Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet. (b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”). (i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5. (d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet. (e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto. (f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties. (g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form. (h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 2 contracts
Samples: Asset Purchase Agreement (CF Industries Holdings, Inc.), Asset Purchase Agreement (Mosaic Co)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event Not later than ninety thirty (9030) days after the Closing Date, Buyer Parent shall prepare and cause to be delivered to Seller a certificate financial data schedule (the "Parent Financial Data Schedule") of the Chief Financial Officer Company and its Subsidiaries presenting, as of Buyer certifying (i) its the Closing Date, Parent's good faith calculation of (i) the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) Other Indebtedness and (ii) a balance sheet for the Business as of immediately prior to Transaction Expenses. The Company Financial Data Schedule and the Closing Parent Financial Data Schedule and the items set forth therein shall each be prepared in accordance with GAAP applied on a basis consistent with the accounting methodsCompany Financial Statements, practices, policies, procedures and estimation methods used except to prepare the Balance Sheet and including extent otherwise provided herein. In connection with the Parent Financial Data Schedule all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If known arithmetic errors contained in the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price Company Financial Data Schedule shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, taken into account and (ii) if assuming compliance with the Estimated Purchase Price is less than the Final Purchase Priceimmediately preceding sentence, the Purchase Price no changes in accounting principles, policies, practices, procedures or methodologies shall be adjusted upward dollar-for-dollar made from those utilized in preparing the Company Financial Data Schedule, including, without limitation, with respect to the nature and Buyer shall pay to Seller classification of accounts or the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount level of such reduction reserves, accruals or increase materiality. The Company Financial Data Schedule and the Parent Financial Data Schedule shall each be accompanied by all necessary and appropriate supporting work papers and materials. With respect to the Parent Financial Data Schedule, if these work papers and materials are materially deficient or incomplete, the Review Period referenced in Section 3.3(b) hereof shall be extended to give the Purchase Price in accordance with this Section 3.5Holders' Representatives' accountants sufficient time to complete their review of the Parent Financial Data Schedule.
(db) Upon Following receipt of the calculation Parent Financial Data Schedule and supporting work papers and materials, the Holders' Representatives and its accountants will be afforded a period of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five thirty (4530) day period days (the “"Review Period”") reasonable access, upon reasonable notice, to (i) review the Books and Records in Parent Financial Data Schedule. At or before the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day end of the Review Period, Seller the Holders' Representatives may deliver to Parent a written notice (an "Objection Notice") in accordance with paragraph (d) of this Section 3.3 disputing the Parent Financial Data Schedule. Any Objection Notice shall notify Buyer specify in writing reasonable detail the dollar amount of such disagreement with any objection and the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall basis therefor. Any determination expressly set forth any such disagreement on the Parent Financial Data Schedule which is not specifically objected to in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within shall be deemed final and binding upon the parties upon delivery of the Objection Notice If the Holders' Representatives do not give Parent such an Objection Notice before the end of the Review Period, then the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall Parent Financial Data Schedule will be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final conclusive and binding upon the parties hereto.
(fc) If Buyer Within ten (10) days following the later of (i) the date the Parent Financial Data Schedule is accepted by the Holders' Representatives, and Seller (ii) the final, binding and conclusive determination of all disputes with respect to the Parent Financial Data Schedule as provided in paragraph (d) of this Section 3.3 (such later date, the "Adjustment Determination Date"), the Parent shall deliver to former holders of Common Shares and of the CVC Warrants receiving Merger Consideration, on a pro rata basis pursuant to the provisions of Section 3.4(a)(2), an aggregate amount in cash equal to either (A) in the event the Estimated Aggregate Cash Consideration Value is greater than the Aggregate Cash Consideration Value, the Escrow Amount minus such difference; (B) in the event the Estimated Aggregate Cash Consideration Value is less than the Aggregate Cash Consideration Value, the Escrow Amount plus such difference; or (C) in the event the Estimated Aggregate Cash Consideration Value and the Aggregate Cash Consideration Value are unable the same, the Escrow Amount.
(d) In the event that prior to resolve any disagreement the expiration of the Review Period the Holders' Representatives provide Parent with an Objection Notice, Parent and the Holders' Representatives shall attempt to reconcile in good faith their differences as contemplated by Section 3.5(eto the items specified therein within ten (10) within 60 days (the "Resolution Period") after delivery Parent's receipt of the Objection Notice, then Buyer and Seller any resolution by them as to any disputed items shall be final, binding and conclusive on Parent and the former holders of Common Shares and of the CVC Warrants. If Parent and the Holders' Representatives are unable to reach a resolution with such effect within the Resolution Period, Parent and the applicable Holders' Representatives shall submit the matter for resolution dispute to a mutually agreