Seller or Buyer, as the Seller Retained Subsidiaries as provided case may be. The amount of any Post-Closing Adjustment shall bear interest from and including the Closing Date to and including the date of payment at a rate per annum equal to the prime rate published in the Estimated Available Cash Allocation were in excess Wall Street Journal, plus 5%. Such interest shall be calculated daily on the basis of a 365 day year and the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount actual number of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amountdays elapsed.
Appears in 2 contracts
Samples: Asset Purchase Agreement (Micronet Enertec Technologies, Inc.), Asset Purchase Agreement (Micronet Enertec Technologies, Inc.)
Post-Closing Adjustment. (a) Within 90 No later than sixty (60) days following the Closing Date, Purchaser shall cause to be prepared and delivered to Seller shall prepare and deliver to IDB Buyer a statement (the “Closing Statement”) consisting of (i) an unaudited consolidated balance sheet of the Seller Retained Subsidiaries Target Entities other than FIC as of the close of business on the Closing (giving effect to the Estimated Available Cash Allocation) Date (the "Seller “Closing Admin/Obligor Balance Sheet"”), which (ii) an unaudited consolidated balance sheet of the Affiliated Reinsurance Entities as of the close of business on the Closing Date (the “Closing Affiliated Reinsurance Entity Balance Sheet”), (iii) an unaudited balance sheet of FIC as of the close of business on the Closing Date (the “Closing FIC Balance Sheet”), (iv) a calculation in reasonable detail of Closing Working Capital and aggregate Indebtedness of the Target Entities other than FIC (“Closing Indebtedness”) derived from the Closing Admin/Obligor Balance Sheet, (v) a calculation in reasonable detail of Closing Date Legacy Reserves and Affiliated Entity Reinsurance Company Cash derived from the Closing Affiliated Reinsurance Entity Balance Sheet, (vi) a calculation in reasonable detail of FIC Equity derived from the Closing FIC Balance Sheet, (vii) the final amount of Transaction Expenses and (viii) calculations in reasonable detail of the Purchase Price Adjustment and Commutation Payment Adjustment based on the foregoing. The Closing Statement shall be prepared in conformity with GAAP applied on a basis consistent accordance with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquityApplicable Accounting Principles.
(b) Following delivery The Closing Statement shall become final, binding and conclusive upon Seller and Purchaser on the thirtieth (30th) day following Seller’s receipt of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and Statement, unless prior to such thirtieth (30th) day Seller delivers to Purchaser a written notice (a “Notice of Disagreement”) stating that Seller believes the deadline for delivering Closing Statement contains mathematical errors or was not prepared in accordance with the Applicable Accounting Principles and specifying in reasonable detail each item that Seller disputes (each, a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein“Disputed Item”), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (for each such Disputed Item and the "Dispute Notice"reasons supporting Seller’s positions. Seller shall not challenge the Closing Statement on any other basis, and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party Seller shall be deemed to have accepted agreed with all other items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, Statement delivered by the other Party pursuant to Section 2.7(a2.3(a).
(c) For 30 days after During the later thirty (30) -day period following the delivery of a Notice of Disagreement (such period of time, the Dispute Notice by Seller or IDB Buyer“Resolution Period”), Seller and IDB Buyer Purchaser shall endeavor seek in good faith to resolve by mutual agreement in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement. During the Resolution Period, Purchaser and its auditors shall have access to all Disputed Items. Ifof the working papers of Seller prepared in connection with the Notice of Disagreement, for any reason, and Seller and IDB Buyer his auditor shall have access to all working papers of Purchaser prepared in connection with the Closing Statement. In the event that Seller and Purchaser are unable to resolve agree on any Disputed Item item or items shown or reflected in the Notice of Disagreement within such 30 day periodthe Resolution Period, each of Seller and IDB Buyer Purchaser shall engage Deloitte & Touche LLP (prepare separate written reports of such unresolved item or items specified in the "Notice of Disagreement and deliver such reports, along with copies of the Notice of Disagreement and the Closing Statement marked to indicate those line items that remain in dispute, to the Independent Accountant Arbitrator"within fifteen (15) days after the expiration of the Resolution Period. The failure of either such party to make timely deliver its initial written statement or response to such other party’s initial written statement shall constitute a determination waiver of such party’s right to submit the same, and the Independent Accountant shall rule in favor of the other party in all issues. The parties hereto shall use their respective reasonable best efforts to cause the Independent Accountant to, as soon as practicable and in any event within thirty (30) days after receiving such written reports, determine whether and to what extent (if any) the Closing Statement requires adjustment with respect to the calculation of the items set forth therein; provided, however, that the dollar amount of each item in dispute shall be determined within the range of dollar amounts proposed by Seller in the Notice of Disagreement, on the one hand, and Purchaser in the Closing Statement, on the other hand. The parties hereto acknowledge and agree that (i) the review by and determinations of the Independent Accountant shall be limited to, and only to, the unresolved item or items contained in the reports prepared and submitted to the Independent Accountant by Seller and Purchaser and (ii) the determinations by the Independent Accountant shall be based solely on (A) such reports submitted by Seller and Purchaser and the basis for Seller’s and Purchaser’s respective positions and (B) this Section 2.3 and the Applicable Accounting Principles. Seller and Purchaser agree to enter into an engagement letter with the Independent Accountant containing customary terms and conditions for this type of engagement. The parties hereto shall use their reasonable best efforts to cooperate with each other and to cooperate with and provide information and documentation, including work papers, to assist the Independent Accountant. Any such information or documentation provided by any party hereto to the Independent Accountant shall be concurrently delivered to the other parties hereto, subject, in the case of any work papers of such party’s accountants or auditors, to such other parties hereto entering into a customary release agreement with respect thereto. None of the parties hereto shall disclose to the Independent Accountant, and the Independent Accountant shall not consider for any purposes, any settlement discussions or settlement offers made by any of the parties hereto with respect to any objection under this Section 2.3(c). The determinations by the Independent Accountant solely as to the amount of Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection Items shall be made pursuant to the rules of the American Arbitration Association, which accounting firm in writing and shall be final, binding and conclusive for all purposes of determining the "Independent Accountant Arbitrator" hereunderPurchase Price Adjustment and the Commutation Payment Adjustment and shall have the same effect for all purposes as if such determinations had been embodied in a final judgment, entered by a court of competent jurisdiction, and either party hereto may petition the New York courts to reduce such decision to judgment. The fees, costs and expenses of retaining the Independent Accountant Arbitrator will shall be borne 50% by Seller and IDB Buyer in relative proportion to the amount 50% by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant ArbitratorXxxxxxxxx.
(dx) If there is a referral Each party shall use its reasonable best efforts to provide promptly to the Independent Accountant Arbitratorother party all information and reasonable access to employees as such other party shall reasonably request in connection with review of the Estimated Closing Statement, each the Closing Statement or the Notice of Seller and IDB Buyer agreesDisagreement, if requested by as the Independent Accountant Arbitratorcase may be, including all work papers of the accountants who audited, compiled or reviewed such statements or notices (subject to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, Purchaser and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item representatives entering into any undertakings required by Seller's or IDB Buyer's calculation ’s accountants in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding onconnection herewith), and shall not be subject otherwise cooperate in good faith with such other party to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9arrive at a final determination of the Closing Statement.
(e) No later than 30 days following Within two (2) Business Days after the later Closing Statement is finalized pursuant to sub-sections (c) and (d) of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effectedthis Section 2.3:
(i) if any the Purchase Price Adjustment is a positive amount, Seller shall pay Purchaser an aggregate amount equal to the Purchase Price Adjustment, by wire transfer of the amounts that were transferred immediately available funds to an account or retained accounts previously designated in writing by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.Purchaser; or
(ii) if any the Purchase Price Adjustment is a negative amount, Purchaser shall pay Seller an aggregate amount equal to the Purchase Price Adjustment, by wire transfer of immediately available funds to an account or accounts previously designated in writing by Seller. Any payment made pursuant to this Section 2.3(e) shall be treated for all applicable Tax purposes as an adjustment to the amounts Purchase Price unless otherwise required by applicable Law.
(f) Within two (2) Business Days after the Closing Statement is finalized pursuant to sub-sections (c) and (d) of this Section 2.3:
(i) if the Commutation Payment Adjustment is a positive amount, FIC shall pay the Affiliated Reinsurance Entities an aggregate amount equal to the Commutation Payment Adjustment, by wire transfer of immediately available funds to an account or accounts previously designated in writing by Seller; or
(ii) if the Commutation Payment Adjustment is a negative amount, the Affiliated Reinsurance Entities shall pay FIC an aggregate amount equal to the Commutation Payment Adjustment, by wire transfer of immediately available funds to an account or accounts previously designated in writing by Purchaser.
(iii) Payments due to or from the Affiliated Reinsurance Entities pursuant to this Section 2.3(f) shall be made in accordance with the Reinsurance Allocation Schedule; provided that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then all Affiliated Reinsurance Entities and Seller shall be jointly and severally liable for any payment owed to FIC pursuant to clause (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amountii).
Appears in 2 contracts
Samples: Equity Interest Purchase Agreement (Fortegra Group, LLC), Equity Interest Purchase Agreement (Fortegra Group, LLC)
Post-Closing Adjustment. The Closing Merger Consideration shall be adjusted after the Closing as follows:
(a) Within 90 As soon as practicable, but in any event within one hundred and twenty (120) days following the Closing Date, Seller the Buyer shall prepare and deliver deliver, or cause to IDB Buyer a consolidated be delivered, to the Company Equityholder Representative an unaudited balance sheet of the Seller Retained Subsidiaries Company (the “Preliminary Closing Date Balance Sheet”) as of the close of business on the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be Date prepared in conformity accordance with GAAP (applied on a basis consistent with the preparation of, application thereof to the Financial Statements) and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation form and format of Exhibit E.
(b) Subject to the resolution of any disputes pursuant to this Section 1.12, within five (5) business days after the determination of the balance sheet for Final Closing Date Balance Sheet (as defined below):
(i) (A) if the fiscal year ended December 31, 2013, included in sum of the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Estimated Net Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as Estimated Closing Cash exceeds (B) the sum of the Closing Net Working Capital and the Closing Cash (giving effect such amount resulting from subtracting the amount described in the foregoing clause (ii) from the amount described in the foregoing clause (i) being referred to hereinafter as the “Closing Shortfall”), the Buyer shall be entitled to a payment from the Company Equityholders in an amount equal to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets")Shortfall, which shall be prepared in conformity with GAAP applied on treated as a basis consistent with downward adjustment to the preparation of, and using Closing Merger Consideration payable to the same accounting methods, policies, practices, procedures and estimation methods as those used in Company Equityholders for Tax purposes; and
(ii) (A) if the preparation sum of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Net Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure Closing Cash exceeds (B) the amount sum of Available Cash, Estimated Net Working Capital and Tangible Common Equity and the Estimated Closing Cash (such processes are not intended amount resulting from subtracting the amount described in the foregoing clause (ii) from the amount described in the foregoing clause (i) being referred to permit hereinafter as the introduction of different judgments“Closing Excess”), accounting methodsthe Company Equityholders shall be entitled to a payment from the Buyer, policiesin accordance with Section 1.16, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing in an amount equal to the Closing Balance Sheets or determining Available CashExcess, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior which shall be treated as an upward adjustment to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access Closing Merger Consideration payable to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis Company Equityholders for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a)Tax purposes.
(c) For 30 In the event of a Closing Shortfall, the Buyer and the Company Equityholder Representative shall, within five (5) business days after the later delivery determination of the Dispute Notice by Seller or IDB BuyerFinal Closing Date Balance Sheet, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as deliver to the Disputed Items; provided that if Escrow Agent a joint instruction letter signed by each such Party instructing the Independent Accountant Arbitrator is unable Escrow Agent to disburse from the General Escrow Fund an amount in cash equal to the Closing Shortfall to one or unwilling more accounts designated by the Buyer. If the Closing Shortfall exceeds the available General Escrow Fund (as reduced by claims for indemnification pursuant to serve in this capacityArticle VII which have previously been satisfied from the General Escrow Amount or which are then pending), then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection excess shall be made pursuant deducted from the first proceeds of any Future Payments otherwise available for distribution to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant ArbitratorCompany Equityholders.
(d) If there is a referral As of the thirtieth (30th) day following the delivery thereof to the Independent Accountant ArbitratorCompany Equityholder Representative, the Preliminary Closing Date Balance Sheet shall be final, binding and conclusive on the Parties and all Company Equityholders for purposes of this Section 1.12 unless, prior to such thirtieth (30th) day, the Company Equityholder Representative shall have notified the Buyer in writing of each of Seller and IDB Buyer agrees, if requested item on the Preliminary Closing Date Balance Sheet disputed by the Independent Accountant ArbitratorCompany Equityholder Representative, specifying the amount thereof in dispute and setting forth, in reasonable detail, the basis for such dispute. In the event of such a dispute, the Buyer and the Company Equityholder Representative shall attempt to execute reconcile their differences. If the Buyer and the Company Equityholder Representative are unable to reach a reasonable engagement letter resolution within twenty (20) days after receipt by the Buyer of the Company Equityholder Representative’s written notice of such dispute, the Buyer and the Company Equityholder Representative shall submit the items remaining in dispute for resolution to the Independent Neutral Accountant, which shall, within thirty (30) days of such submission, determine and report to the Company Equityholder Representative and the Buyer upon such remaining disputed items, and such report shall be final, binding and conclusive on all Parties and the Company Equityholders. In resolving any disputed items, the Neutral Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on shall apply the Disputed Items, together with such supporting documentation as it deems necessaryaccounting principles described in Section 1.12(a). The Independent Neutral Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, expert and not by independent review, only the Disputed Items as an arbitrator. The Preliminary Closing Date Balance Sheet that have has not been settled challenged, has been reconciled, or has been determined by negotiation, the Neutral Accountant pursuant to this Section 1.12 is referred to herein as the “Final Closing Date Balance Sheet” and its determination with respect to each Disputed Item shall be an amount within final, binding and conclusive on all Parties and the range established with respect to such Disputed Item by Seller's or IDB Company Equityholders for purposes of this Section 1.12. The fees and disbursements of the Neutral Accountant shall be allocated equally between the Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute NoticeCompany Equityholders, on the other hand. Seller The Parties agree that the procedures set forth in this Section 1.12(d) for resolving disputes with respect to the Preliminary Closing Date Balance Sheet, the Closing Shortfall, the Closing Excess, the Closing Net Working Capital or the Closing Cash shall (notwithstanding anything to the contrary contained in this Agreement) be the sole and IDB Buyer exclusive procedures for resolving any such disputes, provided that nothing herein shall instruct preclude any Party from instituting litigation in a court of competent jurisdiction to enforce the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award determination of the Independent Neutral Accountant Arbitrator as or any agreement of the Parties with respect to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or resolution of any other Person, and may be entered and enforced as provided in Section 9.9such dispute.
(e) No later than 30 Within five (5) business days following after the later of the final determination of the Seller Closing Balance Sheet Final Adjustment Amount (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"as defined in Schedule 1.12(e), the following adjustments shall be effected:
): (i) if any of the amounts that were transferred Final Adjustment Amount is greater than zero, (A) the Buyer shall be entitled to a payment in an amount equal to the Final Adjustment Amount, which shall be treated as a downward adjustment to the Closing Merger Consideration payable to the Company Equityholders for Tax purposes, and (B) the Buyer and the Company Equityholder Representative shall deliver to the Escrow Agent a joint instruction letter signed by each such Party instructing the Escrow Agent to disburse from the Adjustment Escrow Fund an amount in cash equal to the Final Adjustment Amount to one or retained more accounts designated by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in Buyer and, to extent the Final Available Cash AllocationAdjustment Amount exceeds the available Adjustment Escrow Fund, then IDB Buyer shall from the General Escrow Fund (or shall cause it being agreed that, if the applicable IDB Subsidiaries to) pay Final Adjustment Amount exceeds the amount of such excess(es) the then available Adjustment Escrow Fund and the then available General Escrow Fund, the Buyer may deduct the Final Adjustment Amount from the first proceeds of any Future Payments otherwise available for distribution to Seller.
the Company Equityholders); and (ii) if any the Buyer and the Company Equityholder Representative shall deliver to the Escrow Agent a joint instruction letter signed by each such Party instructing the Escrow Agent to disburse, for the benefit of the amounts that were transferred or retained by Company Equityholders in accordance with Section 1.16, from the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay Adjustment Escrow Fund an amount in excess of cash equal to the Excess Cash amount, if any, by which the Adjustment Escrow Fund exceeds the Final Adjustment Amount. The Parties shall comply with their respective obligations set forth on Schedule 1.12(e).
Appears in 2 contracts
Samples: Agreement and Plan of Merger, Merger Agreement (Amag Pharmaceuticals Inc.)
Post-Closing Adjustment. (ai) Within 90 forty-five (45) days following after the Closing Date, Seller the OpCo Buyer shall prepare and deliver to IDB Buyer the Seller a consolidated statement setting forth its calculation of Closing Working Capital and Closing Date Company Cash (and each component thereof), which statement shall contain a balance sheet of the Seller Retained Subsidiaries Company as of the Closing Date (without giving effect to the Estimated Available Cash AllocationTransactions) and a calculation of the Closing Working Capital and the Post-Closing Adjustment (the "Seller “Closing Balance Sheet"Statement”), which shall together with such schedules and data with respect to the determination thereof as may be appropriate to support the calculations set forth in the Closing Statement. The Closing Statement, as it applies to the calculation of Closing Working Capital, will be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, principles and policies, practiceswith consistent classifications, procedures judgments and valuation and estimation methods as those methodologies that were used in the preparation of the balance sheet Example Calculation and otherwise in accordance with the Audited Financial Statements for the most recent fiscal year ended December 31end as if such Closing Statement was being prepared and audited as of a fiscal year end, 2013, included except for (x) such reclassifications and estimation methodologies changes as reflected in the GFI Interim Financial StatementsStatements and (y) such adjustments and estimates as may be required, and which shall include in the good faith determination of the OpCo Buyer, to take account of the fact that the Closing Statement is being prepared at a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days time other than following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as closing of the Closing (giving effect to Company’s books for the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets")prior fiscal year end, which adjustments and estimates shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, adjustments and using the same accounting methods, policies, practices, procedures and estimation methods as those estimates used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Estimated Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerStatement.
(ii) The post-closing adjustment (the “Post-Closing Adjustment”) shall be an amount equal to the sum of:
(A) The difference between Closing Date Company Cash and Estimated Closing Date Company Cash (where the difference will be positive, if any of the amounts that were transferred Closing Date Company Cash exceeds the Estimated Closing Date Company Cash, or retained by negative, if the Estimated Closing Date Company Cash exceeds the Closing Date Company Cash); plus
(B) The difference between Closing Working Capital and Estimated Closing Working Capital (where the difference will be positive, if the Closing Working Capital exceeds the Estimated Closing Working Capital, or negative, if the Estimated Closing Working Capital exceeds the Closing Working Capital). If the Post-Closing Adjustment as finally determined in accordance with this Section 2.06 is a positive number, the OpCo Buyer shall pay to the Seller Retained Subsidiaries as provided in an amount equal to the Estimated Available Cash Allocation were in excess of Post-Closing Adjustment. If the corresponding amounts that should have been transferred or retained by Post-Closing Adjustment is a negative number, the Seller Retained Subsidiaries as provided in shall pay to the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay OpCo Buyer an amount in excess of equal to the Excess Cash AmountPost-Closing Adjustment.
Appears in 2 contracts
Samples: Transaction Agreement (Penn National Gaming Inc), Transaction Agreement (Vici Properties Inc.)
Post-Closing Adjustment. (a) Within 90 days following In the Closing Date, Seller shall prepare and deliver event that (i) the General Account Reinsurance Premium determined by reference to IDB Buyer a consolidated balance sheet the Final Statement of Net Settlement exceeds the Seller Retained Subsidiaries as of the Closing (giving effect General Account Reinsurance Premium determined by reference to the Estimated Available Cash AllocationStatement of Net Settlement, then Sellers shall transfer to the Ceded Business Trust assets (selected in accordance with Investment Asset Identification Protocol) (the "Seller Closing Balance Sheet"), which shall be prepared with an aggregate statutory carrying value determined in conformity with GAAP applied on a basis consistent accordance with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation Statement of Net Settlement Methods equal to such excess within five (5) Business Days of the balance sheet for delivery of the fiscal year ended December 31Final Statement of Net Settlement, 2013, included in plus interest on such amount from and including the GFI Financial Statements, and which shall include a calculation Closing Date up to but not including the date of Available Cash payment accrued at the Seller Retained Subsidiaries and Working Capital derived from 60-Day Treasury Rate, or (ii) the items and amounts on such balance sheet. Within 90 days following General Account Reinsurance Premium determined by reference to the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet Final Statement of IDB Buyer and Net Settlement is less than the IDB Subsidiaries as of the Closing (giving effect General Account Reinsurance Premium determined by reference to the Estimated Available Cash Allocation) (Statement of Net Settlement, then CIGNA Life, directly or from the "IDB Buyer Closing Balance Sheet" and together Ceded Business Trust, as determined in accordance with the Seller Coinsurance Agreement and the Ceded Business Trust Agreement, shall return to CGLIC assets (selected in accordance with the Investment Asset Identification Protocol) previously transferred by CGLIC to the Ceded Business Trust with an aggregate statutory carrying value determined in accordance with the Statement of Net Settlement Methods equal to such shortfall within five (5) Business Days of the delivery to the Buyer of the Final Statement of Net Settlement, plus interest on such amount from and including the Closing Balance SheetDate up to but not including the date of payment accrued at the 60-Day Treasury Rate. The foregoing shall apply to the Guaranteed Cost Reinsurance Premium, provided that any adjustment to the "Closing Balance Sheets"), which Guaranteed Cost Reinsurance Premium shall be prepared in conformity with GAAP applied on a basis consistent with transferred to the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived Guaranteed Cost Business Trust by CGLIC or from the items and amounts on such balance sheet. The Parties agree that Guaranteed Cost Business Trust by the purpose of preparing trustee thereof to CGLIC, as the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equitycase may be.
(b) Following delivery On the Closing Date all Separate Account Assets as of such date shall be retained in the Seller Closing Balance Sheet and corresponding Modco Account. In the IDB Buyer Closing Balance Sheet and prior event any Separate Account Assets are not retained in the appropriate Modco Account at Closing, Sellers shall cause such assets to the deadline for delivering a Dispute Noticebe transferred thereto promptly after discovery thereof, each of Seller and IDB Buyer will provide the together with any interest, dividends or other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days earnings after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet Date in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation respect of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a)assets.
(c) For 30 days after Notwithstanding any other provision of this Agreement to the later delivery contrary, in the event CGLIC (i) fails to transfer to CIGNA Life or to the Ceded Business Trust, as the case may be, an asset reflected on either the Estimated Statement of Net Settlement or the Final Statement of Net Settlement, or (ii) erroneously transfers an Investment Asset to CIGNA Life which was not reflected on either the Estimated Statement of Net Settlement or the Final Statement of Net Settlement (and which was not to be transferred pursuant to this Agreement or any Ancillary Agreement), the parties agree to correct such error by effectuating a transfer or return, as the case may be, of the Dispute Notice assets in question (or cash equal to the fair market value of such asset) promptly upon receipt of a written notice from the other party describing the error. All written notice of any such error shall be provided on or before the second anniversary of the Closing Date.
(i) In the event that (A) there are inaccuracies or omissions in the factual data inputs utilized in the calculation of Insurance-Related Liabilities or the value of Transferred Investment Assets not addressed by Seller Section 2.11(c) (such as inputting the wrong CUSIP number or IDB Buyerinterest rate), Seller including data (and IDB Buyer shall endeavor the omission of data) relating to the inventory of policies in good faith force, the terms of such policies, the relevant information related to resolve the holders or annuitants of such policies and activities related thereto, CUSIP numbers, interest rates, principal amounts, the terms of loan documents and organizational documents, the terms of leases, lease abstracts and rent rolls, or such factual data inputs are coded, compiled or aggregated inaccurately, other than omissions in the factual data inputs utilized in the calculation of the Insurance-Related Liabilities resulting from reasonable judgments by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination an actuary or other financial professional as to the Disputed Itemsscope of factual data inputs (or omissions of factual data inputs) (a “Data Input Inaccuracy”); provided that if (B) such Data Input Inaccuracy has resulted in a demonstrable error in the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after aggregate Insurance-Related Liabilities reflected on the end Final Statement of such 30 day period agree on an alternate independent accounting firm Net Settlement or in default thereof such selection shall be made pursuant to the rules aggregate statutory carrying value (determined in accordance with the Statement of Net Settlement Methods) of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB BuyerTransferred Investment Assets, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect (C) Buyer has transmitted to each Disputed Item shall be an amount within the range established Sellers a Notice of Demand (as defined below) with respect to such Disputed Item by Seller's or IDB Buyer's calculation in Data Input Inaccuracy prior to the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award second anniversary of the Independent Accountant Arbitrator as to Closing Date, then the Disputed Items requirements of this Section 2.11(d) shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9applicable.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 2 contracts
Samples: Stock Purchase and Asset Transfer Agreement (Cigna Corp), Stock Purchase and Asset Transfer Agreement (Prudential Financial Inc)
Post-Closing Adjustment. (a) Within 90 45 days following after the Closing Date, Seller shall the Purchaser will prepare and deliver to IDB Buyer the Seller a written notice (the “Adjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Seller Retained Subsidiaries Acquired Companies as at immediately prior to the Closing (the “Closing Balance Sheet”), (ii) the Purchaser’s calculation of the Closing Net Working Capital based on the Closing Balance Sheet (giving effect the “Closing Net Working Capital Statement”), (iii) the Purchaser’s calculation of Closing Net Cash based on the Closing Balance Sheet (the “Closing Net Cash Statement”) and (iv) the Purchaser’s calculation of the amount of any payments required pursuant to the Estimated Available Cash AllocationSection 2.4(g) (the "Seller Closing Balance Sheet"“Adjustment Calculation”), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller The Closing Balance Sheet, the "Closing Balance Sheets"), which shall Net Working Capital Statement and the Closing Net Cash Statement will be prepared in conformity accordance with GAAP applied on in a basis manner consistent with the preparation of, methods and using practices used to prepare the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Company Interim Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquitySheet.
(b) Following delivery During the preparation of the Adjustment Notice, at the Purchaser’s request, the Seller Closing Balance Sheet will, and will cause each of the Acquired Companies to, (i) provide the Purchaser and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Purchaser’s Representatives with reasonable access to the books and books, records, personnel facilities and related work papers Employees of the Acquired Companies to the extent not otherwise already acquired as of the Closing Date, (ii) provide the Purchaser, within ten Business Days after the Closing Date, with normal month-end closing financial information for the period ending as of the close of business on the Closing Date and (iii) reasonably cooperate with the Purchaser and the Purchaser’s Representatives, including by providing on a timely basis all information reasonably necessary or useful in preparing the Adjustment Notice and any other information reasonably requested by the Purchaser. Following delivery of the Adjustment Notice, at the Seller’s request, the Purchaser (i) shall reasonably cooperate and assist, and shall cause its Representatives to assist, the Seller or IDB Buyer, as applicable, and its Representatives in connection with such other Party's the review of the Seller Closing Balance Sheet or Adjustment Notice and (ii) shall provide the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, its Representatives with any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered information reasonably requested by the other Party pursuant to Section 2.7(a)them.
(c) For Within 30 days after the later delivery of the Dispute Notice Adjustment Notice, the Seller will either:
(i) agree in writing with the Adjustment Calculation, in which case such calculation will be final and binding on the parties for purposes of Section 2.4(g); or
(ii) dispute the Adjustment Calculation by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as delivering to the Disputed Items; provided that if Purchaser a written notice (a “Dispute Notice”) which shall specify which items are being disputed and set forth in reasonable detail the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by basis for each of them differs from the calculation to be made by the Independent Accountant Arbitratordisputed item therein.
(d) If there is the Seller fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then the Seller will be deemed to have irrevocably accepted the Adjustment Calculation, in which case, the Adjustment Calculation will be final and binding on the parties for purposes of Section 2.4(g).
(e) If the Seller timely delivers a referral Dispute Notice to the Independent Accountant ArbitratorPurchaser, each then the Purchaser and the Seller will attempt in good faith, for a period of Seller and IDB Buyer agrees30 days following the Purchaser’s receipt of such Dispute Notice (the “Resolution Period”), if requested to agree on the Adjustment Calculation for purposes of Section 2.4(g). Any resolution by the Independent Accountant Arbitrator, Purchaser and the Seller memorialized in writing and signed by both the Purchaser and the Seller during the Resolution Period as to execute a reasonable engagement letter any disputed items set forth in such Dispute Notice will be final and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position binding on the Disputed Items, together with such supporting documentation as it deems necessaryparties for purposes of Section 2.4(g). The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on If the materials submitted Purchaser and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet do not resolve all disputed items by the end of the Resolution Period, then the Purchaser and the Seller will submit the remaining items in dispute to PricewaterhouseCoopers LLP for resolution, or IDB Buyer Closing Balance Sheetif that firm is unwilling or unable to serve, as applicablethe Purchaser and the Seller will engage another mutually agreeable independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after the Resolution Period, the Purchaser, on the one hand, and the applicable Dispute NoticeSeller, on the other hand. Seller , will each select an independent accounting firm of recognized international standing and IDB Buyer shall instruct such selected accounting firms will select a third independent accounting firm of recognized international standing, which firm is not the regular auditing firm of the Purchaser or the Acquired Companies; provided, however, that if either the Purchaser, on the one hand, or the Seller, on the other hand, fails to select such independent accounting firm during this 10-day period, then the parties agree that the independent accounting firm selected by the other party will be the independent accounting firm selected by the parties for purposes of this Section 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Independent Accounting Firm”).
(i) The Independent Accounting Firm will (A) act as an expert in accounting, and not as an arbitrator, to resolve only those items specifically set forth on a timely delivered Dispute Notice that remain in dispute as of such time, and that have not been deemed pursuant to Section 2.4(c), Section 2.4(d) or Section 2.4(e) to be final and binding on the Parties, (B) render its determination in accordance with this Agreement and otherwise in accordance with GAAP applied in a manner consistent with the methods and practices used to prepare the Company Interim Balance Sheet, (C) not determine an Adjustment Calculation that would result in a Purchase Price (1) in excess of the applicable amount in the Adjustment Notice or (2) that is less than the applicable amount in the Dispute Notice and (D) render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accountant Arbitrator Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Independent Accounting Firm will only render its determination with respect to the specific remaining accounting differences submitted to it and may rely only upon information submitted to it by or on behalf of the Purchaser or the Seller. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its decision determination within 30 days after referral of its appointment the disputed items on a timely delivered Dispute Notice to such firm or as soon thereafter as is reasonably practicable. The decision/award decision of the Independent Accountant Arbitrator as to the Disputed Items shall Accounting Firm will be final final, conclusive and binding on, on the Parties and shall will not be subject to appeal by, Seller or further review. The costs and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later expenses of the final determination Independent Accounting Firm will be allocated between the Parties based upon the percentage which the portion of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect contested amount not awarded to each party bears to the items and amounts accepted or deemed to have been accepted amount actually contested by either Seller or IDB Buyersuch party, Disputed Items settled by negotiation and Disputed Items finally as determined by the Independent Accountant Arbitrator; such final calculations being Accounting Firm. The Buyer and the "Final Available Cash Allocation")Representative agree to execute, if requested by the following adjustments shall be effected:
(i) if any Independent Accounting Firm, a reasonable engagement letter, including customary indemnities in favor of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerIndependent Accounting Firm.
(ii) if any For purposes of complying with this Section 2.4, the amounts that were transferred or retained by Purchaser and the Seller Retained Subsidiaries will furnish to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items on a timely delivered Dispute Notice as the Independent Accounting Firm may reasonably request and are available to that party (or its Representatives). A copy of any such work papers and other documents and information provided by a party to the Independent Accounting Firm will be provided concurrently to the other party free of charge. Each party will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items on a timely delivered Dispute Notice and to discuss such items with the Independent Accounting Firm, with any such presentation or discussion to be held in the Estimated Available Cash Allocation were in excess presence of both the corresponding amounts that should have been transferred or retained by Purchaser and the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyerand/or their respective Representatives. Notwithstanding anything herein to the foregoing and contrary, the dispute resolution mechanism contained in this Section 2.4(e) will be the exclusive mechanism for resolving any disputes regarding the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash AmountAdjustment Calculation.
Appears in 2 contracts
Samples: Share Purchase Agreement (Ariad Pharmaceuticals Inc), Share Purchase Agreement (Ariad Pharmaceuticals Inc)
Post-Closing Adjustment. (a) Within 90 No later than forty-five (45) days following the Closing Date, Seller the Purchaser shall prepare and deliver to IDB Buyer a consolidated balance sheet the Stockholder Representative the draft closing statement of the Seller Retained Subsidiaries Company as of the Closing (giving effect to the Estimated Available Cash Allocation) Date (the "Seller “Proposed Closing Balance Sheet"Statement”), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as each of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance SheetDate Net Working Capital, the "Working Capital Surplus, if any, the Working Capital Deficit, if any, the Closing Balance Sheets")Cash, which shall the Cash Deficit, if any, the Cash Surplus, if any, the Transaction Expenses, the Expense Overpayment, if any, the Expense Underpayment, if any, the Final Shortfall, if any, and the Final Surplus, if any. The calculation of the foregoing will be prepared in conformity with GAAP applied on a basis consistent accordance with the preparation of, and using the same accounting methods, policies, principles, practices, procedures procedures, classifications and estimation methods as those methodologies (whether with regard to reserves or otherwise) that were used in the preparation of Exhibit 1.1(a) and shall not include any changes in assets or liabilities as a result of purchase accounting adjustments or other changes arising from or resulting as a consequence of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheettransactions contemplated by this Agreement. The Parties agree that the purpose of preparing the Proposed Closing Balance Sheets Statement and determining the Available CashClosing Date Net Working Capital, Working Capital Closing Cash and Tangible Common Equity and the related adjustment contemplated by Transaction Expenses pursuant to this Section 2.7 3.6 is to measure changes in Closing Date Net Working Capital, Closing Cash and Transaction Expenses against the amount of Available CashEstimated Closing Date Net Working Capital, Working Capital Estimated Closing Cash and Tangible Common Equity Estimated Transaction Expenses amounts, and such processes are process is not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies (whether with regard to reserves or otherwise) for the purpose of preparing the Proposed Closing Balance Sheets Statement or determining Available CashClosing Date Net Working Capital, Working Capital Closing Cash and Tangible Common EquityTransaction Expenses from those utilized by the Company in the preparation of the Estimated Closing Statement.
(b) Following delivery The Stockholder Representative shall have thirty (30) days following receipt of the Seller Proposed Closing Balance Sheet Statement (the “Evaluation Period”) during which to notify the Purchaser in writing of any dispute of any item contained in the Proposed Closing Statement, which written notice (the “Notice of Disagreement”) shall set forth in reasonable detail the basis for such dispute. At any time within the Evaluation Period, the Stockholder Representative shall be entitled to agree with any or all of the items set forth in the Proposed Closing Statement. For purposes of the Stockholder Representative’s evaluation of the Proposed Closing Statement, the Purchaser and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will Surviving Corporation shall make available or provide the other Party and its Representatives with reasonable access to the books Stockholder Representative and its Representatives, upon advance notice and during normal business hours, all information, records, personnel data and related work working papers of Seller created or IDB Buyer, as applicable, used in connection with such other Party's review the preparation of the Seller Proposed Closing Balance Sheet Statement; and shall permit reasonable access, upon advance notice and during normal business hours, to the Surviving Corporation’s and its Subsidiaries’ facilities and personnel, as may be reasonably requested by the Stockholder Representative and its Representatives to analyze the Proposed Closing Statement. The Evaluation Period shall be tolled and thereby extended in respect of any delay of the Stockholder Representative’s evaluation by more than five (5) days arising out of any failure of Purchaser or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller Surviving Corporation to (x) timely and IDB Buyer shall have 45 days after the later delivery substantively respond to any reasonable request or (y) act in good faith in respect of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts covenants contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a)foregoing sentence.
(c) For 30 days after If the later delivery Stockholder Representative does not deliver a Notice of Disagreement to the Purchaser within the Evaluation Period, or notifies the Purchaser of its agreement with the adjustments in the Proposed Closing Statement prior to the expiration of the Dispute Evaluation Period, the Proposed Closing Statement prepared by the Purchaser shall be deemed to be the Final Closing Statement, and shall be final, conclusive and binding on all Parties.
(d) If the Stockholder Representative delivers a Notice by Seller or IDB Buyerof Disagreement to the Purchaser within the Evaluation Period, Seller the Final Closing Statement shall be resolved as follows:
(i) The Purchaser and IDB Buyer the Stockholder Representative shall endeavor cooperate in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller such dispute as promptly as possible.
(ii) In the event the Purchaser and IDB Buyer the Stockholder Representative are unable to resolve any Disputed Item such dispute within fifteen (15) days (or such 30 day periodlonger period as the Purchaser and the Stockholder Representative shall mutually agree in writing) after delivery to the Purchaser of the Notice of Disagreement, Seller such dispute and IDB Buyer each Party’s work papers related thereto shall engage be submitted to Deloitte & Touche LLP (the "Independent Accountant “Arbitrator"”) for resolution in accordance with this Section 3.6(d)(ii). The Stockholder Representative and the Purchaser shall use reasonable best efforts to cause the Arbitrator to render a written decision resolving the matters submitted to the Arbitrator within thirty (30) days of the making of such submission. The scope of the disputes to be resolved by the Arbitrator shall be limited to whether the items in dispute that were included in the Notice of Disagreement were prepared in accordance with this Agreement and the Arbitrator shall determine, on such basis, whether and to what extent, the Proposed Closing Statement requires adjustment. The Arbitrator is not to make a determination as to any other determinations. The Arbitrator’s decision shall be based solely on written submissions and presentations by the Disputed Items; provided that if Stockholder Representative and the Independent Accountant Arbitrator is unable or unwilling to serve in this capacityPurchaser and their respective Representatives and not by independent review, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant in accordance with the accounting methods, policies, principles, practices, procedures, classifications and estimation methodologies (whether with regard to reserves or otherwise) that were used in the preparation of Exhibit 1.1(a), to the rules extent applicable. The Arbitrator shall address only those items in dispute and may not assign a value greater than the greatest value for such item claimed by either Party or smaller than the smallest value for such item claimed by either Party. Judgment may be entered upon the determination of the American Arbitration Association, Arbitrator in any court having jurisdiction over the Party against which accounting firm shall such determination is to be the "Independent Accountant Arbitrator" hereunderenforced. The fees, costs and expenses of the Independent Accountant Arbitrator will shall be borne by Seller and IDB Buyer in relative proportion to allocated between the amount by which the aggregate calculation Stockholder Representative (on behalf of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicableHolders), on the one hand, and the applicable Dispute NoticePurchaser (or, at its election, the Surviving Corporation), on the other hand. Seller and IDB Buyer shall instruct , in the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award same proportion that the aggregate amount of the Independent Accountant Arbitrator as disputed items submitted to the Disputed Items Arbitrator that is unsuccessfully disputed by each such Party (as finally determined by the Arbitrator) bears to the total amount of such disputed items so submitted. For example, if the Stockholder Representative challenges the calculation of the Proposed Closing Statement by an amount of One Hundred Thousand Dollars ($100,000), but the Arbitrator determines that the Stockholder Representative has a valid claim for only Forty Thousand Dollars ($40,000), the Purchaser (or, at its election, the Surviving Corporation) shall be final bear forty percent (40%) of the fees and binding onexpenses of the Arbitrator and the Holders shall bear the other sixty percent (60%) of such fees and expenses, with the Holders portion of such fees and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9expenses paid solely out of the Stockholder Representative Reserve.
(e) No later than 30 days following The Purchaser and the later Stockholder Representative jointly shall revise the Proposed Closing Statement and the calculation of Closing Date Net Working Capital, the Working Capital Surplus, if any, the Working Capital Deficit, if any, the Closing Cash, the Cash Deficit, if any, the Cash Surplus, if any, the Transaction Expenses, the Expense Overpayment, if any, the Expense Underpayment, if any, the Final Shortfall, if any, and the Final Surplus, if any, as appropriate to reflect the resolution of the final determination of Stockholder Representative’s objections (as agreed upon by the Seller Closing Balance Sheet (Purchaser and the calculations of Available Cash and Working Capital set forth therein) Stockholder Representative or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally as determined by the Independent Accountant Arbitrator; ) and deliver it to the Stockholder Representative within ten (10) days after the resolution of such final calculations being objections. Such revised Proposed Closing Statement shall be the "Final Available Cash Allocation"Closing Statement, and shall be final, conclusive and binding on all Parties.
(f) To the extent there is a Final Shortfall on the Final Closing Statement, the Purchaser shall be entitled to recover the amount of the Final Shortfall solely from the Working Capital Escrow Fund in accordance with the Escrow Agreement.
(g) To the extent there is a Final Surplus on the Final Closing Statement, the Purchaser shall pay the Paying Agent, on behalf of the Holders or, in the case of the Option Holders, the Purchaser shall pay to the Company for the benefit of the Option Holders (in accordance with their Pro Rata Percentages), the following adjustments shall be effected:
(i) if any amount of the amounts that were transferred Final Surplus by wire transfer of immediately available funds within five (5) Business Days after the Purchaser’s delivery of the Final Closing Statement to the Stockholder Representative to an account or retained accounts designated by the IDB Subsidiaries at Closing as provided Paying Agent. Upon such payment, Paying Agent shall disburse promptly such amount to the Holders in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Selleraccordance with their Pro Rata Percentages.
(iih) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the If there is no Final Available Cash AllocationShortfall and no Final Surplus, then Seller no further adjustments or payments shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amountmade.
Appears in 1 contract
Samples: Merger Agreement (Nordson Corp)
Post-Closing Adjustment. (ai) Within 90 days following If the Closing DateActual Sprintank Fixed Asset Amount is greater than $12,430,217, Seller the Purchaser shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect pay to the Estimated Available Cash AllocationSeller, within two (2) (the "Seller Closing Balance Sheet")business days after determination thereof, which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Itemsexcess; provided that if the Independent Accountant Arbitrator Actual Sprintank Fixed Asset Amount is unable or unwilling less than $12,430,217, the Purchaser shall be entitled to serve in this capacityreceive from the Holdback, then Seller and IDB Buyer shall within 14 two (2) business days after the end determination thereof, the amount of such 30 day period agree on an alternate independent accounting firm or in default thereof shortfall (provided, however, that if the Holdback is less than the amount of such selection shortfall, the Seller shall be made pursuant pay to the rules Purchaser, within two (2) business days after the determination of the American Arbitration AssociationActual Sprintank Fixed Asset Amount, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there Holdback is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later less than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(esshortfall) by wire transfer or delivery of other immediately available funds. Such payment shall be deemed to Sellerbe an adjustment to the Sprintank Purchase Price.
(ii) if any of If the amounts that were transferred or retained by Actual Sprintank Prepaid Expenses Amount is greater than $64,441, the Seller Retained Subsidiaries as provided in Purchaser shall pay to the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash AllocationSeller, then Seller shall within two (or shall cause the applicable Seller Retained Subsidiaries to2) pay business days after determination thereof, the amount of such excess(esexcess; provided that if the Actual Sprintank Prepaid Expenses Amount is less than $64,441, the Purchaser shall be entitled to receive from the Holdback, within two (2) business days after the determination thereof, the amount of such shortfall (provided, however, that if the Holdback is less than the amount of such shortfall, the Seller shall pay to IDB Buyer. Notwithstanding the foregoing and for Purchaser, within two (2) business days after the avoidance of doubt, in no event shall Seller be required to pay an amount in excess determination of the Excess Cash Actual Sprintank Prepaid Expenses Amount, the amount by which the Holdback is less than the amount of such shortfall) by wire transfer or delivery of other immediately available funds. Such payment shall be deemed to be an adjustment to the Sprintank Purchase Price.
(iii) If the Actual Sprintank Inventory Amount is less than $200,000, the Purchaser shall be entitled to receive from the Holdback, within two (2) business days after the determination thereof, the amount of such shortfall (provided, however, that if the Holdback is less than the amount of such shortfall, the Seller shall pay to the Purchaser, within two (2) business days after the determination of the Actual Sprintank Inventory Amount, the amount by which the Holdback is less than the amount of such shortfall) by wire transfer or delivery of other immediately available funds. Such payment shall be deemed to be an adjustment to the Sprintank Purchase Price.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 days As soon as practicable following the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet")but in any event within 120 calendar days thereafter, which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated (w) the unaudited balance sheet of IDB Buyer and the IDB Subsidiaries AACR-DR as of the Closing (giving effect to Date, or if such date is not the Estimated Available Cash Allocation) last day of a calendar month, the last day of the then most recently ended calendar month (the "IDB Buyer “Closing Balance Sheet" ”) which shall be prepared using $US and together in accordance with GAAP applied using the same accounting principles, procedures, policies and methods used in preparing the Balance Sheet and used historically by AACR-DR, and a Net Working Capital schedule based thereon setting forth each of the items forming the Net Working Capital as of the Closing Date, or if such date is not the last day of a calendar month, the last day of the then most recently ended calendar month (the “Net Working Capital Adjustment Schedule”), (x) a schedule showing the calculation of the Base Purchase Price (the “Closing Purchase Price Schedule”), (y) a certificate from an executive officer of Buyer, certifying that such schedules have been prepared by Buyer in accordance with the Seller terms hereof and (z) reasonable documentation supporting the amounts and calculations set forth in such schedule.
a. The Closing Balance Sheet, the "Net Working Capital Adjustment Schedule and the Closing Balance Sheets"), which Purchase Price Schedule shall be prepared final, binding and conclusive unless Seller notifies Buyer in conformity with GAAP applied on a basis consistent with writing of any disagreement therewith (an “Objection Notice”) within thirty calendar days after its receipt thereof (such period, the preparation of“Objection Period”). During the Objection Period, and using the same accounting methodsfor so long as any dispute set forth in an Objection Notice remains unresolved, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which upon reasonable advance notice Buyer shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of afford Seller and IDB Buyer will provide the other Party and its Representatives advisors with reasonable access during normal business hours to the books and records, personnel and related work papers financial records of Seller or IDB Buyer, AACR-DR so as applicable, in connection with such other Party's to enable their review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicablethe Net Working Capital Adjustment Schedule and Closing Purchase Price Schedule. Each of Seller and IDB Buyer Any Objection Notice shall have 45 days after the later delivery set forth Seller’s calculation of the Seller Closing Balance Sheet Net Working Capital or IDB Buyer Closing Balance Sheet the Base Purchase Price and shall specify in which to provide to the other Party a notice setting forth, in detail, any good faith dispute reasonable detail such items or amounts as to any item or amount reflected in which Seller disagrees and shall state the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis reasons for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item")disagreement. Other than the Disputed Items, each Party Seller shall be deemed to have accepted agreed with all other items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a)Net Working Capital Adjustment Schedule and the Closing Purchase Price Schedule which are not contained in an Objection Notice timely issued during the Objection Period.
(c) For 30 days after b. If Seller duly delivers to Buyer an Objection Notice within the later delivery of the Dispute Notice by Seller or IDB BuyerObjection Period, Seller and IDB Buyer shall endeavor in good faith attempt to resolve such disputes, and any written resolution signed by mutual agreement all Disputed Items. IfBuyer and Seller as to any disputed amounts shall be final, for any reason, binding and conclusive.
c. If Seller and IDB Buyer are unable to resolve any Disputed Item all disputes reflected in the Objection Notice within thirty calendar days after receipt thereof (or such longer period as Buyer and Seller may mutually agree upon in writing) (the “Resolution Period”) then Seller and Buyer shall promptly thereafter (but no later than five calendar days thereafter) submit the items remaining in dispute for resolution to an independent accounting firm of international reputation, which shall not be a “big four” accounting firm, mutually acceptable to Buyer and Seller (such accounting firm being referred to as the “Accounting Firm”). If Seller and Buyer are unable to agree upon a mutually acceptable Accounting Firm within such 30 five day period, Seller and IDB Buyer the parties shall engage Deloitte & Touche LLP (submit the "Independent Accountant Arbitrator") to make a determination as selection of any Accounting Firm to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules president of the American Arbitration Association, which accounting firm who shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs select an Accounting Firm and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items whose selection shall be final and binding onon Seller and Buyer. The Accounting Firm shall be instructed to deliver to Buyer and Seller a written report setting forth its resolution of all the disputed items submitted to it (and a revised (x) Closing Balance Sheet and Net Working Capital Adjustment Schedule and/or (y) Closing Purchase Price Schedule as a result thereof) as promptly as practicable (but no later than thirty calendar days after accepting its appointment). Absent fraud or manifest error, the determination by the Accounting Firm (and the revised Net Working Capital Adjustment Schedule and/or Closing Purchase Price Schedule resulting therefrom) shall be final, binding and conclusive on the parties as of the date of such resolution, including with respect to the issue as to whether the Accounting Firm had authority under this Section 1.7(d) to resolve such disputes. “Final, binding and conclusive” shall mean that the aforesaid determination and final Net Working Capital Adjustment and/or Base Purchase Price, as the case may be, shall have the same preclusive effect for all purposes as if such determination had been embodied in a final judgment, no longer subject to appeal, entered by a court of competent jurisdiction after full and fair litigation on the merits. Seller and Buyer shall deliver or make available to the Accounting Firm the work papers and back-up materials supporting such party’s calculations relating to the disputed amounts, as requested by the Accounting Firm and to the extent available to Seller, Buyer and their respective Representatives. Seller and Buyer shall be afforded the opportunity to present to the Accounting Firm material related to the unresolved disputes and to discuss the issues with the Accounting Firm pursuant to rules of engagement to be mutually agreed upon, including that there shall be no contact with the Accounting Firm without the presence of a Representative of both Seller and Buyer. The determination of the Accounting Firm shall be limited to the disputed items submitted to it and shall not be subject include any item in the Closing Balance Sheet, the Net Working Capital Adjustment Schedule or the Closing Purchase Price Schedule as to appeal by, which Seller has not disagreed in its Objection Notice or which was resolved by the parties during the Resolution Period. The fees and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later expenses of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments Accounting Firm shall be effected:
(i) if any of the amounts that were transferred or retained borne by the IDB Subsidiaries at Closing as provided Buyer and Seller in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay proportion to the amount of the disputed item(s) with respect to which such excess(esparty’s claim was unsuccessful.
d. Within five calendar days after the date of determination by the Accounting Firm (or of any earlier resolution by the parties of all disputed issues) or, if Seller did not timely deliver an Objection Notice, within five calendar days after the expiration of the Objection Period:
i. if the Initial Purchase Price paid at Closing exceeds the Adjusted Purchase Price, Seller shall pay Buyer an amount equal to the difference between the Initial Purchase Price and the Adjusted Purchase Price, in immediately available funds by wire transfer to an account designated by Buyer; and
ii. if the Adjusted Purchase Price exceeds the Initial Purchase Price paid at Closing, Buyer shall pay Seller an amount equal to the difference between the Adjusted Purchase Price and the Initial Purchase Price, in immediately available funds by wire transfer to an account designated by Seller.
(ii) if any e. For the purposes of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.this Agreement:
Appears in 1 contract
Samples: Stock Purchase Agreement (Centennial Communications Corp /De)
Post-Closing Adjustment. (ai) Within 90 ninety (90) days following after the Closing Date, Seller Buyer, with reasonable input and review by Holdings, shall prepare and deliver to IDB Buyer a consolidated Holdings an unaudited draft balance sheet of the Seller Retained Subsidiaries Company as of the time of Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller “Closing Balance Sheet"”), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries Net Asset Value (the “Actual Net Asset Value”) prepared in accordance with the Company Accounting Policies and Working Capital derived from Estimated Calculations as set forth in Schedule 3, including the items and amounts on such balance sheet. Within 90 days following adjustments set forth thereon, (the “Actual Net Asset Value Statement”).
(ii) The post-closing adjustment shall be an amount equal to the Closing DateNet Asset Value minus the Estimated Net Asset Value, IDB with a dollar for dollar adjustment (whether positive or negative) equal to the difference between the Closing Net Asset Value and the Estimated Net Asset Value (the “Post-Closing Adjustment”). If the Post-Closing Adjustment is a positive number, Buyer shall prepare and deliver pay to Seller a consolidated balance sheet of IDB Buyer and Holdings an amount equal to the IDB Subsidiaries as of Post-Closing Adjustment, plus the Closing (giving effect to Adjustment Holdback. If the Estimated Available Cash Allocation) (the "IDB Buyer Post-Closing Balance Sheet" and together with the Seller Closing Balance SheetAdjustment is a negative number, the "Closing Balance Sheets"), which Buyer shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure retain the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing Post-Closing Adjustment from the Closing Balance Sheets or determining Available CashAdjustment Holdback, Working Capital and Tangible Common Equityand, to the extent that the Closing Adjustment Holdback is insufficient to cover the entire Post-Closing Adjustment, from the Holdback to the extent of such insufficiency.
(biii) Following delivery From the Closing Date through the date of the Seller Closing Balance Sheet and determination of the IDB final Purchase Price Adjustment provided for in this Section 1.8, Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party shall give Holdings and its Representatives with advisors reasonable access during normal business hours to the books and records, the accounting and other appropriate personnel and related work papers of Seller or IDB Buyerthe accountants for the Company and Buyer in order to review the Post-Closing Adjustment, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet and Closing Net Asset Value Statement; provided, that such access shall be in a manner that does not interfere with the normal business operations of Buyer or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a)Company.
(civ) For 30 days after the later delivery purposes of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP this subsection (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"b), the following adjustments shall be effected:
(i) if any Parties agree to allocate expenses for utilities, water, internet, phone and sewer charges incurred in the operation of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess business of the corresponding amounts that should have been transferred or retained by Company based on the IDB Subsidiaries as provided in number of days occurring period to the Final Available Cash Allocation, then IDB Buyer shall (or shall cause Closing Date and beginning on and following the applicable IDB Subsidiaries to) pay Closing Date during the amount of such excess(es) to Sellerbilling period.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (Rollins Inc)
Post-Closing Adjustment. (a) Within 90 days following In addition to Schedules 2.2(a)(i) through 2.2(a)(iv), at least three (3) Business Days prior to the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the draft Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent good faith and in accordance with the preparation ofaccounting principles set forth on Schedule 2.3(a) (the “Accounting Principles”), and using the same accounting methods, policies, practices, procedures and estimation methods as those used a statement setting forth in the preparation reasonable detail Seller’s calculation of the balance sheet for Estimated Net Working Capital, the fiscal year ended December 31Estimated Indebtedness, 2013the Estimated Transaction Expenses, included the Estimated Benefits Payouts and the Estimated Closing Cash in accordance with the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Accounting Principles.
(b) Within 90 sixty (60) days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing draft Final Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent good faith and in accordance with the preparation ofAccounting Principles, and using a statement (the same accounting methods, policies, practices, procedures and estimation methods as those used “Closing Statement”) setting forth in the preparation reasonable detail Buyer’s calculation of the balance sheet for Final Net Working Capital, the fiscal year ended December 31Final Indebtedness, 2013the Final Transaction Expenses, included the Final Benefits Payouts and the Final Closing Cash in accordance with the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheetAccounting Principles. The Parties agree that the purpose of preparing If Seller does not receive the Closing Balance Sheets and determining Statement within such sixty (60) day period, the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Estimated Balance Sheet, as applicable. Each of Seller the Estimated Net Working Capital, the Estimated Indebtedness, the Estimated Transaction Expenses, the Estimated Benefits Payouts and IDB Estimated Closing Cash contained in Seller’s deliveries pursuant to Section 2.3(a) shall, at Seller’s option, be deemed to have been accepted by Buyer and shall have 45 days after become binding on Buyer and the later delivery calculation of the Seller Estimated Net Working Capital, the Estimated Indebtedness, the Estimated Transaction Expenses, the Estimated Benefits Payouts and Estimated Closing Balance Sheet or IDB Buyer Cash contained in Seller’s deliveries pursuant to Section 2.3(a) shall be the Final Net Working Capital, the Final Indebtedness, the Final Transaction Expenses, the Final Benefits Payouts and Final Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth thereinSeller’s deliveries pursuant to Section 2.3(a) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in be the Seller Final Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, Statement (as applicable, delivered by the other Party pursuant to Section 2.7(adefined herein).
(c) For 30 days after the later delivery Following its receipt from Buyer of the Dispute Notice draft Final Balance Sheet and the Closing Statement, Seller shall have forty-five (45) days to review the draft Final Balance Sheet and the Closing Statement (and Seller shall have the right, until the final determination of the Final Closing Statement, to (i) examine all accounting records, work papers and financial records used or generated in connection with the preparation of the draft Final Balance Sheet, the Closing Statement and the Final Closing Statement as may be reasonably requested by Seller or IDB and such other documents as Seller may reasonably request in connection with its review of the draft Final Balance Sheet, the Closing Statement and the Final Closing Statement and (ii) have access during normal business hours on advance notice to all Facilities and all employees, agents and professional advisors of Buyer, the Company and its Subsidiaries as Seller may reasonably request in connection with its review of the draft Final Balance Sheet, the Closing Statement and the Final Closing Statement) and to inform Buyer in writing of any disagreement that it may have with the draft Final Balance Sheet and the Closing Statement, which objection shall, to the extent practicable, specify in reasonable detail Seller’s disagreement with the draft Final Balance Sheet and the Closing Statement and shall in any case include Seller’s calculation of any disputed items, to the extent practicable (the “Objection”). If Buyer does not receive the Objection within such forty-five (45) day period, the draft Final Balance Sheet and the amount of the Final Net Working Capital, the Final Indebtedness, the Final Transaction Expenses, the Final Benefits Payouts and the Final Closing Cash set forth on the Closing Statement shall be deemed to have been accepted by Seller and IDB shall become binding upon Seller, and the calculation of the Final Net Working Capital, the Final Indebtedness, the Final Transaction Expenses, the Final Benefits Payouts and the Final Closing Cash on the Closing Statement shall be the Final Net Working Capital, the Final Indebtedness, the Final Transaction Expenses, the Final Benefits Payouts and the Final Closing Cash, respectively. If Seller timely delivers an Objection to Buyer, Buyer shall endeavor then have ten (10) days from the date of receipt of such Objection (the “Review Period”) to review and respond to the Objection in writing (and Buyer shall have the right to examine the work papers and financial records used or generated in connection with the preparation of the Objection and such other documents as Buyer may reasonably request in connection with its review of the Objection); provided, however, that Buyer’s response to any Objection shall be limited to those specific disagreements listed in the Objection. Furthermore, Buyer may not in its response to the Objection change its calculation of any line item or component of working capital shown in or the Final Closing Cash shown in Buyer’s draft Final Balance Sheet and Closing Statement that would, taken on an individual basis, have the result of reducing the Final Net Working Capital or Final Closing Cash, as applicable, below the amounts thereof indicated in Buyer’s draft Final Balance Sheet and Closing Statement previously delivered to Seller. If Seller does not receive a written response from Buyer within such ten (10) day period, the draft Final Balance Sheet and the amount of the Final Net Working Capital, the Final Indebtedness, the Final Transaction Expenses, the Final Benefits Payouts and the Final Closing Cash set forth in the Objection shall be deemed to have been accepted by Buyer and shall become binding upon Buyer, and the calculation of the Final Net Working Capital, the Final Indebtedness, the Final Transaction Expenses, the Final Benefits Payouts and Final Closing Cash contained in the Objection shall be the Final Net Working Capital, the Final Indebtedness, the Final Transaction Expenses, the Final Benefits Payouts and the Final Closing Cash, respectively. If Buyer does timely deliver a written response within such ten (10) day period, Buyer and Seller shall attempt in good faith to resolve by mutual agreement all Disputed Itemsany disagreements with respect to the Final Balance Sheet and the determination of the Final Net Working Capital, the Final Indebtedness, the Final Transaction Expenses, the Final Benefits Payouts and the Final Closing Cash. If, for any reason, Seller and IDB Buyer If they are unable to resolve any Disputed Item all of their disagreements with respect to the Final Balance Sheet and/or the determination of the Final Net Working Capital, the Final Indebtedness, the Final Transaction Expenses, the Final Benefits Payouts and the Final Closing Cash within twenty (20) days following the expiration of Buyer’s Review Period, Buyer and Seller shall promptly refer the dispute to the CPA Firm, which shall resolve such 30 day period, disagreements based solely on written presentations by Seller and IDB Buyer, which are in accordance with the terms and procedures and the definitions of this Agreement, and not by independent review. The written presentations provided by each of Seller and Buyer shall engage Deloitte & Touche LLP be limited such that neither party may change its calculations of any line item or component of Final Net Working Capital or Final Closing Cash from the draft Final Balance Sheet and draft Closing Statement, in the case of Buyer, and the Objection, in the case of Seller, if such change, taken on an individual basis, would have the result of reducing, in the case of Buyer, or increasing, in the case of Seller, the calculation of actual Final Net Working Capital or Final Closing Cash, respectively, set out in the draft Final Balance Sheet and draft Closing Statement or Objection, as applicable. Buyer and Seller shall direct the CPA Firm to use its reasonable best efforts to render its determination within thirty (the "Independent Accountant Arbitrator"30) to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection dispute is first submitted to the CPA Firm. The CPA Firm’s determination shall be made pursuant conclusive and binding upon Buyer and Seller. Buyer and Seller shall make readily available to the rules CPA Firm all relevant books and records relating to the Closing Statement or Objection and all other items reasonably requested by the CPA Firm. Neither Seller nor Buyer shall have or conduct any communication, either written or oral, with the CPA Firm without the other party either being present or receiving a concurrent copy of any written communication. Nothing in this Section 2.3(c) shall be construed to authorize or permit the CPA Firm to resolve any differences between Buyer and Seller other than those unresolved disagreements listed in the Objection, and the CPA Firm shall not be authorized or permitted to do so. The scope of the American Arbitration Associationdisputed items to be resolved by the CPA Firm shall be limited to whether the draft Final Balance Sheet and the Closing Statement were prepared in accordance with the terms of this Agreement. In resolving any disagreements, which accounting firm the CPA Firm shall be bound by the provisions of this Section 2.3 and may not assign a value to any item greater than the greatest value for such item claimed by either party in its written presentation or less than the smallest value for such item claimed by either party in its written presentation. The Final Balance Sheet, the Final Net Working Capital, the Final Indebtedness, the Final Transaction Expenses, the Final Benefits Payouts and the Final Closing Cash as determined by the CPA Firm shall be the "Independent Accountant Arbitrator" hereunderFinal Balance Sheet, the Final Net Working Capital, the Final Indebtedness, the Final Transaction Expenses, the Final Benefits Payouts and the Final Closing Cash. The Closing Statement as agreed to (or deemed to be agreed to) by Buyer and Seller or as determined by the CPA Firm, as applicable, shall be referred to as the “Final Closing Statement.”
(d) If any unresolved objections are submitted to the CPA Firm for resolution as provided above, the fees and expenses of the CPA Firm shall be allocated between Buyer, on the one hand, and Seller, on the other hand, based upon the relationship the contested amount not awarded to each party bears to the amount actually contested by such party. For example, if Buyer claims that the appropriate adjustments are $1,000 greater than the amount determined by Seller, and if the CPA Firm ultimately resolves such claim by awarding to Buyer $300 of the $1,000 contested, then the fees, costs and expenses of the Independent Accountant Arbitrator CPA Firm will be borne allocated 70% to Buyer and 30% to Seller.
(e) Upon the final determination of the Final Closing Statement,
(i) if the Purchase Price on the Final Closing Statement is greater than the estimated Purchase Price paid pursuant to Section 2.2(b)(v), then an amount in cash equal to such excess shall be payable by Buyer to Seller in accordance with Section 2.3(g); and
(ii) if the Purchase Price on the Final Closing Statement is less than the estimated Purchase Price paid pursuant to Section 2.2(b)(v), then an amount in cash equal to such shortfall shall be payable by Seller and IDB to Buyer in relative proportion accordance with Section 2.3(g).
(f) If the Closing Statement delivered by Buyer shows that the amount, if any, due to Buyer pursuant to this Section 2.3(e) (such amount, the “Proposed Final Closing Adjustment”) is less than the Adjustment Escrow Funds, then Seller and Buyer shall, within two (2) Business Days after the delivery of the Closing Statement by Buyer, jointly instruct the Escrow Agent to release to Seller an amount in cash equal to the amount by which the aggregate calculation excess of the Disputed Items by each of them differs Adjustment Escrow Funds over the Proposed Final Closing Adjustment from the calculation Adjustment Escrow Funds.
(g) For purposes of the payment of the items set forth in Section 2.3(e), (i) if Buyer is required to make a payment to Seller pursuant to Section 2.3(e)(i), then Buyer shall, within two (2) Business Days after the Final Closing Statement becomes final and binding in accordance with the terms hereof, make payment to Seller of such amount, in cash, by wire transfer of immediately available funds to an account or accounts designated by Seller in writing and (ii) if Seller is required to make payment to Buyer pursuant to Section 2.3(e)(ii), then Seller and Buyer shall, within two (2) Business Days after the Final Closing Statement becomes final and binding in accordance with the terms hereof, jointly instruct the Escrow Agent to release (A) to Buyer such amount from the Adjustment Escrow Funds and (B) to Seller the balance, if any, of the Adjustment Escrow Funds.
(h) Any payments due under this Section 2.3 shall bear interest from the Closing Date to the date of actual payment at a rate equal to the “prime rate” adjusted on a daily basis as published from time to time in The Wall Street Journal.
(i) Notwithstanding any provision set forth in this Section 2.3 or elsewhere in this Agreement to the contrary, there is no general agreement among the parties to submit disputes under this Agreement to arbitration, and the CPA Firm will act as an independent expert and not an arbitrator.
(j) For the avoidance of doubt, the calculations to be made by pursuant to this Section 2.3 and the Independent Accountant Arbitrator.
(d) If there is a referral purchase price adjustment to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, be made pursuant to execute a reasonable engagement letter and shall submit this Section 2.3 are not intended to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator be used to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items adjust for errors or omissions that have not been settled by negotiation, and its determination may be found with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's Financial Statements or IDB Buyer's calculation in any inconsistencies between the Seller Closing Balance Sheet Financial Statements or IDB Buyer Closing Balance Sheet, as applicablethe Accounting Principles, on the one hand, and the applicable Dispute NoticeGAAP, on the other hand. Seller , for which Buyer’s rights under the R&W Policy for breaches of representations and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items warranties contained in this Agreement shall be final the sole and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9exclusive remedy absent Actual Fraud.
(ek) No later than 30 days following Buyer’s sole source of payment for any amounts owed or payable under this Section 2.3 will be from the later of the final determination of the Adjustment Escrow Amount, and, absent Actual Fraud, Buyer will have no Action against Seller Closing Balance Sheet (with respect to or for, and the calculations of Available Cash and Working Capital set forth therein) Seller will not be liable for or the IDB obligated in any manner whatsoever with respect to or for, any amounts owed to or payable to Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect pursuant to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Sellerthis Section 2.3.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Infrastructure & Energy Alternatives, Inc.)
Post-Closing Adjustment. (a) Within 90 As promptly as practicable after the Divestiture Date and in any event within 45 days following the Closing Datethereafter, Seller Knewco shall prepare and deliver to IDB Buyer a consolidated (with Sensormatic's cooperation, as appropriate) its final balance sheet of at the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) Divestiture Date (the "Seller Closing Divestiture Date Balance Sheet"). The Divestiture Date Balance Sheet, which shall be prepared in conformity accordance with GAAP applied on a basis and the Allocation Principles, and consistent with the preparation ofEstimated Balance Sheet, and using shall reflect, among other things, the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation net worth of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash Knewco at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (Divestiture Date after giving effect to the Estimated Available Cash AllocationContribution (but without giving effect to any write-downs described in Section 1.5). If Sensormatic and Knewco are in agreement as to the net worth of Knewco, as reflected on the Divestiture Date Balance Sheet, such net worth shall have been finally determined in accordance with this Section 7.6 and, accordingly, either Sensormatic or Knewco shall promptly pay to the other the cash payment, if any, required pursuant to Section 7.6(e). If Sensormatic and Knewco are not in agreement on such net worth, they shall promptly thereafter jointly instruct Deloitte & Touche ("Deloitte") to conduct an audit or, if agreed to by the parties, a review of the Divestiture Date Balance Sheet (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance SheetsExamination"), which . The purpose of the Examination shall be prepared in conformity with GAAP applied on a basis consistent with to determine the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation net worth of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash Knewco at the IDB Subsidiaries Divestiture Date after giving effect to the Contribution and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended any adjustment in the amount of cash or cash equivalents contributed to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquityKnewco pursuant to this Section 7.6.
(b) Following delivery of Sensormatic and Knewco shall jointly instruct Deloitte to complete the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 Examination within 30 days after the later delivery receipt of the Seller Closing Divestiture Date Balance Sheet or IDB Buyer Closing Balance Sheet in which as prepared by Knewco and to provide render its report thereon (the "Report") to the Knewco and Sensormatic within such period. The Report shall include, among other Party a notice setting forththings, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such PartyDeloitte's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount net worth of Knewco as reflected on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Divestiture Date Balance Sheet. Sensormatic and Knewco shall jointly instruct Deloitte to make its work papers with respect to the Examination and the Report available to Knewco and its advisers and to Sensormatic, as applicable, delivered by the Ernst & Young and Sensormatic's other Party pursuant to Section 2.7(a)advisers.
(c) For The content and conclusions of the Report shall be conclusive and binding on Sensormatic and Knewco unless either one notifies the other and Deloitte that it disputes the Report within 30 days after Deloitte's delivery of the Report to it. If either Sensormatic or Knewco timely disputes the Report, they shall promptly attempt to resolve any differences between them with respect to the Report. If they are unable to do so within 30 days after the later delivery date of the Dispute Notice by Seller notice of dispute, either Sensormatic or IDB BuyerKnewco or both of them jointly may submit the dispute to Price Waterhouse or, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer if they are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacityact, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent other "Big Six" public accounting firm or in default thereof such selection shall as may be made pursuant to the rules of selected by the American Arbitration Association, which accounting firm shall be Association (the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash AllocationSecond Auditor"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Samples: Contribution and Divestiture Agreement (Sentry Technology Corp)
Post-Closing Adjustment. (a) Within 90 The Buyer will prepare and deliver to the Seller, no later than 60 days following after the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet statement setting forth the exact amount of the Company Closing Net Worth (the “Post-Closing Statement”), calculated in accordance with the provisions set forth in the definition of “Company Closing Net Worth” herein, together with all related supporting schedules, calculations and documentation. The Post-Closing Statement shall not be binding on the Parties for the purposes of determining the Post-Closing Adjustment Amount payable by the Buyer or the Seller, as applicable, to the other Party, as provided herein, until the earlier of (i) the Seller Retained Subsidiaries as confirming it has accepted such calculation of the Company Closing (giving effect Net Worth in writing to the Buyer, and (ii) if the Seller has failed to deliver a Notice of Objection to the Buyer in respect of the Post-Closing Statement, the end of the last day of the Review Period in respect of the Post-Closing Statement, and (iii) the decision of the Independent Expert pursuant to Section 2.3 in respect of any Notice of Objection delivered by the Seller to the Buyer in respect of the Post-Closing Statement. In the event the Seller disagrees with any portion of the Post-Closing Statement, the Seller may object in accordance with the procedures set forth in Section 2.3 following the Closing. The amount by which the Company Closing Net Worth as finally determined pursuant to this Section 2.2(a) and Section 2.3 exceeds or is less than the Estimated Available Cash Allocation) (the "Seller Company Closing Balance Sheet"), which Net Worth in absolute value shall be prepared in conformity with GAAP applied on a basis consistent with referred to as the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the “Post-Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquityAdjustment Amount”.
(b) Following delivery of Promptly upon the Seller Post-Closing Balance Sheet and Statement becoming binding on the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicableParties, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item event within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten 5 Business Days after its appointmentthereafter, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Company Closing as provided in Net Worth exceeds the Estimated Available Cash Allocation were in excess of Company Closing Net Worth, the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause pay to the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.and
Appears in 1 contract
Samples: Purchase Agreement (Metlife Inc)
Post-Closing Adjustment. (ai) Within 90 days following On or before October 30, 2023 if the Closing Dateoccurs on or prior to September 30, Seller 2023, or within 60 days after the Closing Date if the Closing occurs after September, 30, 2023, the Purchaser shall prepare and deliver to IDB Buyer the Seller a consolidated statement setting forth the Purchaser’s calculation of the Closing TBV (the “Closing TBV Statement”), which statement shall contain an unaudited balance sheet of the Seller Retained Subsidiaries Company, including any unpaid Transaction Expenses of the Group Companies, and including a calculation of the Unrestricted Cash (the “Closing Unrestricted Cash Statement”, and together with the Closing TBV Statement, the “Closing Statements”), as of the Closing Effective Time (without giving effect to the Estimated Available Cash AllocationTransactions herein) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent accordance with the preparation ofAccounting Principles, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as calculations of the Closing (giving effect to TBV, Closing Unrestricted Cash and the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together Purchase Price, with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied amount thereof (A) increased on a basis consistent with dollar-for-dollar basis, without duplication, if the preparation ofresult of the Closing TBV minus the Target TBV is a positive number and decreased by the TBV Shortfall Factor if the result of the Closing TBV minus the Target TBV is a negative number, and using (B) increased on a dollar-for-dollar basis, without duplication, if the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation result of the balance sheet for Closing Unrestricted Cash minus the fiscal year ended December 31Minimum Unrestricted Cash is a positive number and decreased on a dollar-for-dollar basis, 2013without duplication, included in if the GFI Financial Statements, and which shall include result of the Closing Unrestricted Cash minus the Minimum Unrestricted Cash is a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheetnegative number. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, Purchase Price as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party finally determined pursuant to Section 2.7(a).
(c2.4(b) For 30 days after is referred to as the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "“Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerPurchase Price”.
(ii) if any The post-closing adjustment shall be an amount equal to the Final Purchase Price minus the Estimated Purchase Price (the “Post-Closing Adjustment”).
(iii) If the Post-Closing Adjustment is a positive number, (i) the Purchase Price Adjustment Holdback shall be released to the Seller pursuant to the terms of the amounts that were transferred Purchase Price Escrow Agreement; and (ii) the Purchaser shall promptly pay to the Seller, in cash by wire transfer, bank draft or retained other immediately available funds, an amount, if any, by which the absolute value of the Post-Closing Adjustment exceeds the Purchase Price Adjustment Holdback.
(iv) If the Post-Closing Adjustment is a negative number, (i) the Purchase Price Adjustment Holdback, in an amount equal to the absolute value of the Post-Closing Adjustment, shall be released to the Purchaser pursuant to the terms of the Purchase Price Escrow Agreement; and (ii) the Seller Retained Subsidiaries as provided in shall promptly pay to the Estimated Available Cash Allocation were in excess Purchaser the amount, if any, by which the absolute value of the corresponding amounts that should have been transferred or retained by Post-Closing Adjustment exceeds the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash AmountPurchase Price Adjustment Holdback.
Appears in 1 contract
Samples: Share Purchase Agreement (CURO Group Holdings Corp.)
Post-Closing Adjustment. (a) Within 90 days following the a. The Post-Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries Statement as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer agreed by Xxxxx and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Sellers’ Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; is referred to herein as the “Final Closing Statement” and (i) the Net Working Capital set forth on such Final Closing Statement shall be deemed the final calculations being Net Working Capital, (ii) the "Debt set forth on such Final Available Closing Statement shall be deemed the final Debt, (iii) the Transaction Expenses set forth on such Final Closing Statement shall be deemed the final Transaction Expenses, (iv) the Cash Allocation"set forth on such Final Closing Statement shall be deemed the final Cash, and (v) the Purchase Price set forth on such Final Closing Statement shall be deemed the final Purchase Price (the “Final Purchase Price”). On the fifth (5th) Business Day following the determination of the Final Closing Statement (the “Settlement Date”), the following adjustments payments contemplated by Section 2.8(b) shall be effected:made.
(i) b. On the Settlement Date,
i. if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in Final Purchase Price is greater than the Estimated Available Cash Allocation were in excess Purchase Price (such difference, the “Surplus”), Buyer shall deposit, or cause to be deposited, with Sellers’ Representatives, by wire transfer of immediately available funds to the corresponding amounts that should have been transferred or retained account specified by the IDB Subsidiaries as provided in Sellers’ Representatives, an amount equal to such Surplus; and
ii. if the Final Available Cash AllocationPurchase Price is less than the Estimated Purchase Price (such difference the “Deficiency”), then IDB Buyer shall (or and Sellers’ Representatives shall cause the applicable IDB Subsidiaries to) pay the Escrow Agent to release an amount of cash equal to the Deficiency from the Escrow Amount to Buyer, by wire transfer of immediately available funds to an account designated in writing by Buyer to Sellers’ Representatives and the Escrow Agent; provided, that to the extent that the Deficiency is greater than the Escrow Amount (such excess(es) to Seller.
(ii) if any of difference the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation“Remaining Amount”), then Seller Sellers’ Representative shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to also pay an amount of cash equal to the Remaining Amount concurrently with the foregoing release by the Escrow Agent by wire transfer of immediately available funds to an account designated in excess writing by Buyer to Sellers’ Representatives.
c. Subsequent to the adjustments being made in accordance with this Section 2.8, the parties will direct the Escrow Agent to release the residual balance of the Excess Cash AmountEscrow Amount to the Sellers’ Representatives contemporaneously with the adjustments contemplated by this Section 2.8 in accordance with the Escrow Agreement.
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Post-Closing Adjustment. (ai) Within 90 days following If the Closing Net Worth Amount as reflected on the Final Closing Balance Sheet is determined to be less than the Base Net Worth Amount, there will be a dollar-for-dollar downward adjustment of the Purchase Price, with Seller being obligated to pay Buyer the sum by which the Closing Net Worth Amount is less than the Base Net Worth Amount. If, however, the Closing Net Worth Amount as reflected on the Final Closing Balance Sheet is determined to be greater than the Base Net Worth Amount, there will be a dollar-for-dollar upward adjustment of the Purchase Price, with Buyer being obligated to pay Seller any sum by which the Closing Net Worth Amount exceeds the Base Net Worth Amount.
(ii) The Purchase Price shall also be subject to adjustment after the Closing Date on account of the proration of water, electricity, gas, sewage and other utility charges and Taxes applicable to the Business and/or the Assets if and only to the extent such amounts are not reflected on the Final Closing Balance Sheet.
(iii) If the Purchase Price is subject to adjustment pursuant to this Section 2.1(c), the required adjustment, together with interest on the amount being paid from the Closing Date to the date of payment at a rate per annum equal to the prime rate charged by Bank of America in effect on the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet will be paid within five (5) Business Days of the Seller Retained Subsidiaries as determination of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheetamount due. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common EquityAny party may, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cashits sole discretion, Working Capital and Tangible Common Equity and the related adjustment contemplated by make a payment pursuant to this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b2.1(c) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Final Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance purpose of doubt, in no event shall Seller reducing the interest it may be required obligated to pay an amount in excess of the Excess Cash Amountpursuant to such provision.
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Post-Closing Adjustment. (aA) Within 90 days following At least seven Business Days before the Closing DateClosing, Seller shall prepare and deliver to IDB Buyer Purchaser a consolidated balance sheet statement setting forth its good faith estimate of the Seller Retained Subsidiaries as Minimum Net Capital and Excess Net Capital (together, the “Estimated Net Capital”), a reasonably detailed calculation of the Closing (giving effect to the Estimated Available Cash Allocation) Net Capital (the "Seller Closing Balance Sheet"), which shall be “Estimated Net Capital Statement”) prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methods as those methodologies that were used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, most recent monthly Focus Report (United States Securities and which shall include Exchange Commission Form X-17A-5) (a calculation “Focus Report”) as if such Estimated Net Capital Statement was being prepared as of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer which shall include the following adjustments: any and all accruals necessary to ensure all expenses that have been incurred, but not paid, are reflected in the Estimated Net Capital (including prorated franchise, other taxes and expenses, accrued but unpaid severance as set forth herein, etc.), but only to the extent such adjustments are prepared in accordance with GAAP, for the periods prior to and through the date of the calculation of Estimated Net Capital (herein, “Normal Adjustments”). For the avoidance of doubt, Estimated Net Capital shall give effect to (and be reduced by) Seller’s good faith estimate of the dividend of Excess Net Capital to be made immediately prior to Closing pursuant to Section 1.1(e).
(B) Within 60 days after the Closing Date, Purchaser shall prepare and deliver to Seller a consolidated balance sheet statement setting forth its good faith calculation of IDB Buyer Net Capital and the IDB Subsidiaries Post-Closing Adjustment (as of the Closing (giving effect to the Estimated Available Cash Allocationdefined below) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be “Net Capital Statement”) prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methods as those methodologies that were used in the preparation of the balance sheet for most recent monthly Focus Report as if such Net Capital Statement was being prepared as of the fiscal year ended December 31Closing Date, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquityNormal Adjustments.
(bC) Following The post-closing adjustment shall be an amount equal to the Net Capital minus the Estimated Net Capital (the “Post-Closing Adjustment”). If the Post-Closing Adjustment is a positive number, Purchaser shall pay to Seller, by wire transfer of immediately available funds, an amount equal to the Post-Closing Adjustment. If the Post-Closing Adjustment is a negative number, Seller shall pay to Purchaser, by wire transfer of immediately available funds, an amount equal to the Post-Closing Adjustment.
(D) The Net Capital Statement shall be final and binding on Seller, unless within 30 Business Days following the date of delivery of the Net Capital Statement, Seller Closing Balance Sheet notifies Purchaser in writing (a “Section 1.1(b) Objection Notice”) that Seller does not accept as correct the calculation of Net Capital (as shall be specified therein) and the IDB Buyer resulting Post Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB BuyerAdjustment, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Net Capital Statement. If Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth thereintimely delivers a Section 1.1(b) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Objection Notice, a "Disputed Item"). Other than the Disputed Items, each Party then Purchaser and Seller shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor attempt in good faith to resolve by mutual reach agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that calculation of Net Capital and the resulting Post-Closing Adjustment. If within 20 Business Days following delivery of a Section 1.1(b) Objection Notice, the Parties have not reached agreement as to the calculations mentioned above, then Purchaser and Seller shall promptly designate an accounting firm of nationally or regionally recognized standing (the “Independent Accountant”) and not having any material business relationship with any of the Parties (and they shall promptly disclose any such relationships to the other), which (acting as an expert and not as an arbitrator) shall be instructed to make, as soon as practicable after the matter is referred to such accounting firm, its calculation of Net Capital and the resulting Post-Closing Adjustment (if any). If unresolved disputed items are submitted to the Independent Accountant, Purchaser and Seller shall each furnish to the Independent Accountant Arbitrator is unable or unwilling such work papers, schedules and other documents and information relating to serve the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the applicable definitions and other terms in this capacityAgreement and the presentations by Purchaser and Seller, then Seller and IDB Buyer shall within 14 days after the end not by independent review. The determination of Net Capital by such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be final and binding on the "Parties (“Independent Accountant Arbitrator" hereunderPost-Closing Determination”). The fees, costs fees and expenses of the Independent Accountant Arbitrator will with respect to this Section 1.1(b)(i)(D) (the “Independent PCA Fees”), shall be borne one-half by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by one-half Purchaser, provided, however, if the Independent Accountant Arbitratordetermines that the amount of the Net Capital or Post-Closing Adjustment has been understated or overstated by 5% or more, Purchaser or Seller, respectively, shall be solely responsible for full payment of the Independent PCA Fees.
(dE) If there is a referral to Payment of the Independent Accountant ArbitratorPost-Closing Adjustment (if any) shall be paid in full by Purchaser or Seller (as determined in accordance with Section 1.1(b)(i)(C)), each of Seller promptly (and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than in any event within ten Business Days (as hereinafter defined)) after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Post-Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be Adjustment becomes final and binding onpursuant to sub-paragraph (D) above, and unless Seller delivers a Section 1.1(b) Objection Notice, in which case the Post-Closing Adjustment shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days paid within ten Business Days following the later of the final determination of the Seller Independent Post-Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerDetermination.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Tectonic Financial, Inc.)
Post-Closing Adjustment. (a) The Cash Purchase Price shall be subject to adjustment after the Closing Date as specified in this Section 1.3.
(b) Within 90 one hundred twenty (120) days following the Closing Date, Seller Buyer, at its option, shall prepare and deliver cause PriceWaterhouseCoopers ("Buyer's Accountant") to IDB Buyer a consolidated balance sheet audit the Company's books to determine the accuracy of the Seller Retained Subsidiaries information set forth on the Closing Financial Certificate (the "Post-Closing Audit"). The parties acknowledge and agree that for purposes of determining the net worth of the Company as of the Closing Date, (giving i) the value of the assets of the Company shall, except with the prior written consent of Buyer, be calculated as provided in the last paragraph of Section 6.9 and(ii) no effect shall be given to the Estimated Available Contingent Litigation Liability. In the event that Buyer's Accountant determines that the actual Company net worth as of the Closing Date was less than the Certified Closing Net Worth, Buyer shall deliver a written notice (the "Financial Adjustment Notice") to the Stockholders' Representative, as defined in Section 1.6, setting forth (i) the determination made by Buyer's Accountant of the actual Company net worth (the "Actual Company Net Worth"), (ii) the amount of the Cash AllocationPurchase Price that would have been payable at Closing pursuant to Section 1.2(c) had the Actual Company Net Worth been reflected on the Closing Financial Certificate instead of the Certified Closing Net Worth, and (iii) the amount by which the Cash Purchase Price would have been reduced at Closing had the Actual Company Net Worth been used in the calculations pursuant to Section 1.2(c) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed ItemPurchase Price Adjustment"). Other than The Purchase Price Adjustment shall take account of the Disputed Itemsreduction, each Party shall be deemed if any, to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party Cash Purchase Price already taken pursuant to Section 2.7(a1.2(c)(i).
(c) For 30 The Stockholders' Representative shall have thirty (30) days after from the later delivery receipt of the Dispute Financial Adjustment Notice by Seller or IDB Buyer, Seller and IDB to notify Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Itemsif the Stockholders dispute such Financial Adjustment Notice. If, for any reason, Seller and IDB If Buyer are unable to resolve any Disputed Item has not received notice of such a dispute within such 30 thirty (30) day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") be entitled to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs receive from the calculation to be made by the Independent Accountant Arbitrator.
Stockholders (d) If there is a referral to the Independent Accountant Arbitratorwhich may, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB at Buyer's calculation in sole discretion, be from the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, Pledged Assets as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided defined in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"1.4), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 days Immediately following the completion and filing by the Company of its regular Annual Statement with the Tennessee Insurance Division as set forth below, there shall be a "Post- Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet Adjustment" whereby the amounts of the Seller Retained Subsidiaries Reserves and Policy Assets that were estimated and used to effect the Closing will be replaced by the actual amounts of the Reserves and Policy Assets as of December 31, 1997, such that the Net Transfer Amount shall be recalculated, using the format of Schedule 4.3 attached hereto. The December 31, 1997, Reserves and Policy Assets shall be determined as set forth in Section 10.5. Using the format of Schedule 4.3, the parties shall calculate the amount that should have been transferred at Closing if the amount of the Reserves and Policy Assets as of December 31, 1997, had been known at Closing. If the Net Transfer Amount is more than the Closing Net Transfer Amount, the Company shall transfer additional assets to Reinsurer equal in amount to such differential ("Adjusting Transfer Amount"), together with interest on the Adjusting Transfer Amount (at the rate of the 6.2% per annum) from the Effective Date to the "Post-Closing Adjustment Date" (as hereinafter defined). If the Net Transfer Amount is less than the Closing Net Transfer Amount, Reinsurer shall transfer assets to the Company equal in amount to such differential ("Adjusting Transfer Amount"), together with interest on the Adjusting Transfer Amount (at the rate of the 6.2% per annum) from the Effective Date to the "Post-Closing Adjustment Date" (as hereinafter defined). The assets comprising such Adjusting Transfer Amount shall consist of (i) bonds having an NAIC designation of 1, (ii) accrued investment income attributable to said bonds, (iii) Policy Assets attributable to the Policies (that is, an adjustment, up or down, of such Policy Assets to bring the Policy Assets component of the Closing (giving effect Transfer Amount in line with the actual Policy Assets attributable to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended Policies at December 31, 2013, included 1997,) and/or cash. The purpose of this Section 4.3 is that the Post-Closing Adjustment shall put the parties in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following respective positions they would have been in if the Closing Date, IDB Buyer shall prepare had used the Reserves and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries Policy Assets determined as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 20131997, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any instead of the amounts that were transferred or retained by used to accommodate an earlier Closing. The Post-Closing Adjustment shall take place on the IDB Subsidiaries first business day falling next after the expiration of ten (10) days following the date on which the Company files its 1997 Annual Statement with the Tennessee Insurance Division, referred to herein as the "Post-Closing Adjustment Closing Date." The Adjusting Transfer Amount shall bear interest at the rate of 10% per annum, compounded annually, beginning on the Post-Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerAdjustment Closing Date until paid.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Samples: Coinsurance Agreement (Acap Corp)
Post-Closing Adjustment. (a) Within 90 As promptly as practicable but no later than thirty (30) days following after the Closing Date, Seller shall prepare there will be an adjustment (the “Post Closing Adjustment”) to the Estimated Purchase Price to arrive at the Purchase Price to reflect the actual amount of Accounts Receivable, the actual amount of Inventory at book value, the actual amount of Seller’s deposits, advances and deliver to IDB Buyer a consolidated balance sheet prepaid expenses, the actual amount of the Seller Retained Subsidiaries Accounts Payable and Accrued Expenses, in each case as of the Closing Date. Seller with the assistance of Healthcare Facilities’ staff shall cause to be prepared and delivered to Buyer within thirty (giving effect 30) days after Closing, an unaudited balance sheet and income statement as of and for the period from the Financial Statement Date (hereinafter defined) to the Estimated Available Cash AllocationClosing Date prepared in accordance with GAAP (except as to absence of footnotes and subject to audit adjustments and Seller’ normal accounting practices) (the "Seller “Closing Balance Sheet"Financials”), which shall be prepared in conformity with GAAP applied on and a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation detailed calculation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Post Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquityAdjustment.
(b) Following Should Buyer dispute the amount of the Post Closing Adjustment, Buyer shall promptly advise Seller. If after thirty (30) days after delivery of Seller’s calculation thereof, Buyer and Seller are unable to agree upon the Seller amount of the Post Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute NoticeAdjustment, each of Seller and IDB Buyer will provide the other Party shall engage an independent public accounting firm mutually acceptable to Seller and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, which shall not then be regularly engaged by either (i) Buyer (or its Affiliates) or (ii) Seller (or its Affiliates) (the “Accountants”), to review the proposed Post Closing Adjustment and determine the amount thereof, such determination to be made as applicablesoon as practicable but no later than ninety (90) days after Closing. In making such review and determination the Accountants shall utilize the terms and provisions of this Agreement together with accounting policies and procedures consistent with those utilized by Seller in preparing the June 30, 2016 Financials. The decision of the Accountants shall be binding on Seller and Buyer. Buyer and Seller shall each pay one half of the reasonable fees and expenses of engagement of the Accountants unless such firm determines (x) that a net error in Seller’s favor was made in the proposed Post Closing Adjustment and such error was greater than five percent (5%) of the Post Closing Adjustment, as calculated by the Accountants, in connection with such other Party's review which event Seller shall pay all fees and expenses of engagement of the Seller Accountants or (y) no net error greater than five percent (5%) of the Post Closing Balance Sheet or the IDB Buyer Closing Balance SheetAdjustment, as applicable. Each of Seller and IDB calculated by the Accountants, was made in Seller’s favor in the proposed Post Closing Adjustment, in which event Buyer shall have 45 days after pay all the later delivery fees and expenses of engagement of the Accountants. In the event any Post Closing Adjustment is due from Buyer to Seller, Buyer shall upon demand pay to Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Post Closing Adjustment due Seller. In the event any Post Closing Adjustment is due from Seller or IDB to Buyer, Seller and IDB shall upon demand pay to Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (immediately available funds the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules additional amount of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant ArbitratorPost Closing Adjustment due Buyer.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Samples: Asset Purchase Agreement (Sunlink Health Systems Inc)
Post-Closing Adjustment. (a) Within 90 No later than one hundred and twenty (120) calendar days following after the Closing Date, Seller the Buyers shall prepare and deliver deliver, or cause to IDB Buyer be prepared and delivered, to Sellers a consolidated balance sheet of schedule setting forth the Seller Retained Subsidiaries as Buyers’ good faith calculation of the Closing (giving effect Working Capital, the Closing Cash, the Transferring Indebtedness, the Repaid Indebtedness, the Transaction Expenses, the Closing Working Capital Adjustment Amount and the Final Purchase Price together with such schedules and data with respect to the Estimated Available Cash Allocation) determination thereof as may be appropriate to support the calculations set forth therein (the "Seller “Closing Balance Sheet"Adjustments Schedule”), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties parties agree that the purpose of preparing the Closing Balance Sheets Adjustments Schedule and determining the Available Closing Working Capital, the Closing Cash, the Transferring Indebtedness, the Repaid Indebtedness, the Transaction Expenses, the Closing Working Capital and Tangible Common Equity Adjustment Amount and the related adjustment contemplated by this Section 2.7 Final Purchase Price is to measure the amount of Available the Closing Working Capital, the Closing Cash, the Transferring Indebtedness, the Repaid Indebtedness, the Transaction Expenses, the Closing Working Capital Adjustment Amount and Tangible Common Equity the Final Purchase Price in accordance with the definitions set forth in this Agreement and the Accounting Principles, and such processes are process is not intended (A) to permit the introduction of different judgments, accounting methods, policies, principles, practices, assumptions, conventions, judgments, procedures, classifications or estimation methodologies (including with respect to accruals and reserves) for the purpose of preparing determining the Closing Balance Sheets or determining Available Working Capital, the Closing Cash, the Transferring Indebtedness, the Repaid Indebtedness, the Transaction Expenses, the Closing Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet Adjustment Amount and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the Final Purchase Price other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected than those set forth in the Seller Closing Balance Sheet Accounting Principles or (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator"B) to make a determination as to the Disputed Items; provided adjust for errors or omissions that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall may be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination found with respect to each Disputed Item the Business Financial Statements or any inconsistencies between the Business Financial Statements and GAAP (it being understood that this clause (B) shall be an amount within not affect the range established Buyers’ rights and remedies otherwise available with respect to such Disputed Item by Seller's or IDB Buyer's calculation in errors, omissions and inconsistencies, including against the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9R&W Insurance Policy).
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. The “Post-Closing Adjustment” may be either a positive or negative amount, and shall be equal to (a) Within 90 days following (i) the Working Capital Adjustment Amount set forth in the Final Closing Statement, minus (ii) the Working Capital Adjustment Amount set forth in the Estimated Closing Statement, plus (b) (i) the Closing DateIndebtedness Amount set forth in the Estimated Closing Statement, Seller shall prepare and deliver to IDB Buyer minus (ii) the Closing Indebtedness Amount set forth in the Final Closing Statement, plus (c) (i) the Closing Cash Amount set forth in the Final Closing Statement, minus (ii) the Closing Cash Amount set forth in the Estimated Closing Statement, plus (d) (i) the Closing Transaction Expense Amount set forth in the Estimated Closing Statement, minus (ii) the Closing Transaction Expense Amount set forth in the Final Closing Statement. If the Post-Closing Adjustment is a consolidated balance sheet positive amount, then Purchaser shall, within two (2) Business Days after the determination of the Seller Retained Subsidiaries as of the Post-Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet")Amount, which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation ofissue, and using cause the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and Purchaser Subsidiary to deliver to Seller a consolidated balance sheet (or to an Affiliate designated by Seller), an aggregate number of IDB Buyer and Purchaser Common Shares equal to (A) the IDB Subsidiaries as amount of the Post-Closing Adjustment divided by (giving effect B) the Purchaser Reference Share Price. If the Post-Closing Adjustment is a negative amount, then Seller (or an Affiliate designated by Seller) shall, within two (2) Business Days after the determination of the Post-Closing Amount, surrender to the Estimated Available Cash AllocationPurchaser Subsidiary an aggregate number of Purchaser Common Shares equal to (A) the absolute value of the amount of the Post-Closing Adjustment divided by (B) the "IDB Buyer Purchaser Reference Share Price. The Purchase Price, as adjusted by the Post-Closing Balance Sheet" and together with Adjustment, shall be the Seller Closing Balance Sheet“Final Purchase Price.” Except to the extent otherwise required by applicable Law, Seller, Purchaser, the "Closing Balance Sheets"), which Transferred Entities and their respective Affiliates shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, treat any and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by all payments under this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior as an adjustment to the deadline purchase price for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicableall Tax purposes, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding onparties shall, and shall not be subject to appeal bycause their respective Affiliates to, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9file their respective Tax Returns accordingly.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Samples: Stock Purchase Agreement (Limelight Networks, Inc.)
Post-Closing Adjustment. (a) Within 90 days following the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery OBWC notice of change (i.e., Form 816) is sent to Ohio employers of the Dispute Notice by Seller or IDB BuyerBusiness, Seller and IDB Buyer shall endeavor in good faith cause to resolve by mutual agreement all Disputed Items. If, for any reason, Seller be prepared a schedule setting forth the following: (i) each Disenrolling Employer and IDB Buyer are unable to resolve any Disputed Item within the annual workers' compensation premiums associated with such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP Disenrolling Employer (the "Independent Accountant ArbitratorLost Annual Premiums"); (ii) to make a determination as the lost revenue of CIC caused by the Open Enrollment Period, which amount shall be determined by multiplying the total amount of the Lost Annual Premiums by 6.2% (the "Lost Revenue"); and (iii) and the total amount of the adjustment to the Disputed Items; provided that if Purchase Price, which amount shall be determined by multiplying the Independent Accountant Arbitrator is unable or unwilling Lost Revenue by a fraction, the numerator of which shall be $5,750,000 and the denominator of which shall be $14,068,500 (the "Post-Closing Purchase Price Adjustment"). The Post-Closing Purchase Price Adjustment shall be applied to serve in this capacityreduce the six Deferred Payments dollar-for-dollar. An amount equal to one-sixth of the Post-Closing Purchase Price Adjustment shall be applied to reduce each Deferred Payment. In all cases, then Seller and IDB Buyer the Post-Closing Purchase Price Adjustment shall within 14 days be applied to reduce a Deferred Payment after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules application of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with credit against such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided Deferred Payment described in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer2.7, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if below. If for any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay year the amount of the Post-Closing Purchase Price Adjustment to be applied for that year is not so applied (for example, because the credit against such excess(es) to Seller.
(ii) if Deferred Payment for that year plus the Post-Closing Purchase Price Adjustment applied for that year exceeds the Deferred Payment due for that year), then any unapplied amount shall be carried-over and applied in the following year, with the intention of the amounts parties that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess entire amount of the corresponding amounts that should have been transferred or retained by Post-Closing Purchase Price Adjustment be applied to the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash AmountDeferred Payments.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 Seller, at its expense, shall prepare, in accordance with the accounting principles and procedures set forth in Exhibit E hereto (the "CLOSING BALANCE SHEET PRINCIPLES"), an estimated balance sheet of the Business as of the close of business on the Closing Date (the "PRELIMINARY CLOSING BALANCE SHEET"). In addition, Seller shall prepare a report as of the Closing Date (the "PRELIMINARY CLOSING REPORT") setting forth its estimate of the net assets of the Business as of the Closing Date (the "PRELIMINARY NET ASSETS") as calculated in accordance with the Closing Balance Sheet Principles. Not later than two (2) business days following prior to the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet (i) the Preliminary Closing Balance Sheet and the Preliminary Closing Report and (ii) its estimate of the Seller Retained Subsidiaries as amount of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Payment. The Closing Balance Sheet"), which Cash Payment shall be prepared in conformity with GAAP applied on a basis consistent with equal to $150,000,000 (i) plus the preparation ofamount, and using if any, by which the same accounting methodsPreliminary Net Assets exceeds $58,000,000 or (ii) minus the amount, policiesif any, practices, procedures and estimation methods by which $58,000,000 exceeds the Preliminary Net Assets.
(b) As promptly as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days practicable following the Closing Date, IDB Buyer Seller, at its expense, shall prepare and deliver cause to Seller be prepared in accordance with the Closing Balance Sheet Principles, a consolidated balance sheet of IDB Buyer the Business as of the close of business on the Closing Date. This balance sheet (the "FINAL CLOSING BALANCE SHEET") shall be prepared by Seller and examined in accordance with the IDB Subsidiaries Closing Balance Sheet Principles and U.S. generally accepted auditing standards by Arthxx Xxxexxxx XXX, independent auditors for Seller ("ARTHXX XXXEXXXX"), and delivered to Buyer, as soon after the Closing Date as possible, but in no event later than sixty (60) days after the Closing Date, and shall be accompanied by a report prepared by Arthxx Xxxexxxx (xxe "FINAL CLOSING REPORT") setting forth the net assets of the Business as of the Closing (giving effect to the Estimated Available Cash Allocation) Date (the "IDB FINAL NET ASSETS"). At Buyer's expense, Buyer Closing Balance Sheet" and together Price Waterhouse LLP, independent auditors for Buyer ("PRICE WATERHOUSE") shall have the opportunity to participate in the physical inventory taken in connection with the Seller preparation and examination of the Final Closing Balance Sheet, and to review such of the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent worksheets and other documents created or utilized by Seller and the related work papers of Arthxx Xxxexxxx xx connection with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation examination of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Final Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is Sheet as Buyer shall from time to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equitytime reasonably request.
(bc) Following delivery Recording fees, transfer taxes, and escrow fees incurred in connection with the conveyance of the Shares, Property, Real Property Leases, Subsidiary Real Property Leases (as hereafter defined) or personal property, including such taxes as are imposed by the Australian and New Zealand taxing authorities, shall be borne equally by Buyer and Seller and shall not be reflected as an asset or a liability on the Final Closing Balance Sheet. Costs associated with obtaining title insurance of the Property shall be the responsibility of Buyer. Sales and use taxes and all other similar taxes (other than income and franchise taxes) and all interest and penalties thereon incurred in connection with conveyance of the Property, Real Property Leases, Subsidiary Real Property Leases or personal property shall be borne equally by Buyer and Seller and shall not be reflected as an asset or a liability on the Final Closing Balance Sheet. Seller shall provide copies of the current or most recent property tax bills for the Property and, if available, for any leased properties, to Buyer prior to the Closing Date. After the Closing Date, any bills or requests for payment received by either Seller or Buyer in connection with the Business attributable to Taxes which have not been accrued on the Final Closing Balance Sheet and reflect in whole or part liabilities retained or assumed, respectively, by Seller on the IDB one hand, or Buyer on the other, shall be allocated between Buyer and Seller in the manner described in Section 5.9 hereof, or as otherwise appropriate under the terms of this Agreement; PROVIDED, HOWEVER, that neither party shall pay such bill xxxhout the prior written consent of the other party, which consent shall not be unreasonably withheld.
(d) Buyer shall have 30 days following delivery to Buyer of the Final Closing Balance Sheet and prior during which to notify Seller of any dispute of any item contained in the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Final Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer which notice shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and in reasonable detail the basis for such dispute together and shall be accompanied by a certificate of Price Waterhouse that they concur with each of the posi- tions taken by Buyer in the notice that the Final Closing Balance Sheet was not prepared in accordance with the Closing Balance Sheet Principles. If Buyer fails to notify Seller of any such Party's calculation of dispute within such item or amount in dispute (30-day period, the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party Final Closing Balance Sheet shall be deemed to have accepted all items and amounts contained in be the Seller Closing Balance Sheet or the IDB Buyer agreed upon Final Closing Balance Sheet, as applicable, delivered by . In the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB event that Buyer shall endeavor so notify Seller of any dispute, Buyer and Seller shall cooperate in good faith to resolve by mutual such dispute as promptly as possible, and upon such resolution, the Final Closing Balance Sheet shall be prepared in accordance with the agreement all Disputed Items. If, for any reason, of Buyer and Seller.
(e) If Buyer and Seller and IDB Buyer are unable to resolve any Disputed Item such dispute within 15 days (or such 30 day period, longer period as Buyer and Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator"mutually agree in writing) to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of Buyer's delivery of such 30 day period agree on an alternate independent accounting firm or in default thereof notice, such selection dispute shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made resolved by the Independent Accountant Arbitrator.
Accounting Firm (d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyerhereafter defined), and not by independent review, only the Disputed Items that have not been settled by negotiation, and its such determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, on the parties. Seller and IDB Buyer shall mutually select the Independent Accounting Firm, but if Seller and Buyer cannot mutually agree on the identity of the Independent Accounting Firm, then Seller and Buyer shall each submit to the other party's independent auditor the name of a national accounting firm other than the firm whose report accompanied the Final Closing Balance Sheet or Buyer's objections thereto and other than any firm that has in the prior two years provided services to Seller, Buyer or any other Personof their respective Affiliates, and may the Independent Accounting Firm shall be entered selected by lot from these two firms by the independent auditors of the two parties. (If no national accounting firm shall be willing to serve as the Independent Accounting Firm, then an arbitrator shall be selected to serve as such, such selection to be according to the above procedures.) Any expenses relating to the engagement of the Independent Accounting Firm shall be shared equally by Buyer and enforced Seller. The Independent Accounting Firm shall be instructed to use every reasonable effort to perform its services within 15 days of submission of the Final Closing Balance Sheet to it and, in any case, as provided in Section 9.9promptly as practicable after such submission. The Final Closing Balance Sheet shall then be prepared by the Buyer and Seller based on the determination of the Independent Accounting Firm.
(ef) No later than 30 The Purchase Price shall be equal to the Closing Cash Payment (i) plus the amount, if any, by which the Final Net Assets exceed the Preliminary Net Assets or (ii) minus the amount, if any, by which the Preliminary Net Assets exceed the Final Net Assets. Buyer or Seller, as the case may be, shall, within 10 business days following the later of after the final determination of the Seller Final Closing Balance Sheet (pursuant to Sections 2.6(c) and the calculations 2.6(d) hereof, make payment by wire transfer in immediately available funds of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) difference as determined pursuant to Sellerthe preceding sentence, together with interest thereon at a rate equal to the prime rate per annum on the date immediately preceding the date on which payment is to be made, as quoted by NationsBank, N.A., from the Closing Date to the date of payment.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Samples: Asset Purchase Agreement (Figgie International Inc /De/)
Post-Closing Adjustment. (ai) Within 90 forty-five (45) days following after the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries Date (as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"defined herein), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller the Sellers a statement (the “Closing Working Capital Statement”) containing an unaudited consolidated balance sheet of IDB Buyer and the IDB Subsidiaries Full Moon as of the Closing Date (without giving effect to the Estimated Available Cash Allocationtransactions contemplated herein) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a setting forth its final calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, (“Final Closing Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth thereinCapital”), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) The post-closing adjustment to the Closing Cash shall be an amount equal to the Final Closing Working Capital minus the Estimated Closing Working Capital (without duplication related to any Closing Cash adjustment under 1.03(a)(ii) above) (the “Post-Closing Adjustment”).
(iii) Subject to subparagraphs (c) and (d) below:
(A) If the Post-Closing Adjustment is a positive number, Buyer shall pay to Sellers, an amount equal to the Post-Closing Adjustment. If to be paid to Sellers, Buyer shall pay the Post-Closing Adjustment by wire transfer of immediately available funds to such account as is directed in writing by Sellers, in the same proportions as the Closing Cash was distributed to Sellers at Closing.
(B) If the Post-Closing Adjustment is a negative number, Sellers, in the same proportions as the Closing Cash was distributed to Sellers at Closing, shall pay to Buyer an amount equal to the Post-Closing Adjustment by wire transfer of immediately available funds to such account as is directed in writing by Buyer; provided that, if any unpaid upon demand, Buyer in its sole discretion may cancel or redeem for $0 that number of restricted shares then issued of the amounts that were transferred or retained by Closing Stock Consideration necessary to full recover any deficiency determined based on the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess lower of the corresponding amounts that should have been transferred stock price at which such stock consideration was issued under Section 1.02 hereof or retained by the Seller Retained Subsidiaries then current stock price of the OEG Common Stock as provided in of the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount date of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amountdemand.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 days following after the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB US Buyer shall prepare and deliver to Seller Parent a consolidated statement setting forth its calculation of the Closing Working Capital, Closing Cash, Closing Indebtedness, Transaction Expenses and all amounts owed to or from the LiveArea Companies and any Related Party or Sellers or their Affiliates (excluding the LiveArea Companies) pursuant to the agreements described in Section 7.02(m) or otherwise (and reasonable supporting documentation related thereto), which statement shall contain an unaudited balance sheet of IDB Buyer and the IDB Subsidiaries LiveArea Companies as of the Closing Date (without giving effect to the Estimated Available Cash Allocationtransactions contemplated herein) (the "IDB “Closing Statement”) and a certificate of the Chief Financial Officer of US Buyer that the unaudited balance sheet of the LiveArea Companies as of the Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be Date was prepared in conformity accordance with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. Exhibit A. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related post-closing adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within equal to the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award sum of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
following: (eA) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and if there was a Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (Reduction and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB BuyerClosing Working Capital exceeds Estimated Closing Working Capital, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) excess up to Seller.
a maximum of the Working Capital Closing Reduction expressed as a positive number, (iiB) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the there was no Working Capital Closing Reduction and Closing Working Capital exceeds Target Working Capital, $0, (C) if there was a Working Capital Closing Reduction and Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash AllocationClosing Working Capital exceeds Closing Working Capital, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(esexcess expressed as a negative number, (D) if there was no Working Capital Closing Reduction and Target Working Capital exceeds Closing Working Capital, the amount of such excess expressed as a negative number, (E) Closing Cash minus Estimated Closing Cash, (F) Estimated Closing Indebtedness minus Closing Indebtedness,(G) Estimated Transaction Expenses minus Transaction Expenses, (H) all amounts owed to the LiveArea Companies from any Related Party or Sellers or their Affiliates (excluding the LiveArea Companies) pursuant to the agreements described in Section 7.02(m) or otherwise as of the Closing Date to the extent that the LiveArea Companies received one or more payments of cash for such amounts within 60 days after the Closing Date, subject to a cap of $1,000,000 and reduced by (I) fifty percent (50%) to IDB Buyerthe extent any of such amounts relate to receivables from parties domiciled in India, and (II) fourteen and one-half percent (14.5%) to the extent any of such amounts relate to receivables from parties domiciled in Bulgaria, expressed as a positive number, and (I) all amounts owed by the LiveArea Companies to any Related Party or Sellers or their Affiliates (excluding the LiveArea Companies) pursuant to the agreements described in Section 7.02(m) or otherwise as of the Closing Date , expressed as a negative number (collectively, the “Post-Closing Adjustment”). Notwithstanding If the foregoing and for the avoidance of doubtPost-Closing Adjustment is a positive number, in no event US Buyer shall Seller be required pay to pay Sellers (other than RevTech Solutions) an amount in excess equal to the Post-Closing Adjustment as an adjustment to the LA US Purchase Price. If the Post-Closing Adjustment is a negative number, Sellers (other than RevTech Solutions) shall pay to US Buyer an amount equal to the absolute value of the Excess Cash AmountPost-Closing Adjustment as an adjustment to the LA US Purchase Price (e.g., a ($100,000) Post-Closing Adjustment would result in a $100,000 payment to US Buyer).
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 No sooner than the date that is ninety (90) days following after the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of but in no case later than the Seller Retained Subsidiaries as of the Closing date that is one hundred fifty (giving effect to the Estimated Available Cash Allocation150) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following after the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet statement (the “Post-Closing Statement”) setting forth in reasonable detail Buyer’s good faith calculation of IDB (i) the Adjustment Amount, including each component thereof (but excluding any adjustments with respect to disputed Title Defects, Title Defect Amounts, Title Benefits, Title Benefit Amounts, Environmental Defects or Environmental Defect Amounts), and (ii) the resulting calculation of the adjusted Purchase Price (excluding any adjustments with respect to disputed Title Defects, Title Defect Amounts, Title Benefits, Title Benefit Amounts, Environmental Defects or Environmental Defect Amounts, the “PC Statement Purchase Price”). Concurrently with the delivery of the Post-Closing Statement, Buyer shall deliver to Seller reasonable documentation in the possession of Buyer or any of its Affiliates to support the calculations for which adjustments are proposed or made in the Post-Closing Statement delivered by Buyer, and a reasonably detailed explanation of any such adjustments and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equityreasons therefor.
(b) Following delivery Seller shall have thirty (30) days after Seller’s receipt of the Post-Closing Statement (the “Review Period”) within which to review Buyer’s calculation of the PC Statement Purchase Price. If Seller disputes any component of the PC Statement Purchase Price (including the Adjustment Amount set forth in the Post-Closing Balance Sheet and Statement, but excluding any adjustments with respect to disputed Title Defects, Title Defect Amounts, Title Benefits, Title Benefit Amounts, Environmental Defects or Environmental Defect Amounts), Seller shall notify Buyer in writing of its objection to the IDB Buyer Closing Balance Sheet and PC Statement Purchase Price prior to the deadline expiration of the Review Period, together with a reasonable description of the basis for delivering and dollar amount of such disputed components, together with reasonable documentation in the possession of Seller supporting such disputed components (a “Dispute Notice”). The PC Statement Purchase Price shall become final, conclusive and binding on the Parties, and be considered the Final Purchase Price for all purposes of this Agreement (other than adjustments with respect to disputed Title Defects, Title Defect Amounts, Title Benefits, Title Benefit Amounts, Environmental Defects or Environmental Defect Amounts), unless Seller delivers to Buyer a Dispute Notice prior to the expiration of the Review Period. If Seller timely delivers a Dispute Notice, each (i) any amounts in the PC Statement Purchase Price (excluding any adjustments with respect to disputed Title Defects, Title Defect Amounts, Title Benefits, Title Benefit Amounts, Environmental Defects or Environmental Defect Amounts) not objected to by Seller in the Dispute Notice shall be final, conclusive and binding on the Parties, and (ii) Buyer and Seller shall, within fifteen (15) days following Xxxxx’s receipt of Seller and IDB Buyer will provide such Dispute Notice (the other Party and its Representatives “Resolution Period”), use commercially reasonable efforts to attempt to mutually resolve in writing their differences with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as respect to any item or amount reflected remaining items set forth in the Seller Closing Balance Sheet (including the calculations of Available Cash Dispute Notice and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash any such mutual resolution shall be final, conclusive and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount binding on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a)Parties.
(c) For 30 days after If, at the later delivery conclusion of the Resolution Period, any items set forth in any Dispute Notice by Seller (but excluding any adjustments with respect to disputed Title Defects, Title Defect Amounts, Title Benefits, Title Benefit Amounts, Environmental Defects or IDB Buyer, Seller and IDB Buyer shall endeavor Environmental Defect Amounts) remain in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP dispute (the "Independent Accountant Arbitrator"“Remaining Disputes”), then Buyer and Seller shall submit all such Remaining Disputes to KPMG International Limited (or such other nationally recognized accounting firm the Parties may mutually select) to make a determination as to the Disputed Itemsfor resolution; provided provided, that if KPMG International Limited has not confirmed that it will arbitrate such disputes and the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period Parties do not agree on an alternate independent another accounting firm or in default thereof within ten (10) days following the request from the Parties for KPMG International Limited to arbitrate such selection shall be made pursuant to disputes, the rules Houston, Texas, office of the American Arbitration Association, which Association shall select a nationally recognized accounting firm without a material relationship to Seller or Buyer to arbitrate such disputes. The appointed accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees“Accounting Firm”, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
within five (d5) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a appointment of the Accounting Firm the Parties shall deliver to the Accounting Firm their written statement summarizing its position on the Disputed Items, together with respect to such supporting documentation as it deems necessaryRemaining Disputes. The Independent Accountant Arbitrator Accounting Firm, once appointed, shall act as an arbitrator to have no ex parte communications with the Parties concerning the Remaining Disputes. The Accounting Firm shall determine, based solely on the materials submitted submissions by Xxxxxx and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items Remaining Disputes and shall choose Seller’s position or Buyer’s position with respect to each matter addressed in a Dispute Notice, in each case, in accordance with this Agreement. The Accounting Firm may not award damages, interest or penalties to any Party with respect to any matter. The Parties shall request that have not been settled by negotiationthe Accounting Firm make a decision with respect to all Remaining Disputes within forty-five (45) days after the submission of the Remaining Disputes to the Accounting Firm, as provided above, and its in any event as promptly as practicable. The final determination with respect to each Disputed Item all Remaining Disputes, and the resulting determinations of the Adjustment Amount and the Purchase Price, shall be an amount within set forth in a written statement by the range established Accounting Firm delivered simultaneously to Seller and Xxxxx and shall, absent manifest error, be final, conclusive and binding on the Parties and enforceable against the Parties in any court of competent jurisdiction, without right of appeal, as the Final Adjustment Amount and the Final Purchase Price, respectively. Buyer and Seller shall promptly execute any reasonable engagement letter requested by the Accounting Firm and shall each cooperate fully with respect the Accounting Firm, including, by providing the information, data and work papers used by each Party to prepare and/or calculate the Final Purchase Price, making its personnel and accountants available to explain any such Disputed Item information, data or work papers, so as to enable the Accounting Firm to make such determination as quickly and as accurately as practicable. Each Party shall bear its own legal fees and other costs in presenting any Remaining Disputes to the Accounting Firm. The fees, costs and expenses of the Accounting Firm pursuant to this Section 2.7(c) shall be borne one half (1/2) by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Noticeone half (1/2) by Xxxxx, on the other hand. For the avoidance of doubt, the Adjustment Amount used to determine the Final Purchase Price shall be deemed to be the Final Adjustment Amount (excluding any adjustments with respect to disputed Title Defects, Title Defect Amounts, Title Benefits, Title Benefit Amounts, Environmental Defects or Environmental Defect Amounts).
(d) From and after the date Buyer delivers to Seller the Post-Closing Statement until the Final Purchase Price is finally determined pursuant to this Section 2.7, Seller, its Affiliates and IDB Buyer their respective auditors, accountants, counsel and other representatives shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as be permitted reasonable access (during normal business hours and upon reasonable advance notice) to the Disputed Items shall be final Company and binding onits auditors, accountants, personnel, books and records and any other documents or information reasonably requested by Seller (including the information, data and work papers used by Xxxxx and/or the Company’s auditors or accountants to prepare and calculate the Final Purchase Price) solely and exclusively for the purpose of reviewing the Post-Closing Statement and determining the Final Purchase Price, and shall not be subject to appeal by, Seller and IDB Buyer or any for no other Person, and may be entered and enforced as provided in Section 9.9purpose.
(e) No later than 30 days following If the later of Purchase Price as adjusted by the final determination of Final Adjustment Amount exceeds the Seller Purchase Price as adjusted by the Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) Adjustment Amount (such items being "final" excess amount, if any, the “Excess Amount”), within five (5) Business Days after giving effect the Final Purchase Price is finally determined pursuant to this Section 2.7, Buyer shall pay to Seller, in immediately available funds, an aggregate amount equal to the items and amounts accepted or deemed Excess Amount in accordance with wiring instructions delivered to have been accepted Buyer by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(iif) if any of If the amounts that were transferred or retained Purchase Price as adjusted by the Seller Retained Subsidiaries Final Adjustment Amount is less than the Purchase Price as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained adjusted by the Seller Retained Subsidiaries as provided in Closing Adjustment Amount (such shortfall amount, if any, the “Shortfall Amount”), within five (5) Business Days after the Final Available Cash AllocationPurchase Price is finally determined pursuant to this Section 2.7, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event immediately available funds, an aggregate amount equal to the Shortfall Amount in accordance with wiring instructions delivered to Seller by Buyer.
(g) Any payments made pursuant to this Section 2.7 shall Seller be required deemed an adjustment to pay an amount in excess of the Excess Cash AmountPurchase Price, to the extent permitted by applicable Law.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (Crescent Energy Co)
Post-Closing Adjustment. (a) Within 90 The Final Total Adjusted Book Value, Final RLI Required Initial Premium, the Final RLI Transferred Asset Value, the Final RLINY Required Initial Premium, the Final RLINY Transferred Asset Value, the Final VRIAC Required Initial Premium, the Final VRIAC Transferred Asset Value, the Final RLI-Buyer Lifeco Required Initial Premium and the Final RLI-Buyer Lifeco Transferred Asset Value shall be determined as set forth in this Section 2.6.
(i) If the Final Total Adjusted Book Value exceeds the Estimated Total Adjusted Book Value, Buyer shall pay or cause to be paid to Seller or its designee, within ten (10) Business Days after the final determination of the Final Total Adjusted Book Value, an amount equal to such excess. If the Estimated Total Adjusted Book Value exceeds the Final Total Adjusted Book Value, then Seller shall pay or cause to be paid to Buyer or its designee, within ten (10) Business Days after the final determination of the Final Total Adjusted Book Value, an amount equal to such excess.
(ii) If the RLI Reinsurance True-Up Amount is a positive number, Buyer shall cause SLD to pay to RLI, within ten (10) Business Days after the final determination of the RLI Reinsurance True-Up Amount, cash or (if mutually agreed by the parties hereto) Investment Assets having a Fair Market Value as of the date of payment equal to the RLI Reinsurance True-Up Amount. If the RLI Reinsurance True-Up Amount is a negative number, Seller shall cause RLI to transfer to the RLI Trust Account, within ten (10) Business Days after the final determination of the RLI Reinsurance True-Up Amount, cash or (if mutually agreed by the parties hereto) additional Investment Assets that have an aggregate Fair Market Value as of the date of such transfer equal to the absolute value of the RLI Reinsurance True-Up Amount.
(iii) If the RLINY Reinsurance True-Up Amount is a positive number, Buyer shall cause SLD to pay to RLINY, within ten (10) Business Days after the final determination of the RLINY Reinsurance True-Up Amount, cash or (if mutually agreed by the parties hereto) Investment Assets having a Fair Market Value as of the date of payment equal to the RLINY Reinsurance True-Up Amount. If the RLINY Reinsurance True-Up Amount is a negative number, Seller shall cause RLINY to transfer to the RLINY Trust Account, within ten (10) Business Days after the final determination of the RLINY Reinsurance True-Up Amount, cash or (if mutually agreed by the parties hereto) additional Investment Assets that have an aggregate Fair Market Value as of the date of such transfer equal to the absolute value of the RLINY Reinsurance True-Up Amount.
(iv) If the VRIAC Reinsurance True-Up Amount is a positive number, Buyer shall cause SLD to pay to VRIAC, within ten (10) Business Days after the final determination of the VRIAC Reinsurance True-Up Amount, cash or (if mutually agreed by the parties hereto) Investment Assets having a Fair Market Value as of the date of payment equal to the VRIAC Reinsurance True-Up Amount. If the VRIAC Reinsurance True-Up Amount is a negative number, Seller shall cause VRIAC to transfer to the VRIAC Trust Account, within ten (10) Business Days after the final determination of the VRIAC Reinsurance True-Up Amount, cash or (if mutually agreed by the parties hereto) additional Investment Assets that have an aggregate Fair Market Value as of the date of such transfer equal to the absolute value of the VRIAC Reinsurance True-Up Amount.
(v) If the RLI-Buyer Lifeco Reinsurance True-Up Amount is a positive number, Buyer shall permit RLI to withdraw from the Funds Withheld Account within ten (10) Business Days after the final determination of the RLI-Buyer Lifeco Reinsurance True-Up Amount, cash or (if mutually agreed by the parties hereto) Investment Assets having a Statutory Carrying Value (as determined by Seller in good faith) equal to the RLI-Buyer Lifeco Reinsurance True-Up Amount. If the RLI-Buyer Lifeco Reinsurance True-Up Amount is a negative number, Seller shall cause RLI to transfer to the Funds Withheld Account, within ten (10) Business Days after the final determination of the RLI-Buyer Lifeco Reinsurance True-Up Amount, cash or (if mutually agreed by the parties hereto) additional Investment Assets that have an aggregate Statutory Carrying Value (as determined by Seller in good faith) equal to the absolute value of the RLI-Buyer Lifeco Reinsurance True-Up Amount. Any cash payment required to be made by any Person pursuant to this Section 2.6(a) will be made by wire transfer of immediately available funds to an account designated by the recipient thereof.
(b) No later than one hundred eighty (180) days following after the Closing Date, Seller Buyer shall prepare and deliver to IDB Buyer Seller (a) a consolidated statement (the “Closing Statement”) setting forth balance sheet sheets of each of the Seller Retained Subsidiaries Acquired Companies, in each case, as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be Effective Time prepared in conformity with GAAP applied on a basis consistent with the preparation of, Reference Closing Statement and using in accordance with the same accounting methods, policies, practices, procedures Accounting Principles and estimation methods as those used in the preparation showing Buyer’s good faith calculation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries Total Adjusted Book Value as of the Closing Effective Time derived therefrom, (giving effect to the Estimated Available Cash Allocationb) a statement (the "IDB Buyer “Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be Net Settlement Statement”) prepared in conformity with GAAP applied on a basis consistent with the preparation ofReference Net Settlement Statement and in accordance with the Settlement Methodologies setting forth Buyer’s calculations as of the Effective Time of the RLI Required Initial Premium, the RLINY Required Initial Premium, the VRIAC Required Initial Premium and the RLI-Buyer Lifeco Required Initial Premium and (c) a statement (the “Closing Fair Value Statement”, and using together with the same accounting methodsClosing Statement and the Closing Net Settlement Statement, policiesthe “Closing Settlement Statements”) of the RLI Transferred Asset Value, practicesRLINY Transferred Asset Value, procedures the VRIAC Transferred Asset Value and estimation methods as those used in the RLI-Buyer Lifeco Transferred Asset Value. In connection with Buyer’s preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, Closing Statement and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available CashNet Settlement Statement, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB shall provide Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable such access to the books employees and recordsRepresentatives of Seller and its Affiliates and to such documentation, personnel records and related work papers other information of Seller or IDB Buyerany of its Affiliates as Buyer or any of its Representatives may reasonably request; provided, as applicable, in connection that such access does not unreasonably interfere with such other Party's review the conduct of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each business of Seller or its Affiliates; provided, further, that the independent accountants of Seller will not be obligated to make any work papers available to Buyer or its Representatives, unless and IDB until Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet has signed a customary agreement relating to such access to work papers in which form and substance reasonably acceptable to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a)accountants.
(c) For 30 Seller shall have sixty (60) days after the later delivery date on which the Closing Settlement Statements are delivered to it to review the Closing Settlement Statements and the calculations set forth therein (the “Review Period”). In furtherance of such review, Buyer shall, and shall cause the Acquired Companies to, provide Seller and its Representatives with such access to the employees and Representatives of Buyer and the Acquired Companies and to such documentation, records and other information of Buyer or the Acquired Companies as Seller or any of its Representatives may reasonably request; provided, that such access does not unreasonably interfere with the conduct of the business of Buyer or the Acquired Companies; provided, further, that the independent accountants of Buyer and the Acquired Companies will not be obligated to make any work papers available to Seller or its Representatives, unless and until Seller has signed a customary agreement relating to such access to work papers in form and substance reasonably acceptable to such accountants.
(i) If Seller disagrees with the Closing Settlement Statements (including any amount or computation set forth therein) in any respect and on any basis, Seller may, on or prior to the last day of the Review Period, deliver a notice to Buyer setting forth, in reasonable detail, each disputed item or amount and the basis for Seller’s disagreement therewith (the “Dispute Notice”). The Dispute Notice shall set forth, with respect to each disputed item or amount, Seller’s position as to the correct amount or computation that should have been included in the Closing Settlement Statements, as applicable.
(ii) If no Dispute Notice is received by Buyer with respect to any matter in the Closing Settlement Statements on or prior to the last day of the Review Period, the amount or computation with respect to such matters as set forth in the Closing Settlement Statements shall be deemed accepted by Seller, whereupon the amount or computation of such matter or matters shall be final and binding on the parties.
(iii) For a period of thirty (30) days beginning on the date that Buyer receives a Dispute Notice, if any, Buyer and Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Itemsmatters identified in the Dispute Notice. IfIf Buyer and Seller reach agreement with respect to any such disagreements, for Buyer shall revise the Closing Settlement Statements to reflect such agreement. In the event that the parties do not resolve by mutual agreement any reason, Seller and IDB Buyer are unable to resolve any Disputed Item matter in the Dispute Notice within such 30 thirty (30) day period, Buyer and Seller and IDB Buyer shall jointly engage Deloitte & Touche LLP an accounting firm of national reputation or any other Person, as mutually agreed by the parties hereto (the "“Independent Accountant Arbitrator") Accounting Firm”), to make a determination as with respect to all matters in dispute; provided, that, if such firm is unwilling or unable to serve, unless otherwise agreed by the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacityparties, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection dispute shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer resolved in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitratoraccordance with Section 10.7.
(div) If there is a referral to Buyer and Seller will direct the Independent Accountant ArbitratorAccounting Firm to render a determination within thirty (30) days after its retention, each of and Buyer, Seller and IDB Buyer agrees, if requested by their respective employees and Representatives will cooperate with the Independent Accountant ArbitratorAccounting Firm during its engagement. Buyer, to execute a reasonable on the one hand, and Seller, on the other hand, shall promptly (and in any event within ten (10) Business Days) after the Independent Accounting Firm’s engagement letter and shall each submit to the Independent Accountant Arbitrator not later than Accounting Firm their respective computations of the disputed items or amounts identified in the Dispute Notice and information, arguments and support for their respective positions, and shall concurrently deliver a copy of such materials to the other party. Each party shall then be given an opportunity to supplement the information, arguments and support included in its initial submission with one additional submission to respond to any arguments or positions taken by the other party in such other party’s initial submission, which supplemental information shall be submitted to the Independent Accounting Firm (with a copy thereof to the other party) within ten (10) Business Days after its appointment, a written statement summarizing its position the first date on which both parties have submitted their respective initial submissions to the Disputed Items, together with such supporting documentation as it deems necessaryIndependent Accounting Firm. The Independent Accountant Arbitrator Accounting Firm shall act as an arbitrator thereafter be permitted to request additional or clarifying information from the parties, and each of the parties shall cooperate and shall cause their Representatives to cooperate with such requests of the Independent Accounting Firm. The Independent Accounting Firm shall determine, based solely on the materials submitted so presented by the parties and presentations by Seller and IDB Buyer, upon information received in response to such requests for additional or clarifying information and not by independent review, only those issues that remain in dispute specifically set forth in the Disputed Items Dispute Notice and shall render a written report to Buyer and Seller (each, an “Adjustment Report”) in which the Independent Accounting Firm shall, after considering all matters set forth in the Dispute Notice, determine what adjustments, if any, should be made to the amounts and computations set forth in the Closing Settlement Statements solely as to the disputed items or amounts set forth in the Dispute Notice and shall determine the appropriate Total Adjusted Book Value, RLI Required Initial Premium, RLI Transferred Asset Value, RLINY Required Initial Premium, RLINY Transferred Asset Value, VRIAC Required Initial Premium, VRIAC Transferred Asset Value, RLI-Buyer Lifeco Required Initial Premium and RLI-Buyer Lifeco Transferred Asset Value on that have not been settled by negotiationbasis.
(v) The Adjustment Report shall set forth, and its in reasonable detail, the Independent Accounting Firm’s determination with respect to each Disputed Item of the disputed items or amounts specified in the Dispute Notice, and the revisions, if any, to be made to the Closing Settlement Statements, together with supporting calculations. In resolving any disputed item or amount, the Independent Accounting Firm (A) shall be an amount within bound to the range established principles of this Section 2.6 and the terms of this Agreement, including whether the Closing Settlement Statements were prepared in accordance with the Accounting Principles and Settlement Methodologies (as applicable), (B) shall limit its review to matters specifically set forth in the Dispute Notice and (C) shall not assign a value to any matter higher than the highest value for such matter claimed by either party or less than the lowest value for such matter claimed by either party.
(vi) All fees and expenses relating to the work of the Independent Accounting Firm shall be paid by the party (that is, Buyer or Seller) whose position with respect to such Disputed Item by Seller's or IDB Buyer's calculation the matter in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct dispute is furthest from the Independent Accountant Arbitrator Accounting Firm’s final determination. Each Adjustment Report, absent fraud or manifest error, shall be expert determinations under New York law governing expert determination and appraisal proceedings. Any claim, dispute or controversy arising out of or relating to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award the final determinations of the Independent Accountant Arbitrator as to the Disputed Items Accounting Firm, including enforcement of such final determinations, shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided resolved in accordance with Section 9.910.7.
(evii) No later than 30 days following the later The final form of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items Settlement Statements as finally determined by pursuant to this Section 2.6 are referred to herein as the Independent Accountant Arbitrator; such final calculations being “Final Settlement Statements”. The Total Adjusted Book Value calculated therefrom is referred to as the "“Final Available Cash Allocation"Total Adjusted Book Value,” the RLI Required Initial Premium calculated therefrom is referred to as the “Final RLI Required Initial Premium,” the RLI Transferred Asset Value calculated therefrom is referred to as the “Final RLI Transferred Asset Value”), the following adjustments shall be effected:
(i) if any RLINY Required Initial Premium calculated therefrom is referred to as the “Final RLINY Required Initial Premium”), the RLINY Transferred Asset Value calculated therefrom is referred to as the “Final RLINY Transferred Asset Value”), the VRIAC Required Initial Premium calculated therefrom is referred to as the “Final VRIAC Required Initial Premium”), the VRIAC Transferred Asset Value calculated therefrom is referred to as the “Final VRIAC Transferred Asset Value”), the RLI-Buyer Lifeco Required Initial Premium calculated therefrom is referred to as the “Final RLI-Buyer Lifeco Required Initial Premium” and the RLI-Buyer Lifeco Transferred Asset Value calculated therefrom is referred to as the “Final RLI-Buyer Lifeco Transferred Asset Value”. Notwithstanding anything to the contrary contained in this Agreement, the provisions of this Section 2.6 represent the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in sole and exclusive method for determining the Final Available Cash AllocationTotal Adjusted Book Value, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in Final RLI Required Initial Premium, the Final Available Cash AllocationRLI Transferred Asset Value, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay Final RLINY Required Initial Premium, the amount of such excess(es) to IDB Buyer. Notwithstanding Final RLINY Transferred Asset Value, the foregoing Final VRIAC Required Initial Premium, the Final VRIAC Transferred Asset Value, the Final RLI-Buyer Lifeco Required Initial Premium and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash AmountFinal RLI-Buyer Lifeco Transferred Asset Value.
Appears in 1 contract
Samples: Master Transaction Agreement (Voya Financial, Inc.)
Post-Closing Adjustment. (a) Within 90 days following the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) The Purchase Price will be adjusted (the "Post-Closing Adjustment"), dollar for dollar following the Effective Time of Closing (i) to the extent that the Tangible Net Worth of Seller Closing as of December 31, 1997 (the "Final Tangible Net Worth") shown upon the Year End Balance Sheet differs from the Tangible Net Worth of Seller at November 30, 1997 (the "Contract Tangible Net Worth") shown upon the Interim Date Balance Sheet of Seller dated as of November 30, 1997 (the "Interim Date Balance Sheet") attached to Schedule 2.5.1(a), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery For purposes of this Agreement, Tangible Net Worth shall mean total assets (other than Excluded Assets) less intangible assets (including, but not limited to, the Seller Closing intangible assets owned directly or indirectly by NVB or otherwise related to the NVB Franchise) less total liabilities (other than Excluded Obligations) as reflected on the Interim Date Balance Sheet and on the IDB Buyer Closing Year End Balance Sheet, respectively. In determining Tangible Net Worth, except for the Inventory Reserve and except for the application of Section 5.3, there should be no deduction for any Inventory which is determined not to be salable in the ordinary course of business as previously conducted by Seller. The Interim Date Balance Sheet was prepared by Seller and delivered to Buyer prior to the deadline for delivering a Dispute Noticedate hereof, each and Seller has made available to Buyer all of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related Seller's work papers of Seller or IDB Buyer, as applicable, and other relevant documents in connection with such other Party's review the preparation of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Interim Date Balance Sheet (including collectively, the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing "Interim Date Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the Work Papers"Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 The Tangible Net Worth, as of December 31, 1997 (the "Year End Date"), shall be determined by Seller and reflected on the Balance Sheet of Seller dated as of the Year End Date (the "Year End Balance Sheet"). As promptly as possible and in any event within sixty (60) days after the later delivery date hereof, Seller shall prepare the Year End Balance Sheet, with the assistance and cooperation of Buyer, which Year End Balance Sheet shall be audited and accompanied by a report from Xxxxxx Xxxxxxxx LLP ("AA"), Seller's independent certified public accountants, which shall state, among other things, that the Year End Balance Sheet, as of the Dispute Notice by Year End Date, fairly represents, in all material respects, the financial position of Seller or IDB as of the Year End Date, in conformity with GAAP consistently applied. At the time the Year End Balance Sheet is delivered to Buyer, Seller shall make available to Buyer all of Seller's work papers and IDB other relevant documents in connection with the preparation of the Year End Balance Sheet (collectively, the "Year End Balance Sheet Work Papers"). Buyer shall endeavor pay AA for its fees in good faith connection with auditing the Year End Balance Sheet and Seller shall reimburse Buyer for such portion of such fees as shall be equal to resolve the amount paid by mutual agreement all Disputed Items. If, Seller to AA for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination audit of Seller's 1996 Audited Financial Statements against receipt of reasonable evidence as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end payment of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne fees by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant ArbitratorSeller.
(d) If there is Unless Buyer provides written notice of a referral specific objection to the Independent Accountant ArbitratorYear End Balance Sheet before the close of business on the tenth (10th) Business Day after the date of Buyer's receipt of the Year End Balance Sheet and the Year End Balance Sheet Work Papers, each of such Year End Balance Sheet shall become binding upon Buyer and Seller and IDB Buyer agrees, if requested by will form the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award basis of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in computation under Section 9.92.5.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. The Parties acknowledge that the Initial Amount will be calculated and paid based on an assessment of Company that took into consideration the Estimated Working Capital and Estimated Net Debt, and which, therefore, is subject to post-closing adjustment as explained below (a"Initial Amount Adjustment") , only in the event that the Initial Amount Adjustment amount exceeds the Minimum Adjustment Value of Initial Amount.
4.5.1. Within 90 ninety (90) days following from the Closing Date, Seller the Company shall prepare hand to the Parties a notice containing (i) Audited Balance Sheet Q1 2021, as provided below (if this sheet has not been delivered prior to Closing) and deliver Company and its Subsidiaries consolidated financial statements for the base Closing Date Date, subject to IDB Buyer a consolidated balance sheet the limited review by an independent auditor ("Closing Financial Statements"); (ii) the Initial Amount calculated on the basis of the Seller Retained Subsidiaries as formula in Exhibit 2.2.1(i); (iii) the amount of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries Company's Net Debt and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the based on Closing Financial Statements (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance SheetEffective Net Debt" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Effective Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute NoticeCapital", and each item or amount on the Dispute Notice, a "Disputed Item"respectively). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
; (civ) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each Adjustment of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation Initial Amount in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days terms detailed below ("Notice of its appointment or as soon thereafter as is reasonably practicable. The decision/award Adjustment of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being Initial Amount"final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:):
(i) if any of The Initial Amount will be calculated based on the amounts that were transferred or retained by formula set out in Exhibit 2.2.1(i) and will be subject to the IDB Subsidiaries at Closing as provided Net Debt and Working Capital adjustments described in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall items (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(esii) to Seller.(vi) below;
(ii) if any If the Effective Working Capital exceeds the Estimated Working Capital, the Initial Amount will be increased by the amount which the Effective Working Capital exceeds the Estimated Working Capital;
(iii) If the Effective Working Capital is lower than the Estimated Working Capital, the Initial Amount will be reduced by the amount which the Estimated Working Capital exceeds Working Capital Effective;
(iv) If Effective Net Debt exceeds Estimated Net Debt, Initial Amount will be reduced by the amount which Effective Net Debt exceeds Estimated Net Debt;
(v) If the Effective Net Debt is lower than the estimated net debt amount, the Initial Amount will be increased by the amount at which the Effective Net Debt is less than the Estimated Net Debt; and
(vi) If the Initial Amount Adjustment results in a positive number lower, or a negative number higher than [*****] on behalf of Buyer or Sellers ("Minimum Adjustment Value of Initial Amount Adjustment"), no amount shall be due by either Party.
4.5.2. Within fifteen (15) days after receiving the Notice of Adjustment of Initial Amount, Buyer shall send to the Seller in Charge , and Seller in Charge shall send Buyer a notice expressing their (i) consent to the calculation of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess Initial Amount Adjustment ("Notice of Acceptance of the corresponding amounts that should have been transferred Initial Amount") or retained by (ii) disagreement with the Seller Retained Subsidiaries as provided in calculation of the Final Available Cash Allocation, then Seller shall Initial Amount Adjustment (or shall cause "Notice of Disagreement of the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubtInitial Amount"), in no event shall Seller which case the provisions of Clauses 6.1 and following will be required to pay an amount in excess of the Excess Cash Amountobserved.
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Samples: Agreement for the Purchase and Sale of Equity Interest and Other Covenants (Zenvia Inc.)
Post-Closing Adjustment. The Purchase Price shall be subject to adjustment after Closing as follows. If the Combined Net Assets (aas hereinafter defined) Within 90 days following of the Companies as of the Closing Date is less than $828,529 (as calculated on the worksheet entitled "Opening Balance for Working Capital Computation Based on 12/28/97 Unaudited Balance Sheet" attached hereto as Schedule 1.2(b)), then the Cash Purchase Price shall be reduced by the amount of such deficiency. If the Combined Net Assets of the Companies as of the Closing Date shall exceed $828,529, then the Cash Purchase Price shall be increased by the amount of such excess. As used herein, "Combined Net Assets" shall mean the excess or deficiency, as of the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries Total Assets (x) minus the Total Liabilities, (y) minus the pre-tax net earnings of JEF (translated into United States dollars (USD) at the spot rate as of the Closing Date (giving effect as hereinafter defined), and (z) plus up to USD$12,300 (which represents the tax benefit of the prior year's net operating loss carry forward in JEF through the Closing Date at the applicable Canadian tax rate translated into USD at the spot rate as of December 28, 1997). As used herein, "Total Assets" means the book value of the current assets and fixed assets of the Companies on a combined basis as reflected on the Closing Balance Sheet (as hereinafter defined) and shall not include (i) a receivable payable to the Estimated Available Cash Allocation) Companies from Xxxxxxx X. Xxxxxxxx in the amount of $620,000 (the "Seller Xxxxxxxx Receivable") and (ii) other assets which are not fixed or current assets. "Total Liabilities" means the book value of the total liabilities of the Companies on a combined basis as reflected on the Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which provided that current liabilities shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Dateall amounts, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries whether or not current, outstanding as of the Closing (giving effect to Date under the Estimated Available Cash Allocation) (Companies' revolving credit facility. In addition, the "IDB Buyer parties agree that the Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which Sheet shall include a calculation litigation reserve of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity$50,000.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. (a) The Cash Purchase Price shall be subject to adjustment after the Closing Date as specified in this Section 1.3.
(b) Within 90 one hundred twenty (120) days following the Closing Date, Seller Buyer, at its option, shall prepare and deliver cause PriceWaterhouseCoopers ("Buyer's Accountant") to IDB Buyer a consolidated balance sheet audit the Company's books to determine the accuracy of the Seller Retained Subsidiaries information set forth on the Closing Financial Certificate (the "Post-Closing Audit"). The parties acknowledge and agree that for purposes of determining the net worth of the Company as of the Closing Date, (giving effect i) the value of the assets of the Company shall, except with the prior written consent of Buyer, be calculated as provided in the last paragraph of Section 6.9 and (ii) net worth shall be calculated in accordance with Section 1.2(b). In the event that Buyer's Accountant determines that the actual Company net worth as of the Closing Date was less than the Certified Closing Net Worth, Buyer shall deliver a written notice (the "Financial Adjustment Notice") to the Estimated Available Stockholders' Representative, as defined in Section 1.6, setting forth (i) the determination made by Buyer's Accountant of the actual Company net worth (the "Actual Company Net Worth"), (ii) an explanation in reasonable detail of all calculations made by the Buyer's Accountant in connection with determining the Actual Company Net Worth, including supporting work papers which shall be made available in Santa Ana, California, (iii) the amount of the Cash AllocationPurchase Price that would have been payable at Closing pursuant to Section 1.2(c) had the Actual Company Net Worth been reflected on the Closing Financial Certificate instead of the Certified Closing Net Worth, and (iv) the amount by which the Cash Purchase Price would have been reduced at Closing had the Actual Company Net Worth been used in the calculations pursuant to Section 1.2(c) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed ItemPurchase Price Adjustment"). Other than The Purchase Price Adjustment shall take account of the Disputed Itemsreduction, each Party shall be deemed if any, to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party Cash Purchase Price already taken pursuant to Section 2.7(a1.2(c)(i). In the event that the Buyer's Accountant determines that there is a Net Worth Excess (as defined in Section 1.2(b)(i)), then the terms and conditions of Section 1.2(b)(ii) shall govern.
(c) For 30 The Stockholders' Representative shall have sixty (60) days after from the later delivery receipt of the Dispute Financial Adjustment Notice by Seller or IDB Buyer, Seller and IDB to notify Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Itemsif the Stockholders dispute such Financial Adjustment Notice. If, for any reason, Seller and IDB If Buyer are unable to resolve any Disputed Item has not received notice of such a dispute within such 30 sixty (60) day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") be entitled to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs receive from the calculation to be made by the Independent Accountant Arbitrator.
Stockholders (d) If there is a referral to the Independent Accountant Arbitratorwhich may, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB at Buyer's calculation in sole discretion, be from the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, Pledged Assets as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided defined in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"1.4), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. (ai) Within 90 days following If the Closing DateFinal Net Working Capital as determined in accordance with Section 2.3(a)(ii) exceeds the Reference Working Capital, Seller Purchaser shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect pay to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation Sellers by wire transfer of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver immediately available funds to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications one or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered more accounts designated by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to Sellers the amount by which the aggregate calculation of Final Net Working Capital exceeds the Disputed Items by each of them differs from Reference Working Capital plus any interest accruing on such amount at the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position Reference Rate beginning on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on Closing Date through the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days date of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Sellerpayment.
(ii) If the Final Closing Cash as determined in accordance with Section 2.3(a)(ii) is positive, Purchaser shall pay to the Sellers by wire transfer of immediately available funds to one or more accounts designated by the Sellers the amount by which the Final Closing Cash is greater than zero plus interest accruing on such amount at the Reference Rate beginning on the Closing Date through the date of payment.
(iii) Any Net Working Capital Shortfall and any Closing Cash Shortfall (together, the “Shortfall”), which amount shall include interest accruing on such funds in the Preliminary Purchase Price Escrow Account (the rate of such interest accruals being the “Reference Rate”) beginning on the Closing Date through the date of payment, shall be released to the Purchaser from the Preliminary Purchase Price Escrow Account, and the remaining amount, if any any, in the Purchase Price Escrow Account shall be released to one or more accounts designated by the Sellers; provided, however, that if the Shortfall exceeds the amount on deposit in the Preliminary Purchase Price Escrow Account, such excess shall be payable by the Sellers.
(iv) Any adjustment payment pursuant to Section 2.3(b) shall be paid within three Business Days after the determination of the amounts that were transferred or retained by Final Net Working Capital and the Seller Retained Subsidiaries as provided in the Estimated Available Final Closing Cash Allocation were in excess pursuant to Section 2.3(a)(ii).
(v) Any right of the corresponding amounts that should have Purchaser to set-off and/or to withhold any adjustment payment pursuant to Section 2.3(b) shall be prohibited unless Purchaser’s respective set-off claim is undisputed or has been transferred or retained confirmed by final court decision. The Preliminary Purchase Price shall be adjusted in accordance with the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall aggregate amount paid (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(esA) to IDB Buyerthe Sellers pursuant to Sections 2.3(b)(i) and 2.3(b)(ii), which amount shall increase the Preliminary Purchase Price, or (B) to the Purchaser pursuant to Section 2.3(b)(iii), which amount shall reduce the Preliminary Purchase Price. Notwithstanding The Preliminary Purchase Price as so adjusted is referred to herein as the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount“Final Purchase Price”.
Appears in 1 contract
Post-Closing Adjustment. (ai) Within 90 45 days following after the Closing Date, Seller Parent shall prepare and deliver to IDB Buyer the Stockholder Representative a statement, which statement shall be substantially in the form of Section 2.13 of the Disclosure Schedules (the “Closing Statement”), attaching the following items and certifying as to Parent’s good faith preparation and calculation of the following items:
(A) an unaudited consolidated balance sheet of the Seller Retained Subsidiaries Target as of 11:59 P.M., New York City, New York time, on the Closing (giving effect to the Estimated Available Cash Allocation) Date (the "Seller “Closing Balance Sheet"”), which shall be prepared in conformity with GAAP applied on a basis consistent with ;
(B) the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Closing Working Capital derived from based on the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity together with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries variance between the Estimated Closing Working Capital and Tangible Common EquityClosing Working Capital;
(C) the Closing Accrued Tax Amount (including each component item), together with a calculation of the variance between the Estimated Closing Accrued Tax Amount and the Closing Accrued Tax Amount;
(D) the Closing Indebtedness (including each component item), together with a calculation of the variance between the Estimated Closing Indebtedness and the Closing Indebtedness; and
(E) a calculation of the Post-Closing Adjustment.
(ii) After each of the Closing Working Capital, Closing Accrued Tax Amount, Closing Indebtedness has been finally determined in accordance with this Section 2.13 (the Closing Working Capital, Closing Accrued Tax Amount, Closing Indebtedness, in each case derived from case, as so finally determined being referred to herein as the items “Final Closing Working Capital”, “Final Closing Accrued Tax Amount”, and amounts on such balance sheet“Final Closing Indebtedness”), the Aggregate Merger Consideration shall be, if necessary, further adjusted to reflect the Post-Closing Adjustment. The Parties agree that the purpose of preparing the “Post-Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item Adjustment” shall be an amount within equal to (A) the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in sum of the Seller Final Closing Balance Sheet or IDB Buyer Working Capital, minus the Final Closing Balance Sheet, as applicable, on the one handAccrued Tax Amount, and minus the applicable Dispute NoticeFinal Closing Indebtedness, on minus (B) the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award sum of the Independent Accountant Arbitrator as to Estimated Closing Working Capital, minus the Disputed Items shall be final and binding onEstimated Closing Accrued Tax Amount, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in minus the Estimated Available Cash Allocation were in excess of Closing Indebtedness. If the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash AllocationPost-Closing Adjustment is a positive number, then IDB Buyer Parent shall pay (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(esSurviving Corporation to pay) to Seller.
the Stockholders (iion a pro rata basis in accordance with their respective Participating Percentages) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess equal to the Post-Closing Adjustment. If the Post-Closing Adjustment is a negative number, Parent shall be entitled to payment of an amount equal to the Excess Cash AmountPost-Closing Adjustment from the Escrow Account.
Appears in 1 contract
Samples: Merger Agreement (Teladoc, Inc.)
Post-Closing Adjustment. The purchase price paid pursuant to Section 1.01 shall be reduced by an aggregate amount of deficiencies (athe "Post- Closing Adjustment") equal to the sum of (A) (B) (C) and (D), where (A) (B) (C) and (D) shall be as follows:
(A) is the greater of (1) any shortfall between the actual VFICO net worth and the Required Amount of net worth on the VFICO Closing Financial Certificate or (2) any shortfall between the actual available cash balance of VFICO and the Required Amount of available cash balance of VFICO on the VFICO Closing Financial Certificate;
(B) is the greatest of (1) any shortfall between the actual Net Capital of VFAM and the Required Amount of Net Capital on the VFAM Closing Financial Certificate or (2) any shortfall between the actual available cash balance of VFAM and the Required Amount of cash balance of VFAM on the VFAM Closing Financial Certificate or (3) any shortfall between the actual VFAM cash plus receivables minus current liabilities compared to the Required Amount on the VFAM Closing Financial Certificate or (4) any shortfall between the actual VFAM net worth and the Required Amount on the VFAM Closing Financial Certificate;
(C) is any long term liabilities of VFICO; and
(D) is any long term liabilities of VFAM. Within 90 five (5) business days following the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet after notification of the Seller Retained Subsidiaries as amount of the Post- Closing (giving effect Adjustment, each Shareholder shall pay to Buyer his or her Proportionate Share of the Post-Closing Adjustment. Such Proportionate Share shall equal the fraction the numerator of which is the purchase price paid to such Shareholder at Closing as set forth on Annex I and the denominator of which is the purchase price paid to all Shareholders at Closing as set forth on Annex I. If any Shareholder fails to promptly make such payment, Buyer shall have the right to offset the amount of such payment by a claim against the amounts escrowed for the benefit of such Shareholder under Sections 2.01 and 3.01 of this Agreement. Upon demand by Buyer to the Estimated Available Cash AllocationEscrow Agent (with notice to the Shareholder), the Escrow Agent shall pay such Proportionate Share of the Post-Closing Adjustment to Buyer, or the Buyer may deduct any such deficiencies from any payments to which such Shareholder may become entitled under his or her Contingent Earnings Agreement as defined in Section 9.02(i) hereto or Additional Stock Payments as defined in Section 1.07 hereto (or which have been deposited into escrow for the benefit of such shareholder, by demand to the Escrow Agent as provided above). Any amount still not collected from such Shareholder shall remain the personal obligation of that Shareholder. If such Shareholder would not have been entitled to receive funds in escrow which have been paid to Buyer pursuant to this Section 1.05(d) (the "Seller Closing Balance SheetDisqualified Amount")) because the conditions to distribution of such funds would not have been satisfied by the continued employment by such Shareholder with VFAM, which then the liability of such Shareholder to Buyer shall be prepared in conformity with GAAP applied on a basis consistent with increased by the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which Disqualified Amount. Any amounts not paid by any Shareholder when due shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived bear interest from the items and amounts on such balance sheet. Within 90 days following Closing Date until the Closing Date, IDB Buyer shall prepare and deliver to Seller date of payment of a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect rate equal to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyerprime rate, as applicablereported from time to time in The Wall Street Journal, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a)eastern edition.
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Samples: Stock Purchase Agreement (Susquehanna Bancshares Inc)
Post-Closing Adjustment. (a) The Cash Purchase Price shall be subject to adjustment after the Closing Date as specified in this Section 1.3.
(b) Within 90 one hundred twenty (120) days following the Closing Date, Seller at its option, Buyer shall prepare and deliver cause PriceWaterhouseCoopers ("Buyer's Accountant") to IDB Buyer a consolidated balance sheet audit DGI's books to determine the accuracy of the Seller Retained Subsidiaries information set forth on the Closing Financial Certificate (the "Post-Closing Audit"). The parties acknowledge and agree that for purposes of determining the net worth of DGI as of the Closing Date (giving i), the value of the assets of DGI shall, except with the prior written consent of Buyer, be calculated as provided in the last paragraph of Section 6.9 and (ii) full effect shall be given to the Estimated Available manner in which the Net Worth Target of DGI has been calculated as set forth on Schedule 1.2(b). In the event that Buyer's Accountant determines that the actual net worth of DGI as of the Closing Date was less than the Certified Closing Net Worth, Buyer shall deliver a written notice (the "Financial Adjustment Notice") to the Stockholders' Representative, as defined in Section 1.6, setting forth (i) the determination made by Buyer's Accountant of the actual net worth of DGI (the "Actual Net Worth"), (ii) the amount of the Cash AllocationPurchase Price that would have been payable at Closing pursuant to Section 1.2(c) had the Actual Net Worth been reflected on the Closing Financial Certificate instead of the Certified Closing Net Worth, and (iii) the amount by which the Cash Purchase Price would have been reduced at Closing had the Actual Net Worth been used in the calculations pursuant to Section 1.2(c) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed ItemPurchase Price Adjustment"). Other than The Purchase Price Adjustment shall take account of the Disputed Itemsreduction, each Party shall be deemed if any, to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party Cash Purchase Price already taken pursuant to Section 2.7(a1.2(c)(i).
(c) For 30 The Stockholders' Representative shall have thirty (30) days after from the later delivery receipt of the Dispute Financial Adjustment Notice by Seller or IDB Buyer, Seller and IDB to notify Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Itemsif the Stockholders dispute such Financial Adjustment Notice. If, for any reason, Seller and IDB If Buyer are unable to resolve any Disputed Item has not received notice of such a dispute within such 30 thirty (30) day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") be entitled to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs receive from the calculation to be made by the Independent Accountant Arbitrator.
Stockholders (d) If there is a referral to the Independent Accountant Arbitratorwhich may, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB at Buyer's calculation in sole discretion, be from the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, Pledged Assets as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided defined in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"1.4), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 days following If the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries Net Working Capital as of the Closing Date as conclusively determined as provided in Section 3.5 (giving effect such conclusive determination is referred to the Estimated Available Cash Allocation) (the herein as "Seller Closing Balance SheetCertified Net Working Capital"), which is less than $6,180,000, then Sellers cause the amount of such deficiency to be paid to Buyer out of the Purchase Price Escrow Amount. The parties acknowledge that $700,000 was used as the Unfunded Pension Liability amount in computing the Net Working Capital base amount of $6,180,000 for purposes of this Section as Buyer is assuming that amount of Unfunded Pension Liability as of the Closing. The Unfunded Pension Liability is reflected in accounts 10000000 and 10000000 on Schedule 3.5. In the event that the Purchase Price Escrow Amount is less than the amount of the adjustment, if any, payable to Buyer under this Section 3.6(a), Sellers shall pay or cause to be paid, to Buyer the amount of such deficiency. The positive remainder, if any, of (i) the Purchase Price Escrow Amount plus any net accrued interest earned on the Purchase Price Escrow Amount, less (ii) the amount of the adjustment, if any paid to Buyer out of the Purchase Price Adjustment Escrow under this Section 3.6(a), shall be prepared in conformity with GAAP applied on a basis paid to Sellers. In the event that no amount is payable to Buyer under this Section 3.6(a), then the entire Purchase Price Escrow Amount, plus all net accrued interest earned thereon, shall be paid to Sellers. If the Certified Net Working Capital is greater than $6,180,000, then Buyer shall pay, or cause to be paid, to Sellers the amount of such excess. Any payment pursuant to this Section 3.6(a) shall be made within five (5) business days following the determination of Certified Net Working Capital (such fifth business day, the "Due Date"). Any payment not made by the Due Date therefor shall bear interest from the Due Date at the rate of six percent (6%) per annum. Any amount payable to Buyer under this Section 3.6(a) shall be paid, first, out of the Purchase Price Adjustment Escrow. Buyer and Sellers shall give instructions to the escrow agent consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation provisions of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equityparagraph.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party Payments made pursuant to this Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection 3.6 shall be made pursuant by wire transfer of immediately available funds to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made an account designated by the Independent Accountant Arbitratorparty receiving such payment.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Samples: Asset Purchase Agreement (Jpe Inc)
Post-Closing Adjustment. (ai) Within 90 As soon as practicable after the Closing Date, but in any event within ninety (90) calendar days following the Closing Date, Seller Buyer shall prepare or cause to be prepared and deliver to IDB Buyer the Seller Representatives a consolidated closing balance sheet for the Company setting forth the book value of the assets and liabilities of the Company as of the Effective Time (the “Closing Balance Sheet”) and determine the calculations of (a) the Net Working Capital as of the Effective Time (the “Final Closing Net Working Capital”), (b) the Cash amount as of the Effective Time (the “Final Cash Amount”), (c) the Adjusted Debt Amount as of the Effective Time (the “Final Adjusted Debt Amount”), (d) the amount of Seller Retained Subsidiaries Transaction Expenses that were unpaid as of the Closing (giving effect to the “Final Seller Transaction Expenses”) and (e) the Final Seller Closing Payment (collectively, with (a) through (e) the “Final Closing Statement”) based on such determinations. Such calculations shall not include any changes in assets or liabilities as a result of purchase accounting adjustments or other changes arising from or resulting as a consequence of the transactions contemplated hereby. The Closing Statement shall set forth a reconciliation between the estimated calculations reflected in set forth in the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, Estimated Closing Net Working Capital, Estimated Cash Amount, Estimated Adjusted Debt Amount, and Estimated Seller Transaction Expenses, and those calculations set forth on the "Closing Balance Sheets")Statement including an explanation for all such changes and all reasonable supporting documentation used in calculating each of the foregoing to the extent such documentation is readily available. Additionally, which the calculations shall be prepared in conformity with GAAP applied based on a basis consistent with the preparation offacts, circumstances, and using information available as they exist prior to the same accounting methodsClosing and shall exclude the effect of any act, policiesdecision, practiceschange in circumstance, procedures and estimation methods as those used in development or event arising or occurring on or after the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheetClosing. The Parties agree that the purpose of preparing the Closing Balance Sheets Sheet and determining the Available amounts of Cash, Adjusted Debt Amount, unpaid Seller Transaction Expenses and Net Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 Final Seller Closing Payment is to measure changes in the amount of Available Cashforegoing amounts, Working Capital and Tangible Common Equity and in undertaking such processes are processes, the Parties shall not intended to permit the introduction of introduce different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing determining such amounts not reflected in the calculations of the Closing Balance Sheets or determining Available CashSheet, Estimated Closing Net Working Capital or included in the Accounting Principles. Without limiting the foregoing, the Final Closing Net Working Capital shall not contain any categories or types of assets or liabilities or other accounts, reserves or line items not reflected in the calculations of the Estimated Closing Net Working Capital or included in the Accounting Principles. If Buyer fails to deliver the Closing Balance Sheet and Tangible Common Equitycalculations contemplated by this paragraph within ninety (90) days following the Closing, then the Closing Estimates shall be final, not subject to further adjustment and binding for all purposes (including calculating the Purchase Price).
(bii) Following delivery If the Seller Representatives wish to dispute the Closing Balance Sheet, Final Closing Net Working Capital, the Final Cash Amount, the Final Adjusted Debt Amount, the Final Seller Transaction Expenses, and/or the Final Seller Closing Payment determined by Buyer, then the Seller Representatives shall deliver to Buyer a written statement (as such statement may be updated pursuant to paragraph (iii) below, the “Dispute Notice”) describing with reasonable detail the basis for any such dispute within fifty (50) calendar days after receiving the Closing Balance Sheet and calculations required by Section 2(f)(i); provided, however, that such disputes shall be limited to objections based on (i) failure to comply with the terms of this Agreement and (ii) mathematical error. If the Seller Representatives do not deliver the Dispute Notice to Buyer within such fifty (50) calendar day time period, then the determination of the Final Closing Net Working Capital, the Final Cash Amount, the Closing Balance Sheet, Final Adjusted Debt Amount, the Final Seller Transaction Expenses and the Final Seller Closing Payment shall be deemed final and accepted by the Seller Representatives. Any Dispute Notice must set forth in reasonable detail (x) any item delivered by Buyer in the Final Closing Statement which the Seller believes has not been prepared in accordance with this Agreement and, to the extent then known or able to be estimated, the purported correct amount of such item and (y) to the extent then known or able to be estimated, the Seller Representatives’ alternative calculation of each such item and the Final Seller Closing Payment. Subject to Section 2(f)(i), any item or amount to which no dispute is raised in a Dispute Notice will be final, conclusive and binding on the Parties on the fifty-first (51st) calendar day after the delivery to the Seller Representatives of the Final Closing Statement. If the Seller Representatives deliver a Dispute Notice, and Buyer’s calculations delivered pursuant to Section 2(e)(i) show a Final Excess, then at any time within five (5) Business Days after the Seller Representatives provide a written request therefor, the Buyer and the Seller Representatives shall execute and deliver joint written instructions to the Escrow Agent to pay to each Seller the amount of the Final Excess in the manner forth in the Funds Flow Memorandum. If the Seller Representatives deliver a Dispute Notice, and Buyer’s calculations delivered pursuant to Section 2(e)(i) show an amount in dispute that is less than the amount of the Adjustment Escrow Amount, then at any time within five (5) Business Days after the Seller Representatives provide a written request therefor, the Buyer shall execute and deliver joint written instructions to the Escrow Agent to pay the portion of the Adjustment Escrow Fund that exceeds the amount in dispute to the accounts designated by the Seller Representatives on behalf of the Sellers as set forth in the Funds Flow Memorandum. Buyer and the Seller Representatives will use reasonable efforts to resolve any such dispute themselves. If any such dispute is not finally resolved within thirty (30) calendar days after Buyer’s receipt of the Dispute Notice (the “Discussion Period”), either Buyer or the Seller Representatives may promptly thereafter cause PricewaterhouseCoopers or another mutually acceptable third party accounting firm (the “Independent Accountant”), acting as an expert and not as an arbitrator, to resolve such unresolved disputed items duly set forth in the Dispute Notice delivered pursuant to this Section 2(f)(ii) (the “Disputed Items”). For the avoidance of doubt, the Independent Accountant shall apply the Accounting Principles and the other principles set forth in this Agreement (including the requirements of Section 2(f)(i)) for purposes of the resolving the Disputed Items, and the engagement letter for the Independent Accountant shall include the agreement of the Independent Accountant to apply the Accounting Principles. Buyer and the Seller Representatives shall keep each other copied on any correspondence with the Independent Accountant, and shall not engage in telephone calls or meetings with the Independent Accountant unless the other Party is provided with reasonable advance notice of the call or meeting and an opportunity to participate. Within twenty-five (25) calendar days after submission to the Independent Accountant for resolution, Buyer and the Seller Representatives each shall submit a written presentation indicating in writing its position on each Disputed Item and each such Party’s resulting determination of the amount of the Final Closing Net Working Capital, Final Cash Amount, the Final Adjusted Debt Amount, the Final Seller Transaction Expenses and the Final Seller Closing Payment. Within twenty-five (25) calendar days after submission of each Party’s opening written presentation, Buyer and the Seller Representatives each shall submit a written response thereto. The Independent Accountant shall base its determination solely on the terms, definitions and other applicable provisions of this Agreement, the written presentations of the Parties in accordance with the preceding sentence, and any written responses to interrogatories of the Independent Accountant (if applicable), and shall not base its determinations upon independent review. The Parties shall instruct the Independent Accountant to make a written determination on each disputed matter (and no other matters) no later than sixty (60) calendar days after submission to the Independent Accountant for resolution and such determination will be conclusive and binding upon the Parties with respect to each disputed matter, absent fraud or manifest error. The Independent Accountant shall, by applying the principles set forth in this Agreement (including the requirements of Section 2(f)(i)) and the Accounting Principles, as applicable), only decide the specific Disputed Items and its decision for each Disputed Item must be within the range of values assigned to each such item by the Buyer (in the Closing Balance Sheet or in Buyer’s calculation of the Final Closing Net Working Capital, the Final Cash Amount, the Final Adjusted Debt Amount, the Final Seller Transaction Expenses or the Final Seller Closing Payment) or the Seller Representatives (in the Dispute Notice as may be updated pursuant to paragraph (iii) below). The proposed Closing Balance Sheet and the IDB Final Closing Net Working Capital, the Final Cash Amount, the Final Adjusted Debt Amount, the Final Seller Transaction Expenses and the Final Seller Closing Payment will be revised by the Independent Accountant as appropriate to reflect the resolution of any such claims pursuant to this Section 2(f)(ii). The fees and expenses of the Independent Accountant incurred in the resolution of such dispute shall be borne by Buyer and the Seller Representatives (on behalf of Sellers) in such proportion as is appropriate to reflect the relative benefits received by Buyer and the Sellers from the resolution of the dispute, which proportionate allocation shall be determined by the Independent Accountant at the time the determination of the Independent Accountant is rendered on the merits. For example, if the Seller Representatives challenge the calculation of the Final Closing Balance Sheet Net Working Capital by an amount of $100,000, but the Independent Accountant determines that the Seller Representatives have a valid claim for only $40,000 (i.e., the Seller Representatives prevail as to 40% of its claim), then Buyer shall bear 40% of the fees and prior expenses of the Independent Accountant and the Seller Representatives (on behalf of the Sellers) shall bear the other 60% of such fees and expenses. Each of the Parties agrees to use its commercially reasonable efforts to cooperate with the deadline for delivering Independent Accountant (including by executing a Dispute Noticecustomary engagement letter reasonably acceptable to it) and to cause the Independent Accountant to resolve any such dispute as soon as practicable after the commencement of the Independent Accountant’s engagement.
(iii) For purposes of this Section 2(f), each of Seller and IDB Buyer will provide the other Party and its Seller Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, records used in connection with such other Party's review the preparation of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available the Final Closing Net Working Capital, the Final Cash and Working Capital set forth therein) or Amount, the IDB Buyer Closing Balance Sheet (including Final Adjusted Debt Amount, the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, Final Seller Transaction Expenses and the basis for such dispute together with such Party's calculation Final Seller Closing Payment and shall make its (and the Company) financial staff and accountants (subject to the execution of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed customary work paper access letters if requested) reasonably available to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the Representatives and their accountants and other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller representatives and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitratorupon reasonable notice and during normal business hours during the (a) review by the Seller Representatives of the calculations of the Final Closing Net Working Capital, each the Final Cash Amount, the Closing Balance Sheet and the Final Adjusted Debt Amount, the Final Seller Transaction Expenses and the Final Seller Closing Payment, (b) the Discussion Period and (c) the resolution by Buyer and the Seller Representatives or the Independent Accountant of Seller any objections thereto. If the Buyer does not provide access to any books, records, working papers, and IDB Buyer agrees, if personnel reasonably requested by the Independent Accountant ArbitratorSeller Representatives or any of their authorized representatives, as required by this Section, within three Business Days of request therefor (or such shorter period as may remain in the Discussion Period), the Discussion Period shall be extended by one day for each additional day required for Buyer to execute a reasonable engagement letter and fully respond to such request. During the Discussion Period, the Seller Representatives shall submit be entitled to update the Dispute Notice from time to time to remove items or amounts in dispute by providing written notice thereof to Buyer based on information learned or provided under this paragraph (provided, however, that in no instance shall the Seller Representatives be entitled to update the Dispute Notice to add additional items or amounts in dispute to the Independent Accountant Arbitrator Dispute Notice); provided that such access does not later than ten Business Days after its appointment(i) unreasonably disrupt the normal operations of the Parties’ respective businesses or (ii) based on advice of counsel (A) result in the waiver of any attorney client privilege, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination (B) create any Liability under applicable Law or (C) violate any obligation with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9confidentiality.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 days following Not less than three (3) Business Days prior to the Closing Date, Seller the Company shall prepare and deliver to IDB Buyer a consolidated the Purchaser (i) an unaudited balance sheet prepared as a good faith estimate of the Seller Retained Subsidiaries Company’s balance sheet as of the Closing (giving effect immediately prior to the Estimated Available Cash Allocation) Effective Time (the "Seller “Estimated Closing Balance Sheet"”), which shall be prepared in conformity with GAAP applied (ii) based on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" , a statement, certified by the Chief Executive Officer or Vice President of Finance of the Company, detailing the Company’s calculation of (A) the Closing Cash (the “Estimated Closing Cash”), (B) the Closing Indebtedness (the “Estimated Closing Indebtedness”), and together (C) the Net Working Capital (such statement, the “Estimated Closing Statement,” and the calculation of the Net Working Capital as set forth in the Estimated Closing Statement, the “Estimated Closing Net Working Capital”), (iii) a statement (the “Estimated Transaction Expense Statement”), certified by the Chief Executive Officer or Vice President of Finance of the Company, setting forth the Company’s good faith estimate of the amount of Unpaid Transaction Expenses (the “Estimated Unpaid Transaction Expenses”), including an itemized list identifying each Person entitled to receive payment of any portion of the Estimated Unpaid Transaction Expenses, the total amount owed to such Person, a description of the nature of expenses owed to such person and payment instructions for the payment of such Estimated Unpaid Transaction Expenses, and (iv) any additional information reasonably requested by the Purchaser with respect to the Seller amounts or calculations set forth in the Estimated Closing Balance Sheet, the "Estimated Closing Statement or the Estimated Transaction Expense Statement. The Estimated Closing Balance Sheets"), which Sheet shall be prepared (i) calculated in conformity with GAAP applied on a basis manner consistent with the preparation of, and using the same accrual method accounting methods, policies, practices, procedures and estimation methods (except as those used in the preparation otherwise Table of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.Contents
Appears in 1 contract
Samples: Merger Agreement (Gannett Co., Inc.)
Post-Closing Adjustment. (ai) Within 90 forty-five days following after the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated statement setting forth its calculation of Closing Working Capital, which statement shall contain an audited balance sheet of IDB Buyer and the IDB Subsidiaries Company as of the Closing Date (without giving effect to the Estimated Available Cash Allocation) transactions contemplated herein), a calculation of Closing Working Capital (the "IDB “Closing Working Capital Statement”) and a certificate of the Chief Financial Officer of Buyer that the Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be Working Capital Statement was prepared in conformity accordance with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methods as those methodologies that were used in the preparation of the balance sheet Most Recent Financial Statements for the most recent fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on end as if such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital Statement was being prepared and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount audited as of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Sellerfiscal year end.
(ii) if The post-closing adjustment shall be an amount equal to the Closing Working Capital minus the Estimated Closing Working Capital (the “Post-Closing Adjustment”). If the Post-Closing Adjustment is a positive number, Buyer shall not owe any additional consideration to the Seller. If the Post-Closing Adjustment is a negative number, the Seller shall pay to Buyer an amount equal to the Post-Closing Adjustment.
(iii) Any payment of the amounts that were transferred or retained Post-Closing Adjustment, together with interest calculated as set forth below, shall be due within ten Business Days of the delivery of the Post-Closing Adjustment and shall be paid by wire transfer of immediately available funds to such account as is directed by Buyer. The amount of any Post-Closing Adjustment shall bear interest from and including the Closing Date to but excluding/and including the date of payment at a rate per annum equal to 8%. Such interest shall be calculated daily on the basis of a 365 day year and the actual number of days elapsed. In the event the Seller Retained Subsidiaries as provided in does not make a required Post-Closing Adjustment payment, such amount (including any accrued but unpaid interest) shall be reduced from the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash AmountFuture Purchase Price payments.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 As soon as practicable, but no later than sixty (60) days following after the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller Parent a consolidated balance sheet statement (the “Closing Statement”) setting forth Buyer’s calculation of IDB Buyer (i) the Closing Date Cash, (ii) the Closing Date Indebtedness, (iii) the Closing Date Working Capital and (iv) the IDB Subsidiaries as “Final Purchase Price”, which shall equal (A) the Base Payment, plus (B) the amount of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Date Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure minus (C) the amount of Available Cashthe Closing Date Indebtedness, plus (D) the Closing Date Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgmentsAdjustment (which, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, may be a positive or negative number). Buyer’s calculations set forth in no event the Closing Statement (collectively, the “Proposed Purchase Price Calculations”) shall Seller be required delivered with reasonable supporting detail with respect to pay an amount the calculation of such amounts. If Buyer does not deliver a Closing Statement to Parent within such sixty (60)-day period, the Closing Notice and applicable calculations set forth therein shall conclusively be deemed to be the Closing Statement; it being understood that Parent shall have the right to deliver a Purchase Price Dispute Notice and exercise its rights set forth in excess this Section 2.08 in respect of such deemed Closing Statement to reflect a more accurate calculation of the Excess Cash AmountFinal Purchase Price as compared to the calculation of the Estimated Purchase Price as set forth in the Closing Notice.
(b) Within forty-five (45) days of receipt of the Closing Statement, Parent may provide written notice to Buyer disputing all or a part of the Proposed Purchase Price Calculations (such notice, a “Purchase Price Dispute Notice”). If Parent does not provide a Purchase Price Dispute Notice to Buyer within such forty-five (45)-day period, then the parties agree that the Proposed Purchase Price Calculations set forth in the Closing Statement shall be deemed final and binding on the parties hereto. If a Purchase Price Dispute Notice is provided to Buyer, then Buyer and Parent shall use commercially reasonable efforts to resolve the disputed items during the thirty (30)-day period commencing on the date of Buyer’s receipt of the Purchase Price Dispute Notice (the “Resolution Period”). In the event that Buyer and Parent resolve in writing all disputed items within the Resolution Period, such amounts so agreed in writing by Buyer and Parent will be final and binding on the parties hereto.
(c) If Parent and Buyer do not agree upon a final resolution with respect to any disputed items within the Resolution Period, then the remaining items in dispute shall be submitted immediately to a mutually agreeable accounting firm to be determined by Parent and Buyer, or, if such firm declines to be retained to resolve the dispute, another nationally recognized, independent accounting firm reasonably acceptable to Buyer and Parent (in either case, the “Accounting Firm”). The parties agree to instruct the Accounting Firm to render a determination of the applicable dispute within forty-five (45) days after referral of the matter to such Accounting Firm, which determination must be in writing and must set forth, in reasonable detail, the basis therefor. The terms of appointment and engagement of the Accounting Firm shall be as agreed upon between Parent and Buyer as promptly as reasonably practicable, acting reasonably and in good faith, and any associated engagement fees shall be initially borne fifty percent (50%) by Parent and fifty percent (50%) by Buyer; provided that such fees shall ultimately be borne by Parent and Buyer in inverse proportion as they may prevail on matters resolved by the Accounting Firm, which proportionate allocations shall also be determined by the Accounting Firm at the time the determination of the Accounting Firm is rendered on the merits of the disputed items. For example, should the items in dispute total in amount to $1,000 and the Accounting Firm awards $600 in favor of Parent’s position, sixty percent (60%) of the costs of its review would be borne by Buyer and forty percent (40%) of the costs would be borne by Parent. Except as provided in the preceding sentence, all other costs and expenses incurred by the parties hereto in connection with resolving any dispute hereunder before the Accounting Firm shall be borne by the party incurring such cost and expense. In resolving the disputed items, the Accounting Firm (A) shall be bound by the provisions of this Section 2.08, (B) shall act as expert and not as arbitrator, (C) may not assign a value to any item greater than the greatest value claimed for such item or less than the smallest value for such item claimed by either Buyer or Parent and (D) shall limit its decision to such items as are in dispute and to only those adjustments as are necessary for the Proposed Purchase Price Calculations to comply with the provisions of this Agreement. Such determination of the Accounting Firm shall, absent manifest error or fraud, be conclusive, final and binding upon the parties hereto.
(d) The parties agree that they will, and agree to cause their respective Representatives to, cooperate and assist in the calculation of the Final Purchase Price and in the conduct of the review by the Accounting Firm of any proposed calculations of the Final Purchase Price or the components thereof, including the making available, to the extent necessary, of books, records, work papers and personnel.
(e) If the Final Purchase Price is equal to or greater than the Estimated Purchase Price, then Buyer shall promptly (but in any event within ten (10) Business Days after the date on which the Final Purchase Price is determined pursuant to this Section 2.08) pay to Parent or any other Affiliate of Parent as designated by Parent in writing, an aggregate cash amount equal to such excess (if any), by wire transfer of immediately available funds to the account or accounts as directed by Parent in the Closing Notice (or such other accounts as Parent shall designate in writing to Buyer).
(f) If the Estimated Purchase Price is greater than the Final Purchase Price, then Parent shall promptly (but in any event within ten (10) Business Days after the date on which the Final Purchase Price is determined pursuant to this Section 2.08) pay to Buyer an aggregate cash amount equal to such excess (if any), by wire transfer of immediately available funds to the account or accounts as Buyer shall designate in writing to Parent.
(g) Any amount paid pursuant to this Section 2.08 shall be treated as an adjustment to the Closing Payment for tax reporting purposes.
Appears in 1 contract
Samples: Stock and Asset Purchase Agreement (Campbell Soup Co)
Post-Closing Adjustment. (a) Within 90 No later than 120 days following after the Closing Date, Seller shall prepare Date (or such later date as mutually agreed by Buyer and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"Seller), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller (i) a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries Company as of the Measurement Time (together with supporting documentation reasonably necessary for Seller to verify such balance sheet, the “Final Balance Sheet”), (ii) worksheets showing Buyer’s calculation of the: (A) Indebtedness of the Company as of the Measurement Time, plus the amount of any premiums, penalties, fees, make-whole payments or other charges incurred as a result of the payment thereof on the Closing Date as reflected in the applicable Payoff Letter (giving effect collectively, “Final Indebtedness”), (B) the amount of all Transaction Expenses unpaid as of the Measurement Time (“Final Transaction Expenses”), (C) Net Working Capital derived from the Final Balance Sheet (based upon, and subject to the Estimated Available Cash Allocationadjustments set forth in, the definitions of Current Assets and Current Liabilities) (the "IDB Buyer “Final Net Working Capital”), (D) the amount of all Incremental Equity Capital, if applicable (the “Final Incremental Equity Capital”), (E) the amount of all Gap Period Extraordinary Expenditures, if any (the “Final Gap Period Extraordinary Expenditures”), and (F) the Interim Tax Amount (the “Final Interim Tax Amount”) and (iii) Buyer’s calculation of the Final Closing Balance Sheet" and Securities Payment, in each case, together with a worksheet showing the Seller difference, if any, between any Estimated Closing Item and the corresponding Final Closing Item. The Final Balance Sheet, Final Indebtedness, Final Transaction Expenses, the "Final Net Working Capital, the Final Closing Balance Sheets"Securities Payment, the Final Incremental Equity Capital (if applicable), which the Final Gap Period Extraordinary Expenditures (if any), and the Final Interim Tax Amount (together, the “Final Closing Items”) shall be prepared in conformity with GAAP applied good faith and on a basis consistent with the preparation of, Audited Financial Statements. Seller and using the same accounting methods, policies, practices, procedures its representatives shall be entitled to reasonable access during normal business hours to all books and estimation methods as those used in the preparation records of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated Company as may be reasonably requested by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies Seller for the purpose of preparing this Section 2.4. Buyer and Seller shall promptly provide to each other all documents reasonably requested by the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery other to verify any of the items set forth in the Final Closing Items calculations. Seller Closing Balance Sheet and shall have the IDB Buyer Closing Balance Sheet and prior to the deadline right for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review 30 days following receipt of the Seller Final Closing Balance Sheet Items to object to any of the Final Closing Items or the IDB Buyer Closing Balance Sheet, as applicablecalculation thereof. Each of Any objection made by Seller shall be made in writing and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount objection in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item")reasonable detail. Other than the Disputed Items, each Party Seller shall be deemed to have accepted all items waived any rights to object under this Section 2.4 unless Seller furnishes its written objections to Buyer within such 30-day period. If Seller delivers an objection within such 30-day period, then Buyer and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Itemsthe objections. If, at the end of a 15-day period from the date of delivery of any objection by Seller or such longer period as may be mutually agreed by Buyer and Seller, there are any objections that remain in dispute, then the remaining objections in dispute shall be submitted for any reasonresolution to the Oklahoma City, Oklahoma offices of the accounting firm of Ernst & Young (the “Closing Item Arbitrator”) and, in connection with the engagement for such submission, Seller and IDB Buyer are unable shall execute any engagement, indemnity and other agreements as the Closing Item Arbitrator may reasonably require as a condition to resolve any Disputed Item within such 30 day period, engagement in form and substance reasonably acceptable to each of the Seller and IDB Buyer. The Closing Item Arbitrator shall determine the Final Closing Securities Payment as promptly as reasonably practicable after the objections that remain in dispute are submitted to the Closing Item Arbitrator, but in any event within 30 days after such objections that remain in dispute are submitted to the Closing Item Arbitrator. If any objections are submitted to the Closing Item Arbitrator for resolution, (i) each of Buyer and Seller shall furnish to the Closing Item Arbitrator such workpapers and other documents and information relating to such objections as the Closing Item Arbitrator may request and are reasonably available to that Party (or its independent public accountants) and will be afforded the opportunity to present to the Closing Item Arbitrator any material relating to the determination of the matters in dispute and to discuss such determination with the Closing Item Arbitrator, provided that neither Seller nor Buyer shall engage Deloitte & Touche LLP in any communication or correspondence with the Closing Item Arbitrator outside of the presence, or without the inclusion, of the other; (ii) the "Independent Accountant Closing Item Arbitrator must not adopt an amount of the Final Closing Securities Payment that is greater than the amount submitted by Seller or less than the amount submitted by Buyer; and (iii) the determination by the Closing Item Arbitrator of the Final Closing Securities Payment, as set forth in a written notice delivered to both Buyer and Seller by the Closing Item Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to in accordance with this Agreement and the rules Sample Balance Sheet and shall be binding and conclusive on the parties and, absent manifest error, shall constitute an arbitral award that is final, binding and unappealable and upon which a judgment may be entered by a court having jurisdiction thereof. Buyer and Seller shall each bear their own legal fees and other costs in connection with any such objection; provided, however, that Buyer, on one hand, and Seller, on the other hand, shall bear one-half of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer Closing Item Arbitrator. Notwithstanding anything in relative proportion this Agreement to the amount by which contrary, the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller Closing Item Arbitrator and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item procedures set forth herein shall be an amount within the range established with respect to such Disputed Item by Seller's sole method for resolving any disputes regarding the Final Closing Securities Payment or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheetprovisions of this Section 2.4, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and provided that this Section 2.4 shall not be subject to appeal by, Seller and IDB affect the respective rights of Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of Seller under ARTICLE IX. Following the final determination of the Seller Final Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect Securities Payment pursuant to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyerthis Section 2.4, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, Closing Securities Payment is greater than the Closing Securities Payment then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay to Seller the amount of such excess(es) to Seller.
the Final Adjustment Amount promptly (ii) if but in any event within five Business Days of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess determination of the corresponding amounts that should have been transferred Final Closing Securities Payment) or retained by if the Seller Retained Subsidiaries as provided in Closing Securities Payment is greater than the Final Available Cash AllocationClosing Securities Payment, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay to Buyer the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, Final Adjustment Amount promptly (but in no any event shall Seller be required to pay an amount in excess within five Business Days of the Excess Cash Amountdetermination of the Final Closing Securities Payment).
Appears in 1 contract
Samples: Securities Purchase Agreement (EnLink Midstream Partners, LP)
Post-Closing Adjustment. No later than the later of (ai) Within 90 days the 60th day following the Closing Date, Seller or (ii) the seventh (7th) Business Days after the delivery to Parent of the audited financial statements of the Company for 2015 accompanied by the audit opinion letter of Deloitte & Touche LLP thereon, the Parent will cause to be prepared and delivered to the Member Representative a statement setting forth its calculation of the Closing Working Capital, which statement shall prepare and deliver to IDB Buyer contain a consolidated balance sheet of the Seller Retained Subsidiaries Company as of the Closing Date (without giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"transactions contemplated herein), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Closing Working Capital (the “Closing Working Capital Statement”) and a certificate of the Parent that the Closing Working Capital Statement was prepared in accordance with the Agreed Accounting Principles. The Closing Working Capital Statement shall also set forth (A) the variance, if any, between the Estimated Cash Balance and the actual amount of the cash and cash equivalents at the Seller Retained Subsidiaries and Working Capital derived from Closing Time determined in accordance with the items and amounts on such balance sheet. Within 90 days following Agreed Accounting Principles (the “Actual Cash Balance”), (B) the variance, if any, between the Estimated Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer Date Indebtedness and the IDB Subsidiaries actual Closing Date Indebtedness as of the Closing (giving effect to the Estimated Available Cash Allocation) Time (the "IDB Buyer “Actual Closing Balance Sheet" and together with Date Indebtedness”), (C) the Seller actual amount of the Merger Consideration recalculated based upon the actual Closing Balance SheetWorking Capital, the "Actual Cash Balance and the Actual Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation ofDate Indebtedness, and using (D) the same accounting methods, policies, practices, procedures difference between the Merger Consideration paid at Closing and estimation methods as those used in the preparation actual amount of the balance sheet for Merger Consideration as finally determined (the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet“Post-Closing Adjustment”). The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure If the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Post-Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB BuyerAdjustment, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party adjusted pursuant to Section 2.7(a2.14(e).
(c) For 30 days after , if applicable, results in an increase in the later delivery Merger Consideration from that paid at Closing, Parent will pay to the Paying Agent, on behalf of the Dispute Notice by Seller or IDB Buyerholders of the Company Units, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as an amount equal to the Disputed Items; provided that if Post-Closing Adjustment (without deduction). Any amount payable by Parent to the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made Paying Agent pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator this Section 2.14(b) will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
paid within three (d3) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Post-Closing Balance Sheet Adjustment (including any Review Period and/or Resolution Period as may be required pursuant to Section 2.14(c) or (d) below) by wire transfer of immediately available funds to an account specified by the Paying Agent. The Paying Agent shall distribute to each Company Securityholder who has tendered before such payment date his, her or its completed and duly executed Letter of Transmittal, such holder’s share of both the Post-Closing Adjustment Escrow Amount and the calculations of Available Cash the Post-Closing Adjustment deposited by Parent based upon such holder’s entitlement to Merger Consideration computed after the Post-Closing Adjustment. If and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to extent there are holders of Company Units who have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation")not yet tendered their letters of transmittal, the following adjustments Paying Agent shall be effected:
(i) if any distribute the remainder of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries topayment(s) pay pursuant to Section 2.9. If the amount of such excess(esthe Post-Closing Adjustment, as adjusted pursuant to Section 2.14(e), if applicable, results in a decrease in the Merger Consideration from that paid at Closing, the Member Representative and Parent shall provide written instructions to the Escrow Agent within three (3) to Seller.
(ii) if any Business Days of the amounts that were transferred final determination of the Post-Closing Adjustment (including any Review Period and/or Resolution Period as may be required pursuant to Section 2.14(c) or retained (d) below) instructing Escrow Agent to release to Parent from the Post-Closing Adjustment Escrow Amount an amount equal to the Post-Closing Adjustment and to release the remaining Post-Closing Adjustment Escrow Amount, if any, to the Paying Agent for distribution to the Company Securityholders who have tendered before such payment date his, her or its completed and duly executed Letter of Transmittal based upon their entitlement to Merger Consideration after the Post-Closing Adjustment. If and to the extent there are holders of Company Units who have not yet tendered their letters of transmittal, the Paying Agent shall distribute the remainder of the payment(s) pursuant to Section 2.9. If the Post-Closing Adjustment exceeds the Post-Closing Adjustment Escrow Amount (the amount by which the Seller Retained Subsidiaries Post-Closing Adjustment exceeds the Post-Closing Adjustment Escrow Amount is referred to hereinafter as provided the “Excess Amount”), (x) the Member Representative and Parent shall provide written instructions to the Escrow Agent instructing the Escrow Agent to release to Parent all of the funds in the Estimated Available Cash Allocation were Post-Closing Adjustment Escrow Amount and (y) the Company Securityholders shall pay, by bank wire transfer of immediately available funds to an account or accounts designated in excess of the corresponding amounts that should have been transferred or retained writing by the Seller Retained Subsidiaries as provided in the Final Available Cash AllocationParent, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the an amount of equal to such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required Excess Amount with each Company Securityholder to pay an amount in excess of such Excess Amount based upon their entitlement to Merger Consideration after the Post-Closing Adjustment. At Parent’s election and sole discretion, Parent may also recover all or any portion of the Excess Cash Amount from the Indemnity Escrow Amount, in which case the Company Securityholders shall be obligated to promptly replenish the Indemnity Escrow Amount for any such portion. Any payments made pursuant to this Section 2.14(b) shall be treated as an adjustment to the Merger Consideration by the parties for Tax purposes, unless otherwise required by Law.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 No later than ninety (90) days following the Closing Date, Seller Buyer shall prepare and deliver to IDB Buyer Sellers a consolidated balance sheet written statement (the “Post-Closing Statement”) setting forth Buyer’s good faith determination of (i) the Seller Retained Subsidiaries Total Actual Revenue and (ii) the outstanding amounts of CABS A/R and Subscriber A/R as of the Closing (giving effect last day of the calendar month ending immediately prior to the Estimated Available Cash AllocationBenchmark Date. Within fifteen (15) (days of Sellers’ receipt of the "Seller Post-Closing Balance Sheet")Statement, which shall be prepared Sellers must notify Buyer in conformity with GAAP applied on a basis consistent with writing if they object to any of the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used amounts or calculations in the preparation Post-Closing Statement and identify the objectionable amounts or calculations in their written notice to Buyer. Buyer and Sellers shall cooperate in a diligent good faith manner to resolve such objections as soon as possible after Buyer’s receipt of Sellers’ objections, but not later than the balance sheet for the fiscal year ended earlier of (iii) December 3115, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived or (iv) one hundred twenty (120) days from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer and the Post-Closing Statement shall prepare and deliver be adjusted to Seller a consolidated balance sheet of IDB reflect any changes agreed to by Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquitySellers.
(b) Following delivery The “Buyer Adjustments” shall be an amount equal to (i) the product of (A) the Base Purchase Price and (B) (1) the amount by which the sum of the Seller Total Actual Revenue set forth on the Closing Balance Sheet and Statement exceeds the IDB Buyer Total Actual Revenue set forth on the Post-Closing Balance Sheet and prior to Statement, if any, divided by (2) $15,900,000, plus (ii) the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide amount by which the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review sum of the Seller current and 30-day CABS A/R and Subscriber A/R set forth on the Closing Balance Sheet or Statement exceeds the IDB sum of the current and 30-day CABS A/R and Subscriber A/R set forth on the Post-Closing Statement, if any. In the event of any Buyer Closing Balance SheetAdjustments, as applicable. Each of Seller Sellers and IDB Buyer shall have 45 days after jointly direct the later delivery of Escrow Agent to release such amount to Buyer from the Seller Closing Balance Sheet or IDB Escrow Account. In no event shall the Buyer Closing Balance Sheet in which to provide to Adjustments exceed the other Party a notice setting forthEscrow Amount. In addition, in detail, any good faith dispute as to any item or amount reflected in there shall be no Buyer Adjustments unless the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital Total Actual Revenue set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other Post-Closing Statement is less than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a)$15,900,000.
(c) For 30 days after To the later delivery extent that Sellers receive any credit or refund relating to Pre-Paid Expenses or payments under any of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP Acquired Assets (the "Independent Accountant Arbitrator") to make a determination as relating to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling time period subsequent to serve in this capacityClosing), then Seller Sellers shall refund to Buyer such amounts and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection these shall be made pursuant reflected as an additional credit to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant ArbitratorBuyer.
(d) If there is a referral For purposes of this Section 3.4, references to Total Actual Revenue shall not include any Revenue related to Subscriber Accounts that are more than forty-five (45) days past due from the invoice due date (unless related to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation accounts listed in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9Exhibit A).
(e) No later than 30 days following Buyer and Sellers agree that the later of Post-Closing Adjustments provided in this Section 3.4 will be handled contemporaneously with the final determination of the Seller Closing Balance Sheet (Closing, and the calculations provisions of Available Cash Section 3.4(a) and Working Capital set forth therein(b) or will have no application in the IDB Buyer Closing Balance Sheet event that at least forty-five (and the calculations of Available Cash and Tangible Common Equity set forth therein45) (such items being "final" after giving effect days prior to the items Closing Date, Sellers have provided to Buyer all financial and amounts accepted or deemed to have been accepted by either customer data for the three full calendar months immediately preceding the Benchmark Date. Buyer and Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments agree that Future Revenue shall be effected:
(i) if any of delivered by Seller with the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerStatement.
(iif) if any Within 30 days of the amounts that were transferred or retained by agreement between Buyer and Seller on the Seller Retained Subsidiaries Post Closing adjustments as provided outlined in the Estimated Available Cash Allocation were in excess Section 3.4(e), Buyer will provide an allocation of the corresponding amounts Purchase Price based on an independent valuation of the acquired assets. Buyer and Seller agree to use the results of the independent valuation as the basis for any reporting that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller may be required to pay an amount in excess of under the Excess Cash AmountCode or applicable Treasury regulations.
Appears in 1 contract
Samples: Asset Purchase Agreement (Lightyear Network Solutions, Inc.)
Post-Closing Adjustment. Within five (a5) Within 90 days following Business Days after the Closing Date, Seller shall prepare and deliver earlier to IDB Buyer a consolidated balance sheet occur of (x) the Seller Retained Subsidiaries as expiration of the Closing (giving effect Statement Review Period, if no Closing Statement Objection Notice is delivered by Seller to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation ofBuyer by such date, and using (y) the same accounting methods, policies, practices, procedures final resolution of all disputes properly and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the timely asserted by Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following regarding the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party Statement pursuant to Section 2.7(a).
(c2.2(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effectedabove:
(i) if any the Estimated Payment Adjustment is a positive number, then (1) Buyer shall pay to Seller the aggregate amount of the amounts that were transferred Estimated Payment Adjustment by wire transfer of immediately available funds to an account or retained accounts designated in advance by Seller and (2) Buyer and Seller shall direct the IDB Subsidiaries at Closing as provided Escrow Agent in writing to disburse the Estimated Available Cash Allocation were Adjustment Escrow Amount to Seller by wire transfer of immediately available funds to an account or accounts designated in excess of the corresponding amounts that should have been transferred or retained advance by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.;
(ii) if any the Estimated Payment Adjustment is a negative number, then Buyer and Seller shall direct the Escrow Agent in writing to disburse (1) an amount equal to the Estimated Payment Adjustment from the Adjustment Escrow Amount to Buyer by wire transfer of immediately available funds to an account or accounts designated in advance by Buyer and (2) the remainder of the amounts Adjustment Escrow Amount, if any, to Seller by wire transfer of immediately available funds to an account or accounts designated in advance by Seller, provided, that were transferred or retained by if the Seller Retained Subsidiaries as provided in the Adjustment Escrow Amount is insufficient to satisfy any Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash AllocationPayment Adjustment due and owing to Buyer (an “Adjustment Shortfall”), then Seller shall pay to Buyer by wire transfer of immediately available funds to an account or accounts designated in advance by Buyer the Adjustment Shortfall; and
(iii) if the Estimated Payment Adjustment is equal to Zero Dollars ($0.00), then no payment shall be due by either Buyer or Seller under this Section 2.2(d) and Buyer and Seller shall cause direct the applicable Escrow Agent in writing to disburse the Adjustment Escrow Amount to Seller Retained Subsidiaries to) pay the amount by wire transfer of such excess(es) immediately available funds to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, an account or accounts designated in no event shall Seller be required to pay an amount in excess of the Excess Cash Amountadvance by Seller.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (Kingsway Financial Services Inc)
Post-Closing Adjustment. (a) Within 90 days following Following the Closing DateClosing, Seller Parent shall cause its accountants to prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) Agent an audited reimbursement amount calculation schedule (the "Seller “Post-Closing Balance Sheet"Reimbursement Amount Calculation Schedule”), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing verifying the Reimbursement Amount paid to the Seller Group based on the Closing Balance Sheets or determining Available CashReimbursement Amount Calculation Schedule prepared pursuant to Section 1.2(a)(v) above. If, Working Capital upon acceptance by the Agent of the Post-Closing Reimbursement Amount Calculation Schedule (according to the procedures set forth in subparagraph (b) below), it is determined that the Reimbursement Amount calculated based on the amounts appearing on the Post-Closing Reimbursement Amount Calculation Schedule (the “Post-Closing Reimbursement Amount”) exceeds the Reimbursement Amount actually paid to the Seller Group at Closing, then Parent shall promptly make a cash payment to the Seller Group in an amount equal to the (positive) difference between the Post-Closing Reimbursement Amount and Tangible Common Equitythe Reimbursement Amount (such difference, the “Post-Closing Adjustment Amount”). Notwithstanding the reference in the foregoing sentence to Parent, the obligation to make such payment of the Post-Closing Adjustment Amount shall be the joint and several obligation of the Buyer Group. If, on the other hand, the Post-Closing Reimbursement Amount paid to the Seller Group at Closing is smaller than the Reimbursement Amount paid to the Seller Group at Closing, then Parent shall be entitled to reclaim the Post-Closing Adjustment Amount by recourse to the Escrow Account pursuant to the procedures set forth in the Escrow Agreement; provided, however that notwithstanding any provisions in the Escrow Agreement to the contrary, if the procedures set forth in subparagraph (b) below have been followed, the Agent shall not be entitled to further dispute the Post-Closing Adjustment Amount under the Escrow Agreement.
(b) Following delivery of To the extent required to permit the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party Group and its Representatives to review the Post-Closing Reimbursement Amount Calculation Schedule, each Buyer Group Entity will allow the Seller Group and its Representatives full and complete access at all reasonable times to all work papers, books and records and all additional information used in preparing the Post-Closing Reimbursement Amount Calculation Schedule, and each Buyer Group Entity will make its officers, employees and independent accountants reasonably available to discuss with reasonable access to the Seller Group and its Representatives such papers, books and records. If the Seller Group elects to dispute the Post-Closing Reimbursement Amount Calculation Schedule, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review then it shall so notify Parent within 15 days following delivery to the Agent of the Seller Post-Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicableReimbursement Amount Calculation Schedule, and thereafter, Parent and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party Agent shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor negotiate in good faith to resolve by mutual agreement all Disputed Itemssettle any such dispute. If, for any reasonnotwithstanding such good faith negotiation, Seller Parent and IDB Buyer are unable the Agent fail to resolve any Disputed Item settle such dispute within 15 days, either Parent or the Agent may refer the dispute to such 30 day period, Seller and IDB Buyer firm of independent certified public accountants as the parties shall engage Deloitte & Touche LLP mutually select (the "Independent Accountant Arbitrator") to make a “Post-Closing Reimbursement Amount Calculation Auditor”). The Post-Closing Reimbursement Amount Calculation Auditor shall be engaged jointly by the Buyer Group and the Seller Group and its fees and expenses shall be paid equally by the Buyer Group and the Seller Group. The Post-Closing Reimbursement Amount Calculation Auditor shall review the Post-Closing Reimbursement Amount Calculation Schedule and the calculation of the Post-Closing Adjustment Amount and shall determine any adjustments thereto in accordance with this Agreement, which determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant and certified in writing to the rules of Buyer Group and the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer Group as promptly as practicable but in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator any event not later than ten Business Days 30 days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessaryengagement. The Independent Accountant Arbitrator shall act as an arbitrator to determinedetermination of any Post-Closing Adjustment Amount, based solely on whether by acceptance by the materials submitted and presentations by Seller and IDB BuyerAgent, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its or determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items Post-Closing Reimbursement Amount Calculation Auditor, shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later upon all of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Sellerparties hereto.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. (ai) Within 90 ninety (90) days following after the Closing Date, Seller the Buyer or its accountant (the “Buyer’s Accountant”) shall prepare and deliver to IDB Buyer the Seller a consolidated balance sheet statement setting forth the Buyer’s good faith calculation of the Seller Retained Subsidiaries Net Working Capital as of 12:01 a.m., Eastern Standard Time on the Closing Date (without giving effect to the Estimated Available Cash Allocationtransactions contemplated herein) (the "Seller “Final Closing Balance Sheet"Net Working Capital”), which statement shall include reasonable supporting documentation with respect to all amounts and calculations therein (the “Final Closing Net Working Capital Statement”). Buyer shall prepare the Final Closing Net Working Capital Statement in good faith, based on books and records of the CryoScience Business, in accordance with GAAP and the Accounting Policies.
(ii) The post-Closing adjustment shall be prepared in conformity with GAAP applied on a basis consistent an amount equal to the Final Closing Net Working Capital minus the Estimated Closing Net Working Capital (the “Post-Closing Adjustment” and together with the preparation ofFinal Closing Net Working Capital Statement, the “Post-Closing Deliveries”). If the Post-Closing Adjustment is a positive number, the Buyer shall pay for the account of Seller to Agent in immediately available funds by wire transfer to an account designated by Agent in writing to Buyer an amount equal to the Post-Closing Adjustment, and using if the Post-Closing Adjustment is a negative number, the Seller shall instruct the Indemnity Escrow Agent to deduct the same accounting methodsfrom the Escrow Amount and deliver to the Buyer an amount equal to the Post-Closing Adjustment, policies, practices, procedures and estimation methods in each case as those used provided in paragraph (vii)(a) hereof.
(iii) During the period of the preparation of the balance sheet for Post-Closing Deliveries and the fiscal year ended December 31Resolution Period (as defined below), 2013, included in the GFI Financial Statements, and which Buyer shall include a calculation of Available Cash at (A) provide the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives authorized representatives with reasonable access to the books and books, records, personnel facilities employees and related work papers accountants of the Buyer (to the extent relating to the CryoScience Business), in each case upon reasonable prior written notice and during normal business hours, and (B) cooperate with the Seller and its authorized representatives, including the provision on a timely basis of all information reasonably requested and necessary or IDB Buyer, as applicable, useful in connection with such other Party's review analyzing the Post-Closing Deliveries.
(iv) No later than twenty (20) Business Days after receipt by the Seller of the Final Closing Net Working Capital Statement (the “Dispute Period”), the Seller shall notify the Buyer in writing that (i) the Seller agrees with the Final Closing Balance Sheet Net Working Capital (an “Approval Notice”) or (ii) the IDB Seller disagrees with such calculations, identifying with reasonable specificity the items with which the Seller disagrees (a “Dispute Notice”). The failure by the Seller to provide a Dispute Notice to Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after within the later delivery Dispute Period will constitute the Seller’s acceptance of the Seller Final Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Net Working Capital set forth thereinStatement.
(v) or Upon receipt by the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the a Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or and the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicableaccountants, on the one hand, and the applicable Dispute NoticeBuyer and the Buyer's accountants, on the other hand, will use good faith efforts during the twenty (20)-Business Day period following the date of receipt by the Buyer of a Dispute Notice (the “Resolution Period”) to resolve any differences they may have as to the amounts set forth in the Final Closing Net Working Capital Statement and/or the calculation of the Net Working Capital set forth therein. If the Buyer and the Seller cannot reach written agreement during the Resolution Period, within five (5) Business Days thereafter, their disagreements, limited to only those issues still in dispute (the “Remaining Disputes”), shall be promptly submitted to the New York office of Anchin Block & Anchin LLP (the “Independent Accountant”), which firm shall conduct such additional review as is necessary to resolve the specific Remaining Disputes referred to it. The Seller and IDB the Buyer shall instruct will cooperate fully with the Independent Accountant Arbitrator to render facilitate its decision within 30 days resolution of the Remaining Disputes, including by providing the information, data and work papers used by each Party to prepare and/or calculate the Final Closing Net Working Capital Statement and the Remaining Disputes, making its appointment personnel and accountants available during normal business hours to explain any such information, data or as soon thereafter as is reasonably practicablework papers and submitting each of their proposed calculations of the Final Closing Net Working Capital Statement. The decision/award of Based upon such review and other information and testimony from the Parties and their respective accountants that the Independent Accountant Arbitrator may request, the Independent Accountant shall determine the Final Closing Net Working Capital Statement and the Post-Closing Adjustment strictly in accordance with the terms of this Section 1.6(f) (the “Independent Accountant Determination”); provided, that such Independent Accountant Determination of the Post-Closing Adjustment shall be equal to or between the amount of the Post-Closing Adjustment proposed by each of the Buyer and the Seller, as adjusted for any differences resolved by the Seller and the Buyer prior to the Disputed Items submission of the Remaining Disputes to the Independent Accountant. Such Independent Accountant Determination shall be completed as promptly as practicable and if possible in no event later than twenty (20) days following the submission of the Remaining Disputes to the Independent Accountant, shall be explained in reasonable detail and confirmed by the Independent Accountant in writing to, and shall be final and binding on, and shall not be subject all interested Persons, except to appeal by, Seller and IDB Buyer correct manifest clerical or any other Person, and may be entered and enforced as provided in Section 9.9mathematical errors.
(evi) No later than 30 days following the later The fees and expenses of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(iallocated between the Seller and the Buyer, based upon the percentage that the amount not awarded to the Seller or the Buyer pursuant to Section 1.6(f)(v) if any of bears to the amounts that were transferred or retained amount actually contested by the IDB Subsidiaries at Closing Seller or the Buyer, as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Sellerapplicable.
(iivii) if any On the third (3rd) Business Day after the earliest of (A) the amounts that were transferred or retained receipt by the Seller Retained Subsidiaries as provided in of an Approval Notice, (B) the Estimated Available Cash Allocation were in excess expiration of the corresponding amounts that should Dispute Period, if during such Dispute Period no Dispute Notice shall have been transferred or retained delivered by the Seller, (C) the resolution by the Seller Retained Subsidiaries and the Buyer of all differences regarding the Closing Net Working Capital Statement and the Post- Closing Adjustment within the Resolution Period and (D) the receipt of the Independent Accountant Determination, the Post-Closing Adjustment shall be paid as provided follows:
a) if the Post-Closing Adjustment is payable to the Buyer by the Seller, the Indemnity Escrow Agent shall deduct the same from the Escrow Amount and deliver the same to the Buyer; or
b) if the Post-Closing Adjustment is payable to the Seller by the Buyer, the Buyer shall pay the Post-Closing Adjustment for the account of Seller to Agent in immediately available funds by wire transfer to an account designated by Agent in writing to Buyer.
(viii) This Section 1.6(f) is intended by the Parties to solely provide for an adjustment to the purchase consideration for the difference between the agreed Target Net Working Capital and the Final Closing Net Working Capital. Nothing in this Section 1.6 is intended to be used to adjust for errors, omissions or inconsistencies that may be found with respect to the Financial Information, or any actual or alleged failure of the Financial Information, the Seller’s representations and warranties with respect to which are set forth in Section 2.5 hereof. No Party shall be permitted to introduce accounting policies, principles, practices or methodologies in the Final Available Cash Allocation, then Seller shall (preparation or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess review of the Excess Cash AmountFinal Closing Net Working Capital or the determination thereof different than the Accounting Policies.
Appears in 1 contract
Samples: Asset Purchase Agreement
Post-Closing Adjustment. (a) Within 90 days following If the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries Final Cash Purchase Price as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made determined pursuant to the rules provisions of Section 3.04 above exceeds the American Arbitration AssociationInitial Cash Purchase Price, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation Final Cash Purchase Price exceeds the Initial Cash Purchase Price shall be paid by the Buyer to the Sellers by wire transfer of immediately available funds credited to such accounts as may be designated by the Sellers and Joint Written Instructions shall be delivered by the Parties to the Escrow Agent directing the Escrow Agent to pay to the Sellers the full amount of the Disputed Items Working Capital Escrow Amount, in each case, no later than the end of the (10) day period beginning on the first day following the date that the Closing Net Working Capital and the amount of the Customer Advances have become final and binding upon the Parties hereto as provided for by each of them differs from the calculation to be made by the Independent Accountant ArbitratorSection 3.03 hereof.
(da) If there the Final Cash Purchase Price as determined pursuant to Section 3.04 above is a referral less than the Initial Cash Purchase Price, then the amount by which the Initial Cash Purchase Price exceeds the Final Cash Purchase Price (such amount being hereinafter the “Deficit Amount”) will be paid first from the Escrow Amount in an amount not to exceed the Working Capital Escrow Amount and, to the Independent Accountant Arbitratorextent that the amount of the Deficit Amount is: (i) less than the Working Capital Escrow Amount, each any remaining portion of the Working Capital Escrow Amount shall be released to the Sellers in accordance with the Escrow Agreement; or (ii) exceeds the Working Capital Escrow Amount, the Seller Parties shall be obligated, jointly and IDB Buyer agrees, if requested by the Independent Accountant Arbitratorseverally, to execute a reasonable engagement letter and shall submit pay such excess to the Independent Accountant Arbitrator not Buyer in cash or immediately available funds no later than the end of the ten Business Days after its appointment, a written statement summarizing its position (10) day period beginning on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on first day following the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only date that the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, Net Working Capital and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award amount of the Independent Accountant Arbitrator as to the Disputed Items shall be Customer Advances have become final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced upon the Parties hereto as provided in for by Section 9.9.
(e) No later than 30 days following 3.03 hereof. The Parties shall provide Joint Written Instructions to the later Escrow Agent to effect the distribution of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or Escrow Amount from the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted Escrow Amount as required by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"this Section 3.05(b), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Samples: Asset Purchase Agreement (Gibraltar Industries, Inc.)
Post-Closing Adjustment. The Purchase Price set forth in Section 1.2 shall be subject to adjustment after the Closing Date as follows:
(a) Within 90 sixty (60) calendar days following after the Closing Date, Seller the Purchaser shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries a schedule substantially in the form of Schedule 1C hereto (the “Post-Closing Statement”) setting forth the final calculation of (i) the Consolidated Net Cash/Debt Amount (the “Actual Consolidated Net Cash/Debt Amount”), (ii) the Stand-Alone Net Cash/Debt Amount for each Target Company, (iii) the Inventory Adjustment Amount (the “Actual Inventory Adjustment Amount”) and (iv) the GRP Adjustment Amount (the “Actual GRP Adjustment Amount”), each as of the Closing Date. The Post-Closing Statement shall also set out the Purchase Price, as adjusted for the Adjustment Amount (giving effect as defined below), in aggregate and as allocated among the Sale Shares on the basis of Schedule 1A hereto. An amount equal to the sum of (i) Actual Consolidated Net Cash/Debt Amount less Estimated Available Cash AllocationConsolidated Net Cash/Debt Amount, (ii) Actual Inventory Adjustment Amount less the Estimated Inventory Adjustment Amount, and (the "Seller Closing Balance Sheet")iii) Estimated GRP Adjustment Amount less Actual GRP Adjustment Amount, which shall be prepared in conformity with GAAP applied on a basis consistent with referred to as the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity“Adjustment Amount”.
(b) Following If the Adjustment Amount is a negative number, then the Seller shall pay an amount equal to the Adjustment Amount (by wire transfer) to the Purchaser. If the Adjustment Amount is a positive number, then the Purchaser shall pay an amount equal to the Adjustment Amount (by wire transfer) to the Seller. Any payment of the Adjustment Amount to be made in accordance with this paragraph (b) shall be made within ten (10) calendar days after (x) the delivery of the Seller Post-Closing Balance Sheet and Statement or (y) if there is an objection under paragraph (c) below, the IDB Buyer Closing Balance Sheet and prior to final resolution of the deadline for delivering a Dispute Noticepayments due under this Section 1.3, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicableif any, in connection accordance with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet paragraph (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(ac).
(c) For 30 If the Seller objects to the Post-Closing Statement, it shall provide notice of such objection to the Purchaser within twenty (20) calendar days after of delivery of such Post-Closing Statement. The Seller and the later Purchaser shall use good faith efforts to agree any adjustments to the Post-Closing Statement. If the Seller and the Purchaser are unable to reach such agreement within twenty (20) calendar days of delivery of the Dispute Notice by Seller or IDB BuyerSeller’s objection to the Post-Closing Statement, the Seller and IDB Buyer the Purchaser shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (forward the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Post-Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, Statement and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator Closing Statement to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained an independent auditor approved by the Seller Retained Subsidiaries as provided in and the Estimated Available Cash Allocation were in excess of Purchaser to calculate the corresponding amounts that should have been transferred or retained payment due under this Section 1.3, if any, which determination shall be binding upon the Parties. Once the Post-Closing Statement is determined, it shall be signed by both the Seller Retained Subsidiaries as provided in Purchaser and the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash AmountSeller.
Appears in 1 contract
Samples: Purchase Agreement (CTC Media, Inc.)
Post-Closing Adjustment. (a) Within 90 days following During the period between the Effective Date and the Closing Date, Seller the Businesses shall prepare and deliver to IDB Buyer a consolidated balance sheet of be operated as between the Seller Retained Subsidiaries as of the Closing (giving effect parties, to the Estimated Available Cash Allocation) (extent reasonably possible, as if the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquitySeparation had been completed.
(b) Following delivery As soon as practicable after Closing, but in any event no later than January 30, 2003, Veraz U.S., together with its auditors, shall prepare a balance sheet with respect to the Businesses, as of December 31, 2002 (the Seller “Closing Date Balance Sheet Sheet”), using the same principles and accounting policies under which the September 30 and Effective Date Balance Sheets were prepared, and related profit and loss and cash flow statements (the “Closing Date Income Statement” and the IDB Buyer “Closing Balance Sheet Date Cash Flow Statement”, respectively, and prior to together with the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Date Balance Sheet, as applicablethe “Closing Date Financial Statements”) for the period between the Effective Date and December 31, 2002 (the “Interim Period”). Each The Closing Date Income Statement and Closing Date Cash Flow Statement shall each be prepared on the basis of Seller income and IDB Buyer shall expenses which would have 45 days after been incurred by Veraz U.S. had the later delivery of Closing occurred on the Seller Effective Date. In preparing the Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detailDate Financial Statements, any good faith dispute as inter-company financial transfers from Veraz to any item or amount reflected in Veraz U.S. during the Seller period between the Closing Balance Sheet (including the calculations of Available Cash Date and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein)December 31, as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party 2002 shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a)disregarded.
(c) For The Seller shall have a period of 30 days after the later delivery of the Dispute Notice by Effective Date Balance Sheet to present in writing to Veraz U.S. all objections the Seller may have to any of the matters set forth or IDB Buyerreflected therein. Similarly, the Seller and IDB Buyer shall endeavor have a period of 30 days after delivery of the Closing Date Financial Statements to present in good faith writing to resolve by mutual agreement Veraz U.S. all Disputed Itemsobjections the Seller may have to any of the matters set forth or reflected therein. If, for any reason, Seller and IDB Buyer If no objections are unable to resolve any Disputed Item raised within such 30 30-day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection Closing Date Financial Statements shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made deemed approved by the Independent Accountant ArbitratorSeller.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Itemsbasis of the Closing Date Cash Flow Statement, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator the Businesses generated a net increase in cash and cash equivalents during the Interim Period, NGTS U.S. shall act as an arbitrator transfer to determineVeraz U.S., based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 three business days of its appointment or as soon thereafter as is reasonably practicable. The decision/award approval of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding onsuch amount, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided cash in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any the net increase in cash and cash equivalents generated by Veraz U.S. during the Interim Period. If on the basis of the amounts that were transferred or retained by Closing Date Cash Flow Statement, the Seller Retained Subsidiaries as provided Businesses generated a net decrease in the Estimated Available Cash Allocation were cash and cash equivalents, Veraz U.S. shall transfer, within three business days of approval of such amount, cash to NGTS U.S. in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(esthe net decrease in cash and cash equivalents generated by Veraz U.S. during the Interim Period. The foregoing amounts to be transferred pursuant to this Section 9.2(d) to IDB Buyer. Notwithstanding shall be adjusted by the foregoing net amount of cash or cash equivalents actually received or paid by Veraz U.S. during the period between the Closing Date and for the avoidance of doubtDecember 31, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount2002.
Appears in 1 contract
Samples: Separation and Asset Purchase Agreement (Veraz Networks, Inc.)
Post-Closing Adjustment. (ai) Within 90 45 days following after the Closing Date, Seller Purchaser shall prepare and deliver to IDB Buyer the Member Representative a statement, which statement shall be substantially in the form of Section 2.07 of the Disclosure Schedules (the “Closing Statement”), attaching the following items and certifying as to Purchaser’s good faith preparation and calculation of the following items:
(A) an unaudited consolidated balance sheet of the Seller Retained Subsidiaries Target as of 11:59 P.M., Dallas, Texas time, on the Closing (giving effect to the Estimated Available Cash Allocation) Date (the "Seller “Closing Balance Sheet"”), which shall be prepared in conformity with GAAP applied on a basis consistent with ;
(B) the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Closing Working Capital derived from based on the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity together with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries variance between the Estimated Closing Working Capital and Tangible Common EquityClosing Working Capital;
(C) the Closing Accrued Tax Amount (including each component item), together with a calculation of the variance between the Estimated Closing Accrued Tax Amount and the Closing Accrued Tax Amount;
(D) the Closing Indebtedness (including each component item), together with a calculation of the variance between the Estimated Closing Indebtedness and the Closing Indebtedness; and
(E) a calculation of the Post-Closing Adjustment.
(ii) After each of the Closing Working Capital, Closing Accrued Tax Amount, and Closing Indebtedness has been finally determined in accordance with this Section 2.07 (the Closing Working Capital, Closing Accrued Tax Amount and Closing Indebtedness, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyercase, as applicableso finally determined being referred to herein as the “Final Closing Working Capital”, in connection with such other Party's review of “Final Closing Accrued Tax Amount”, and “Final Closing Indebtedness”), the Seller Aggregate Merger Consideration shall be, if necessary, further adjusted to reflect the Post-Closing Balance Sheet or the IDB Buyer Closing Balance SheetAdjustment, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller follows: The “Final Post-Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item Adjustment Amount” shall be an amount within equal to the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in Final Closing Working Capital, minus the Seller Final Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one handAccrued Tax Amount, and minus the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicableFinal Closing Indebtedness. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items “Estimated Post-Closing Adjustment Amount” shall be final and binding onan amount equal the Estimated Closing Working Capital, minus the Estimated Closing Accrued Tax Amount, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in minus the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in Closing Indebtedness. If the Final Available Cash AllocationPost-Closing Adjustment Amount is greater than the Estimated Post-Closing Adjustment Amount, then IDB Buyer Purchaser shall pay (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(esSurviving Corporation to pay) to Seller.
the Members (iion a pro rata basis in accordance with their respective Post-Closing Participating Percentages) if any an amount equal to the absolute value of the amounts that were transferred or retained by difference between the Seller Retained Subsidiaries as provided in Final Post-Closing Adjustment Amount and the Estimated Available Cash Allocation were in excess of Post-Closing Adjustment Amount (the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in “Post-Closing Adjustment”). If the Final Available Cash AllocationPost-Closing Adjustment Amount is less than the Estimated Post-Closing Adjustment Amount, then Seller Purchaser shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount be entitled to payment of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount equal to the Post-Closing Adjustment in excess of the Excess Cash Amountaccordance with Section 2.07(d)(vi) below.
Appears in 1 contract
Samples: Merger Agreement (Teladoc, Inc.)
Post-Closing Adjustment. (a) Within 90 As soon as practicable, but in no event later than 60 days following after the Closing Date, Seller Buyer shall prepare and deliver to IDB Buyer Member Agent a consolidated balance sheet of the Seller Retained Subsidiaries Company as of the Closing (giving effect to the Estimated Available Cash Allocation) Date (the "Seller “Closing Date Balance Sheet"”), which . Such balance sheet shall be prepared in conformity with GAAP applied on accompanied by a basis consistent with schedule (the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a “Buyer Adjustment Schedule”) setting forth Buyer’s calculation of Available Cash at (i) the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer Assets and the IDB Subsidiaries Working Capital Liabilities, in each case as of the Closing Date (giving effect the “Proposed Closing Date Working Capital Amount”), and (ii) the amount by which the Purchase Price should be adjusted (A) upward to the extent that the Proposed Closing Date Working Capital Amount is greater than the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation ofDate Working Capital Amount, and using (B) downward to the same accounting methodsextent that the Proposed Closing Date Working Capital Amount is less than the Estimated Closing Date Working Capital Amount (such proposed upward or downward adjustment is hereinafter referred to as the “Proposed Final Adjustment Amount Due”). For the avoidance of doubt, policiesfor purposes of computing the Final Closing Date Working Capital Amount and the Final Adjustment Amount Due, practicesno cap or limitation on the upward or downward adjustment, procedures and estimation methods as those used if any, to the Purchase Price in the preparation respect of the balance sheet for the fiscal year ended December 31Proposed Final Adjustment Amount Due, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equityapply.
(b) Following delivery After receipt of the Seller Buyer Adjustment Schedule, Member Agent may request, and Buyer will provide to Member Agent and its accountants and other representatives, upon reasonable notice, reasonable access during normal business hours to, or copies of, as Member Agent or such accountants and other representatives shall reasonably request, the information (including the books and records of the Surviving Company), data and work papers used in connection with the preparation of the Buyer Adjustment Schedule and to calculate the Proposed Final Adjustment Amount Due, and will make its and the Surviving Company’s personnel and accountants reasonably available to Member Agent and its accountants and other representatives to discuss any such information, data or work papers. Without limiting the generality of the foregoing, during the Dispute Period (as defined below), Buyer agrees to make available to Member Agent the services of the Chief Financial Officer and Controller of the Company as of the Effective Time (to the extent such persons are employees of the Surviving Company or Buyer during the Dispute Period) as requested by Member Agent to assist Member Agent with its evaluation and review of the Closing Date Balance Sheet and Buyer Adjustment Schedule; provided, however, that neither the Chief Financial Officer nor the Controller shall be required to devote more than 50% of his working hours each week to assisting Member Agent with its evaluation and review of the Closing Date Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Adjustment Schedule. Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, agrees that such persons shall not in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall way be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet breached any fiduciary duty, duty of loyalty, or other duty owed to Buyer or the IDB Surviving Company by so assisting Member Agent, and shall not have any liability to Buyer Closing Balance Sheet, as applicable, delivered by or the other Party pursuant Surviving Company with respect to Section 2.7(a)such assistance.
(c) For Member Agent shall have 30 days after from the later delivery of date that Member Agent receives the deliveries contemplated in Section 1.11(a) (the “Dispute Notice by Seller or IDB Period”) to notify Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. Ifwriting, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to whether Member Agent (i) agrees with the Disputed Items; provided that if Buyer Adjustment Schedule and the Independent Accountant Arbitrator is unable Proposed Final Adjustment Amount Due (an “Approval Notice”) or unwilling to serve in this capacity(ii) disagrees with such calculations, then Seller and IDB Buyer shall within 14 days after identifying with reasonable detail the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, items with which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant ArbitratorMember Agent disagrees (a “Dispute Notice”).
(d) If there Member Agent fails to deliver a Dispute Notice to Buyer during the Dispute Period, the Buyer Adjustment Schedule and the Proposed Final Adjustment Amount Due shall be deemed to be final and correct and shall be binding upon each of the parties hereto.
(e) If Member Agent delivers a Dispute Notice to Buyer during the Dispute Period, Buyer and Member Agent shall, for a period of 20 days from the date the Dispute Notice is a delivered to Buyer (the “Resolution Period”), use their respective good faith efforts to amicably resolve the items in dispute. Any items so resolved by them shall be deemed to be final and correct as so resolved and shall be binding upon each of the parties hereto.
(f) If Buyer and Member Agent are unable to resolve all of the items in dispute during the Resolution Period, then either Member Agent or Buyer may refer the items remaining in dispute (the “Remaining Disputes”) to Deloitte & Touche LLP, 0000 X. Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000 (the “Independent Accountants”). Such referral shall be made in writing to the Independent Accountant ArbitratorAccountants, each copies of Seller and IDB Buyer agrees, if requested by which shall concurrently be delivered to the non-referring party hereto. The referring party shall furnish the Independent Accountant ArbitratorAccountants, at the time of such referral, with copies of the deliveries contemplated in Section 1.11(a) and the Dispute Notice. The parties shall also furnish the Independent Accountants with such other information and documents as the Independent Accountants may reasonably request in order for them to execute a reasonable engagement letter and resolve the Remaining Disputes. The parties hereto shall submit also, within ten days of the date the Remaining Disputes are referred to the Independent Accountant Arbitrator not later than ten Business Days after its appointmentAccountants, provide the Independent Accountants with a written statement summarizing its position notice (a “Position Statement”) describing in reasonable detail their respective positions on the Disputed ItemsRemaining Disputes (copies of which shall concurrently be delivered to the other party hereto). If any party fails to timely deliver its Position Statement to the Independent Accountants, together with such supporting documentation as it deems necessarythe Independent Accountants shall resolve the Remaining Disputes solely upon the basis of the information otherwise provided to them. The Independent Accountant Arbitrator Accountants shall act as an arbitrator resolve all Remaining Disputes in a written determination to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect be delivered to each Disputed Item shall be an amount within of the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision parties hereto within 30 days of its appointment or as soon thereafter as after such matter is reasonably practicablereferred to them. The decision/award decision of the Independent Accountant Arbitrator Accountants as to the Disputed Items Remaining Disputes shall be final and binding on, upon the parties hereto (except to correct manifest clerical or mathematical errors) and shall not be subject to appeal byjudicial review. The fees and disbursements of the Independent Accountants shall be apportioned between Buyer and the Company based on the total dollar value of disputed exceptions resolved in favor of each such party, Seller with each such party bearing such percentage of the fees and IDB Buyer or any other Person, and may be entered and enforced disbursements of the Independent Accountants as provided in Section 9.9the aggregate disputed exceptions resolved against that party bears to the total dollar value of all disputed exceptions considered by the Independent Accountants.
(eg) No later than 30 days Within five Business Days following the later date on which the Final Adjustment Amount Due is finally determined pursuant to this Agreement (whether through failure of Member Agent to timely deliver a Dispute Notice, agreement of the parties, or final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined any Remaining Disputes by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:Accountants):
(i) if any the Final Adjustment Amount Due results in an upward adjustment to the Purchase Price, (x) Buyer shall deliver to (a) the Paying Agent by wire transfer of immediately available funds, an amount equal to the amounts that were transferred or retained product of (i) the Final Adjustment Amount Due multiplied by (ii) 0.93 for distribution to the IDB Subsidiaries at Closing as provided Members in accordance with the procedures set forth in Section 1.9(b) and pursuant to the allocations set forth in the Estimated Available Cash Allocation were in excess Closing Date Capitalization Schedule and (b) the Escrow Agent by wire transfer of immediately available funds, an amount equal to the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in product of (x) the Final Available Cash AllocationAdjustment Amount Due multiplied by (y) 0.07, then IDB Buyer which shall be added to the General Indemnification Escrow, and (or y) the parties shall cause instruct the applicable IDB Subsidiaries to) pay Escrow Agent to promptly disburse the amount of such excess(es) Post-Closing Adjustment Escrow in accordance with the Escrow Agreement to Sellerthe Paying Agent for distribution to the Members in accordance with the procedures set forth in Section 1.9(b).
(ii) if any the Final Adjustment Amount Due results in a downward adjustment to the Purchase Price, the parties shall instruct the Escrow Agent to promptly disburse from the Post-Closing Adjustment Escrow in accordance with the Escrow Agreement (x) to Buyer, an amount equal to the Final Adjustment Amount Due and (y) to the Paying Agent for distribution to the Members in accordance with the procedures set forth in Section 1.9(b), the remaining amounts (if any) of the amounts that were transferred or retained by Post-Closing Adjustment Escrow.
(h) For purposes of this Section 1.11, the Seller Retained Subsidiaries as provided in following defined terms have the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.following meanings:
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 days following Attached hereto as Section 2.10(a) of the Schedule of Exceptions sets forth a statement (the “Estimated Closing Statement”) containing the Company’s good faith estimates of Estimated Cash, Estimated Accounts Receivable, Estimated Accounts Payable, Closing Indebtedness, Company Expenses and Estimated WIP, in each case as of the close of business on the day immediately prior to the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet calculation of the Seller Retained Subsidiaries as Estimated Merger Consideration. The estimate of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet")Cash, which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation ofEstimated Accounts Receivable, Estimated Accounts Payable and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, Estimated WIP included in the GFI Financial Statements, Estimated Closing Statement and which all computations and determinations related thereto shall include a calculation of Available Cash be based on the Company’s books and records and other information available at the Seller Retained Subsidiaries time and Working Capital derived from calculated in good faith in accordance with the items and amounts principles set forth on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as Section 2.10(a) of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation Schedule of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquityExceptions.
(b) Following delivery The Estimated Merger Consideration shall be, dollar for dollar:
(i) increased in the event that the actual, final Cash as of the Seller Closing Balance Sheet and close of business on the IDB Buyer Closing Balance Sheet and day immediately prior to the deadline for delivering a Dispute NoticeClosing Date exceeds the Estimated Cash, each or decreased in the event that the actual, final Cash as of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access close of business on the day immediately prior to the books and recordsClosing Date is less than the Estimated Cash;
(ii) increased in the event that the actual, personnel and related work papers of Seller or IDB Buyer, final Accounts Receivable as applicable, in connection with such other Party's review of the Seller close of business on the day immediately prior to the Closing Balance Sheet Date exceeds the Estimated Accounts Receivable, or decreased in the IDB Buyer event that the actual, final Accounts Receivable as of the close of business on the day immediately prior to the Closing Balance SheetDate is less than the Estimated Accounts Receivable;
(iii) increased in the event that the actual, final Accounts Payable as applicableof the close of business on the day immediately prior to the Closing Date is less than the Estimated Accounts Payable, or decreased in the event that the actual, final Accounts Payable as of the close of business on the day immediately prior to the Closing Date exceeds the Estimated Accounts Payable;
(iv) increased in the event that the actual, final Indebtedness as of the close of business on the day immediately prior to the Closing Date is less than the Estimated Indebtedness, or decreased in the event that the actual, final Indebtedness as of the close of business on the day immediately prior to the Closing Date exceeds the Estimated Indebtedness;
(v) increased in the event that the actual, final WIP as of the close of business on the day immediately prior to the Closing Date exceeds the Estimated WIP, or decreased in the event that the actual, final WIP as of the close of business on the day immediately prior to the Closing Date is less than the Estimated WIP; and
(vi) increased in the event that the actual, final Company Expenses as of the close of business on the day immediately prior to the Closing Date is less than the Estimated Company Expenses, or decreased in the event that the actual, final Company Expenses as of the close of business on the day immediately prior to the Closing Date exceeds the Estimated Company Expenses. Each of Seller and IDB Buyer shall have 45 Within ninety (90) days after the later delivery Closing Date, Parent shall cause to be prepared and delivered to the Stockholders’ Representative a balance sheet of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide Company as of the close of business on the day immediately prior to the other Party Closing Date together with (i) a notice setting forthstatement (the “Final Closing Statement”) containing Parent’s determination of the actual amounts of Cash, Accounts Receivable, Accounts Payable, Indebtedness, WIP and Company Expenses, in detaileach case as of the close of business on the day immediately prior to the Closing Date and (ii) a calculation of any adjustments to the Estimated Merger Consideration based on such calculations (the result of such calculation being the “Merger Consideration”). The calculation of Cash, any good faith dispute as to any item or amount reflected Accounts Receivable, Accounts Payable and WIP included in the Seller Final Closing Balance Sheet (including Statement and all computations and determinations related thereto shall be prepared in accordance with the calculations of Available Cash and Working Capital principles set forth thereinon Section 2.10(a) or of the IDB Buyer Closing Balance Sheet (including the calculations Schedule of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a)Exceptions.
(c) For Within 30 days after the later following delivery of the Dispute Notice by Seller Final Closing Statement to the Stockholders’ Representative, the Stockholders’ Representative shall deliver or IDB Buyercause to be delivered a written notice to Parent of any dispute the Stockholders’ Representative has with respect to the preparation or content of the Final Closing Statement, Seller which written notice shall specify with reasonable specificity and IDB Buyer in reasonable detail the item(s) disputed and the basis for the dispute. The Stockholders’ Representative shall endeavor not dispute the accounting principles and adjustments used in preparing the Final Closing Statement and Merger Consideration if such principles and adjustments are, in the Stockholders’ Representative’s sole opinion, consistent with Section 2.10(a) of the Schedule of Exceptions. If the Stockholders’ Representative does not so notify Parent of a dispute with respect to the Final Closing Statement within such 30-day period, such Final Closing Statement will be final, conclusive and binding on the Parties. In the event of such notification of a dispute, Parent and the Stockholders’ Representative shall negotiate in good faith to resolve by mutual agreement all Disputed Itemssuch dispute. IfIf Parent and the Stockholders’ Representative, for any reasonnotwithstanding such good faith effort, Seller and IDB Buyer are unable fail to resolve any Disputed Item such dispute within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP fifteen (the "Independent Accountant Arbitrator"15) to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end Stockholders’ Representative notifies Parent of such 30 day period agree on its objections, then Parent and the Stockholders’ Representative jointly shall engage an alternate independent certified public accounting firm that is not presently providing and has not provided either party or their Affiliates with services in default thereof the last two years as mutually agreed upon by Parent and the Stockholders’ Representative (the “Independent Accounting Firm”) to resolve such selection dispute. As promptly as practicable thereafter, Parent and the Stockholders’ Representative shall be made pursuant each prepare and submit a presentation to the rules Independent Accounting Firm (collectively, the “Dispute Presentations”). As soon as practicable thereafter, Parent and the Stockholders’ Representative shall cause the Independent Accounting Firm to resolve only those items remaining in dispute between the parties in accordance with the provisions of this Section 2.10 within the range of the American Arbitration Association, which accounting firm shall be difference between Parent’s position with respect thereto and the "Independent Accountant Arbitrator" hereunderStockholders’ Representative’s position with respect thereto based solely upon the information set forth in the Dispute Presentations. The fees, costs of any fees and expenses of the Independent Accountant Arbitrator will Accounting Firm and of any enforcement of the determination thereof, shall be borne by Seller and IDB Buyer the parties in inverse proportion as they may prevail on the matters resolved by the Independent Accounting Firm, which proportionate allocation shall be calculated on an aggregate basis based on the relative proportion to the amount by which the aggregate calculation dollar values of the Disputed Items amounts in dispute and shall be determined by each the Independent Accounting Firm at the time the determination of them differs from such firm is rendered on the calculation to be merits of the matters submitted. All determinations made by the Independent Accountant ArbitratorAccounting Firm will be final, conclusive and binding on the Parties.
(d) If there the Merger Consideration (as finally determined pursuant to Section 2.10(c)) is a referral less than the Estimated Merger Consideration, then the Stockholders’ Representative shall pay or cause to be paid to Parent an amount equal to such shortfall. If the amount of such shortfall is less than or equal to ten percent (10%) of the Holdback Amount, then such amount shall be retained from the Holdback Amount by the Parent. Otherwise, such shortfall amount shall be paid no later than five (5) business days following the date on which the Merger Consideration is finally determined pursuant to Section 2.10(c) by wire transfer of immediately available funds to an account or accounts designated in writing by Parent to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit Stockholder’s Representative prior to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with date such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as payment is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9due hereunder.
(e) No If the Merger Consideration (as finally determined pursuant to Section 2.10(c)) is greater than the Estimated Merger Consideration, then Parent shall pay or cause to be paid an amount in cash equal to such excess to the Stockholders’ Representative for the benefit of the Company Stockholders. Such amount shall be paid by Parent no later than 30 five (5) business days following the later date on which the Merger Consideration is finally determined pursuant to Section 2.10(c) by wire transfer of immediately available funds to an account or accounts designated in writing by the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect Stockholders’ Representative to Parent prior to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; date such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Sellerpayment is due hereunder.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Samples: Merger Agreement
Post-Closing Adjustment. Within one hundred twenty (a120) Within 90 days following after the Closing, the Parent shall engage KPMG Peat Marwick LLP to audit a balance sheet prepared in accordance with generally accepted accounting principles ("GAAP") of the Company as of 5:00 PM (EST) on the day prior to the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) Date (the "Seller Closing Date Balance Sheet"). Such Closing Balance Sheet will utilize the accrual method of accounting notwithstanding the fact that the Company has heretofore utilized the cash-basis method of accounting in connection with its financial statements and taxes. If the aggregate shareholders' equity as shown on the Closing Date Balance Sheet is less than $270,000 (the amount of such shortfall being hereafter known as the "Net Worth Deficiency"), the Stockholders shall, at the sole discretion of the Parent and the Surviving Corporation within thirty (30) days of the date of delivery of the Closing Date Balance Sheet, shall pay within five (5) days of the date of determination of the Net Worth Deficiency (subject to the dispute resolution procedure set forth below) (i) 18% of the Net Worth Deficiency to the Parent in cash, by certified check or by wire transfer of immediately available funds, and (ii) 82% of the Net Worth Deficiency in Shares of Parent Common Stock which shall be prepared valued at the "closing sales price" (as defined in conformity with GAAP applied on a basis consistent with SECTION 4(b)(i) of the preparation ofEscrow Agreement attached hereto as EXHIBIT 1.6) for the ten (10) business day period immediately preceding the date the parties reach agreement as to any Net Worth Deficiency. The Parent shall have the option, at its sole discretion and using notwithstanding any language to the same accounting methods, policies, practices, procedures and estimation methods as those used contrary in the preparation Escrow Agreement, to receive the shares of Parent Stock necessary to satisfy 82% of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived Net Worth Deficiency from the items Stockholders directly (i.e. not from the "Escrow Shares") or from the Escrow Shares. Notwithstanding anything in this SECTION 2 to the contrary, if there is any Net Worth Deficiency and amounts the Stockholders dispute any item contained on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Date Balance Sheet, the Stockholders shall notify the Parent in writing of each disputed item (collectively, the "Closing Balance SheetsDisputed Amounts"), which shall be prepared and specify the amount thereof in conformity with GAAP applied on a basis consistent with dispute within thirty (30) business days after the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation delivery of the balance sheet for Closing Date Balance Sheet. If the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity Parent and the related adjustment contemplated by this Section 2.7 is to measure Stockholders cannot resolve any such dispute which would eliminate or reduce the amount of Available Cashthe Net Worth Deficiency, Working Capital and Tangible Common Equity and then such processes are not intended dispute shall be resolved by an independent nationally recognized accounting firm which is reasonably acceptable to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet Parent and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP Stockholders (the "Independent Accountant ArbitratorAccounting Firm") to make a ). The determination as to the Disputed Items; provided that if of the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection Accounting Firm shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs as promptly as practical and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding onon the parties, and shall not absent manifest error which error may only be subject corrected by such Independent Accounting Firm. Any expenses relating to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later engagement of the final determination of Independent Accounting Firm shall be allocated between the Seller Closing Balance Sheet (Parent and the calculations Stockholders so that the Stockholders' aggregate share of Available Cash and Working Capital set forth therein) or such costs shall bear the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect same proportion to the items and amounts accepted or deemed to have been accepted total costs that the Disputed Amounts unsuccessfully contested by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items the Stockholders (as finally determined by the Independent Accountant Arbitrator; such final calculations being Accounting Firm) bear to the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any total of the amounts that were transferred or retained by Disputed Amounts so submitted to the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerIndependent Accounting Firm.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 days following The Parent Pre-Merger Value and the Closing Date, Seller shall prepare and deliver Company Pre-Merger Value will each be subject to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) final adjustment (the "Seller “Post-Closing Balance Sheet"), which shall be prepared Adjustment”) in conformity with GAAP applied on a basis consistent accordance with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation terms of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheetSchedule 2.2(d). Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Post-Closing Balance Sheet Adjustment:
(and i) in the calculations of Available Cash and Working Capital set forth thereinevent that the Merger Consideration (calculated prior to the Post-Closing Adjustment) or exceeds the IDB Buyer Closing Balance Sheet Merger Consideration (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" calculated after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"Post-Closing Adjustment), then: (A) an amount of Adjustment Shares with a value (based on the following adjustments Merger Share Price) equal to such excess shall be effected:
released to Parent from escrow under the Escrow Agreement, and (iB) all Adjustment Shares (if any any) remaining in escrow under the Escrow Agreement shall be released to the Stockholder; provided, that, in the event that after the release of all of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash AllocationAdjustment Shares to Parent pursuant to clause (A), then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount a portion of such excess(esexcess amount remains outstanding, the Stockholder shall transfer to Parent that number of additional shares of Parent Common Stock with a value (based on the Merger Share Price) equal to Seller.such shortfall; and
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in event that the Merger Consideration (calculated after giving effect to the Post-Closing Adjustment) exceeds the Merger Consideration (calculated prior to the Post-Closing Adjustment), then: (A) Parent shall issue and deliver to Stockholder an amount of validly issued, fully paid and nonassessable shares of Parent Common Stock with a value (based on the Merger Share Price) equal to such excess (provided, that, if the issuance of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall such additional shares would cause the applicable Seller Retained Subsidiaries toStockholder’s post-Closing ownership percentage to exceed the Maximum Percentage then only such number of shares of Parent Common Stock as will cause the Stockholder to own the Maximum Percentage), and (B) pay all Adjustment Shares in escrow under the amount of such excess(es) Escrow Agreement shall be released to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash AmountStockholder.
Appears in 1 contract
Post-Closing Adjustment. The “Post-Closing Adjustment” may be either a positive or negative amount, and shall be equal to (a) Within 90 days following (i) the Working Capital Adjustment Amount set forth in the Final Closing Statement, minus (ii) the Working Capital Adjustment Amount set forth in the Estimated Closing Statement, plus (b) (i) the Closing DateIndebtedness Amount set forth in the Estimated Closing Statement, Seller minus (ii) the Closing Indebtedness Amount set forth in the Final Closing Statement, plus (c) (i) the Closing Cash Amount set forth in the Final Closing Statement, minus (ii) the Closing Cash Amount set forth in the Estimated Closing Statement, plus (d) (i) the Closing Transaction Expense Amount set forth in the Estimated Closing Statement, minus (ii) the Closing Transaction Expense Amount set forth in the Final Closing Statement. If the Post-Closing Adjustment is a positive amount, then Purchaser shall prepare and deliver pay in cash to IDB Buyer a consolidated balance sheet Parent (or one or more Affiliates designated by Parent) the amount of the Seller Retained Subsidiaries as Post-Closing Adjustment. If the Post-Closing Adjustment is a negative amount, then Parent (or an Affiliate designated by Parent) shall pay in cash to Purchaser the absolute value of the amount of the Post-Closing (giving effect to Adjustment. The Closing Purchase Price, as adjusted by the Estimated Available Cash Allocation) (the "Seller Post-Closing Balance Sheet")Adjustment, which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on “Final Purchase Price.” Any such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver payment pursuant to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules by wire transfer of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
immediately available funds within five (d5) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Final Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect Statement to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined an account designated in writing by the Independent Accountant Arbitrator; party entitled to such final calculations being payment within three (3) Business Days after the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any determination of the amounts that were transferred or retained by the IDB Subsidiaries at Final Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerStatement.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
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Post-Closing Adjustment. (a) Within 90 60 days following the Closing DateClosing, Seller shall TPI shall, at its expense and with cooperation from Newco's employees and access to Newco's books and records, prepare or cause to be prepared, and deliver to IDB Buyer PCA and Newco a consolidated balance sheet statement (the "Closing Working Capital Statement") which shall set forth the Net Working Capital of the Seller Retained Subsidiaries Containerboard Business as of the Closing (giving effect to the Estimated Available Cash Allocation) Determination Date (the "Seller Closing Balance SheetWorking Capital") and as of the date of the Most Recent Statement of Assets and Liabilities. The amounts so computed shall be used to determine the amount of the payment between TPI and Newco in accordance with this Section 2.5 (the "Post Closing Adjustment"), which . The Closing Working Capital Statement shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methodsprinciples, policiespractices and procedures that were used in preparing the Most Recent Statement of Assets and Liabilities. Notwithstanding the foregoing, practicesthe following paragraphs (i) through (viii) shall take precedence over such principles, practices and procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, Closing Working Capital Statement:
(i) The Current Assets included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Closing Working Capital derived from Statement will be adjusted to exclude the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance SheetRetained Assets, the "LIFO reserve and any current assets related to Tenneco defined benefit pension plans and shall not be taken into account in computing the Post Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, Adjustment.
(ii) The Current Liabilities included in the GFI Financial StatementsClosing Working Capital Statement will be adjusted to exclude the Retained Liabilities. Any current liabilities related to Tenneco's defined benefit pension plans shall not be taken into account in computing the Post Closing Adjustment.
(iii) The Most Recent Statement of Assets and Liabilities does not, and the Closing Working Capital Statement will not, include any accrual or deferral related to federal, state, local or foreign income Taxes.
(iv) The Closing Working Capital Statement shall not include any dollar amounts related to the Existing Financing Arrangements.
(v) The Closing Working Capital Statement shall not include any dollar amounts related to the New Financing Arrangements. No Post Closing Adjustment shall result from the purchase during the period from the date of the Most Recent Statement of Assets and Liabilities to the Determination Date of any assets which shall include a calculation of Available Cash were leased at the IDB Subsidiaries date of the Most Recent Statement of Assets and Tangible Common Equity, Liabilities.
(vi) The Closing Working Capital Statement shall not include any liabilities related to bonuses or incentive compensation earned in each case derived from 1998.
(vii) Any change in accounting principles after the items date of the Most Recent Statement of Assets and amounts on such balance sheet. The Parties agree that the purpose of preparing Liabilities (including any changes required by GAAP) will not apply in determining the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Statement.
(viii) The Closing Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, Statement shall exclude any increase or decrease in Current Assets or Current Liabilities resulting directly from accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquityTransaction.
(b) Following delivery of the Seller Closing Balance Sheet PCA and the IDB Buyer Closing Balance Sheet PCA's accountants and prior to the deadline for delivering a Dispute Notice, each of Seller Newco and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other PartyNewco's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer accountants shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery by TPI of the Dispute Notice by Seller Closing Working Capital Statement to review the Closing Working Capital Statement. In the event that PCA or IDB BuyerNewco determines that the Closing Working Capital as derived from the Closing Working Capital Statement has not been determined on the basis set forth herein, Seller and IDB Buyer PCA or Newco shall endeavor inform TPI in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP writing (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash AllocationObjection"), the following adjustments shall be effected:
(i) if any setting forth a specific description of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess basis of the corresponding amounts that Objection and the adjustments to the Closing Working Capital which PCA or Newco believes should have been transferred be made, which Objection must be delivered to TPI on or retained by before the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount last day of such excess(es) 30-day period. TPI shall then have 30 days to Seller.
(ii) if any of review and respond to the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB BuyerObjection. Notwithstanding the foregoing TPI and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.PCA and Newco shall
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Post-Closing Adjustment. (aA) Within 90 Purchaser shall cause to be prepared and, as soon as practical, but in no event later than ninety (90) days following after the Closing Date, Seller shall prepare and deliver cause to IDB Buyer a consolidated balance sheet of be delivered to Sxxxxxx, the Seller Retained Subsidiaries as Purchaser’s calculation of the Closing (giving effect to the Estimated Available Cash Allocation) Date Balance Sheet (the "Seller “Purchaser Closing Date Balance Sheet"”), which shall be prepared in conformity together with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working following adjustment to the Sxxxxxx Closing Payment, as applicable (1) increasing the amount thereof by the excess, if any, of the Total Capital derived from shown on the items and amounts Purchaser Closing Date Balance Sheet over the Base Total Capital (such excess, the “Closing Date Balance Sheet Positive Adjustment”), or (2) decreasing the amount thereof by the excess, if any, of the Base Total Capital over the Total Capital shown on the Purchaser Closing Date Balance Sheet (such balance sheetexcess, the “Closing Date Balance Sheet Negative Adjustment”). Within 90 days following five (5) Business Days of its delivery of the Purchaser Closing DateDate Balance Sheet, IDB Buyer Purchaser shall prepare and deliver pay to Seller a consolidated balance sheet of IDB Buyer and Sxxxxxx the IDB Subsidiaries as amount of the Closing Date Balance Sheet Positive Adjustment, if any, as determined by the Purchaser Closing Date Balance Sheet (giving effect the “Estimated Closing Adjustment Payment”) in accordance with such payment instructions as Sxxxxxx shall designate. In the event that Purchaser does not deliver the Purchaser Closing Date Balance Sheet within such ninety (90)-day period, Sxxxxxx shall have the right to prepare the Closing Date Balance Sheet and Purchaser shall be deemed to have accepted in full the Closing Date Balance Sheet as prepared by Sxxxxxx, and, for purposes of determining the Closing Date Balance Sheet Positive Adjustment or Closing Date Balance Sheet Negative Adjustment, as applicable, such Closing Date Balance Sheet shall be deemed final, binding and conclusive upon Purchaser and Sxxxxxx.
(B) The Purchaser shall promptly furnish to Sxxxxxx such work papers, documents, general ledger records and other documents and information relating to the Estimated Available Cash Allocation) (the "IDB Buyer Purchaser Closing Balance Sheet" and together with the Seller Closing Date Balance Sheet, the "Closing Balance Sheets")and promptly provide access to personnel and answer questions, which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies Sxxxxxx may reasonably request for the purpose of evaluating and verifying data in the Purchaser Closing Date Balance Sheet and/or for preparing the Closing Date Balance Sheets or determining Available CashSheet, Working Capital and Tangible Common Equityas applicable.
(bC) Following delivery If Sxxxxxx disagrees in whole or in part with the Purchaser Closing Date Balance Sheet, then within thirty (30) days after his receipt thereof, Sxxxxxx shall notify Purchaser of such disagreement in writing (the “Closing Notice of Disagreement”), setting forth in reasonable detail the particulars of any such disagreement. To be effective, any such Closing Notice of Disagreement shall include a copy of Purchaser Closing Date Balance Sheet marked to indicate the specific line items of the Seller Purchaser Closing Date Balance Sheet that are in dispute (the “Disputed Closing Date Balance Sheet Line Items”) and shall be accompanied by Stephan’s calculation of each of the Disputed Closing Date Balance Sheet Line Items and Stephan’s determination of the Closing Date Balance Sheet and the IDB Buyer Closing Date Balance Sheet Positive Adjustment or Closing Date Balance Sheet Negative Adjustment, as applicable. All items that are not Disputed Closing Date Balance Sheet Line Items shall be final, binding and prior conclusive for purposes of determining the Closing Date Balance Sheet Positive Adjustment or Closing Date Balance Sheet Negative Adjustment, as applicable, hereunder unless the resolution of a Disputed Closing Date Balance Sheet Line Item affects an undisputed item, in which case such undisputed item shall remain open and be considered a Disputed Closing Date Balance Sheet Line Item to the deadline extent of such corresponding effect. In the event that Sxxxxxx does not provide a Closing Notice of Disagreement within such thirty (30)-day period, Sxxxxxx shall be deemed to have accepted in full the Purchaser Closing Date Balance Sheet, and, for delivering purposes of determining the Closing Date Balance Sheet Positive Adjustment or Closing Date Balance Sheet Negative Adjustment, as applicable, such Purchaser Closing Date Balance Sheet shall become final, binding and conclusive upon Purchaser and Sxxxxxx. In the event any Closing Notice of Disagreement is properly and timely provided, Purchaser and Sxxxxxx shall use their respective commercially reasonable efforts for a Dispute Noticeperiod of fifteen (15) days (or such longer period as they may mutually agree) to resolve any Disputed Closing Date Balance Sheet Line Items. During Stephan’s aforesaid thirty (30) day period and until the Closing Date Balance Sheet shall be finally determined as provided herein, Purchaser and Sxxxxxx shall cooperate with each of Seller other and IDB Buyer will provide the other Party and its Representatives with shall have reasonable access to the books and records, personnel working papers, schedules and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review calculations of the Seller other in order to prepare, or used in the preparation of, their respective Closing Date Balance Sheet. If, at the end of such period, Purchaser and Sxxxxxx are unable to resolve all Disputed Closing Date Balance Sheet or Line Items, then any such remaining Disputed Closing Date Balance Sheet Line Items shall be referred to an independent accounting firm jointly designated by Purchaser and Sxxxxxx (the IDB Buyer Closing Balance Sheet“Accounting Firm”); provided, that in the event the Purchaser and Sxxxxxx cannot mutually agree as applicable. Each of Seller and IDB Buyer shall have 45 days after to the later delivery designation of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Accounting Firm, each such Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicablewill designate an accounting firm, and the basis two accounting firms will designate a third accounting firm to act as the Accounting Firm, except that Gxxxx Xxxxxxxx LLP shall not be selected as the Accounting Firm, unless the Purchaser and Sxxxxxx mutually agree.
(D) Purchaser and Sxxxxxx will enter into reasonable and customary arrangements for the services to be rendered by the Accounting Firm under this Section 2.2(b)(ii), such services to be provided in the Accounting Firm’s capacity as an accounting expert and not an arbitrator. The Accounting Firm shall be directed to determine as promptly as practicable (and Purchaser and Sxxxxxx shall use commercially reasonable efforts to cause such determination to occur within thirty (30) days) the resolution of the Disputed Closing Date Balance Sheet Line Items. In making any determination of the Disputed Closing Date Balance Sheet Line Items, the Accounting Firm may not assign a value greater than the greatest value for such dispute together with such Party's calculation of item claimed by either Party or smaller than the smallest value for such item or amount claimed by either Party, and the Accounting Firm may only make a determination regarding the matters in dispute (between Purchaser and Sxxxxxx. Purchaser and Sxxxxxx shall each furnish to the "Dispute Notice"Accounting Firm such work papers and other documents and information relating to the Disputed Closing Date Balance Sheet Line Items, and each item or amount shall provide access to personnel and answer questions, as such Accounting Firm may reasonably request. The determination of the Disputed Closing Date Balance Sheet Line Items by the Accounting Firm shall be set forth in writing and shall be final, conclusive and binding on the Dispute Notice, a "Disputed Item")Purchaser and Sxxxxxx for purposes of determining the Closing Date Balance Sheet absent fraud or manifest error and shall be based solely on the terms of this Agreement and the written submissions by Purchaser and Sxxxxxx and not by independent review or investigation. Other than The Parties agree that judgment may be entered upon the Disputed Itemsaward of the Accounting Firm in any court having jurisdiction pursuant to Section 12.13 hereof.
(E) Subject to the next sentence, each Party shall be deemed responsible for its own fees and expenses incurred in connection with this Section 2.2(b). The Purchaser and Sxxxxxx shall each pay one half of the fees and expenses payable to have accepted all items and amounts contained the Accounting Firm in connection with resolving any dispute under this Section 2.2(b), except that, subject to Purchaser’s compliance with its obligations under Section 2.2(b)(ii)(B), in the Seller event that one Party’s determination of the Disputed Closing Date Balance Sheet Line Items as a whole varies by 20% or more from the IDB Buyer determination of the Disputed Closing Date Balance SheetSheet Line Items as a whole by the Accounting Firm hereunder, then such Party shall be solely responsible for the fees and expenses of the Accounting Firm.
(F) Promptly following (x) the Disputed Closing Date Balance Sheet Line Items have been finally determined or (y) the Closing Date Balance Sheet has been finally determined pursuant to clause (A) of Section 2.2(b)(ii), Purchaser shall prepare, and deliver to Sxxxxxx (or Sxxxxxx shall prepare and deliver to Purchaser if the last sentence of Section 2.2(b)(ii)(A) is applicable), the Closing Date Balance Sheet and the calculation of the Closing Date Balance Sheet Positive Adjustment or Closing Date Balance Sheet Negative Adjustment, as applicable, delivered by whereupon the other Party pursuant to Section 2.7(a).following payment shall be made:
(c1) For 30 days after If the later delivery of Closing Date Balance Sheet Positive Adjustment, as finally determined, exceeds the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacityEstimated Closing Adjustment Payment, then Seller and IDB Buyer Purchaser shall within 14 days after the end of pay an amount in cash equal to such 30 day period agree on an alternate independent accounting firm or excess to Sxxxxxx in default thereof accordance with such selection payment instructions as Sxxxxxx shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.designate; or
(d2) If (x) the Estimated Closing Adjustment Payment exceeds the Closing Date Balance Sheet Positive Adjustment, as finally determined, or (y) there is a referral to the Independent Accountant ArbitratorClosing Date Balance Sheet Negative Adjustment, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and then Sxxxxxx shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be pay an amount within the range established with respect in cash equal to such Disputed Item by Seller's excess or IDB Buyer's calculation in the Seller Closing Date Balance Sheet or IDB Buyer Closing Balance SheetNegative Adjustment, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer to Purchaser in accordance with such payment instructions as Purchaser shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9designate.
(eG) No later than 30 days following Any amount payable pursuant to Section 2.2(b)(ii)(F) shall be paid within five (5) Business Days after the later delivery of the final determination of the Seller Closing Date Balance Sheet (and the calculations via wire transfer of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect immediately available funds to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined account designated herein by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Sellerrecipient thereof.
(iiH) if any of Payments pursuant to Section 2.2(b)(ii)(F) shall be treated for all purposes as adjustments to the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash AmountConsideration.
Appears in 1 contract
Post-Closing Adjustment. (ai) Within 90 days following Following the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet determination of the Seller Retained Subsidiaries as components of the Closing Date Statement, if the result of (giving effect to x) the Final Working Capital minus the Estimated Available Cash AllocationWorking Capital plus (y) the Estimated Assumed Indebtedness minus the Final Assumed Indebtedness is an amount greater than zero (the "“Net Positive Purchase Price Adjustment Amount”) then (A) Buyer shall pay the Net Positive Purchase Price Adjustment Amount in cash to Seller Closing Balance Sheet"), which and (B) Buyer and Seller shall be prepared in conformity with GAAP applied on deliver a basis consistent with joint direction instructing the preparation of, and using Escrow Agent to release the same accounting methods, policies, practices, procedures and estimation methods as those used then available funds in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Post-Closing Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) Escrow Fund to Seller.
(ii) if any Following the determination of the amounts that were transferred or retained by components of the Seller Retained Subsidiaries as provided Closing Date Statement, if the result of (x) the Final Working Capital minus the Estimated Working Capital plus (y) the Estimated Assumed Indebtedness minus the Final Assumed Indebtedness is an amount less than zero (the “Net Negative Purchase Price Adjustment Amount”) then (A) Buyer shall be entitled to receive a payment in cash out of the then available funds in the Estimated Available Cash Allocation were Post-Closing Working Capital Escrow Fund in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then such amount and Buyer and Seller shall (or shall cause deliver a joint direction instructing the applicable Seller Retained Subsidiaries to) pay Escrow Agent to make such payment to Buyer. If the amount of such excess(es) the Post-Closing Working Capital Escrow Fund is greater than the absolute value of the Net Negative Purchase Price Adjustment Amount, then Buyer and Seller shall deliver a joint direction instructing the Escrow Agent to IDB Buyermake a payment to Seller equal to the amount of remaining funds in the Post-Closing Working Capital Escrow Fund after the distribution of the Net Negative Purchase Price Adjustment Amount to Buyer in accordance with this Section 2.06(d). Notwithstanding If the foregoing amount of the Post-Closing Working Capital Escrow Fund is less than the absolute value of the Net Negative Purchase Price Adjustment Amount, Buyer and for Seller shall deliver a joint direction instructing the avoidance of doubt, Escrow Agent to make a payment to Buyer in no event shall Seller be required to pay an amount equal to such shortfall from the Post-Closing Indemnification Escrow Fund. Set forth in excess Section 2.06(d)(ii) of the Excess Cash Disclosure Schedules are examples of the determination of the post-Closing adjustments contemplated in Sections 2.06(d)(i) and (ii), demonstrating both a Net Positive Purchase Price Adjustment Amount and a Net Negative Purchase Price Adjustment Amount.
(iii) All payments pursuant to this Section 2.06(d) shall be made by wire transfer of immediately available funds to an account designated in advance by Seller or Buyer, as applicable, and shall be made on or prior to the fifth (5th) Business Day following: (A) the thirty (30)-day period following Buyer’s delivery of the Closing Date Statement pursuant to Section 2.06(b) if Seller does not timely dispute such amounts pursuant to Section 2.06(c)(ii); (B) the date of Seller’s and Buyer’s mutual determination of Final Working Capital and Final Assumed Indebtedness in the event Seller timely disputes such amounts pursuant to Section 2.06(c)(ii) and Seller’s and Buyer’s differences are resolved without the engagement of an Independent Accountant pursuant to Section 2.06(c)(iii); and (C) the date of the Independent Accountant’s determination of Final Working Capital and/or Final Assumed Indebtedness pursuant to Section 2.06(c)(iii) in the event Seller timely disputes such amounts pursuant to Section 2.06(c)(ii) and Seller and Buyer are unable to resolve their differences pursuant to Section 2.06(c)(ii).
(iv) The amount of any Net Positive Purchase Price Adjustment Amount or any Net Negative Purchase Price Adjustment Amount, as the case may be, shall bear interest from and including the Closing Date to but excluding the date of payment at a rate per annum equal to the rate of interest published by The Wall Street Journal as the “prime rate” at large U.S. money center banks on the Closing Date, calculated on the basis of a 365 day year and the actual number of days elapsed, without compounding.
Appears in 1 contract
Samples: Asset Purchase Agreement (MWI Veterinary Supply, Inc.)
Post-Closing Adjustment. (a) Within 90 As soon as practicable, but in no event later than 60 days following after the Closing Date, Seller Buyer shall prepare and deliver to IDB Buyer Member Agent a consolidated balance sheet of the Seller Retained Subsidiaries Company as of the Closing (giving effect to the Estimated Available Cash Allocation) Date (the "Seller “Closing Date Balance Sheet"”), which . Such balance sheet shall be prepared in conformity with GAAP applied on accompanied by a basis consistent with schedule (the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a “Buyer Adjustment Schedule”) setting forth Buyer’s calculation of Available Cash at (i) the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer Assets and the IDB Subsidiaries Working Capital Liabilities, in each case as of the Closing Date (giving effect the “Proposed Closing Date Working Capital Amount”), and (ii) the amount by which the Purchase Price should be adjusted (A) upward to the extent that the Proposed Closing Date Working Capital Amount is greater than the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation ofDate Working Capital Amount, and using (B) downward to the same accounting methodsextent that the Proposed Closing Date Working Capital Amount is less than the Estimated Closing Date Working Capital Amount (such proposed upward or downward adjustment is hereinafter referred to as the “Proposed Final Adjustment Amount Due”). For the avoidance of doubt, policiesfor purposes of computing the Final Closing Date Working Capital Amount and the Final Adjustment Amount Due, practicesno cap or limitation on the upward or downward adjustment, procedures and estimation methods as those used if any, to the Purchase Price in the preparation respect of the balance sheet for the fiscal year ended December 31Proposed Final Adjustment Amount Due, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equityapply.
(b) Following delivery After receipt of the Seller Buyer Adjustment Schedule, Member Agent may request, and Buyer will provide to Member Agent and its accountants and other representatives, upon reasonable notice, reasonable access during normal business hours to, or copies of, as Member Agent or such accountants and other representatives shall reasonably request, the information (including the books and records of the Surviving Company), data and work papers used in connection with the preparation of the Buyer Adjustment Schedule and to calculate the Proposed Final Adjustment Amount Due, and will make its and the Surviving Company’s personnel and accountants reasonably available to Member Agent and its accountants and other representatives to discuss any such information, data or work papers. Without limiting the generality of the foregoing, during the Dispute Period (as defined below), Buyer agrees to make available to Member Agent the services of the Chief Financial Officer and Controller of the Company as of the Effective Time (to the extent such persons are employees of the Surviving Company or Buyer during the Dispute Period) as requested by Member Agent to assist Member Agent with its evaluation and review of the Closing Date Balance Sheet and Buyer Adjustment Schedule; provided, however, that neither the Chief Financial Officer nor the Controller shall be required to devote more than 50% of his working hours each week to assisting Member Agent with its evaluation and review of the Closing Date Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Adjustment Schedule. Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, agrees that such persons shall not in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall way be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet breached any fiduciary duty, duty of loyalty, or other duty owed to Buyer or the IDB Surviving Company by so assisting Member Agent, and shall not have any liability to Buyer Closing Balance Sheet, as applicable, delivered by or the other Party pursuant Surviving Company with respect to Section 2.7(a)such assistance.
(c) For Member Agent shall have 30 days after from the later delivery of date that Member Agent receives the deliveries contemplated in Section 1.11(a) (the “Dispute Notice by Seller or IDB Period”) to notify Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. Ifwriting, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to whether Member Agent (i) agrees with the Disputed Items; provided that if Buyer Adjustment Schedule and the Independent Accountant Arbitrator is unable Proposed Final Adjustment Amount Due (an “Approval Notice”) or unwilling to serve in this capacity(ii) disagrees with such calculations, then Seller and IDB Buyer shall within 14 days after identifying with reasonable detail the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, items with which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant ArbitratorMember Agent disagrees (a “Dispute Notice”).
(d) If there Member Agent fails to deliver a Dispute Notice to Buyer during the Dispute Period, the Buyer Adjustment Schedule and the Proposed Final Adjustment Amount Due shall be deemed to be final and correct and shall be binding upon each of the parties hereto.
(e) If Member Agent delivers a Dispute Notice to Buyer during the Dispute Period, Buyer and Member Agent shall, for a period of 20 days from the date the Dispute Notice is a delivered to Buyer (the “Resolution Period”), use their respective good faith efforts to amicably resolve the items in dispute. Any items so resolved by them shall be deemed to be final and correct as so resolved and shall be binding upon each of the parties hereto.
(f) If Buyer and Member Agent are unable to resolve all of the items in dispute during the Resolution Period, then either Member Agent or Buyer may refer the items remaining in dispute (the “Remaining Disputes”) to Deloitte & Touche LLP, 2000 X. Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000 (the “Independent Accountants”). Such referral shall be made in writing to the Independent Accountant ArbitratorAccountants, each copies of Seller and IDB Buyer agrees, if requested by which shall concurrently be delivered to the non-referring party hereto. The referring party shall furnish the Independent Accountant ArbitratorAccountants, at the time of such referral, with copies of the deliveries contemplated in Section 1.11(a) and the Dispute Notice. The parties shall also furnish the Independent Accountants with such other information and documents as the Independent Accountants may reasonably request in order for them to execute a reasonable engagement letter and resolve the Remaining Disputes. The parties hereto shall submit also, within ten days of the date the Remaining Disputes are referred to the Independent Accountant Arbitrator not later than ten Business Days after its appointmentAccountants, provide the Independent Accountants with a written statement summarizing its position notice (a “Position Statement”) describing in reasonable detail their respective positions on the Disputed ItemsRemaining Disputes (copies of which shall concurrently be delivered to the other party hereto). If any party fails to timely deliver its Position Statement to the Independent Accountants, together with such supporting documentation as it deems necessarythe Independent Accountants shall resolve the Remaining Disputes solely upon the basis of the information otherwise provided to them. The Independent Accountant Arbitrator Accountants shall act as an arbitrator resolve all Remaining Disputes in a written determination to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect be delivered to each Disputed Item shall be an amount within of the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision parties hereto within 30 days of its appointment or as soon thereafter as after such matter is reasonably practicablereferred to them. The decision/award decision of the Independent Accountant Arbitrator Accountants as to the Disputed Items Remaining Disputes shall be final and binding on, upon the parties hereto (except to correct manifest clerical or mathematical errors) and shall not be subject to appeal byjudicial review. The fees and disbursements of the Independent Accountants shall be apportioned between Buyer and the Company based on the total dollar value of disputed exceptions resolved in favor of each such party, Seller with each such party bearing such percentage of the fees and IDB Buyer or any other Person, and may be entered and enforced disbursements of the Independent Accountants as provided in Section 9.9the aggregate disputed exceptions resolved against that party bears to the total dollar value of all disputed exceptions considered by the Independent Accountants.
(eg) No later than 30 days Within five Business Days following the later date on which the Final Adjustment Amount Due is finally determined pursuant to this Agreement (whether through failure of Member Agent to timely deliver a Dispute Notice, agreement of the parties, or final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined any Remaining Disputes by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:Accountants):
(i) if any the Final Adjustment Amount Due results in an upward adjustment to the Purchase Price, (x) Buyer shall deliver to (a) the Paying Agent by wire transfer of immediately available funds, an amount equal to the amounts that were transferred or retained product of (i) the Final Adjustment Amount Due multiplied by (ii) 0.93 for distribution to the IDB Subsidiaries at Closing as provided Members in accordance with the procedures set forth in Section 1.9(b) and pursuant to the allocations set forth in the Estimated Available Cash Allocation were in excess Closing Date Capitalization Schedule and (b) the Escrow Agent by wire transfer of immediately available funds, an amount equal to the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in product of (x) the Final Available Cash AllocationAdjustment Amount Due multiplied by (y) 0.07, then IDB Buyer which shall be added to the General Indemnification Escrow, and (or y) the parties shall cause instruct the applicable IDB Subsidiaries to) pay Escrow Agent to promptly disburse the amount of such excess(es) Post-Closing Adjustment Escrow in accordance with the Escrow Agreement to Sellerthe Paying Agent for distribution to the Members in accordance with the procedures set forth in Section 1.9(b).
(ii) if any the Final Adjustment Amount Due results in a downward adjustment to the Purchase Price, the parties shall instruct the Escrow Agent to promptly disburse from the Post-Closing Adjustment Escrow in accordance with the Escrow Agreement (x) to Buyer, an amount equal to the Final Adjustment Amount Due and (y) to the Paying Agent for distribution to the Members in accordance with the procedures set forth in Section 1.9(b), the remaining amounts (if any) of the amounts that were transferred or retained by Post-Closing Adjustment Escrow.
(h) For purposes of this Section 1.11, the Seller Retained Subsidiaries as provided in following defined terms have the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.following meanings:
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 days following the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if If the Final Closing Date Cash Consideration is greater than the Estimated Closing Date Cash Consideration (any such increase, the “Price Increase”), then (x) within five (5) Business Days from the date on which the Final Closing Date Cash Consideration is determined in accordance with Section 2.3(d), Buyer shall pay or cause to be paid to Sellers (in accordance with such Seller’s respective Pro Rata Share), by wire transfer of immediately available funds to the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided account(s) designated in the Estimated Available Payment Spreadsheet, an amount in cash equal to the Price Increase, and (y) SD Seller and Buyer shall deliver a joint written authorization to the Escrow Agent within five (5) Business Days from the date on which the Final Closing Date Cash Allocation were Consideration is determined in excess accordance with Section 2.3(d), instructing the Escrow Agent to release the entire Working Capital Escrow Fund to Sellers (in accordance with each such Seller’s respective Pro Rata Share), by wire transfer of immediately available funds, to the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided accounts designated in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerPayment Spreadsheet.
(ii) If the Final Closing Date Cash Consideration is less than the Estimated Closing Date Cash Consideration (such decrease, the “Price Decrease”), then SD Seller and Buyer shall deliver a joint written authorization to the Escrow Agent within five (5) Business Days from the date on which the Final Closing Date Cash Consideration is determined in accordance with Section 2.3(d), instructing the Escrow Agent to release to (A) Buyer, the lesser of (I) an amount of cash equal to the Price Decrease from the Working Capital Escrow Fund and (II) all funds then held in the Working Capital Fund, in each case, by wire transfer of immediately available funds, to an account designated in writing by Buyer to the Escrow Agent, and (B) the remaining amount of cash in the Working Capital Escrow Fund, if any after giving effect to clause (A), to Sellers (in accordance with each such Seller’s respective Pro Rata Share), by wire transfer of immediately available funds, to the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided accounts designated in the Estimated Available Cash Allocation were Payment Spreadsheet; provided, however, that, subject to the limitations set forth in excess of Section 2.3(b), if the corresponding amounts that should have been transferred or retained by Working Capital Escrow Fund is insufficient to cover the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the absolute value amount of such excess(esadjustment, then the remaining amount shall be promptly (but in any event within five (5) Business Days from the date on which the adjustment to IDB Buyer. Notwithstanding the foregoing Closing Date Cash Consideration is determined in accordance with this Section 2.3(f)) paid to Buyer directly by Sellers by wire transfer of immediately available funds to an account designated in writing by Xxxxx.
(iii) If the Final Closing Date Cash Consideration is equal to the Estimated Closing Date Cash Consideration, then no adjustment shall be made to the consideration payable hereunder pursuant to this Section 2.3(f), and for SD Seller and Buyer shall deliver a joint written authorization to the avoidance Escrow Agent within five (5) Business Days from the date on which the adjustment to the Closing Date Cash Consideration is determined in accordance with this Section 2.3(f), instructing the Escrow Agent to release the entire Working Capital Escrow Fund to Sellers (in accordance with each such Seller’s respective Pro Rata Share), by wire transfer of doubtimmediately available funds, to the accounts designated in no event shall writing by SD Seller be required to pay an amount in excess of the Excess Cash AmountEscrow Agent at least five (5) Business Days prior to such payment.
Appears in 1 contract
Samples: Purchase Agreement (Gogo Inc.)
Post-Closing Adjustment. (a) Within 90 As soon as practicable, but no later than sixty (60) days following after the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller the Seller, or any other Affiliate of Parent as designated by Parent, a consolidated balance sheet statement (the “Closing Statement”) setting forth Buyer’s calculation of IDB Buyer (i) the Closing Date Cash, (ii) the Closing Date Indebtedness, (iii) the Closing Date Working Capital, (iv) the Unpaid Transaction Expenses and (v) the IDB Subsidiaries as “Final Purchase Price”, which shall equal (A) the Base Payment, plus (B) the amount of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Date Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure minus (C) the amount of Available Cashthe Closing Date Indebtedness, and (D)(1) if the Closing Date Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgmentsAdjustment is positive, accounting methodsplus, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Date Working Capital and Tangible Common EquityAdjustment or (2) if the Closing Date Working Capital Adjustment is negative, minus, the absolute value of the Closing Date Working Capital Adjustment, minus (E) the Unpaid Transaction Expenses (collectively, (B) through (E), the “Post-Closing Adjustment”). Buyer’s calculations set forth in the Closing Statement (collectively, the “Proposed Purchase Price Calculations”) shall be delivered with reasonable supporting detail with respect to the calculation of such amounts.
(b) Following delivery Within forty-five (45) days of receipt of the Seller Closing Balance Sheet and Statement, Parent may provide written notice to Buyer disputing all or a part of the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering Proposed Purchase Price Calculations (such notice, a “Purchase Price Dispute Notice”). If Parent does not provide a Purchase Price Dispute Notice to Buyer within such 45-day period, each of Seller and IDB Buyer will provide then the other Party and its Representatives with reasonable access to parties agree that the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected Proposed Purchase Price Calculations set forth in the Seller Closing Balance Sheet (including Statement shall be deemed final and binding on the calculations of Available Cash and Working Capital parties hereto. Any Purchase Price Dispute Notice shall set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and in reasonable detail the basis for such dispute together disagreement, the amounts involved and Parent’s determination (in each case, with such Party's calculation reasonable supporting detail) of such item or amount in dispute the (i) the Closing Date Cash, (ii) the Closing Date Indebtedness, (iii) the Closing Date Working Capital and (iv) the Unpaid Transaction Expenses. If a Purchase Price Dispute Notice is provided to Buyer, then Buyer and Parent shall use commercially reasonable efforts to resolve the disputed items (the "“Disputed Items”) during the thirty (30)-day period commencing on the date of Buyer’s receipt of the Purchase Price Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller If Parent and IDB Buyer shall endeavor in good faith do not agree upon a final resolution with respect to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item Items within such 30 30-day period, Seller then the remaining items in dispute shall be submitted immediately to a mutually agreeable accounting firm to be determined by Parent and IDB Buyer shall engage Deloitte & Touche LLP (or, if such firm declines to be retained to resolve the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacitydispute, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate another nationally recognized, independent accounting firm or reasonably acceptable to Buyer and Parent (in default thereof such selection shall be made pursuant to either case, the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder“Accounting Firm”). The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator Accounting Firm shall act as an expert and not as an arbitrator to determine, and shall make any determinations based solely on the materials submitted and presentations by Seller and IDB written submissions of Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute NoticeParent, on the other hand, and not by independent investigation. Seller and IDB Buyer shall The parties agree to instruct the Independent Accountant Arbitrator Accounting Firm to render its decision a determination of the applicable dispute within 30 forty-five (45) days after referral of the matter to such Accounting Firm, which determination must be in writing and must set forth, in reasonable detail, the basis therefor. The terms of appointment and engagement of the Accounting Firm shall be as agreed upon between Parent and Buyer, and any associated engagement fees shall be initially borne fifty percent (50%) by Parent and fifty percent (50%) by Buyer; provided that such fees shall ultimately be borne by Parent and Buyer in inverse proportion as they may prevail on matters resolved by the Accounting Firm, which proportionate allocations shall also be determined by the Accounting Firm at the time the determination of the Accounting Firm is rendered on the merits of the Disputed Items. For example, should the items in dispute total in amount to $1,000 and the Accounting Firm awards $600 in favor of Parent’s position, sixty percent (60%) of the costs of its appointment or as soon thereafter as is reasonably practicable. The decision/award review would be borne by Buyer and forty percent (40%) of the Independent Accountant Arbitrator as to the Disputed Items shall costs would be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced borne by Parent. Except as provided in the preceding sentence, all other costs and expenses incurred by the parties hereto in connection with resolving any dispute hereunder before the Accounting Firm shall be borne by the party incurring such cost and expense. In resolving the Disputed Items, the Accounting Firm (A) shall be bound by the provisions of this Section 9.92.07, (B) may not assign a value to any item greater than the greatest value claimed for such item or less than the smallest value for such item claimed by either Buyer or Parent and (C) shall limit its decision to such items as are in dispute and to only those adjustments as are necessary for the Proposed Purchase Price Calculations to comply with the provisions of this Agreement. Such determination of the Accounting Firm shall be conclusive and binding upon the parties hereto absent fraud or manifest error.
(d) The parties agree that they will, and agree to cause their respective Representatives to, cooperate and assist in the calculation of the Final Purchase Price and in the conduct of the review by the Accounting Firm of any proposed calculations of the Final Purchase Price or the components thereof, including the making available, to the extent necessary, of books, records, work papers and personnel.
(e) No later If the Final Purchase Price is equal to or greater than 30 days following the later of Estimated Purchase Price, then Buyer shall promptly (but in any event within ten (10) Business Days after the final determination of date on which the Final Purchase Price is determined pursuant to this Section 2.07) pay to the Seller Closing Balance Sheet or any other Affiliate of Parent as designated by Parent an aggregate cash amount equal to such excess (and the calculations if any), by wire transfer of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect immediately available funds to the items and amounts accepted account or deemed to have been accepted accounts as directed by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided Parent in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall Closing Notice (or such other accounts as Parent shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) designate in writing to SellerBuyer).
(iif) if any of If the amounts that were transferred or retained by Estimated Purchase Price is greater than the Final Purchase Price, then the Seller Retained Subsidiaries as provided shall promptly (but in any event within ten (10) Business Days after the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in date on which the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries toPurchase Price is determined pursuant to this Section 2.07) pay to Buyer an aggregate cash amount equal to such excess, by wire transfer of immediately available funds to the account or accounts as Buyer shall designate in writing to Parent.
(g) Any amount of such excess(es) paid pursuant to IDB Buyer. Notwithstanding this Section 2.07 shall be treated as an adjustment to the foregoing and Final Purchase Price for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amounttax reporting purposes.
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Post-Closing Adjustment. At the Closing, the Primestar Valuation ----------------------- used to determine the number of Consideration Shares issuable to ASkyB shall be based on all Primestar Subscribers at the Closing Date, including, without limitation, those Primestar Subscribers who become subscribers 90 days or less prior to the Closing Date, or, in the case of those subscribers receiving one (or two) initial "free" month(s) for promotional purposes, 120 days or less (or 150 Days or less, as applicable) prior to the Closing Date (such subscribers being referred to herein as the "Recent Primestar Subscribers"); provided that, for Recent Primestar Subscribers, the requirements of clauses (a), (b) Within 90 days and (c) of the definition of Primestar Subscriber shall not be taken into account. On the 151st day following the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet the number of the Seller Retained Subsidiaries Primestar Subscribers as of the Closing Date shall be adjusted to take into account which Recent Primestar Subscribers shall be given full credit, one-half credit or no credit (giving effect to based on the Estimated Available Cash Allocationdefinition of Primestar Subscriber, including clauses (a), (b) and (c), and based on whether or not, and when, the Recent Primestar Subscribers have made payment for their subscriptions, and the Primestar Valuation shall be recomputed accordingly (the "Seller Closing Balance SheetAdjusted Primestar Valuation")), which shall be prepared in conformity accordance with GAAP applied on a basis consistent with Section 1.52 above. Following such recomputation, to the preparation ofextent that the Adjusted Primestar Valuation is less than the original Primestar Valuation then, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days 151st day following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of conversion price on the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicableNewco Preferred Stock, and the basis for such dispute together with such Party's calculation of such item or amount in dispute conversion price under the Convertible Notes (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party if any) shall be deemed appropriately adjusted, so that (i) the aggregate number of Conversion Shares issuable under the Newco Preferred Stock and the Convertible Notes is equal to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party number required pursuant to Section 2.7(a).
(c) For 30 days after 3.2, determined using the later delivery of Adjusted Primestar Valuation for the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB BuyerPrimestar Valuation, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any the aggregate number of Conversion Shares issuable under the Newco Preferred Stock does not exceed 20% of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess issued and outstanding capital stock of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash AmountNewco.
Appears in 1 contract
Samples: Asset Acquisition Agreement (Tci Satellite Entertainment Inc)
Post-Closing Adjustment. (a) Within 90 Attached as Schedule 2.9 is a certificate signed by the Chief Executive Officer of Company attaching a statement setting forth Company’s reasonable, good faith estimate of (i) the amount of all current liabilities (calculated in accordance with GAAP) of Company (excluding (i) the current portion of the outstanding principal of and interest on Company’s indebtedness under the Oxford Loan, (ii) the lease payments related to the Company’s facility at 1000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx that accrue after the Closing (but not including any amount arising from rental periods prior to Closing), (iii) the Company Expenses (defined below) and (iv) the Employee Payments (defined below)) outstanding at the Closing (collectively, the “Current Liabilities”), (ii) the amount of all Company Expenses and (iii) the amount of any bonuses, severance or back pay paid within six (6) months prior to the Closing and any bonuses, severance or back pay owing or accrued as of the Closing to employees of or consultants to Company, all amounts payable pursuant to the agreements set forth on Section 3.9(a) of the Company Disclosure Schedule and all amounts set forth on Section 3.14(f) of the Company Disclosure Schedule (it being understood that amounts set forth on Section 3.14(f) of the Company Disclosure Schedule that are payable to Mxxx Xxxxxxxx shall be included unless both (a) Mx. Xxxxxxxx has entered into the amendment of his employment agreement in the form attached hereto as Exhibit D and (b) Mx. Xxxxxxxx is hired as an employee of Parent or its subsidiaries within thirty (30) days of the Closing of this Agreement) (collectively, “Employee Payments”).
(b) As soon as reasonably practicable following the Closing Date, Seller and in any event within ninety calendar days thereafter, Parent shall prepare cause to be prepared and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect delivered to the Estimated Available Cash Allocation) Stockholders’ Agent a statement (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with “Adjustment Statement”) setting forth the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
actual (i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash AllocationCurrent Liabilities, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of Company Expenses, (iii) Employee Payments and (iv) the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall Adjustment Amount (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amountdefined below).
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 days following Seller has prepared the attached Schedule 2.2 which lists certain current asset and current liability accounts and certain accounting principles, methodologies and policies to be used to determine the accounts. The Cash Purchase Price shall be adjusted after the Closing Date, Seller shall prepare in accordance with this Section 2.2 based upon (i) the actual Closing Net Indebtedness and deliver to IDB Buyer a consolidated balance sheet of (ii) the Seller Retained Subsidiaries amounts as of the Closing (giving effect to the Estimated Available Cash Allocation) (such amounts, cumulatively, the "Seller Closing Balance SheetWorking Capital")) of the accounts shown on Schedule 2.2. For purposes hereof, which the statement of the Closing Net Indebtedness and the Closing Working Capital, together with the calculation of the Cash Purchase Price that results from the determination of such amounts, shall be referred to as the "Closing Statement."
(b) The Closing Statement shall be prepared in conformity with GAAP applied on a the basis consistent with the preparation of, and using the same accounting methodsprinciples, methodologies and policies, practicesas specified in Schedule 2.2 and, procedures and estimation methods to the extent not specified therein, as those used in preparing the preparation Company Financial Statements. If the Cash Purchase Price as finally determined in accordance with this Section 2.2 is less than the Estimated Cash Purchase Price, Seller shall pay to Purchaser the amount by which the Estimated Cash Purchase Price exceeds the Cash Purchase Price, and if the Cash Purchase Price as finally determined in accordance with this Section 2.2 exceeds the Estimated Cash Purchase Price, Purchaser shall pay to Seller the amount by which the Cash Purchase Price exceeds the Estimated Cash Purchase Price, by wire transfer of immediately available U.S. Dollar funds to an account designated by the party receiving payment within three Business Days after the final determination of the balance sheet for Cash Purchase Price, plus interest on the fiscal year ended December 31, 2013, included in amount paid accrued from the GFI Financial Statements, and which shall include a calculation Closing Date to the date of Available Cash such payment at the Seller Retained Subsidiaries and Working Capital derived Prime Rate applicable from time to time.
(c) As promptly as practicable (and, in any event, within 120 days after the items and amounts on such balance sheet. Within 90 days following the Closing DateClosing), IDB Buyer Purchaser shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer the Closing Statement prepared in accordance with this Section 2.2, with reasonable detail and back up documentation. If Seller disagrees with the IDB Subsidiaries as determination of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" Statement, Seller shall notify Purchaser of such disagreement as soon as practicable and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following any event within 120 days after delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute NoticeStatement, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer which notice shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or any such disagreement in reasonable detail. If Seller fails to deliver this notice by the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation end of such item or amount in dispute (the "Dispute Notice"120 days, and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party Seller shall be deemed to have accepted all items and amounts contained the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement that are not objected to by Seller in such notice shall be deemed accepted by Seller and shall not be subject to further dispute or review in connection with the determination of the Closing Balance Sheet Working Capital or Closing Net Indebtedness. During the 120-day period of Seller's review and during the period of any dispute under this Section 2.2, Purchaser shall provide Seller and its accountants access to the books and records and personnel of Purchaser, the Company and the Company Subsidiaries, in such a manner as not to unreasonably interfere with the normal operations of the business of Purchaser, the Company or the IDB Buyer Closing Balance SheetCompany Subsidiaries, as applicableand Seller shall have reasonable access to all documents, delivered schedules and workpapers used by Purchaser in the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery preparation of the Dispute Notice by Closing Statement. Purchaser and Seller or IDB Buyer, Seller and IDB Buyer shall endeavor negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by mutual agreement all Disputed Items. If, for any reason, Purchaser and Seller shall be final and IDB Buyer binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any Disputed Item such disagreement as contemplated by Section 2.2(c) within 45 days after delivery by Seller of written notice of such 30 day perioddisagreement, either party may give the other a notice of dispute. Promptly after receipt of such notice, Purchaser and Seller and IDB Buyer shall engage Deloitte jointly select a partner at Ernst & Touche Young LLP or another mutually acceptable accounting firm to resolve such disagreement (the person so selected shall be referred to herein as the "Independent Accountant Accounting Arbitrator") ). The parties shall instruct the Accounting Arbitrator to make a determination consider only those items and amounts set forth in the Closing Statement as to which Purchaser and Seller have not resolved their disagreement. The Accounting Arbitrator shall treat each party equally with respect to burdens of proof, and neither party's position shall have a presumption of correctness or reasonableness in any respect. Purchaser and Seller shall use reasonable best efforts to cause the Disputed Items; provided that if Accounting Arbitrator to deliver to the Independent Accountant Arbitrator is unable or unwilling to serve parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection Agreement. Such report shall be made pursuant to final and binding upon the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunderparties. The fees, costs and expenses of the Independent Accountant Accounting Arbitrator will shall be borne one-half by Seller Purchaser and IDB Buyer in relative proportion to one-half by Seller; provided that if the amount by which the aggregate calculation Accounting Arbitrator determines that one party's position is completely correct, then such party shall pay none of the Disputed Items by each fees, costs and expenses of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Accounting Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Noticeother party shall pay all such fees, on the other hand. Seller costs and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9expenses.
(e) No later than 30 days following If and to the later of extent any item taken into account in the final determination of the Closing Net Indebtedness would constitute a breach by Seller of any representation or warranty or of any covenant or agreement contained in this Agreement, such item shall not be considered a breach by Seller of a representation or warranty or covenant or agreement and Purchaser shall not have a right or remedy arising from a breach of the applicable representation or warranty or covenant or agreement; provided, however, that, subject to Article VIII, Purchaser shall be entitled to indemnification for such breach of such representation or warranty or covenant or agreement to the extent of Purchaser's Losses relating to such breach that are in excess of the amount taken into account in the calculation of Closing Balance Sheet Net Indebtedness.
(f) If and to the calculations of Available Cash and extent an item reflected in the Closing Working Capital set forth therein) would constitute a breach by Seller of any representation or the IDB Buyer Closing Balance Sheet (and the calculations warranty or of Available Cash and Tangible Common Equity set forth therein) any covenant or agreement contained in this Agreement (such items being item, a "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash AllocationBreach Item"), then the following adjustments provisions shall be effectedapply:
(i) if any and to the extent Purchaser is aware, or it would be reasonably apparent to a Person familiar with the terms of this Agreement, that such item is a Breach Item, then Purchaser shall be deemed to have irrevocably waived its right to assert a claim for indemnity under this Agreement with respect to such Breach Item to the extent of the amounts aggregate amount in respect of such item that were transferred or retained by the IDB Subsidiaries at Closing as provided is included in the Estimated Available Cash Allocation were Closing Working Capital (and, subject to Article VIII, Purchaser shall be entitled to indemnification for Losses in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the such amount of arising from such excess(es) to Seller.Breach Item); and
(ii) if any and to the extent Purchaser is not aware, and it would not be reasonably apparent to a Person familiar with the terms of this Agreement, that such item is a Breach Item, then Purchaser shall be deemed to have irrevocably waived its right to assert a claim for indemnity under this Agreement with respect to such Breach Item to the extent of the amounts lesser of (A) the amount by which $22.575 million exceeds the Closing Working Capital and (B) the aggregate amount in respect of such Breach Item that were transferred or retained by the Seller Retained Subsidiaries as provided is included in the Estimated Available Cash Allocation were Closing Working Capital (and, subject to Article VIII, Purchaser shall be entitled to indemnification for Losses in excess of such lesser amount arising from such Breach Item).
(g) For the corresponding amounts avoidance of doubt, Closing Working Capital and Closing Net Indebtedness shall be calculated as of the open of business on the Closing Date, except that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of Closing Net Indebtedness shall be reduced to the extent it is reduced on the Closing Date other than as a result of the application of "cash and cash equivalents" (determined on the same basis as such excess(esline item was determined in the Company Financial Statements) to IDB Buyerof the Company or Company Subsidiaries. Notwithstanding the foregoing Furthermore, and for the avoidance of doubt, (i) cash deposited by Purchaser on the Closing Date in no event bank accounts controlled by the Company or any Company Subsidiary shall Seller not be required to pay an amount in excess counted as consolidated cash or cash equivalents of the Excess Company and the Company Subsidiaries and (ii) any part of the transfer of the Estimated Cash AmountPurchase Price that Seller uses to reduce the Closing Net Indebtedness shall be taken into account, in each case when determining the Closing Net Indebtedness.
Appears in 1 contract
Samples: Stock Purchase Agreement (Interpublic Group of Companies Inc)
Post-Closing Adjustment. (a) Within 90 No later than sixty (60) days following after the Land Rights Closing, Seller shall cause to be prepared and delivered to Buyer a statement, prepared in the same format as the Estimated Land Rights Closing Statement (the “Land Rights Closing Statement”), as of the Land Rights Closing Date, Seller shall prepare of (i) the Land Rights Closing Assumed Liability Amount, including the components thereof for each item of Indebtedness and deliver any Assumed RTS Project Land Rights Liability referenced in Section 2.01(i), (ii) the Fair Market Value of each RTS Project Land Right or category of RTS Project Land Rights Transferred to IDB Buyer a consolidated balance sheet of at the Seller Retained Subsidiaries Land Rights Closing, as determined in accordance with Section 2.14 and the Regulatory Methodologies, and (iii) the Land Rights Purchase Price for the RTS Project Land Rights, as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Land Rights Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together calculated in accordance with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity2.08.
(b) Following delivery No later than sixty (60) days after the Undepreciated Assets Closing, Seller shall cause to be prepared and delivered to Buyer a statement, prepared in the same format as the Estimated Undepreciated Assets Closing Statement (the “Undepreciated Assets Closing Statement”), as of the Seller Undepreciated Assets Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB BuyerDate, as applicable, in connection with such other Party's review of (i) the Seller Closing Balance Sheet undepreciated capital cost of each Undepreciated Asset or category of Undepreciated Assets Transferred to Buyer at the IDB Buyer Closing Balance SheetUndepreciated Assets Closing, as applicable. Each derived from the financial books and records of Seller and IDB Buyer shall have 45 days as of the end of the most recently completed calendar month immediately after the later Undepreciated Assets Closing, and prepared in good faith in accordance with the Regulatory Methodologies, (ii) the Undepreciated Assets Closing Assumed Liability Amount, including the components thereof for each item of Indebtedness and any Assumed Undepreciated Assets Liability referenced in Section 2.02(c), and (iii) the Undepreciated Assets Purchase Price for the applicable Undepreciated Assets, as of the Undepreciated Assets Closing Date, calculated in accordance with Section 2.09. Concurrently with the delivery of the Undepreciated Assets Closing Statement for the Undepreciated Assets Closing, Seller shall deliver to Buyer the Updated Undepreciated Assets Cost Statement as of such Undepreciated Assets Closing Balance Sheet or IDB and shall also provide Buyer Closing Balance Sheet in which to provide any update to the other Party a notice setting forth, information specified in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a2.09(e).
(c) For 30 Buyer shall have ten (10) Business Days from the date on which the applicable Closing Statement is delivered to it (the “Review Period”) to review the Closing Statement. Seller shall, and shall cause its Representatives to, upon request, provide Buyer with reasonable assistance in reviewing such statements, including by providing Buyer and its representatives with access to such information (including any books and records) and personnel and Representatives of Seller as Buyer may reasonably request in connection with its review and, subject to, in the case of independent accountant work papers, Buyer entering into a customary release agreement with respect thereto provided that Seller shall not be obligated to deliver any accountant work papers that such accounting firm does not consent to delivery thereof. Unless Buyer delivers written notice to Seller on or prior to the last day of the Review Period stating that it objects to any item or items shown or reflected on the Closing Statement (which objections may only be based on (i) manifest arithmetic error, (ii) any calculation not having been made in accordance with the Regulatory Methodologies, (iii) that any asset or Liability reflected on the Final Updated Schedule is not a Purchased Asset or Assumed Liability as defined in this Agreement and should not have been Transferred or assumed at the applicable Closing, (iv) that the charges or expenses incurred by Seller for any Purchased Asset or Assumed Liability that are reflected in the Land Rights Purchase Price or the Undepreciated Assets Purchase Price, as the case may be, were incorrectly billed or allocated to such Purchased Assets, or (v) that the Fair Market Value of any RTS Project Land Right contained in the Closing Statement is inconsistent with the Fair Market Value of such RTS Project Land Right in the regulatory filings approved by the NYPSC, and, in each case, providing a memorandum from Buyer’s legal counsel specifying in detail the item or items to which it objects and the reasons therefor, including applicable legal precedent (such item or items, the “Disputed Items” and such notice, the “Dispute Notice”)), the Closing Statement shall be deemed accepted by Buyer and, without limiting Section 5.08, the calculations set forth therein shall be final, binding and conclusive for all purposes of determining the True-Up Payment Amount in Section 2.12(f), if any.
(d) In the event of delivery of a Dispute Notice by Buyer, senior executives of Buyer (including a Manager of Buyer not appointed by an Affiliate of Seller), on the one hand, and senior executives of Seller, on the other hand, shall attempt to resolve their differences arising from the Disputed Items, and any resolution agreed by them in writing shall be final, binding and conclusive for all purposes of determining the True-Up Payment Amount in Section 2.12(f), if any. In the event that, for any reason, such senior executives are unable to amicably resolve all their differences in writing within ten (10) days (or such longer period as the Parties may agree in writing) following receipt of a Dispute Notice (the “Resolution Period”), any remaining Disputed Item not agreed in writing by the Parties shall be, unless the Parties have mutually agreed in writing on an alternative method of resolution of the Dispute prior to the end of the Resolution Period, submitted to a partner or senior employee of PriceWaterhouseCoopers LLC (the “Independent Accountant”); provided, however, that any remaining Disputed Item related to any matter addressed in Section 2.12(c)(iii) shall not be submitted to the Independent Accountant and, in such case, any such Purchased Asset or Closing Assumed Liability Amount as reflected in the Closing Statement shall be final, binding and conclusive for all purposes of determining the True-Up Payment Amount in Section 2.12(f), if any; provided, further, however, nothing in the foregoing shall limit the right of Buyer to commence an Action pursuant to Section 9.12 to resolve any such Disputed Item. If PriceWaterhouseCoopers LLC is unwilling or unable to serve as the Independent Accountant, each of Buyer and Seller will jointly select and retain a partner or senior employee of a nationally recognized accounting firm that is not the auditor or independent accounting firm of any of the Parties, who is a certified public accountant and is independent of the Parties and impartial, to serve as the Independent Accountant. If, after fifteen (15) days after the later delivery date PriceWaterhouseCoopers LLC informs the Parties that it is unable or unwilling to have a partner of the Dispute Notice firm serve as the Independent Accountant, the Parties cannot mutually agree on an alternate arbiter, any Party may request the AAA to appoint as the Independent Accountant, within fifteen (15) days from the date of such request or as soon as practicable thereafter, a partner in an internationally recognized accounting firm that is not the auditor or independent accounting firm of any of the Parties, who is a certified public accountant and who is independent of the Parties and impartial. For the avoidance of doubt, the fact that any nationally recognized accounting firm serves as the auditor or independent accounting firm of any ultimate parent of a Member of Buyer (other than the Member appointed by Seller an Affiliate of Seller) shall not by reason of such disqualify any partner or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Itemssenior employee thereof from serving as the Independent Accountant. If, for any reason, Seller and IDB Buyer the Parties are unable to resolve any agree on the Disputed Item Items within the Resolution Period, each of Buyer, on the one hand, and Seller, on the other hand, shall prepare separate written reports of such 30 day period, Seller Disputed Items and IDB Buyer shall engage Deloitte & Touche LLP (deliver such reports to the "Independent Accountant Arbitrator"within twenty (20) days after the later of the expiration of the Resolution Period and the date the Independent Accountant is retained. The Parties shall use their respective reasonable efforts to make cause the Independent Accountant to, acting as an expert, as soon as practicable and in any event, barring exceptional circumstances, within thirty (30) days after receiving such written reports, determine the manner in which the Disputed Items shall be treated in the Closing Statements; provided, however, that the dollar amount of each item in dispute shall be determined within the range of dollar amounts proposed by Buyer, on the one hand, and Seller, on the other hand. The Parties acknowledge and agree that (i) the review by and determination of the Independent Accountant shall be limited to, and only to, the unresolved Disputed Items contained in the reports prepared and submitted to the Independent Accountant by the Parties and (ii) the determinations by the Independent Accountant shall be based solely on such reports submitted by the Parties and the basis for each Party’s respective positions. Each Party agrees to enter into an engagement letter with the Independent Accountant containing customary terms and conditions for this type of engagement. The Parties shall use their commercially reasonable efforts to cooperate with and provide information and documentation, including work papers, to assist the Independent Accountant. Any such information or documentation provided by any Party hereto to the Independent Accountant shall be concurrently delivered to the other Party hereto, subject, in the case of independent accountant work papers, to such other Party entering into a determination customary confidentiality and release agreement with respect thereto. None of the Parties shall disclose to the Independent Accountant, and the Independent Accountant shall not consider for any purposes, any settlement discussions or settlement offers made by any of the Parties with respect to any objection under this Section 2.12. The determinations by the Independent Accountant as to the Disputed Items; provided Items shall be in writing and shall be an expert determination that if is final, binding and conclusive for all purposes of determining the Independent Accountant Arbitrator is unable or unwilling to serve adjustments in this capacitySection 2.12, then Seller if any, and IDB Buyer shall within 14 days after the end such determination may be entered and enforced in any court of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereundercompetent jurisdiction. The fees, costs and expenses of retaining the Independent Accountant Arbitrator will shall be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute NoticeSeller, on the other hand. Seller and IDB Buyer shall instruct , in proportion to those matters submitted to the Independent Accountant Arbitrator to render its decision within 30 days that are resolved against Buyer, on the one hand, and Seller, on the other hand, and the allocation of its appointment or as soon thereafter as is reasonably practicable. The decision/award of such fees, costs and expenses shall be so determined by the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9Accountant.
(e) No later than 30 days the fifth (5th) Business Day immediately following the later resolution of all Disputed Items (or, if there is no dispute, promptly after the Parties reach agreement on the Closing Statement), Seller shall revise the Closing Statement to reflect the resolution of any Disputed Items (as so revised, the “Final Closing Statement”) and shall deliver a copy thereof to Buyer. Buyer shall have five (5) Business Days from the date on which the Final Closing Statement is delivered to it to review the Final Closing Statement solely for purposes of confirming that such statements accurately reflect the prior resolution of all matters set forth in the Dispute Notice either by mutual agreement of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) Parties or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final Accountant, as applicable. The calculations being of the "Final Available Cash Allocation"Land Rights Purchase Price as provided for in Section 2.08, or the Undepreciated Assets Purchase Price as provided for in Section 2.09, as the case may be, and the amount of any True-Up Payment Amount pursuant to Section 2.12(f), once accepted by Buyer in the manner provided by the preceding sentence, shall be referred to as the “Final Statement.”
(f) Effective upon the end of the Review Period (if a timely Dispute Notice is not delivered), or upon the resolution of all matters set forth in the Dispute Notice either by mutual agreement of the Parties or by the Independent Accountant, the Parties shall make the following adjustments shall be effectedtrue-up payments:
(i) if any If the True-Up Payment Amount is positive, within two (2) Business Days of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB determination thereof Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay transfer to Seller the amount of such excess(esTrue- Up Payment Amount, together with interest thereon from and including the applicable Closing Date but not including the date of such transfer, computed at the Federal Funds Rate plus one hundred and fifty (150) basis points, by wire transfer of immediately available funds to an account or accounts designated in writing by Seller.
(ii) if any If the True-Up Payment Amount is negative, within two (2) Business Days of the amounts that were transferred determination thereof Seller shall transfer to Buyer an amount equal to the absolute value of such True-Up Payment Amount, together with interest thereon from and including the applicable Closing Date but not including the date of such transfer, computed at the Federal Funds Rate plus one hundred and fifty (150) basis points, by wire transfer of immediately available funds to an account or retained accounts designated in writing by Buyer.
(g) As used in Section 2.12(f) the Seller Retained Subsidiaries as provided in “True-Up Payment Amount” shall mean an amount (which may be positive or negative) equal to the Estimated Available Cash Allocation were in excess difference of the corresponding amounts that should have been transferred Land Rights Purchase Price or retained by the Seller Retained Subsidiaries Undepreciated Assets Purchase Price, as provided the case may be, reflected in the Final Available Cash AllocationStatement, then minus the Land Rights Purchase Price or the Undepreciated Assets Purchase Price, as the case may be, paid by Buyer to Seller shall (or shall cause at the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash AmountClosing.
Appears in 1 contract
Samples: Asset Purchase Agreement
Post-Closing Adjustment. (a) Within 90 days following Seller has prepared the attached Schedule 2.2 which lists certain current asset and current liability accounts and certain accounting principles, methodologies and policies to be used to determine the Closing Date, Seller Working Capital. The Purchase Price shall prepare and deliver to IDB Buyer a consolidated balance sheet be adjusted after the Closing in accordance with this Section 2.2 based upon the actual Closing Working Capital of the Seller Retained Subsidiaries as accounts shown on Schedule 2.2. For purposes hereof, the statement of the Closing Working Capital, together with the calculation of the Purchase Price that results from the determination of such amount, shall be referred to as the “Closing Statement.”
(giving effect to the Estimated Available Cash Allocationb) (the "Seller The Closing Balance Sheet"), which Statement shall be prepared in conformity with GAAP applied on a the basis consistent with the preparation of, and using the same accounting methodsprinciples, methodologies and policies, practicesas specified in Schedule 2.2 and, procedures and estimation methods to the extent not specified therein, as those used in preparing the preparation Financial Statements. If the Purchase Price as finally determined in accordance with this Section 2.2 (i) is less than the Estimated Purchase Price, Seller shall pay to Purchaser the amount by which the Purchase Price falls short of the balance sheet for Estimated Purchase Price, or (ii) exceeds the fiscal year ended December 31Estimated Purchase Price, 2013Purchaser shall pay to Seller the amount by which the Estimated Purchase Price falls short of the Purchase Price. Any such payment shall be made by wire transfer of immediately available U.S. Dollar funds to an account designated by the party receiving payment within three Business Days after the final determination of the Purchase Price. The amount of any such payment not made when due shall bear interest at a rate per annum equal to the rate announced by Citibank, included in N.A. from time to time as its “Base Rate” plus two percent (2%) from the GFI Financial Statementsthird Business Day after the final determination of the Purchase Price. Any amount owed by Seller to Purchaser pursuant to clause (b) may, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived Purchaser’s option, be satisfied from the items and amounts on such balance sheet. Within 90 Escrowed Amount pursuant to the Escrow Agreement.
(c) As promptly as practicable (and, in any event, within 120 days following after the Closing DateClosing), IDB Buyer Purchaser shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as Closing Statement prepared in accordance with this Section 2.2. If Seller disagrees with the determination of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Statement, Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation notify Purchaser of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following disagreement within 60 days after delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute NoticeStatement, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer which notice shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or any such disagreement in reasonable detail. If Seller fails to deliver this notice by the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation end of such item or amount in dispute (the "Dispute Notice"60 days, and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party Seller shall be deemed to have accepted all items and amounts contained the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement that are not objected to by Seller Closing Balance Sheet in such notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. During the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery 60-day period of Seller’s review of the Dispute Notice by Seller or IDB BuyerClosing Statement and the resolution of any disputes that may arise under this Section 2.2, Purchaser will, upon reasonable notice and during regular business hours, provide Seller and IDB Buyer its accountants access to the books and records and personnel of the Companies and all documents, schedules and workpapers used by Purchaser in the preparation of the Closing Statement. Purchaser and Seller shall endeavor negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by mutual agreement all Disputed Items. If, for any reason, Purchaser and Seller shall be final and IDB Buyer binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any Disputed Item disagreement as contemplated by Section 2.2(c) within 30 days after delivery by Seller of written notice of such 30 day perioddisagreement, Purchaser and Seller and IDB Buyer shall engage Deloitte & Touche LLP jointly select a partner at a mutually acceptable accounting firm to resolve such disagreement (the "Independent Accountant person so selected shall be referred to herein as the “Accounting Arbitrator") ”). The parties shall instruct the Accounting Arbitrator to make a determination consider only those items and amounts set forth in the Closing Statement as to which Purchaser and Seller have not resolved their disagreement. Purchaser and Seller shall use reasonable best efforts to cause the Disputed Items; provided that if Accounting Arbitrator to deliver to the Independent Accountant Arbitrator is unable or unwilling to serve parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection Agreement. Such report shall be made pursuant to final and binding upon the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunderparties. The fees, costs and expenses of the Independent Accountant Accounting Arbitrator will shall be borne one-half by Seller Purchaser and IDB Buyer in relative proportion to one-half by Seller; provided that if the amount by which the aggregate calculation Accounting Arbitrator determines that one party’s position is completely correct, then such party shall pay none of the Disputed Items by each fees, costs and expenses of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Accounting Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Noticeother party shall pay all such fees, on the other hand. Seller costs and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9expenses.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. Within three (a3) Within 90 days following Business Days after the Closing Date, Seller shall prepare and deliver earliest to IDB Buyer a consolidated balance sheet of occur of: (A) the Seller Retained Subsidiaries as expiration of the Closing Cash Balance Adjustment Period, (giving effect B) the expiration of the Objection Deadline Date, if no Objection Notice is delivered by said date, (C) delivery by the Seller Representative of the Acceptance Notice to Buyer and (D) the Estimated Available mutual or final resolution of any Unresolved Objections pursuant to Section 3.2(b) above, the “Cash Allocation) (the "Seller Closing Balance Sheet"), which Adjustment Amount” shall be prepared in conformity with GAAP applied calculated and distributed to Buyer or the Paying Agent (on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation behalf of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth thereinSellers), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effectedfollows:
(i) if any of If the amounts that were transferred or retained by the IDB Subsidiaries at Final Closing as provided in Cash Balance is equal to the Estimated Available Closing Cash Allocation were in excess of Balance the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer Adjustment Amount shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) be deemed to Sellerequal $0.00.
(ii) if any If (A) an Estimated Closing Cash Balance Deficit existed at the Closing and (B) the Final Closing Cash Balance is less than the Estimated Closing Cash Balance, then the Cash Adjustment Amount shall be payable to Buyer and shall equal the amount of such shortfall.
(iii) If (A) an Estimated Closing Cash Balance Deficit existed at the Closing and (B) the Final Closing Cash Balance is greater than the Estimated Closing Cash Balance, then the Cash Adjustment Amount shall be payable to the Paying Agent (on behalf of the amounts Sellers) and shall equal the amount of such excess less the amount, if any, by which the Final Closing Cash Balance exceeds the Closing Cash Balance Cap.
(iv) If (A) an Estimated Closing Cash Balance Surplus existed at the Closing and (B) the Final Closing Cash Balance is less than the Estimated Closing Cash Balance, then the Cash Adjustment Amount shall be payable to Buyer and shall equal the amount of such shortfall less the amount, if any, by which the Estimated Closing Cash Balance exceeded the Closing Cash Balance Cap; provided, however, that were transferred if the Final Closing Cash Balance and the Estimated Closing Cash Balance are each greater than the Closing Cash Balance Cap, then the Cash Adjustment Amount shall be deemed to equal $0.00.
(v) If (A) an Estimated Closing Cash Balance Surplus existed at the Closing and (B) the Final Closing Cash Balance is greater than the Estimated Closing Cash Balance, then the Cash Adjustment Amount shall be payable to the Paying Agent (on behalf of the Sellers) and shall equal the amount of such excess less the amount, if any, by which the Final Closing Cash Balance exceeds the Closing Cash Balance Cap; provided, however, that if the Final Closing Cash Balance and the Estimated Closing Cash Balance are each greater than the Closing Cash Balance Cap, then the Cash Adjustment Amount shall be deemed to equal $0.00. Any Cash Adjustment Amount payable to the Sellers shall be increased by the amount of any VAT attributable to the Seller Parties Transaction Expenses actually recovered by the Company prior to the date of payment, if any, and the resulting amount shall be paid by Buyer in cash by wire transfer of immediately available funds to the Paying Agent or retained to the account or accounts otherwise designated by the Seller Retained Subsidiaries as provided Representative in writing within three (3) Business Days after the Estimated Available date on which the Final Closing Cash Allocation were Balance Statement is finally determined. Any Cash Adjustment Amount payable to Buyer shall be decreased by the amount of any VAT attributable to the Seller Parties Transaction Expenses actually recovered by the Company prior to the date of payment, if any, and the resulting amount shall be set-off against the amount of the Closing Cash Balance Set-Off Amount in accordance with Section 2.5(b) of this Agreement; provided, however, that to the extent any Cash Adjustment Amount payable to Buyer is in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Closing Cash AllocationBalance Set-Off Amount, then Seller any such excess shall (or shall cause be set-off against the applicable Seller Retained Subsidiaries toGeneral Set-Off Amount in accordance with Section 2.5(b) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amountthis Agreement.
Appears in 1 contract
Samples: Share Purchase Agreement (Allscripts Healthcare Solutions, Inc.)
Post-Closing Adjustment. (a) Within 90 Buyer shall deliver to Seller, within 60 days following after the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries Company as of the Closing Date (giving effect to including the Estimated Available Cash Allocation) (accounts receivable schedule described below and attached thereto, the "Seller “Closing Date Balance Sheet"”), which . The Closing Date Balance Sheet shall be prepared in conformity accordance with GAAP applied on and, to the extent compatible with GAAP, in a basis manner consistent with the preparation ofBalance Sheet; provided, that (i) all liabilities of the Company shall be fully reflected on an accrual basis on the Closing Date Balance Sheet (including, without limitation, (x) accrual of all employee bonuses, deferred compensation or other obligations, (y) accrual of a current liability in an amount corresponding to pre-paid services and (z) accrual of all appropriate reserves), (ii) the Closing Date Balance Sheet shall not give effect to any write-up of the value of intangible assets that may be required or permitted under GAAP in connection with the consummation of the Contemplated Transactions, (iii) the Closing Date Balance Sheet shall give effect to the transactions contemplated by the Contribution Agreement, but not to the issuance and purchase of the Class C Units, and using (iv) the same accounting methods, policies, practices, procedures accounts receivable schedule included in the Closing Date Balance Sheet shall separately identify the amount of each account receivable and estimation methods as those used the portions thereof that are in respect of services billed in advance and services billed in arrears. Seller and the Members shall cooperate with Buyer and the Company in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Date Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery The Purchase Price shall be reduced, dollar for dollar, by the amount of the Seller Closing Balance Sheet and excess, if any, of (x) the IDB Buyer Closing Balance Sheet and prior to sum of (i) the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review total liabilities of the Seller Company shown on the Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Date Balance Sheet (including including, subject to paragraph (d) below, accrual of the calculations full amount of Available the tax liabilities of the Company arising out of the Contemplated Transactions) less the amount of the Permitted Debt plus (ii) the Target Adjusted Working Capital, over (y) the aggregate cash, Cash Equivalents, pre-paid expenses and accounts receivable of the Company shown on the Closing Date Balance Sheet. The amount obtained by subtracting clause (x)(i) in the preceding sentence as reflected on the Closing Date Balance Sheet from clause (y) in the preceding sentence as reflected on the Closing Date Balance Sheet is referred to in this Agreement as the “Closing Date Adjusted Working Capital”. Any adjustment of the Purchase Price pursuant to this Section 1.6 is referred to in this Agreement as a “Net Working Capital set forth therein) or Adjustment”, and together with the IDB Client Consents Adjustment, the “Purchase Price Adjustments.” The Net Working Capital Adjustment, if any, to be paid by Seller to Buyer Closing Balance Sheet (including shall be paid first by offset against the calculations of Available Cash and Tangible Common Equity set forth therein)Net Working Capital Holdback and, if in excess thereof, as applicable, and the basis for such dispute together with such Party's calculation of such item or amount provided in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a)1.2 above.
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination Any disputes as to the Disputed Items; provided Net Working Capital Adjustment shall be resolved, and the amount of the Net Working Capital Adjustment finally determined, in accordance with Section 1.7.
(d) For purposes of determining the tax liabilities of the Company arising out of the Contemplated Transactions and reported on the Closing Date Balance Sheet, the parties agree that if the Independent Accountant Arbitrator is unable or unwilling Conversion shall be treated as a liquidation of a corporation and distribution of the assets of the same to serve its shareholders in this capacityaccordance with Section 332 of the Code, then and that the aggregate value of the Class A and Class B Units deemed distributed by the Company to Buyer and Seller in connection with the conversion shall equal 125% of the Purchase Price.
(e) Seller and IDB the Members shall cause the Company to have a balance of cash and Cash Equivalents at Closing of at least $500,000.
(f) Seller, Buyer shall within 14 days after and the end Company agree that any amounts received from the State of such 30 day period agree Washington in refund of any overpayment of Washington state excise taxes disclosed on an alternate independent accounting firm or in default thereof such selection Schedule 2.15(c) hereof shall be made pursuant to distributed by the rules Company (net of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, (i) all costs and expenses of the Independent Accountant Arbitrator will be borne Company incurred or accrued after the date hereof in the pursuit of such refund claim and (ii) any Taxes paid or payable by Seller and IDB the Company and/or Buyer in relative proportion to the amount by which the aggregate calculation as a result of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount receipt of such excess(esrefund) to Seller.
(ii) if , and that notwithstanding any provision of the amounts that were transferred or retained by Company Operating Agreement to the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess contrary all items of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller income and loss associated with such refund shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) be allocated solely to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash AmountSeller.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 As promptly as possible, but in any event within ninety (90) days following after the Closing Date, Seller Parent shall prepare and deliver to IDB Buyer the Securityholder Representative a consolidated balance sheet written statement (the “Post-Closing Statement”) setting forth Parent’s (i) good faith calculation of the Seller Retained Subsidiaries (A) Cash as of the Benchmark Time (“Preliminary Cash”), (B) Indebtedness as of the Benchmark Time (“Preliminary Indebtedness”), (C) Net Working Capital as of the Benchmark Time (together with the components thereof, “Preliminary Net Working Capital”), and (D) Transaction Expenses (“Preliminary Transaction Expenses”) and (ii) resulting calculation of the Merger Consideration (such amount, the “Preliminary Merger Consideration”), together with reasonable supporting detail and back-up for such calculations. The Post-Closing Statement shall be accompanied by a certificate of Parent’s Chief Financial Officer certifying that the Post-Closing Statement has been prepared in accordance with this Agreement, including the Accounting Principles, as applicable. Parent may not amend, supplement or otherwise modify the Post-Closing Statement at any time following delivery of such statement to the Securityholder Representative in accordance with this Section 2.09(a).
(giving b) The parties hereto acknowledge that the Estimated Closing Statement delivered by the Company to Parent pursuant to Section 2.08 will be prepared and delivered prior to the Closing Date and, therefore, the amounts set forth therein will be estimates and may be different than the actual amount of such items as of the Benchmark Time. Accordingly, Section 2.09 sets forth the process by which the amounts set forth in the Estimated Closing Statement may be adjusted solely to ensure that any such amount set forth in the Estimated Closing Statement reflects an adjustment only between the estimate thereof and the actual amount thereof. Accordingly, none of the Securityholder Representative, Parent or any Settlement Accountant shall give effect to or consider any event or circumstance occurring after the Benchmark Time (subject to the definition of Income Tax Liability Amount), and each component of the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which Statement shall be prepared in conformity with GAAP applied on a basis finally and solely determined consistent with the preparation of, applicable definitions of such terms set forth herein and using the same accounting methods, policies, practices, procedures and estimation methods as those used calculated in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together accordance with the Seller Closing Balance SheetAccounting Principles, the "Closing Balance Sheets")as applicable (i.e., which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, no accounting methods, policies, principles, practices, procedures, classifications classifications, judgments or estimation methodologies for inconsistent with the Accounting Principles may be used by Parent (or if applicable, the Settlement Accountant) in calculating or determining any such terms as the sole purpose of preparing the adjustment contemplated by Section 2.09 is to measure the difference, if any, between the estimate of an amount of an item set forth in the Estimated Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet Statement and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or actual amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (as of the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(aBenchmark Time).
(c) For 30 days after the later delivery Upon receipt of the Dispute Notice Post-Closing Statement, the Securityholder Representative shall have forty-five (45) days (the “Review Period”) to review such Post-Closing Statement and related computations of Preliminary Cash, Preliminary Indebtedness, Preliminary Net Working Capital, Preliminary Transaction Expenses, and the Preliminary Merger Consideration. Following the Closing through the date that the Final Closing Statement becomes final, binding and non-appealable in accordance with Section 2.09(e), the Securityholder Representative, its Affiliates, its and their respective representatives and any accountants, advisors or other representatives retained by Seller the Securityholder Representative shall be permitted to access and review the books, records and work papers of the Surviving Corporation and Parent that are reasonably related to the calculations of Cash, Indebtedness, Net Working Capital and Transaction Expenses, and Parent shall, and shall cause its Affiliates (including the Surviving Corporation and its Subsidiaries) and its and their respective representatives, accountants, advisors and other representatives to, reasonably cooperate with and assist the Securityholder Representative, its Affiliates, its and their representatives and any accountants, advisors and other representatives retained by the Securityholder Representative in connection with such review, including by providing reasonable access to such books, records and work papers and making available personnel to the extent requested, in each case, upon reasonable notice and during normal business hours; provided, that in the event that Parent, the Surviving Corporation or IDB Buyertheir respective Affiliates fail to provide such cooperation, Seller assistance or access, the Review Period shall be extended by one (1) day for each day Parent, the Surviving Corporation or their respective Affiliates fail to provide such cooperation, assistance or access. Parent agrees that, following the Closing through the date that the Final Closing Statement becomes final, binding and IDB Buyer non-appealable in accordance with Section 2.09(e), it will not take, or permit to be taken, any actions with respect to any accounting books, records, policies or procedures on which the Audited Financial Statements or the Post-Closing Statement are based, or upon which the Final Closing Statement is to be based, that would impede or delay the determination of the amount of Cash, Indebtedness, Net Working Capital, Transaction Expenses or the preparation of any Statement of Objections or the Final Closing Statement in the manner and utilizing the methods provided by this Agreement, including the Accounting Principles. If the Securityholder Representative has accepted the Post-Closing Statement in writing or has not given written notice to Parent setting forth any objection of the Securityholder Representative to such Post-Closing Statement setting forth the reasons for any difference in calculation of the Post-Closing Statement and disputed components thereof in reasonable detail (such notice, the “Statement of Objections”) prior to the expiration of the Review Period, then such Post-Closing Statement shall endeavor be final, binding and non-appealable upon the parties, and shall be deemed the Final Closing Statement for purposes of Section 2.09(e). The Statement of Objections shall be based only on (x) mathematical or clerical errors or (y) if the calculations of the amounts in the Post-Closing Statement were not determined in accordance with the Accounting Principles. The Statement of Objections shall specify what the Securityholder Representative reasonably believes is the correct amount for each such disputed item. Any component of the calculation set forth in the Post-Closing Statement that is not the subject of a timely delivered Statement of Objections by the Securityholder Representative shall be deemed the Final Closing Statement for purposes of Section 2.09(e).
(d) In the event that the Securityholder Representative delivers a Statement of Objections to Parent prior to the expiration of the Review Period, the Securityholder Representative and Parent shall negotiate in good faith to resolve any such objection on Cash, Indebtedness, Net Working Capital or Transaction Expenses, as the case may be, within thirty (30) days following the receipt by mutual Parent of the Statement of Objections (the “Consultation Period”), and all offers of compromise, unless otherwise agreed by Parent and the Securityholder Representative, be governed by Rule 408 of the Federal Rules of Evidence (and any applicable similar state rules). If the Securityholder Representative and Parent reach an agreement all Disputed Itemsin writing as to any such objections within the Consultation Period, the amounts so agreed upon shall be final, binding and non-appealable upon the parties and such agreement shall be deemed to be included in the Final Closing Statement for purposes of Section 2.09(e). If, for any reason, Seller If the Securityholder Representative and IDB Buyer Parent are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination reach an agreement in writing as to any such objections within the Disputed Items; provided that Consultation Period, then either the Securityholder Representative or Parent may submit such matter to KPMG US LLP, or if the Independent Accountant Arbitrator KPMG US LLP is unable or unwilling to serve in this such capacity, then Seller BDO USA, LLP (the “Settlement Accountant”) (provided, that if the Securityholder Representative and IDB Buyer shall within 14 days after the end of such 30 day period Parent cannot agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to accountant within ten (10) Business Days after the rules expiration of the Consultation Period, then the American Arbitration AssociationAssociation shall appoint the Settlement Accountant, which accounting firm who shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion deemed acceptable to the amount by which Securityholder Representative and Parent), for resolution of those items on the aggregate calculation Statement of Objections that remain in dispute (the “Disputed Items by each of them differs from the calculation to be made Items”). If requested by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant ArbitratorSettlement Accountant, each of Seller the Securityholder Representative and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute Parent agrees that it will enter into a reasonable customary engagement letter with the Settlement Accountant and shall submit to provide customary indemnities in favor of the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessarySettlement Accountant. The Independent Settlement Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted expert and presentations by Seller and IDB Buyernot as an arbitrator, and not by independent review, shall only consider the Disputed Items that have not been settled by negotiation, and its determination with respect to each Items. If any Disputed Item shall be an amount within is referred to the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in Settlement Accountant, the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicableSecurityholder Representative, on the one hand, and the applicable Dispute NoticeParent, on the other hand, shall prepare separate written reports of each such Disputed Item and deliver such reports to the Settlement Accountant, and each other within twenty (20) Business Days after the date the Settlement Accountant is retained. Seller Thereafter, each of the Securityholder Representative and IDB Buyer Parent shall instruct have fifteen (15) Business Days to deliver to the Independent Settlement Accountant, and each other one written rebuttal thereto (if applicable). The Settlement Accountant Arbitrator may not assign a value to render its decision within 30 days any Disputed Item greater than the greatest value for such Disputed Item claimed by either Parent or the Securityholder Representative in the Post-Closing Statement and Statement of its appointment Objections, respectively, or less than the smallest value for such Disputed Item claimed by either Parent or the Securityholder Representative in the Post-Closing Statement and Statement of Objections, respectively. The Securityholder Representative and Parent shall use their respective commercially reasonable efforts to cause the Settlement Accountant to resolve all disagreements as soon thereafter as is reasonably practicablepracticable and in any event within thirty (30) days after the later of the submission of the (i) written reports and (ii) written rebuttals, if any. The decision/award of Settlement Accountant’s review and determination shall be (A) limited only to the Independent Accountant Arbitrator as to reports, rebuttals and materials concerning the Disputed Items shall be final prepared and binding onsubmitted to the Settlement Accountant by the Securityholder Representative and Parent (i.e., not on the basis of an independent review), (B) based solely on such reports, rebuttals and materials submitted by the Securityholder Representative and Parent and the basis for the Securityholder Representative’s and Parent’s respective positions and (C) in accordance with the terms and procedures set forth in this Agreement, including the Accounting Principles and the definitions of Cash, Indebtedness, Net Working Capital and Transaction Expenses contained herein. During the review by the Settlement Accountant, each of the Securityholder Representative and Parent shall, and shall cause their respective Subsidiaries (including, in the case of Parent, the Company and its Subsidiaries) and their respective accountants, advisors and other representatives to, each make available to the Settlement Accountant interviews with such personnel, and such information, books, records and work papers as may be reasonably requested by the Settlement Accountant to fulfill its obligations under this Section 2.09(d); provided that the accountants of the Securityholder Representative or Parent shall not be subject obliged to appeal bymake any work papers available to the Settlement Accountant except in accordance with such accountants’ normal disclosure procedures and then only after such Settlement Accountant has signed a customary agreement relating to such access to work papers. A copy of all materials submitted to the Settlement Accountant shall be promptly provided by the Securityholder Representative or Parent, Seller as applicable, to the other party in the dispute; provided that the accountants of the Securityholder Representative or Parent, as applicable, shall not be obliged to make any work papers available to the other party except in accordance with such accountants’ normal disclosure procedures and IDB Buyer then only after such other party has signed a customary agreement relating to such access to work papers. Neither the Securityholder Representative nor Parent may disclose to the Settlement Accountant, and the Settlement Accountant may not consider for any purpose, any settlement discussions or settlement offer(s) made by or on behalf of either the Securityholder Representative or Parent unless otherwise agreed by the Securityholder Representative and Parent. None of the Securityholder Representative, Parent or any of their respective Affiliates shall have any ex parte communications or meetings with the Settlement Accountant regarding the subject matter hereof without the other Personparty’s prior written consent. The Settlement Accountant shall have exclusive jurisdiction over, and resort to the Settlement Accountant as provided in this Section 2.09(d) shall be the only recourse and remedy of the parties against one another with respect to, any disputes arising out of or relating to the calculation of, and any adjustments to, the Merger Consideration; provided that upon the determination of the Settlement Accountant, such determination may be entered and enforced as provided in any court of competent jurisdiction in accordance with Section 9.9.
(e) No later than 30 days following 10.12. The final determination with respect to all Disputed Items shall be set forth in a written statement by the later Settlement Accountant delivered to the Securityholder Representative and Parent and, absent Fraud, mathematical error promptly corrected by the Settlement Accountant or manifest error, the resolution of the final dispute by the Settlement Accountant shall be final, binding and non-appealable on the parties. The costs and expenses of the Settlement Accountant shall be borne by the Securityholder Representative (solely from the Securityholder Representative Reserve Fund Amount) and Parent in proportion to the difference between the Settlement Accountant’s determination of the Seller Closing Balance Sheet (Merger Consideration and the calculations determination of Available Cash the Merger Consideration claimed by the Securityholder Representative and Working Capital set forth therein) or Parent. For example, if Parent claims that the IDB Buyer Closing Balance Sheet (and Merger Consideration is, in the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to aggregate, $1,000 greater than the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally amount determined by the Independent Securityholder Representative and if the Settlement Accountant Arbitrator; such final calculations being ultimately resolves the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any dispute by awarding to Parent an aggregate of $300 of the amounts that were transferred or retained by $1,000 contested, then the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess costs and expenses of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall Settlement Accountant will be allocated thirty percent (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es30%) to Seller.
the Securityholder Representative and seventy percent (ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es70%) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash AmountParent.
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Post-Closing Adjustment. (a) Within 90 Subsequent to the Closing (as defined below), Seller shall prepare a balance sheet of the Company at the close of business on the Closing Date (the "CLOSING BALANCE SHEET"). The Closing Balance Sheet shall be prepared in accordance with generally accepted accounting principles ("GAAP") used by the Company for financial reporting to Seller consistently applied. Based on the Closing Balance Sheet, Seller shall calculate (i) the total value of the accounts receivable, cost and related earnings in excess of billings and inventory (which shall not be written down below net realizxxxx xxxue) of the Company as of the Closing Date (the "CLOSING VALUE"), which for purposes hereof shall exclude any cash and intercompany accounts and (ii) the post- Closing adjustment, which shall be the difference between the Closing Value and the Adjustment Amount (the "POST-CLOSING ADJUSTMENT"). Upon completion of the same, but not later than thirty (30) days following after the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as copy of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer Sheet and the IDB Subsidiaries as calculations of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity Value and the related adjustment contemplated by this Section 2.7 is Post-Closing Adjustment to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquityBuyer.
(b) Following delivery If the Closing Value exceeds the Adjustment Amount, Buyer shall owe the Post-Closing Adjustment to Seller. If the Closing Value is less than the Adjustment Amount, the $4,000,000 amount set forth in Section 1.1(b)(iv) above shall be reduced by the Post-Closing Adjustment and, to the extent the Post-Closing Adjustment exceeds $4,000,000, the balance shall be treated as a payment of principal on the Note. If Buyer does not object to the amount of the Seller Post-Closing Balance Sheet and Adjustment within twenty (20) days of receipt thereof, (i) Buyer shall pay to Seller, no later than the IDB Buyer second Business Day after the twentieth day following receipt of the Post-Closing Balance Sheet and prior Adjustment, an amount in cash equal to the deadline for delivering a Dispute Notice, each of Seller and IDB Post-Closing Adjustment owed by Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of (ii) the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or $4,000,000 amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth thereinin Section 1.1(b)(iv) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party above shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered reduced by the other Party pursuant to Section 2.7(a)Post-Closing Adjustment.
(c) For 30 If Buyer objects to the Post-Closing Adjustment, it shall notify Seller within twenty (20) days after following receipt thereof, setting forth in specific detail the later delivery of basis for its objection and its proposal for any adjustments to the Dispute Notice by Post-Closing Adjustment. Buyer and Seller or IDB Buyer, Seller and IDB Buyer shall endeavor undertake in good faith to resolve by mutual reach agreement as to any such proposed adjustment or that no such adjustment is necessary. If agreement is reached as to all Disputed Itemsproposed further adjustments, the parties shall make such adjustments and the Post-Closing Adjustment shall be based thereon. If, for any reason, If Buyer and Seller and IDB Buyer are unable to resolve any Disputed Item reach agreement within such 30 day periodthirty (30) days, Seller then a Third Party Accounting Firm shall be engaged to review the proposed adjustments as to which agreement has not been reached and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if resolution of the Independent Accountant Arbitrator is unable proposed adjustments to cause the Post-Closing Adjustment to have been properly prepared in accordance with the provisions of this Agreement. All such resolutions shall relate only to such matters as are still in dispute and were properly included in the notice of Buyer's objection and represent either agreement with the position taken by Seller or unwilling to serve in this capacity, then Seller and IDB by Buyer shall within 14 days after or a compromise between such positions. The determination of the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection Third Party Accounting Firm shall be made pursuant to the rules of the American Arbitration Associationfinal, which accounting firm shall be the "Independent Accountant Arbitrator" hereunderconclusive and binding upon Buyer and Seller. The feesThereafter, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment(10) days following a determination of adjustments by the Third Party Accounting Firm, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator either Buyer shall act as an arbitrator pay to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within in cash equal to the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Post-Closing Balance Sheet or IDB Buyer Closing Balance SheetAdjustment, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being Third Party Accounting Firm, or the "Final Available Cash Allocation"), the following adjustments $4,000,000 amount set forth in Section 1.1(b)(iv) above shall be effected:
(i) if any reduced by the Post-Closing Adjustment, as determined by the Third Party Accounting Firm. Buyer and Seller shall share equally the costs of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerThird Party Accounting Firm under this Section 1.2(c).
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
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Post-Closing Adjustment. (a) Within 90 45 days following after the Closing Date, Seller the Buyer and each of the Sellers shall have the right to (i) review the books and records of the Acquired Entities and any other relevant books and records maintained by the Acquired Entities and (ii) determine whether the Estimated Adjusted Purchase Price is correct based on the Buyer’s or the Sellers’ determination, as applicable, per good faith calculations, that the value of the amounts included in the Adjusted Purchase Price Notice are accurate as of the Closing Date. In the event any of the Parties determines that the Adjusted Purchase Price is not accurate, it shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of other Parties within 45 days after the Closing Date a written statement (giving effect to the Estimated Available Cash Allocationan “Adjustment Statement”) (the "Seller Closing Balance Sheet")setting forth, which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation ofreasonable detail, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries a proposed revised Adjusted Purchase Price (a “Revised Adjusted Purchase Price”) and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity the difference between the Estimated Adjusted Purchase Price and such processes are not intended to permit Revised Adjusted Purchase Price (the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for “Adjustment Amount”) and shall assist the purpose of preparing other Parties in verifying the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equityamounts set forth in such Adjustment Statement.
(b) Following delivery The Buyer or the Sellers may dispute all or any portion of the Seller Closing Balance Sheet calculation of such Revised Adjusted Purchase Price and the IDB Buyer Closing Balance Sheet and prior to related Adjustment Amount by written notice (the deadline for delivering a “Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide ”) to the other Party a notice within 30 days of the date of receipt of the related Adjustment Statement provided to such Party pursuant to Section 2.4(a) setting forth, in reasonable detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's the dispute. If the Parties do not agree on the calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Adjustment Amount within 30 days of any related Dispute Notice, the Buyer and the Sellers will select (within 10 days of the expiration of that 30-day period) an accounting firm mutually acceptable to them to resolve any remaining objections. If the Buyer and the Sellers are unable to agree on the choice of an accounting firm within such 10-day period, they will select, within an additional 10 days, a "Disputed Item"nationally-recognized accounting firm by lot (after excluding their respective regular outside accounting firms) that is a member of the Securities and Exchange Commission’s Practice Division of the American Institute of Certified Public Accountants. The determination of the Revised Adjusted Purchase Price by the accounting firm so selected will be set forth in writing and will be conclusive and binding upon the Buyer and the Sellers for purposes of determining adjustments to the Purchase Price pursuant to this Section 2.4. The cost and expense of such accounting firm shall be borne equally by and between the Buyer and the Sellers. The Revised Adjusted Purchase Price shall be as agreed to by the Parties or determined by an appointed accounting firm in accordance with this Section 2.4, as the case may be. Such Revised Adjusted Purchase Price as so agreed or determined or, in the event no Adjustment Statement is delivered in accordance with Section 2.4(a). Other than , the Disputed Items, each Party Estimated Adjusted Purchase Price shall be deemed and referred to have accepted all items herein as the “Final Adjusted Purchase Price.” If the amount of the Final Adjusted Purchase Price is less in value than the amount of Estimated Adjusted Purchase Price, then the Sellers shall pay to the Buyer the amount of the difference between the Estimated Adjusted Purchase Price and amounts contained the Final Adjusted Purchase Price within two (2) business days by wire transfer of immediately available funds. If the amount of the Final Adjusted Purchase Price is greater in value than the Seller Closing Balance Sheet or amount of Estimated Adjusted Purchase Price, then the IDB Buyer Closing Balance Sheet, as applicable, delivered shall pay to the Sellers the amount of the difference between the Final Adjusted Purchase Price and the Estimated Adjusted Purchase Price within two (2) business days by the other Party pursuant to Section 2.7(a)wire transfer of immediately available funds.
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller The Revised Adjusted Purchase Price and IDB Buyer shall endeavor any adjustments in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve respect thereof determined in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection accordance with Section 2.4 shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs in accordance with GAAP and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following no adjustments shall be effected:
(i) if made for changes in any of Exchange Rates in effect after the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerDate.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
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Post-Closing Adjustment. (a1) The Cash Purchase Price shall be subject to adjustment after the Closing Date as specified in this Section 1.3.
(2) Within 90 one hundred twenty (120) days following the Closing Date, Seller Buyer shall prepare and deliver cause PriceWaterhouseCoopers LLP ("Buyer's Accountant") to IDB Buyer a consolidated balance sheet audit the Company's books to determine the accuracy of the Seller Retained Subsidiaries information set forth on the Closing Financial Certificate (the "Post-Closing Audit"). The parties acknowledge and agree that for purposes of determining the net worth of the Company as of the Closing Date, the value of the assets of the Company shall, except with the prior written consent of Buyer and Stockholder, be calculated as provided in the last paragraph of Section 6.9. Within five (giving effect to 5) days after completion of the Estimated Available Cash Allocation) Post-Closing Audit, Buyer shall deliver a written notice (the "Seller Closing Balance SheetFinancial Adjustment Notice")) to the Stockholder, which shall be prepared in conformity with GAAP applied on a basis consistent with setting forth (i) the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation determination made by Buyer's Accountant of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries actual Company net worth (i.e. total assets minus total liabilities) as of the Closing (giving effect to the Estimated Available Cash Allocation) Date (the "IDB Buyer Closing Balance Sheet" Actual Company Net Worth") and together with if the Seller Closing Balance SheetActual Company Net Worth is in excess of the Net Worth Target, the amount of the actual Net Worth Increase, provided that such actual Net Worth Increase shall be limited to a maximum of $500,000(the "Closing Balance SheetsActual Net Worth Increase"), which shall be prepared in conformity with GAAP applied on a basis consistent with (ii) the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation amount of the balance sheet for Cash Purchase Price that would have been payable at Closing pursuant to Section 1.2(c) or that would be payable after the fiscal year ended December 31Closing pursuant to Section 1.2(d) to reflect the Actual Net Worth Increase, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equityif any, in each case derived from had the items and amounts Actual Company Net Worth been reflected on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery Financial Certificate instead of the Seller Certified Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute NoticeNet Worth, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records(iii) if there is no Actual Net Worth Increase, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation Cash Purchase Price would have been reduced at Closing had the Actual Company Net Worth been used in the calculations pursuant to Section 1.2(c) (the "Purchase Price Reduction") and (iv) if there is an Actual Net Worth Increase, the amount thereof to be paid after the Closing. The Purchase Price Reduction shall take account of the Disputed Items by each of them differs from reduction, if any, to the calculation Cash Purchase Price already taken pursuant to be made by the Independent Accountant ArbitratorSection 1.2(c)(i).
(d3) The Stockholder shall have thirty(30) days from the receipt of the Financial Adjustment Notice to notify Buyer if the Stockholder disputes such Financial Adjustment Notice. If Buyer has not received notice of such a dispute within such thirty(30) day period, (i) if there is no Actual Net Worth Increase, Buyer shall be entitled to receive from the Stockholder (which may, at Buyer's sole discretion, be from the Pledged Assets as defined in Section 1.4) the Purchase Price Reduction, and (ii) if there is an Actual Net Worth Increase, the Stockholder shall be entitled to receive from the Buyer, the amount of the Actual Net Worth Increase, in each case within five (5) days after the earlier to occur of (x) expiration of such thirty (30) day period, or (y) written notice from Stockholder of the acceptability of the Financial Adjustment Notice. If, however, the Stockholder has delivered notice of such a referral dispute to Buyer within such thirty(30) day period, then Buyer and Stockholder shall use their good faith efforts to resolve such dispute, but if they have been unable to do so within twenty (20) days of receipt of Stockholder's notice of dispute, then KPMG Peat Marwick, an independent accounting firm that has not represented any of the Independent Accountant Arbitratorparties hereto within the preceding two (2) years, each of Seller shall be engaged to review the Company's books, Closing Financial Certificate and IDB Buyer agreesFinancial Adjustment Notice(and related information) to determine the amount, if requested by any, of the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one handPurchase Price Reduction, and the applicable Dispute Noticeamount, on if any, of the other handActual Net Worth Increase. Seller The independent accounting firm shall make its determination of the Purchase Price Reduction, if any, and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision Actual Net Worth Increase, if any, within 30 thirty(30) days of its appointment or as soon thereafter as is reasonably practicableselection. The decision/award determination of the Independent Accountant Arbitrator as to the Disputed Items independent accounting firm shall be final and binding onon the parties hereto, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final upon such determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of there is no Actual Net Worth Increase, the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall be entitled to receive from the Stockholder (or shall cause which may, at Buyer's sole discretion, be from the applicable IDB Subsidiaries toPledged Assets as defined in Section 1.4) pay the amount of such excess(es) to Seller.
Purchase Price Reduction and (ii) if any of there is an Actual Net Worth Increase, the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller Stockholder shall (or shall cause the applicable Seller Retained Subsidiaries to) pay be entitled to receive from Buyer the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubtActual Net Worth Increase, in no event shall Seller be required to pay an amount in excess each case within five (5) days after the final determination is reported by such independent accounting firm. The costs of the Excess Cash Amountindependent accounting firm shall be borne proportionately by Buyer and the Stockholder based on the differential amounts of their respective determinations of the Company's net worth at Closing from the determination of the independent accounting firm, or equally by Buyer and the Stockholder in the event that the determination by the independent accounting firm is equidistant between the Certified Closing Net Worth and the Actual Company Net Worth.
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Post-Closing Adjustment. The “Post-Closing Adjustment” may be either a positive or negative amount, and shall be equal to (I) the Purchaser Ownership Percentage multiplied by (II) (a) Within 90 days following (i) the Final Working Capital Adjustment Amount minus (ii) the Estimated Working Capital Adjustment Amount, plus (b) (i) the amount of Net Indebtedness set forth in the Estimated Closing DateStatement minus (ii) the amount of Net Indebtedness set forth in the Final Closing Statement. Any component of clause (II) set forth in the preceding sentence may be either a positive or a negative amount. If the Post-Closing Adjustment is a positive amount, then Purchaser (and in no event the Company) shall pay in cash to Seller (or one or more Approved Recipients) an amount equal to the Post-Closing Adjustment. If the Post-Closing Adjustment is a negative amount, then Parent (or an Affiliate designated by Parent) shall prepare pay in cash to Purchaser (and deliver in no event the Company) an amount equal to IDB Buyer a consolidated balance sheet the absolute value of the Seller Retained Subsidiaries as amount of the Post-Closing Adjustment. The Closing Purchase Price, as adjusted by the Post-Closing Adjustment, shall be the “Final Purchase Price.” The “STT Adjustment” may be either a positive or negative amount, and shall be equal to (giving effect x) the Estimated STT minus (y) the Final STT. If the STT Adjustment is a positive amount, then Purchaser (but in no event the Company) shall pay in cash to Seller (or one or more Approved Recipients) an amount equal to the Estimated Available Cash AllocationSTT Adjustment. If the STT Adjustment is a negative amount, then Parent (or an Affiliate designated by Parent) shall pay in cash to Purchaser (but in no event the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with Company) an amount equal to the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation absolute value of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as amount of the Closing (giving effect STT Adjustment. Any payment pursuant to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior with respect to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives Post-Closing Adjustment shall be offset against any payment pursuant to this Section 2.7 with reasonable access respect to the books and recordsSTT Adjustment, personnel and related work papers such that a single payment is made in respect of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party payable pursuant to this Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer2.7, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection which single payment shall be made pursuant to the rules by wire transfer of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
immediately available funds within ten (d10) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Final Closing Balance Sheet (and Statement to an account designated in writing by the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect Party entitled to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by payment within five (5) Business Days after the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any determination of the amounts that were transferred or retained by the IDB Subsidiaries at Final Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerStatement.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
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Post-Closing Adjustment. (a) Within 90 No later than 120 days following after the Closing DateDate (or such later date as mutually agreed by Buyer and Sellers Representative), Seller Buyer shall prepare and deliver to IDB Buyer the Sellers Representative (i) a consolidated balance sheet of the Seller Retained Subsidiaries Company as of the Measurement Time (together with supporting documentation reasonably necessary for Sellers Representative to verify such balance sheet, the “Final Balance Sheet”), (ii) worksheets showing Buyer’s calculation of the: (A) Indebtedness of the Company as of the Measurement Time, plus the amount of any premiums, penalties, fees, make-whole payments or other charges incurred as a result of the payment thereof on the Closing Date as reflected in the applicable Payoff Letter (giving effect collectively, “Final Indebtedness”), (B) the amount of all Transaction Expenses unpaid as of the Measurement Time (“Final Transaction Expenses”), (C) Net Working Capital derived from the Final Balance Sheet (based upon, and subject to the Estimated Available Cash Allocationadjustments set forth in, the definitions of Current Assets and Current Liabilities) (the "Seller “Final Net Working Capital”), (D) the amount of all Incremental Equity Capital, if applicable (the “Final Incremental Equity Capital”), (E) the amount of all Gap Period Extraordinary Expenditures, if any (the “Final Gap Period Extraordinary Expenditures”), and (F) the Interim Tax Amount (the “Final Interim Tax Amount”) and (iii) Buyer’s calculation of the Final Closing Securities Payment, in each case, together with a worksheet showing the difference, if any, between any Estimated Closing Item and the corresponding Final Closing Item. The Final Balance Sheet", Final Indebtedness, Final Transaction Expenses, the Final Net Working Capital, the Final Closing Securities Payment, the Final Incremental Equity Capital (if applicable), which the Final Gap Period Extraordinary Expenditures (if any), and the Final Interim Tax Amount (together, the “Final Closing Items”) shall be prepared in conformity with GAAP applied good faith and on a basis consistent with the preparation of, Audited Financial Statements. Sellers Representative and using the same accounting methods, policies, practices, procedures its representatives shall be entitled to reasonable access during normal business hours to all books and estimation methods as those used in the preparation records of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries Company as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall may be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated reasonably requested by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies Sellers Representative for the purpose of preparing this Section 2.4. Buyer and Sellers Representative shall promptly provide to each other all documents reasonably requested by the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery other to verify any of the Seller items set forth in the Final Closing Balance Sheet and Items calculations. Sellers Representative shall have the IDB Buyer Closing Balance Sheet and prior to the deadline right for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review 30 days following receipt of the Seller Final Closing Balance Sheet Items to object to any of the Final Closing Items or the IDB Buyer Closing Balance Sheet, as applicablecalculation thereof. Each of Seller Any objection made by Sellers Representative shall be made in writing and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount objection in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item")reasonable detail. Other than the Disputed Items, each Party Sellers Representative shall be deemed to have accepted all items waived any rights to object under this Section 2.4 unless Sellers Representative furnishes its written objections to Buyer within such 30-day period. If Sellers Representative delivers an objection within such 30-day period, then Buyer and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer Sellers Representative shall endeavor in good faith to resolve by mutual agreement all Disputed Itemsthe objections. If, at the end of a 15-day period from the date of delivery of any objection by Sellers Representative or such longer period as may be mutually agreed by Buyer and Sellers Representative, there are any objections that remain in dispute, then the remaining objections in dispute shall be submitted for resolution to the Oklahoma City, Oklahoma offices of the accounting firm of Ernst & Young (the “Closing Item Arbitrator”) and, in connection with the engagement for such submission, Sellers Representative and Buyer shall execute any reasonengagement, Seller indemnity and IDB other agreements as the Closing Item Arbitrator may reasonably require as a condition to such engagement in form and substance reasonably acceptable to each of the Sellers Representative and Buyer. The Closing Item Arbitrator shall determine the Final Closing Securities Payment as promptly as reasonably practicable after the objections that remain in dispute are submitted to the Closing Item Arbitrator, but in any event within 30 days after such objections that remain in dispute are submitted to the Closing Item Arbitrator. If any objections are submitted to the Closing Item Arbitrator for resolution, (i) each of Buyer and Sellers Representative shall furnish to the Closing Item Arbitrator such workpapers and other documents and information relating to such objections as the Closing Item Arbitrator may request and are unable reasonably available to resolve that Party (or its independent public accountants) and will be afforded the opportunity to present to the Closing Item Arbitrator any Disputed material relating to the determination of the matters in dispute and to discuss such determination with the Closing Item within such 30 day periodArbitrator, Seller and IDB provided that neither Sellers Representative nor Buyer shall engage Deloitte & Touche LLP in any communication or correspondence with the Closing Item Arbitrator outside of the presence, or without the inclusion, of the other; (ii) the "Independent Accountant Closing Item Arbitrator must not adopt an amount of the Final Closing Securities Payment that is greater than the amount submitted by Sellers Representative or less than the amount submitted by Buyer; and (iii) the determination by the Closing Item Arbitrator of the Final Closing Securities Payment, as set forth in a written notice delivered to both Buyer and Sellers Representative by the Closing Item Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to in accordance with this Agreement and the rules Sample Balance Sheet and shall be binding and conclusive on the parties and, absent manifest error, shall constitute an arbitral award that is final, binding and unappealable and upon which a judgment may be entered by a court having jurisdiction thereof. Buyer and Seller shall each bear their own legal fees and other costs in connection with any such objection; provided, however, that Buyer, on one hand, and Seller, on the other hand, shall bear one-half of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer Closing Item Arbitrator. Notwithstanding anything in relative proportion this Agreement to the amount by which contrary, the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller Closing Item Arbitrator and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item procedures set forth herein shall be an amount within the range established with respect to such Disputed Item by Seller's sole method for resolving any disputes regarding the Final Closing Securities Payment or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheetprovisions of this Section 2.4, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and provided that this Section 2.4 shall not be subject to appeal by, Seller and IDB affect the respective rights of Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of Seller under ARTICLE IX. Following the final determination of the Final Closing Securities Payment pursuant to this Section 2.4, if the Final Closing Securities Payment is greater than the Closing Securities Payment then Buyer shall pay to Seller the amount of the Final Adjustment Amount promptly (but in any event within five Business Days of the determination of the Final Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth thereinSecurities Payment) or if the IDB Closing Securities Payment is greater than the Final Closing Securities Payment then Seller shall pay to Buyer the amount of the Final Adjustment Amount promptly (but in any event within five Business Days of the determination of the Final Closing Balance Sheet (and Securities Payment; provided, however, that if the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
Adjustment Amount is: (i) to be paid to Buyer, if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in Seller fails to timely pay the Final Available Cash AllocationAdjustment Amount to Buyer, then IDB Buyer each Member shall promptly (or shall cause but in any event within two Business Days following the applicable IDB Subsidiaries todate such payment was due from Seller) pay to Buyer such Member’s pro rata percentage as set forth in Schedule B of the amount of such excess(es) to Seller.
the Final Adjustment Amount that is not timely paid by Seller or (ii) if any to be paid to Seller, then after such payment is made to Seller, Seller shall immediately pay to the Members the Final Adjustment Amount in the proportions set forth on Schedule B hereto in immediately available funds by confirmed wire transfer to the bank account or accounts designated by each Member in writing to Seller at least three Business Days prior to payment of the amounts Final Adjustment Amount (provided that were transferred none of Buyer, the Company or retained by the TS Crude shall have any liability or obligation under this proviso or for any failure of Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amountcomply herewith).
Appears in 1 contract
Samples: Securities Purchase Agreement (EnLink Midstream Partners, LP)
Post-Closing Adjustment. The “Post-Closing Adjustment” may be either a positive or negative amount, and shall be equal to (a) Within 90 days following (i) the Working Capital Adjustment Amount set forth in the Final Closing Statement, minus (ii) the Working Capital Adjustment Amount set forth in the Estimated Closing Statement, plus (b) (i) the Closing DateIndebtedness Amount set forth in the Estimated Closing Statement, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of minus (ii) the Closing Indebtedness Amount set forth in the Final Closing Statement, plus (giving effect c) (i) the Closing Cash Amount set forth in the Final Closing Statement, minus (ii) the Closing Cash Amount set forth in the Estimated Closing Statement, plus (d) (i) the Closing Transaction Expense Amount set forth in the Estimated Closing Statement, minus (ii) the Closing Transaction Expense Amount set forth in the Final Closing Statement. If the Post-Closing Adjustment is a positive amount, then Purchaser (or an Affiliate designated by Purchaser) shall pay in cash to Parent (or to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common EquitySellers or one or more Affiliates, in each case derived from as designated by Parent) the items amount of the Post-Closing Adjustment. If the Post-Closing Adjustment is a negative amount, then Parent (or an Affiliate designated by Parent) shall pay in cash to Purchaser (or an Affiliate designated by Purchaser and amounts on such balance sheetbehalf of the Sellers as designated by Parent) the absolute value of the amount of the Post-Closing Adjustment. The Parties agree that Closing Purchase Price, as adjusted by the purpose of preparing Post-Closing Adjustment, shall be the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by “Final Purchase Price.” Any such payment pursuant to this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules by wire transfer of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
immediately available funds within five (d5) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Final Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect Statement to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined an account designated in writing by the Independent Accountant Arbitrator; party entitled to such final calculations being payment within three (3) Business Days after the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any determination of the amounts that were transferred or retained by the IDB Subsidiaries at Final Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerStatement.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. (a) The Cash Purchase Price shall be subject to adjustment after the Closing Date as specified in this Section 1.3.
(b) Within 90 one hundred twenty (120) days following the Closing Date, Seller Buyer, at its option, shall prepare and deliver cause PriceWaterhouseCoopers ("Buyer's Accountant") to IDB Buyer a consolidated balance sheet audit the Company's books to determine the accuracy of the Seller Retained Subsidiaries information set forth on the Closing Financial Certificate (the "Post-Closing Audit"). The parties acknowledge and agree that for purposes of determining the net worth of the Company as of the Closing Date, the value of the assets of the Company shall, except with the prior written consent of Buyer and Stockholder, be calculated as provided in the last paragraph of Section 6.9. In the event that Buyer's Accountant determines that the actual Company net worth as of the Closing Date was less than the Certified Closing Net Worth, Buyer shall deliver a written notice (giving effect the "Financial Adjustment Notice") to the Estimated Available Stockholder, setting forth (i) the determination made by Buyer's Accountant of the actual Company net worth (the "Actual Company Net Worth"), (ii) the amount of the Cash AllocationPurchase Price that would have been payable at Closing pursuant to Section 1.2(c) had the Actual Company Net Worth been reflected on the Closing Financial Certificate instead of the Certified Closing Net Worth, and (iii) the amount by which the Cash Purchase Price would have been reduced at Closing had the Actual Company Net Worth been used in the calculations pursuant to Section 1.2(c) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed ItemPurchase Price Adjustment"). Other than The Purchase Price Adjustment shall take account of the Disputed Itemsreduction, each Party shall be deemed if any, to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party Cash Purchase Price already taken pursuant to Section 2.7(a1.2(c)(i).
(c) For 30 The Stockholder shall have thirty (30) days after from the later delivery receipt of the Dispute Financial Adjustment Notice by Seller or IDB Buyer, Seller and IDB to notify Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Itemsif the Stockholder disputes such Financial Adjustment Notice. If, for any reason, Seller and IDB If Buyer are unable to resolve any Disputed Item has not received notice of such a dispute within such 30 30-day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") be entitled to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs receive from the calculation to be made by the Independent Accountant Arbitrator.
Stockholder (d) If there is a referral to the Independent Accountant Arbitratorwhich may, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB at Buyer's calculation in sole discretion, be from the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, Pledged Assets as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided defined in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"1.4), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 days Schedule 1.6 hereto sets forth, as of March 31, 1998 (i) the combined current assets of Sellers (other than Excluded Assets), (ii) the combined current liabilities of Sellers (other than the Excluded Liabilities), and (iii) the positive amount by which (i) exceeds (ii) (the "March Adjusted Net Current Assets"). As soon as practicable following the Closing DateClosing, Seller Parent and Sub shall prepare and deliver to IDB Buyer Sellers a consolidated balance sheet statement (the "Closing Statement") setting forth, as of June 30, 1998, (i) the Seller Retained Subsidiaries combined current assets of Sellers (other than Excluded Assets) (ii) the combined current liabilities of Sellers (other than the Excluded Liabilities), and (iii) the positive or negative amount obtained by subtracting (ii) from (i) (the "Closing Adjusted Net Current Assets"). If the March Adjusted Net Current Assets exceeds the Closing Adjusted Net Current Assets, Sellers shall pay to Parent or Sub, as directed by Parent, an amount equal to such excess. If the Closing Adjusted Net Current Assets exceeds the March Adjusted Net Current Assets, Sub shall pay to Sellers an aggregate amount equal to such excess. Any such payment shall be made in U.S. dollars (using as a currency exchange rate the rate published by the Wall Street Journal as of the Closing (giving effect Date) by wire transfer to such account as Parent or Sellers, as the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet")case may be, which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equitymay designate.
(b) Following delivery The parties hereto intend that the Business be run for the account of Sub from June 30, 1998 through the Closing Date. Without limiting the generality of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detailforegoing, any good faith dispute as to any item or amount reflected funds received by Sellers from and after June 30, 1998 in the Seller Closing Balance Sheet (including the calculations respect of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party Sellers' accounts receivable shall be deemed held in trust by Sellers for the benefit of Sub pending the Closing and paid by Sellers to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance SheetSub on, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation")practicable after, the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerClosing.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 thirty (30) days following of the Closing Date (the "Delivery Date"), (i) GTI shall deliver to Seller a balance sheet prepared for GTI on a consolidated basis in accordance with US GAAP and reviewed in accordance with FASB 100 as of the Closing Date, Seller shall prepare and deliver to IDB Buyer together with a supporting schedule setting forth a determination of the Indebtedness for GTI on a consolidated balance sheet of the Seller Retained Subsidiaries basis as of the Closing (giving effect to the Estimated Available Cash Allocation) Date (the "Seller GTI Closing Balance SheetStatement"), which and (ii) Seller shall deliver to GTI a balance sheet prepared for the Company and the Company Subsidiaries on a consolidated basis in accordance with US GAAP and reviewed in accordance with FASB 100 as of the Closing Date, together with a supporting schedule setting forth a determination of the Indebtedness for the Company and the Company Subsidiaries on a consolidated basis as of the Closing Date (the "Company Closing Statement", and together with the GTI Closing Statement, the "Closing Statements"). In preparing the GTI Closing Statement, any adjustment caused to the financial results of GTI that arises from the acquisition by GTI or any Subsidiary(ies) of GTI of the telephone service provider, Sibchallenge TeleCom, and an Internet service provider, Tel, in Krasnoyarsk, Russian Federation, shall not be taken into account, and the GTI Closing Statement shall be prepared as if such acquisitions did not (or will not) occur, provided that if such adjustment would negatively affect the net cash position of GTI and its consolidated Subsidiaries by more than US$20,000,000, then the amount in conformity excess of US$20,000,000 by which such adjustment would affect such net cash position shall be taken into account in preparing the GTI Closing Statement. In preparing the Company Closing Statement, any adjustment caused to the financial results of the Company and the Company Subsidiaries that results from (A) the payment of fees to PricewaterhouseCoopers and American Appraisal for their services in connection with GAAP applied on a basis consistent the Buyer's evaluation of the Acquisition, which in any event shall not exceed US$190,000 in the aggregate, and (B) the payment of any fees of PricewaterhouseCoopers for its services in connection with the preparation ofof the financial materials to be provided by the Seller in connection with GTI's proxy statement seeking shareholder approval of the issuance of the GTI Shares, which in any event shall not exceed US$100,000 in the aggregate, shall not be taken into account, and using the same accounting methods, policies, practices, procedures Company Closing Statement shall be prepared as if such fees had not been paid. GTI will cause its employees (and estimation methods as those used the employees of its Subsidiaries and Affiliates) to assist Seller in the preparation of the balance sheet for Company Closing Statement and to assist Seller's auditor in connection with its review of the fiscal year ended December 31Company Closing Statement; provided, 2013that such assistance will not unreasonably interfere with the normal work duties of such employees. GTI will cause Seller and Seller's auditor to be provided with access at all reasonable times, included in following reasonable notice, to the GFI Financial Statementspersonnel, properties, accounting books and which shall include a calculation records of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer Company and the IDB Company Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equitypurposes.
(b) Following delivery of The Closing Statements will be deemed to be the Seller final, binding and conclusive Closing Balance Sheet and Statements (the IDB Buyer "Final Closing Balance Sheet and prior to Statements") for all purposes on the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days tenth (10th) Business Day after the later delivery of Delivery Date (the "Notice Deadline") unless either GTI or Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide delivers to the other Party written notice of its disagreement (a notice setting forth, "Notice of Disagreement") on or prior to the Notice Deadline specifying in detail, any good faith dispute as reasonable detail the nature of such Party's objections to any item or amount reflected in the Seller Closing Balance Sheet Statement prepared by the other Party (including the calculations Party delivering a Notice of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), Disagreement is referred to as applicablea "Disputing Party", and the basis for such dispute together with such Party to whom the Notice of Agreement is sent is referred to as a "Receiving Party"). Without prejudice to the Parties' respective rights under Sections 9.1 and 9.2 hereunder, each of GTI and Seller hereby waives the right to assert any objection to any item in the opposing Party's calculation Closing Statement that is not asserted in a Notice of Disagreement delivered to such opposing Party by the Notice Deadline. If a Notice of Disagreement is timely delivered, then the set of Closing Statements that are the subject of such item Notice of Disagreement will not be deemed to be final and binding for all purposes until the earlier of (1) the date GTI and Seller resolve in writing all differences they have with respect to the disputed item(s) provided for in the Notice of Disagreement or amount (2) the date the disputed matters are resolved in writing by the Unaffiliated Firm (as defined below). For the avoidance of doubt, if a Notice of Disagreement is only delivered with respect to one set of Closing Statements as provided above, then the other set of Closing Statements shall be deemed final and binding for all purposes hereof. During the fifteen (15) day period following the Notice Deadline, GTI and Seller will seek in good faith to resolve any differences they may have with respect to the matters specified in any Notice of Disagreement. If, at the end of such fifteen (15) day period, GTI and Seller have not reached agreement on such matters, a Receiving Party will have five (5) Business Days to advise a Disputing Party in writing of its position with respect to each of the proposed adjustments by the Disputing Party that are in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed ItemResponse Letter"). Other than Promptly following the Disputed Itemsend of such five (5) Business Day period, GTI and Seller will jointly engage an accounting firm of recognized international standing, the auditing division of which has not been engaged by, or paid, in the aggregate, fees in excess of US$100,000 (or the equivalent thereof in any other currency) by, GTI, Seller or any of their respective Affiliates in any one year within the three year period preceding the Closing Date (the "Unaffiliated Firm"), to resolve the matters which remain in dispute with respect to the disputed Closing Statements. In connection with such engagement, each Party shall be deemed of GTI and Seller agrees to have accepted all items and amounts contained in execute, if requested by the Seller Closing Balance Sheet or Unaffiliated Firm, a reasonable engagement letter including customary indemnities. Promptly after such engagement of the IDB Buyer Closing Balance SheetUnaffiliated Firm, GTI and/or Seller, as applicable, delivered by will provide the Unaffiliated Firm with a copy of this Agreement, the Closing Statements that are the subject of each Notice of Disagreement, each Notice of Disagreement and each Response Letter. The Unaffiliated Firm will have the authority to request in writing such additional written submissions from either GTI or Seller as it deems appropriate, provided, that a copy of any such submission will be provided to the other Party at the same time as it is provided to the Unaffiliated Firm. Neither GTI nor Seller will make (nor permit any of its Subsidiaries or Affiliates to make) any additional submission to the Unaffiliated Firm except pursuant to such a written request by the Unaffiliated Firm, nor will either such Party communicate (nor permit any of its Subsidiaries or Affiliates to communicate) with the Unaffiliated Firm without providing such other Party a reasonable opportunity to participate in such communication with the Unaffiliated Firm (other than with respect to written submissions in response to the written request of the Unaffiliated Firm). From the date that the initial documents are submitted to the Unaffiliated Firm as provided herein, the Unaffiliated Firm will have thirty (30) days to review the documents provided to it pursuant to this Section 2.7(a2.8(b). Within such period, the Unaffiliated Firm will furnish simultaneously to both parties its written determination with respect to each of the items in dispute submitted to it for resolution. The Unaffiliated Firm will resolve the differences submitted to it based solely upon the information provided to the Unaffiliated Firm by GTI and Seller pursuant to the terms of this Agreement (and not by independent review). The Unaffiliated Firm's authority will be limited to resolving disputes with respect to whether the disputed Closing Statements were properly prepared with respect to the individual items on the Closing Statements in dispute (it being understood that the Unaffiliated Firm will have no authority to make any adjustments to any financial statements or amounts other than the Closing Statements in dispute and amounts set forth therein). In resolving any disputed item, the Unaffiliated Firm may not assign a value to such item greater than the greatest value for such item asserted by either Party or less than the lowest value for such item asserted by either Party. The decision of the Unaffiliated Firm will be, for all purposes, conclusive, non-appealable, final and binding upon GTI and Seller. The fees of the Unaffiliated Firm will be borne by GTI and Seller in the same proportion that the US Dollar amount of disputed items lost by a Party bears to the total US Dollar amount in dispute resolved by the Unaffiliated Firm. Each of GTI and Seller will bear the fees, costs and expenses of its own accountants and all of its other expenses in connection with matters contemplated by this Section 2.8(b).
(c) For 30 days after the later delivery Upon resolution of the Dispute Notice disputed items (if any) under the Closing Statements as provided in the foregoing Section 2.8(b), the Closing Statements shall be deemed to be the Final Closing Statements for all purposes hereof. Using the relevant numbers set forth below for September 30, 2003 and December 31, 2003, a straight-line interpolation of Indebtedness for each Party for the period between September 30, 2003 and the Closing Date shall be calculated (the "Required Indebtedness"). The Required Indebtedness for each Party shall be compared to the appropriate amount of Indebtedness set out in the Final Closing Statements (the "Closing Indebtedness"). ------------------------------------------------------------------------------------------------------------- GTI GTI COMPANY RESULTS FOR COMPANY RESULTS FOR RESULTS FOR THE RESULTS FOR THE THE NINE MONTHS THE TWELVE MONTHS NINE MONTHS TWELVE MONTHS ENDED ENDED 9/30/03 ENDED 12/31/03 ENDED 9/30/03 12/31/03 ------------------------------------------------------------------------------------------------------------- INDEBTEDNESS 2.7 (0.6) (41.0) (50.0) ------------------------------------------------------------------------------------------------------------- If this comparison shows that the Company has failed to meet its Required Indebtedness target (by Seller or IDB Buyerhaving more Indebtedness than the amount of such target and/or less cash such that the net cash position of the Company is less than the amount of such target), Seller shall pay to GTI the difference between its Closing Indebtedness and IDB Buyer its Required Indebtedness. If this comparison shows that GTI has failed to meet its Required Indebtedness target (by having more Indebtedness and/or less cash such that the net cash position of GTI is less than the amount of such target), GTI shall endeavor in good faith pay to resolve by mutual agreement all Disputed ItemsSeller the difference between its Closing Indebtedness and its Required Indebtedness. If, for any reasonupon the calculations required by this Section 2.8 having been performed, it is determined that each of GTI and Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") would be required to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacitypayment hereunder, then Seller and IDB Buyer shall within 14 days after only the end net amount of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection payment shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation required to be made by either GTI or the Independent Accountant Arbitrator.
Seller, as the case may be. Any payment required under this Section 2.8(c) will be made by wire transfer of immediately available US Dollars to a bank account designated by GTI or Seller, as the case may be, within five (d5) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointmentthe date that the Closing Statements are deemed to be the Final Closing Statements hereunder. If a Party fails to pay any amount required under this Section 2.8(c) in a timely manner, such amount will bear interest from (and including) the date such amount was due to be paid to (but excluding) the date of payment (calculated based upon actual days elapsed in a written statement summarizing its position 365-day year) at a fluctuating rate per annum equal to the then current six-month London Inter-Bank Offered Rate, as published in the Financial Times on the Disputed Itemsdate(s) of determination thereof, together with such supporting documentation as it deems necessaryplus 5%. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Neither GTI nor Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within entitled to recover any amounts under Section 9.1 or 9.2, as the range established with case may be, in respect of any claim for a failure by the Company or GTI, as the case may be, to meet their respective Indebtedness targets for which GTI or Seller have been paid under this Section 2.8; provided, however, that any claim made by a Party under Section 9.1 or 9.2, as the case may be, in respect of objections specified in a Notice of Disagreement delivered by such Disputed Item by Seller's Party may be aggregated for purposes of reaching the thresholds under Sections 9.1(ii) or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet9.2(ii), as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Samples: Share Exchange Agreement (Nye Telenor East Invest As)
Post-Closing Adjustment. (ai) Within 90 seventy-five (75) days following after the Closing Date, Seller Parent shall prepare and deliver to IDB Buyer the Shareholder Representatives a consolidated statement setting forth its calculation of Closing Net Working Capital, which statement shall contain a pro forma balance sheet of the Seller Retained Subsidiaries Company as of the Closing Measurement Time (without giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"transactions contemplated herein), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Closing Net Working Capital derived from (the items “Closing Net Working Capital Statement”) and amounts on such balance sheet. Within 90 days following a certificate of the Chief Financial Officer of Parent certifying that the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together Net Working Capital Statement was prepared in accordance with the Seller definition of Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Net Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount sample calculation of Available Cash, Closing Net Working Capital and Tangible Common Equity and such processes are attached hereto as Error! Reference source not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing found..
(ii) The Closing Net Working Capital Statement shall be accompanied by (1) statements reflecting (A) the Closing Balance Sheets or determining Available Cash (the “Closing Statement of Cash”), Working Capital (B) Closing Indebtedness (the “Closing Statement of Indebtedness”), and Tangible Common Equity.
(bC) Following delivery Closing Transaction Expenses (the “Closing Statement of Transaction Expenses”), and (2) a certificate of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each Chief Financial Officer of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with Parent certifying that such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor statements were prepared in good faith to resolve by mutual agreement all Disputed Itemsand in accordance with the terms of this Agreement. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator"iii) to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item “Post-Closing Adjustment” shall be an amount within (which may be a positive or negative number) equal to (A) the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in result of the Seller Closing Balance Sheet or IDB Buyer Closing Balance SheetNet Working Capital, as applicablefinally determined pursuant to this Section 2.20, on minus the one handEstimated Closing Net Working Capital, and which result may be a positive or negative number, plus (B) the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award result of the Independent Accountant Arbitrator Closing Cash, as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation")pursuant to this Section 2.20, the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay minus the amount of such excess(esCash reflected on the Estimated Closing Cash Certificate, which result may be a positive or negative number, minus (C) to Seller.
(ii) if any the result of the amounts that were transferred or retained by the Seller Retained Subsidiaries Closing Indebtedness, as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocationfinally determined pursuant to this Section 2.20, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay minus the amount of such excess(esIndebtedness reflected on the Estimated Closing Indebtedness Certificate, which result may be a positive or negative number, minus (D) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess result of the Excess Cash Amount.Closing Transaction Expenses, as finally determined pursuant to this Section 2.20, minus the amount of Transaction Expenses reflected on the Estimated Closing Transaction Expenses Certificate, which result may be a positive or negative number. (c)
Appears in 1 contract
Post-Closing Adjustment. (a) The Consideration shall be subject to adjustment after the Closing Date as specified in this Section 1.3.
(b) Within 90 one hundred twenty (120) days following the Closing Date, Seller Shentel shall prepare and deliver to IDB Buyer a consolidated balance sheet determine the actual Closing Balance of the Seller Retained Subsidiaries Company as of the Closing Date. In the event that Shentel determines that (giving effect to i) the Estimated Available Cash Allocation) (the "Seller actual Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to Date was less than the Estimated Available Cash Allocation) Certified Closing Balance, Shentel shall deliver a written notice (the "IDB Buyer First Adjustment Notice") to the Interestholders' Representative, as defined in Section 1.6, setting forth (i) the determination made by Shentel's accountant of the Actual Closing Balance Sheet" and together with the Seller Closing Balance Sheet, (the "Actual Closing Balance SheetsBalance"), (ii) the amount of the Consideration that would have been payable at Closing pursuant to Section 1.2 had the Actual Closing Balance been reflected on the Closing Financial Certificate instead of the Certified Closing Balance, (iii) the amount by which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using Consideration would have been reduced at Closing had the same accounting methods, policies, practices, procedures and estimation methods as those Actual Closing Balance been used in the preparation calculations pursuant to Section 1.2 (the "Consideration Adjustment"); provided, however, in no event shall such Consideration Adjustment exceeds the remaining balance of the balance sheet Escrow Fund (as defined in Section 1.4) and further provided, such Consideration Adjustment shall reduce, dollar for the fiscal year ended December 31dollar, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies Escrow Fund as provided for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a)1.4.
(c) For 30 The Interestholders' Representative shall have fifteen (15) days after from the later delivery receipt of the Dispute First Adjustment Notice by Seller or IDB Buyerto notify Shentel if the Interestholders dispute such First Adjustment Notice. If Shentel has not received notice of such a dispute within such 15-day period, Seller and IDB Buyer Shentel shall endeavor be entitled to receive such amount of Consideration Adjustment from the Escrow Fund (as defined in good faith to resolve by mutual agreement all Disputed ItemsSection 1.4). If, for any reasonhowever, Seller and IDB Buyer the Interestholders' Representative has delivered notice of such a dispute to Shentel within such 15-day period, then the parties shall first meet to resolve the dispute. If after 30 days (or such longer period as the parties may agree), the parties are unable to resolve any Disputed Item within such 30 day periodthe dispute, Seller Shentel and IDB Buyer the Interestholder Representative shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on select an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules that has not represented any of the American Arbitration Associationparties hereto within the preceding two (2) years to review the financial condition of the Company as of the Closing Date to determine the amount, which if any, of the Consideration Adjustment. Such independent accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made confirmed by the Independent Accountant Arbitrator.
Interestholders' Representative and Shentel within three (d3) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as selection, unless there is reasonably practicablean actual conflict of interest. The decision/award independent accounting firm shall be directed to consider only those agreements, contracts, commitments or other documents (or summaries thereof) that were either (i) delivered or made available to Shentel in connection with the transactions contemplated hereby, or (ii) reviewed by Shentel during the course of the Independent Accountant Arbitrator as to post-closing audit. The independent accounting firm shall make its determination of the Disputed Items Consideration Adjustment within thirty (30) days of its selection. The determination of the independent accounting firm shall be final and binding onon the parties hereto, and upon such determination, Shentel shall not be subject entitled to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following receive from the later Escrow Fund the amount of the final Consideration Adjustment. The costs of the independent accounting firm shall be borne by the party (either Shentel or from the Escrow Fund in the case of the Interestholders as a group) whose determination of the Seller Company's Actual Closing Balance Sheet (at Closing was further from the determination of the independent accounting firm, or equally by Shentel and the calculations of Available Cash and Working Capital set forth therein) or Interestholders in the IDB Buyer event that the determination by the independent accounting firm is equidistant between the Certified Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Actual Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to SellerBalance.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Samples: Interest Purchase Agreement (Shenandoah Telecommunications Co/Va/)
Post-Closing Adjustment. (a) In accordance with the terms and provisions of this Section 3.3, Buyer shall pay to Seller, or Seller shall pay to Buyer (as the case may be), an amount (the "Net Working Capital Adjustment Amount") equal to the amount by which Net Working Capital is greater (in which case the Purchase Price shall be increased by such amount and Buyer shall pay the Net Working Capital Adjustment Amount to Seller) or is less (in which case the Purchase Price shall be reduced by such amount and Seller shall pay the Net Working Capital Adjustment Amount to Buyer) than Estimated Net Working Capital, together with interest thereon at the Prime Rate plus 2% per annum from the Closing Date until the date such payment is made. In accordance with the terms and provisions of this Section 3.3, Seller shall pay to Buyer an amount, if any (the "Indebtedness Adjustment Amount"), equal to the amount by which the Indebtedness exceeds Estimated Indebtedness, together with interest thereon at the Prime Rate plus 2% per annum from the Closing Date until the date such payment is made. In accordance with the terms and provisions of this Section 3.3, Buyer shall pay to Seller, or Seller shall pay to Buyer (as the case may be) an amount, if any (the "Other Purchase Price Adjustments Amount"), equal to the amount by which Other Purchase Price Adjustments is less (in which case the Purchase Price shall be increased by such amount and Buyer shall pay the Other Purchase Price Adjustments Amount to Seller) or is greater (in which case the Purchase Price shall be reduced by such amount and Seller shall pay the Other Purchase Price Adjustments Amount to Buyer) than the Estimated Other Purchase Price Adjustments, together with interest thereon at the Prime Rate plus 2% per annum from the Closing Date until the date such payment is made.
(b) Within 90 ninety (90) days following after the Closing Date, Seller Buyer shall prepare and deliver to IDB Buyer a consolidated Seller the balance sheet of the Seller Retained Subsidiaries ALNG as of the Closing (giving effect to the Estimated Available Cash Allocation) November 30, 2002 (the "Seller Closing Balance Sheet"). The Closing Balance Sheet shall be prepared in accordance with Schedule 3.3. In addition, no later than the date upon which Buyer delivers the Closing Balance Sheet to Seller, Buyer shall deliver to Seller a report setting forth its proposed calculation of Net Working Capital, Indebtedness and Other Purchase Price Adjustments, which shall be prepared made in conformity accordance with GAAP applied on and in a basis manner consistent with the preparation ofillustration set forth in Schedule 3.3, including the statement of accounting principles attached to and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation made a part of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) Schedule 3.3 (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed ItemReport"). The calculation of Net Working Capital, Indebtedness and Other than Purchase Price Adjustments set forth in the Disputed Items, each Party Closing Report shall be deemed binding upon both Parties, unless Seller objects, at Seller's expense, to have accepted all items and amounts contained such calculation in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to accordance with Section 2.7(a3.3(c).
(c) For 30 If, within thirty (30) days after Buyer delivers the later delivery of Closing Balance Sheet and the Dispute Notice by Seller or IDB BuyerClosing Report to Seller, Seller notifies Buyer of any objections to the calculation by Buyer of Net Working Capital, Indebtedness and IDB Other Purchase Price Adjustments (the date upon which Seller notifies Buyer of any such objections shall endeavor be referred to herein as the "Objection Notification Date"), Buyer and Seller will attempt in good faith to resolve by mutual agreement all Disputed Items. Ifagree upon the Net Working Capital Adjustment Amount, for any reason, Seller the Indebtedness Adjustment Amount and IDB Buyer are unable the Other Purchase Price Adjustments Amount prior to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP or on the date that is forty-five (the "Independent Accountant Arbitrator"45) to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant ArbitratorObjection Notification Date.
(d) If there is a referral Buyer and Seller agree prior to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position or on the Disputed Itemsdate that is forty-five (45) days after the Objection Notification Date to a Net Working Capital Adjustment Amount, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determinethe Indebtedness Adjustment Amount and/or Other Purchase Price Adjustments Amount that is different from the amount that would be calculated based upon the Closing Report, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item payment described in Section 3.3(a) shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9agreed upon amount.
(e) No later than 30 If Buyer and Seller do not agree prior to or on the date that is forty-five (45) days following after the later Objection Notification Date to a Net Working Capital Adjustment Amount, the Indebtedness Adjustment Amount and/or Other Purchase Price Adjustments Amount, as the case may be, payment shall be made by Buyer or Seller, as appropriate, with respect to all "agreed upon" issues on said forty-fifth (45th) day and either Party may submit the remaining matters in dispute (but no other matters) to PriceWaterhouse Coopers or, if that firm declines to act as provided in this paragraph, another firm of independent public accountants mutually acceptable to Buyer and Seller (in either case, the "Final Arbiter"), which firm shall make a final and binding determination as to all matters in dispute with respect to the calculation of the final Net Working Capital Adjustment Amount, the Indebtedness Adjustment Amount and/or Other Purchase Price Adjustments Amount,, as the case may be, within forty-five (45) days after its appointment. The Final Arbiter shall send its written determination of Net Working Capital, Indebtedness and Other Purchase Price Adjustments to Buyer and Seller, together with a calculation of the Net Working Capital Adjustment Amount, the Indebtedness Adjustment Amount and/or Other Purchase Price Adjustments Amount, as the case may be, that results from that determination, at which point the determination of the Seller Closing Balance Sheet (Final Arbiter, and the calculations resulting calculation of Available Cash and the Net Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation")Adjustment Amount, the following adjustments Indebtedness Adjustment Amount and/or Other Purchase Price Adjustments Amount, as the case may be, shall be effected:
(i) if any of the amounts that were transferred binding on Buyer and Seller, absent fraud or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Sellermanifest error.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Samples: Purchase Agreement (Keyspan Corp)
Post-Closing Adjustment. (aA) Within 90 days following the Closing Date, Seller Purchaser shall prepare and deliver to IDB Buyer the Representative a consolidated balance sheet statement (the “Post-Closing Statement”) setting forth Purchaser’s good faith calculation of the Seller Retained Subsidiaries actual Net Working Capital as of the Closing (giving effect to the Estimated Available Cash Allocation) Effective Time (the "Seller Closing Balance Sheet"“Actual Net Working Capital”), which shall be prepared in conformity with GAAP applied on a basis consistent with . During the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days day period following the Closing Date, IDB Buyer the Sellers shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocationi) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party Purchaser and its Representatives representatives with reasonable access at all reasonable times during normal business hours and upon reasonable prior notice to the books and records, personnel and related work papers records of Seller the Sellers to the extent reasonably requested by Purchaser or IDB Buyer, as applicable, any of its representatives in connection with such other Party's review its preparation of the Seller Post-Closing Balance Sheet or the IDB Buyer Closing Balance SheetStatement, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery (ii) cooperate with Purchaser and its representatives in connection with its preparation of the Seller Post-Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a)Statement.
(cB) For 30 days after Following the later delivery determination of Final Net Working Capital in accordance with Section 1(g)(iv)(D), the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection Closing Purchase Price shall be made adjusted (1) downwards by the amount (if any) by which Final Net Working Capital is less than Estimated Net Working Capital, and (2) upwards by the amount (if any) by which Final Net Working Capital is greater than Estimated Net Working Capital. The Closing Purchase Price, as adjusted pursuant to the rules immediately preceding sentence, is referred to herein as the “Adjusted Purchase Price.”
(C) If the Closing Purchase Price is greater than the Adjusted Purchase Price (the amount of such excess, the “Downward Adjustment Amount”), (1) Purchaser and the Representative shall jointly instruct the Escrow Agent to (x) release to Purchaser from the Escrow Account, an amount equal to the lesser of the American Arbitration AssociationDownward Adjustment Amount and all amounts remaining in the Escrow Account, which accounting firm shall be and (y) if the "Independent Accountant Arbitrator" hereunder. The feesDownward Adjustment Amount is less than the Escrow Amount, costs and expenses release to the Representative (for the benefit of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(dSellers) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation any amounts remaining in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" Escrow Account after giving effect to the items and amounts accepted or deemed release to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by Purchaser described in the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"preceding clause (x), the following adjustments shall be effected:
and (i2) if any of the amounts that were transferred or retained by Downward Adjustment Amount exceeds the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash AllocationAdjustment Escrow Amount, then IDB Buyer the Sellers, jointly and severally, shall (pay or shall cause the applicable IDB Subsidiaries to) pay to be paid to Purchaser the amount of such excess(es) to Seller.
excess.. If the Adjusted Purchase Price is greater than the Closing Purchase Price (ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(esexcess, the “Upward Adjustment Amount”), (1) Purchaser shall pay or cause to IDB Buyer. Notwithstanding be paid to the foregoing and Representative (for the avoidance benefit of doubtthe Sellers) an amount equal to the Upward Adjustment Amount, and (2) Purchaser and the Representative shall jointly instruct the Escrow Agent to release to the Representative (for the benefit of the Sellers) any amounts then remaining in no event shall Seller be the Escrow Account. Any amounts required to pay an be paid pursuant to this Section 1(g)(iv)(C) shall be paid, by wire transfer of immediately available funds, within ten (10) days after the determination of such amount becomes final in excess of the Excess Cash Amountaccordance with Section 1(g)(iv)(D).
Appears in 1 contract
Samples: Asset Purchase Agreement
Post-Closing Adjustment. (ai) Within 90 days following If the Closing DatePurchase Price is greater than the Final Purchase Price (such difference, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the “Post-Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"Adjustment Shortfall Amount”), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB then Buyer and the IDB Subsidiaries as Stockholders’ Agent shall, within three (3) Business Days of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation determination of the balance sheet for the fiscal year ended December 31, 2013, included Final Purchase Price in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by accordance with this Section 2.7 is 2.16, jointly instruct the Escrow Agent to measure pay the Post-Closing Adjustment Shortfall Amount to Buyer out of the Purchase Price Adjustment Escrow Fund by wire transfer in immediately available funds. If the amount of Available Cashfunds in the Purchase Price Adjustment Escrow Fund exceeds the Post-Closing Adjustment Shortfall Amount, Working Capital then Buyer and Tangible Common Equity and such processes are not intended the Stockholders’ Agent shall also jointly instruct the Escrow Agent to, after paying the Post-Closing Adjustment Shortfall Amount to permit the introduction of different judgmentsBuyer, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery pay to each Participating Stockholder its Pro Rata Portion of the Seller remaining amount of funds in the Purchase Price Adjustment Escrow Fund. If the Purchase Price Adjustment Escrow Fund is insufficient to cover the Post-Closing Balance Sheet Adjustment Shortfall Amount, then Buyer and the IDB Stockholders’ Agent shall jointly instruct the Escrow Agent to (i) distribute the entire Purchase Price Adjustment Escrow Fund to Buyer Closing Balance Sheet as provided above and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth thereinii) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on pay an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation Post-Closing Adjustment Shortfall Amount exceeds the amount in the Purchase Price Adjustment Escrow Fund to Buyer out of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
Indemnity Escrow Fund (d) If there is a referral up to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Indemnity Escrow Fund) by wire transfer in immediately available funds. Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on Company agree that the other hand. Seller Purchase Price Adjustment Escrow Fund and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and Indemnity Escrow Fund shall not be subject the sole source of Buyer’s right to appeal by, Seller and IDB Buyer or any other Personthe Post-Closing Adjustment Shortfall Amount, and may that the Participating Stockholders shall be entered severally and enforced as provided in Section 9.9.
(e) No later than 30 days following the later not jointly liable for their respective Pro Rata Portion of any shortfall after application of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Sellerforegoing.
(ii) if any If the Final Purchase Price is greater than the Closing Purchase Price (such excess amount, the “Post-Closing Adjustment Excess Amount”), then the Company Stockholders shall be entitled to receive such excess amount, and Buyer shall, within five (5) Business Days of the amounts that were transferred or retained by determination of the Seller Retained Subsidiaries Final Purchase Price in accordance with this Section 2.16, pay to the Paying Agent an amount equal to the Post-Closing Adjustment Excess Amount which shall be distributed to the Company Stockholders as provided Cash Merger Consideration in accordance with Section 2.8. Concurrently with the payment of the Post-Closing Adjustment Excess Amount, Buyer and the Stockholders’ Agent shall also jointly instruct the Escrow Agent to pay to each Participating Stockholder its Pro Rata Portion of the remaining amount of funds in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash AmountPurchase Price Adjustment Escrow Fund.
Appears in 1 contract
Post-Closing Adjustment. (a) Within 90 days following During the period between the Effective Date and the Closing Date, Seller the Businesses shall prepare and deliver to IDB Buyer a consolidated balance sheet of be operated as between the Seller Retained Subsidiaries as of the Closing (giving effect Parties, to the Estimated Available Cash Allocation) (extent reasonably possible, as if the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquitySeparation had been completed.
(b) Following delivery As soon as practicable after Closing, but in any event not later than January 30, Veraz, together with its auditors, shall prepare a balance sheet with respect to the Businesses, as of December 31, 2002 (the Seller “Closing Date Balance Sheet Sheet”), using the same principles and accounting policies under which the September 30 and Effective Date Balance Sheets were prepared, and related profit and loss and cash flow statements (the “Closing Date Income Statement” and the IDB Buyer “Closing Balance Sheet Date Cash Flow Statement”, respectively, and prior to together with the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Date Balance Sheet, as applicablethe “Closing Date Financial Statements”) for the period between the Effective Date and December 31, 2002 (the “Interim Period”). Each The Closing Date Income Statement and Closing Date Cash Flow Statement shall each be prepared on the basis of Seller income and IDB Buyer shall expenses which would have 45 days after been incurred by Veraz had the later delivery of Closing occurred on the Seller Effective Date. In preparing the Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detailDate Financial Statements, any good faith dispute as inter-company financial transfers from Veraz Networks to any item or amount reflected in Veraz during the Seller period between the Closing Balance Sheet (including the calculations of Available Cash Date and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein)December 31st, as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party 2002 shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a)disregarded.
(c) For The Sellers shall have a period of 30 days after the later delivery of the Dispute Notice by Seller Effective Date Balance Sheet to present in writing to Veraz all objections the Sellers may have to any of the matters set forth or IDB Buyerreflected therein. Similarly, Seller and IDB Buyer the Sellers shall endeavor have a period of 30 days after delivery of the Closing Date Financial Statements to present in good faith writing to resolve by mutual agreement Veraz all Disputed Itemsobjections the Sellers may have to any of the matters set forth or reflected therein. If, for any reason, Seller and IDB Buyer If no objections are unable to resolve any Disputed Item raised within such 30 30-day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection Closing Date Financial Statements shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made deemed approved by the Independent Accountant ArbitratorSellers.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Itemsbasis of the Closing Date Cash Flow Statement, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator the Businesses generated a net increase in cash and cash equivalents during the Interim Period, NGTS shall act as an arbitrator transfer to determineVeraz, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 three business days of its appointment or as soon thereafter as is reasonably practicable. The decision/award approval of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding onsuch amount, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided cash in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any the net increase in cash and cash equivalents generated by Veraz during the Interim Period. If on the basis of the amounts that were transferred or retained by Closing Date Cash Flow Statement, the Seller Retained Subsidiaries as provided Businesses generated a net decrease in the Estimated Available Cash Allocation were cash and cash equivalents, Veraz shall transfer, within three business days of approval of such amount, cash to NGTS in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(esthe net decrease in cash and cash equivalents generated by Veraz during the Interim Period. The foregoing amounts to be transferred pursuant this Section 9.2(d) to IDB Buyer. Notwithstanding shall be adjusted by the foregoing net amount of cash or cash equivalents actually received or paid by Veraz during the period between the Closing Date and for the avoidance of doubtDecember 31, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount2002.
Appears in 1 contract
Samples: Separation and Asset Purchase Agreement (Veraz Networks, Inc.)
Post-Closing Adjustment. (a) Within 90 No later than sixty (60) days following the Closing Date, Purchaser shall cause to be prepared and delivered to Seller shall prepare and deliver to IDB Buyer a statement (the “Closing Statement”) consisting of (i) an unaudited consolidated balance sheet of the Seller Retained Subsidiaries Target Entities other than FIC as of the close of business on the Closing (giving effect to the Estimated Available Cash Allocation) Date (the "Seller “Closing Admin/Obligor Balance Sheet"”), which (ii) an unaudited consolidated balance sheet of the Affiliated Reinsurance Entities as of the close of business on the Closing Date (the “Closing Affiliated Reinsurance Entity Balance Sheet”), (iii) an unaudited balance sheet of FIC as of the close of business on the Closing Date (the “Closing FIC Balance Sheet”), (iv) a calculation in reasonable detail of Closing Working Capital and aggregate Indebtedness of the Target Entities other than FIC (“Closing Indebtedness”) derived from the Closing Admin/Obligor Balance Sheet, (v) a calculation in reasonable detail of Closing Date Legacy Reserves and Affiliated Entity Reinsurance Company Cash derived from the Closing Affiliated Reinsurance Entity Balance Sheet, (vi) a calculation in reasonable detail of FIC Equity derived from the Closing FIC Balance Sheet, (vii) the final amount of Transaction Expenses and (viii) calculations in reasonable detail of the Purchase Price Adjustment and Commutation Payment Adjustment based on the foregoing. The Closing Statement shall be prepared in conformity with GAAP applied on a basis consistent accordance with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common EquityApplicable Accounting Principles.
(b) Following delivery The Closing Statement shall become final, binding and conclusive upon Seller and Purchaser on the thirtieth (30th) day following Seller’s receipt of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and Statement, unless prior to such thirtieth (30th) day Seller delivers to Purchaser a written notice (a “Notice of Disagreement”) stating that Seller believes the deadline for delivering Closing Statement contains mathematical errors or was not prepared in accordance with the Applicable Accounting Principles and specifying in reasonable detail each item that Seller disputes (each, a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein“Disputed Item”), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (for each such Disputed Item and the "Dispute Notice"reasons supporting Seller’s positions. Seller shall not challenge the Closing Statement on any other basis, and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party Seller shall be deemed to have accepted agreed with all other items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, Statement delivered by the other Party pursuant to Section 2.7(a2.3(a).
(c) For 30 days after During the later thirty (30) -day period following the delivery of a Notice of Disagreement (such period of time, the Dispute Notice by Seller or IDB Buyer“Resolution Period”), Seller and IDB Buyer Purchaser shall endeavor seek in good faith to resolve by mutual agreement in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement. During the Resolution Period, Purchaser and its auditors shall have access to all Disputed Items. Ifof the working papers of Seller prepared in connection with the Notice of Disagreement, for any reason, and Seller and IDB Buyer his auditor shall have access to all working papers of Purchaser prepared in connection with the Closing Statement. In the event that Seller and Purchaser are unable to resolve agree on any Disputed Item item or items shown or reflected in the Notice of Disagreement within such 30 day periodthe Resolution Period, each of Seller and IDB Buyer Purchaser shall engage Deloitte & Touche LLP (prepare separate written reports of such unresolved item or items specified in the "Notice of Disagreement and deliver such reports, along with copies of the Notice of Disagreement and the Closing Statement marked to indicate those line items that remain in dispute, to the Independent Accountant Arbitrator"within fifteen (15) days after the expiration of the Resolution Period. The failure of either such party to make timely deliver its initial written statement or response to such other party’s initial written statement shall constitute a determination waiver of such party’s right to submit the same, and the Independent Accountant shall rule in favor of the other party in all issues. The parties hereto shall use their respective reasonable best efforts to cause the Independent Accountant to, as soon as practicable and in any event within thirty (30) days after receiving such written reports, determine whether and to what extent (if any) the Closing Statement requires adjustment with respect to the calculation of the items set forth therein; provided, however, that the dollar amount of each item in dispute shall be determined within the range of dollar amounts proposed by Seller in the Notice of Disagreement, on the one hand, and Purchaser in the Closing Statement, on the other hand. The parties hereto acknowledge and agree that (i) the review by and determinations of the Independent Accountant shall be limited to, and only to, the unresolved item or items contained in the reports prepared and submitted to the Independent Accountant by Seller and Purchaser and (ii) the determinations by the Independent Accountant shall be based solely on (A) such reports submitted by Seller and Purchaser and the basis for Seller’s and Purchaser’s respective positions and (B) this Section 2.3 and the Applicable Accounting Principles. Seller and Purchaser agree to enter into an engagement letter with the Independent Accountant containing customary terms and conditions for this type of engagement. The parties hereto shall use their reasonable best efforts to cooperate with each other and to cooperate with and provide information and documentation, including work papers, to assist the Independent Accountant. Any such information or documentation provided by any party hereto to the Independent Accountant shall be concurrently delivered to the other parties hereto, subject, in the case of any work papers of such party’s accountants or auditors, to such other parties hereto entering into a customary release agreement with respect thereto. None of the parties hereto shall disclose to the Independent Accountant, and the Independent Accountant shall not consider for any purposes, any settlement discussions or settlement offers made by any of the parties hereto with respect to any objection under this Section 2.3(c). The determinations by the Independent Accountant solely as to the amount of Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection Items shall be made pursuant to the rules of the American Arbitration Association, which accounting firm in writing and shall be final, binding and conclusive for all purposes of determining the "Independent Accountant Arbitrator" hereunderPurchase Price Adjustment and the Commutation Payment Adjustment and shall have the same effect for all purposes as if such determinations had been embodied in a final judgment, entered by a court of competent jurisdiction, and either party hereto may petition the New York courts to reduce such decision to judgment. The fees, costs and expenses of retaining the Independent Accountant Arbitrator will shall be borne 50% by Seller and IDB Buyer in relative proportion to the amount 50% by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant ArbitratorPurchaser.
(d) If there is a referral Each party shall use its reasonable best efforts to provide promptly to the Independent Accountant Arbitratorother party all information and reasonable access to employees as such other party shall reasonably request in connection with review of the Estimated Closing Statement, each the Closing Statement or the Notice of Seller and IDB Buyer agreesDisagreement, if requested by as the Independent Accountant Arbitratorcase may be, including all work papers of the accountants who audited, compiled or reviewed such statements or notices (subject to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, Purchaser and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item representatives entering into any undertakings required by Seller's or IDB Buyer's calculation ’s accountants in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding onconnection herewith), and shall not be subject otherwise cooperate in good faith with such other party to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9arrive at a final determination of the Closing Statement.
(e) No later than 30 days following Within two (2) Business Days after the later Closing Statement is finalized pursuant to sub-sections (c) and (d) of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effectedthis Section 2.3:
(i) if any the Purchase Price Adjustment is a positive amount, Seller shall pay Purchaser an aggregate amount equal to the Purchase Price Adjustment, by wire transfer of the amounts that were transferred immediately available funds to an account or retained accounts previously designated in writing by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.Purchaser; or
(ii) if any the Purchase Price Adjustment is a negative amount, Purchaser shall pay Seller an aggregate amount equal to the Purchase Price Adjustment, by wire transfer of immediately available funds to an account or accounts previously designated in writing by Seller. Any payment made pursuant to this Section 2.3(e) shall be treated for all applicable Tax purposes as an adjustment to the amounts Purchase Price unless otherwise required by applicable Law.
(f) Within two (2) Business Days after the Closing Statement is finalized pursuant to sub-sections (c) and (d) of this Section 2.3:
(i) if the Commutation Payment Adjustment is a positive amount, FIC shall pay the Affiliated Reinsurance Entities an aggregate amount equal to the Commutation Payment Adjustment, by wire transfer of immediately available funds to an account or accounts previously designated in writing by Seller; or
(ii) if the Commutation Payment Adjustment is a negative amount, the Affiliated Reinsurance Entities shall pay FIC an aggregate amount equal to the Commutation Payment Adjustment, by wire transfer of immediately available funds to an account or accounts previously designated in writing by Purchaser.
(iii) Payments due to or from the Affiliated Reinsurance Entities pursuant to this Section 2.3(f) shall be made in accordance with the Reinsurance Allocation Schedule; provided that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then all Affiliated Reinsurance Entities and Seller shall be jointly and severally liable for any payment owed to FIC pursuant to clause (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amountii).
Appears in 1 contract
Post-Closing Adjustment. As soon as practicable, but not more than five days after the Final Post-Closing Statement is determined:
(ai) Within 90 days following Parent shall deliver, or cause to be delivered, by wire transfer of immediately available funds to the Exchange Agent (such amount to be paid by the Exchange Agent to the Stockholders pursuant to the Payments Agreement), the amount (the “Excess Amount”), if any, by which the Net Working Capital on the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet of the Seller Retained Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Final Post-Closing Balance Sheet (including Statement, is greater than the calculations of Available Cash and Target Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash by more than $100,000; and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount payment shall result in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as an immediate upward adjustment to the Disputed Items; provided that if Purchase Price by such Excess Amount. Parent shall have the Independent Accountant Arbitrator is unable or unwilling right to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end offset payment of any such 30 day period agree on Excess Amount by an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion amount equal to the amount by which any portion of the aggregate calculation amount of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position Net Working Capital on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were Date in excess of the corresponding amounts Target Working Capital is directly attributable to an outstanding account receivable of the Company that should have been transferred or retained by was due and payable as of the IDB Subsidiaries Closing, but uncollected as provided in of the date of the Final Available Cash AllocationPost-Closing Statement (each such account receivable, then IDB Buyer an “Uncollected A/R Amount”); provided, however, Parent shall (or shall cause pay, on the applicable IDB Subsidiaries to) pay the amount of Holdback Release Date, any Uncollected A/R Amounts that are collected prior to such excess(es) to Sellerdate.
(ii) Parent shall be entitled to recover from the Holdback, the amount, if any of any, by which the amounts that were transferred or retained by Net Working Capital on the Seller Retained Subsidiaries Closing Date, as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided reflected in the Final Available Post-Closing Statement, is less than the Target Working Capital by more than $100,000; and shall result in an immediate downward adjustment to the Purchase Price by such amount.
(iii) Parent shall deliver, or cause to be delivered, by wire transfer of immediately available funds to the Exchange Agent (such amount to be paid by the Exchange Agent to the Stockholders and Warrantholders pursuant to the Payments Agreement), the amount, if any, by which the Closing Cash, as reflected in the Final Post-Closing Statement, is greater than the Estimated Closing Cash; and such payment shall result in an immediate upward adjustment to the Purchase Price by such amount.
(iv) Parent shall be entitled to recover from the Holdback, the amount, if any, by which the Closing Cash Allocationon the Closing Date, then Seller as reflected in the Final Post-Closing Statement, is less than the Estimated Closing Cash; and shall result in an immediate downward adjustment to the Purchase Price by such amount.
(v) Parent shall deliver, or cause to be delivered, by wire transfer of immediately available funds to the Exchange Agent (such amount to be paid by the Exchange Agent to the Stockholders pursuant to the Payments Agreement), the amount, if any, by which the Closing Indebtedness Amount, as reflected in the Final Post-Closing Statement, is less than the Estimated Closing Indebtedness Amount; and such payment shall cause result in an immediate upward adjustment to the applicable Seller Retained Subsidiaries toPurchase Price by such amount.
(vi) pay Parent shall be entitled to recover from the amount of Holdback, the amount, if any, by which the Closing Indebtedness Amount, as reflected in the Final Post-Closing Statement, is greater than the Estimated Closing Indebtedness Amount; and shall result in an immediate downward adjustment to the Purchase Price by such excess(esamount. Any payment or recovery pursuant to this Section 2.04(d) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amountdeemed a “Post-Closing Adjustment.”
Appears in 1 contract
Post-Closing Adjustment. (a) The Cash Purchase Price shall be subject to adjustment after the Closing Date as specified in this Section 1.3.
(b) Within 90 one hundred twenty (120) days following the Closing Date, Seller Buyer shall prepare cause PriceWaterhouseCoopers ("Buyer's Accountant") to audit the Company's books to determine whether the Net Worth Target and deliver to IDB Buyer a consolidated balance sheet the Net Working Capital Target have been met (the "Post-Closing Audit"). The parties acknowledge and agree that for purposes of determining the net worth and net working capital of the Seller Retained Subsidiaries Company as of the Closing (giving effect to Date, the Estimated Available Cash Allocation) (value of the "Seller Closing Balance Sheet")assets of the Company shall, which except with the prior written consent of Buyer, be calculated as provided in the last paragraph of Section 6.8 and shall be prepared in conformity with GAAP applied on based upon a basis balance sheet which is consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the Company's unaudited balance sheet as of September 30, 1998 and income statement, statement of cash flows and statement of changes in members' equity for the fiscal year nine-month period then ended December 31(collectively, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at "Interim Financials"). In the Seller Retained Subsidiaries and Working Capital derived from event that the items and amounts on such balance sheet. Within 90 days following Buyer's Accountant determines that the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries actual Company net worth as of the Closing (giving effect to Date or actual Company net working capital as of the Estimated Available Cash Allocation) Closing Date were less than the Net Worth Target or Net Working Capital Target, respectively, Buyer shall deliver a written notice (the "IDB Buyer Closing Balance Sheet" and together with Financial Adjustment Notice") to the Seller Closing Balance SheetMembers' Representative (as defined in Section 1.6), setting forth the determination of the actual Company net worth (the "Closing Balance SheetsActual Company Net Worth") and actual Company net working capital ("Actual Company Net Working Capital"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior Subject to the deadline for delivering a Dispute Notice, each resolution of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, any dispute in connection with such other Party's review determination as set forth in Section 1.3(c), (i) if the Actual Company Net Worth or Actual Company Net Working Capital is less than the Net Worth Target or Net Working Capital Target, respectively, the Purchase Price, at the option of the Seller Buyer, shall be adjusted by the greater of (x) the difference between the Net Worth Target and the Actual Closing Balance Sheet or Net Worth and (y) the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after difference between the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Net Working Capital set forth therein) or the IDB Buyer Target and Actual Closing Balance Sheet Net Working Capital (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for any such dispute together with such Party's calculation of such item or amount in dispute (adjustment the "Dispute NoticePurchase Price Adjustment", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 The Members' Representative shall have thirty (30) days after from the later delivery receipt of a Financial Adjustment Notice to notify Buyer if the Dispute Notice by Seller or IDB Buyer, Seller and IDB Members dispute such Financial Adjustment Notice. If Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item has not received a notice of such dispute within such 30 thirty (30) day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") be entitled to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs receive from the calculation to be made by the Independent Accountant Arbitrator.
Members (d) If there is a referral to the Independent Accountant Arbitratorwhich may, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB at Buyer's calculation in sole discretion, be from the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, Pledged Assets as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided defined in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"1.4), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. (a) The Cash Purchase Price shall be subject to adjustment after the Closing Date as specified in this Section 1.3.
(b) Within 90 one hundred twenty (120) days following the Closing Date, Seller Buyer, at its option, shall prepare and deliver cause PriceWaterhouseCoopers ("Buyer's Accountant") to IDB Buyer a consolidated balance sheet audit the Company's books to determine the accuracy of the Seller Retained Subsidiaries information set forth on the Closing Financial Certificate (the "Post-Closing Audit"). The parties acknowledge and agree that for purposes of determining the net worth of the Company as of the Closing Date, (giving i) the value of the assets of the Company shall, except with the prior written consent of Buyer, be calculated as provided in the last paragraph of Section 6.9, (ii) the Buyer's Accountant shall give full effect to the Estimated Available Additional A/R Reserve. In the event that Buyer's Accountant determines that the actual Company net worth as of the Closing Date was less than the Certified Closing Net Worth, Buyer shall deliver a written notice (the "Financial Adjustment Notice") to the Stockholders' Representative, as defined in Section 1.6, setting forth (i) the determination made by Buyer's Accountant of the actual Company net worth (the "Actual Company Net Worth"), (ii) the amount of the Cash AllocationPurchase Price that would have been payable at Closing pursuant to Section 1.2(c) had the Actual Company Net Worth been reflected on the Closing Financial Certificate instead of the Certified Closing Net Worth, and (iii) the amount by which the Cash Purchase Price would have been reduced at Closing had the Actual Company Net Worth been used in the calculations pursuant to Section 1.2(c) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed ItemPurchase Price Adjustment"). Other than The Purchase Price Adjustment shall take account of the Disputed Itemsreduction, each Party shall be deemed if any, to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party Cash Purchase Price already taken pursuant to Section 2.7(a1.2(c)(i).
(c) For 30 The Stockholders' Representative shall have thirty (30) days after from the later delivery receipt of the Dispute Financial Adjustment Notice by Seller or IDB Buyer, Seller and IDB to notify Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Itemsif the Stockholders dispute such Financial Adjustment Notice. If, for any reason, Seller and IDB If Buyer are unable to resolve any Disputed Item has not received notice of such a dispute within such 30 thirty (30) day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") be entitled to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs receive from the calculation to be made by the Independent Accountant Arbitrator.
Stockholders (d) If there is a referral to the Independent Accountant Arbitratorwhich may, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB at Buyer's calculation in sole discretion, be from the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, Pledged Assets as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided defined in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"1.4), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. The “Post-Closing Adjustment” shall be equal to (aa)(i) Within 90 days following the Closing Date, Seller shall prepare and deliver to IDB Buyer a consolidated balance sheet Final Working Capital Adjustment Amount minus (ii) the Estimated Working Capital Adjustment Amount minus (b) (i) the amount of Indebtedness of the Seller Retained Subsidiaries as Company set forth in the Final Closing Statement minus (ii) the amount of Indebtedness of the Closing (giving effect to Company set forth in the Estimated Available Cash AllocationClosing Statement plus (c)(i) the Final CapEx Adjustment Amount minus (ii) the "Seller Estimated CapEx Adjustment Amount plus (d)(i) the Recoverable Costs Amount set forth in the Final Closing Balance Sheet")Statement minus (ii) the Estimated Recoverable Costs Amount. If the Post-Closing Adjustment is a positive amount, which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation ofthen Purchaser shall, and using Parent shall cause Purchaser to, pay in cash to Seller (or one or more Affiliates designated by Seller) the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation amount of the balance sheet for Post-Closing Adjustment. If the fiscal year ended December 31Post-Closing Adjustment is a negative amount, 2013, included then Seller (or an Affiliate designated by Seller) shall pay in cash to Purchaser the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as absolute value of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation amount of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on Post-Closing Adjustment. Any such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by payment pursuant to this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed Item"). Other than the Disputed Items, each Party shall be deemed to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party pursuant to Section 2.7(a).
(c) For 30 days after the later delivery of the Dispute Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Items. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item within such 30 day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection shall be made pursuant to the rules of the American Arbitration Association, which accounting firm shall be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than within ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation as it deems necessarydetermination of the Final Closing Statement by wire transfer of immediately available funds. The Independent Accountant Arbitrator shall act Parties acknowledge and agree that the Closing Payment Adjustments pursuant to Section 2.2 and the Post-Closing Adjustment pursuant to this Section 2.7 (and other applicable provisions of this Agreement) will be read to ensure that (i) there is no benefit to Seller as an arbitrator to determine, based solely on a result of Hurricane Xxxxxxx and (ii) there is no duplication of the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination amounts set forth above in this Agreement with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided in Section 9.9Hurricane Xxxxxxx.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
Appears in 1 contract
Post-Closing Adjustment. (a) The Purchase Price shall be subject to adjustment after the Closing Date as specified in this Section 2.1.
(b) Within 90 one hundred twenty (120) days following the Closing Date, Seller USFloral shall prepare and deliver cause Price Waterhouse LLP ("USFloral's Accountant") to IDB Buyer a consolidated balance sheet audit the Surviving Corporation's books to determine the accuracy of the Seller Retained Subsidiaries information set forth on the Closing Financial Certificate (the "Post-Closing Audit"). The parties acknowledge and agree that for purposes of determining the net worth of Saint Xxx as of the Closing Date, the value of the assets of Saint Xxx shall, except with the prior written consent of USFloral, be calculated as provided in the last paragraph of Section 7.9. The Stockholders shall cooperate and shall use their reasonable efforts to cause the officers and employees of Saint Xxx to cooperate with USFloral and USFloral's Accountant after the Closing Date in furnishing information, documents, evidence and other assistance to USFloral's Accountant to facilitate the completion of the Post-Closing Audit within the aforementioned time period. Without limiting the generality of the foregoing, within two weeks after the Closing the Stockholders shall provide USFloral's Accountants with the information and/or documents requested on the Post-Closing Audit Checklist set forth as Schedule 2.1 hereto. In the event that USFloral's Accountant determines that the actual Company net worth as of the Closing Date was less than the Certified Closing Net Worth, USFloral shall deliver a written notice (giving effect the "Financial Adjustment Notice") to the Estimated Available Cash AllocationStockholders' Representative (as defined in Section 2.3) setting forth (i) the determination made by USFloral's Accountant of Saint Ann's actual net worth (the "Actual Company Net Worth"), (ii) the amount of the Purchase Price that would have been payable at Closing pursuant to Section 1.2(c) had the Actual Company Net Worth been reflected on the Closing Financial Certificate instead of the Certified Closing Net Worth, and (iii) the amount by which the number of shares issued as part of the Purchase Price would have been reduced at Closing had the Actual Company Net Worth been used in the calculations pursuant to Section 1.2(c) (the "Seller Closing Balance Sheet"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the Seller Retained Subsidiaries and Working Capital derived from the items and amounts on such balance sheet. Within 90 days following the Closing Date, IDB Buyer shall prepare and deliver to Seller a consolidated balance sheet of IDB Buyer and the IDB Subsidiaries as of the Closing (giving effect to the Estimated Available Cash Allocation) (the "IDB Buyer Closing Balance Sheet" and together with the Seller Closing Balance Sheet, the "Closing Balance Sheets"), which shall be prepared in conformity with GAAP applied on a basis consistent with the preparation of, and using the same accounting methods, policies, practices, procedures and estimation methods as those used in the preparation of the balance sheet for the fiscal year ended December 31, 2013, included in the GFI Financial Statements, and which shall include a calculation of Available Cash at the IDB Subsidiaries and Tangible Common Equity, in each case derived from the items and amounts on such balance sheet. The Parties agree that the purpose of preparing the Closing Balance Sheets and determining the Available Cash, Working Capital and Tangible Common Equity and the related adjustment contemplated by this Section 2.7 is to measure the amount of Available Cash, Working Capital and Tangible Common Equity and such processes are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheets or determining Available Cash, Working Capital and Tangible Common Equity.
(b) Following delivery of the Seller Closing Balance Sheet and the IDB Buyer Closing Balance Sheet and prior to the deadline for delivering a Dispute Notice, each of Seller and IDB Buyer will provide the other Party and its Representatives with reasonable access to the books and records, personnel and related work papers of Seller or IDB Buyer, as applicable, in connection with such other Party's review of the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable. Each of Seller and IDB Buyer shall have 45 days after the later delivery of the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet in which to provide to the other Party a notice setting forth, in detail, any good faith dispute as to any item or amount reflected in the Seller Closing Balance Sheet (including the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (including the calculations of Available Cash and Tangible Common Equity set forth therein), as applicable, and the basis for such dispute together with such Party's calculation of such item or amount in dispute (the "Dispute Notice", and each item or amount on the Dispute Notice, a "Disputed ItemPurchase Price Adjustment"). Other than The Purchase Price Adjustment shall take account of the Disputed Itemsreduction, each Party shall be deemed if any, to have accepted all items and amounts contained in the Seller Closing Balance Sheet or the IDB Buyer Closing Balance Sheet, as applicable, delivered by the other Party Purchase Price already taken pursuant to Section 2.7(a1.2(c)(i).
(c) For 30 The Stockholders' Representative (as defined in Section 2.3) shall have thirty (30) days after from the later delivery receipt of the Dispute Financial Adjustment Notice by Seller or IDB Buyer, Seller and IDB Buyer shall endeavor in good faith to resolve by mutual agreement all Disputed Itemsnotify USFloral if the Stockholders dispute such Financial Adjustment Notice. If, for any reason, Seller and IDB Buyer are unable to resolve any Disputed Item If USFloral has not received notice of such a dispute within such 30 30-day period, Seller and IDB Buyer shall engage Deloitte & Touche LLP (the "Independent Accountant Arbitrator") to make a determination as to the Disputed Items; provided that if the Independent Accountant Arbitrator is unable or unwilling to serve in this capacity, then Seller and IDB Buyer shall within 14 days after the end of such 30 day period agree on an alternate independent accounting firm or in default thereof such selection USFloral shall be made pursuant entitled to the rules of the American Arbitration Associationreceive from Juecla (which may, which accounting firm shall at USFloral's sole discretion, be the "Independent Accountant Arbitrator" hereunder. The fees, costs and expenses of the Independent Accountant Arbitrator will be borne by Seller and IDB Buyer in relative proportion to the amount by which the aggregate calculation of the Disputed Items by each of them differs from the calculation to be made by the Independent Accountant Arbitrator.
(d) If there is a referral to the Independent Accountant Arbitrator, each of Seller and IDB Buyer agrees, if requested by the Independent Accountant Arbitrator, to execute a reasonable engagement letter and shall submit to the Independent Accountant Arbitrator not later than ten Business Days after its appointment, a written statement summarizing its position on the Disputed Items, together with such supporting documentation Pledged Assets as it deems necessary. The Independent Accountant Arbitrator shall act as an arbitrator to determine, based solely on the materials submitted and presentations by Seller and IDB Buyer, and not by independent review, only the Disputed Items that have not been settled by negotiation, and its determination with respect to each Disputed Item shall be an amount within the range established with respect to such Disputed Item by Seller's or IDB Buyer's calculation in the Seller Closing Balance Sheet or IDB Buyer Closing Balance Sheet, as applicable, on the one hand, and the applicable Dispute Notice, on the other hand. Seller and IDB Buyer shall instruct the Independent Accountant Arbitrator to render its decision within 30 days of its appointment or as soon thereafter as is reasonably practicable. The decision/award of the Independent Accountant Arbitrator as to the Disputed Items shall be final and binding on, and shall not be subject to appeal by, Seller and IDB Buyer or any other Person, and may be entered and enforced as provided defined in Section 9.9.
(e) No later than 30 days following the later of the final determination of the Seller Closing Balance Sheet (and the calculations of Available Cash and Working Capital set forth therein) or the IDB Buyer Closing Balance Sheet (and the calculations of Available Cash and Tangible Common Equity set forth therein) (such items being "final" after giving effect to the items and amounts accepted or deemed to have been accepted by either Seller or IDB Buyer, Disputed Items settled by negotiation and Disputed Items finally determined by the Independent Accountant Arbitrator; such final calculations being the "Final Available Cash Allocation"2.2), the following adjustments shall be effected:
(i) if any of the amounts that were transferred or retained by the IDB Subsidiaries at Closing as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the IDB Subsidiaries as provided in the Final Available Cash Allocation, then IDB Buyer shall (or shall cause the applicable IDB Subsidiaries to) pay the amount of such excess(es) to Seller.
(ii) if any of the amounts that were transferred or retained by the Seller Retained Subsidiaries as provided in the Estimated Available Cash Allocation were in excess of the corresponding amounts that should have been transferred or retained by the Seller Retained Subsidiaries as provided in the Final Available Cash Allocation, then Seller shall (or shall cause the applicable Seller Retained Subsidiaries to) pay the amount of such excess(es) to IDB Buyer. Notwithstanding the foregoing and for the avoidance of doubt, in no event shall Seller be required to pay an amount in excess of the Excess Cash Amount.
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Samples: Stock Purchase Agreement (U S a Floral Products Inc)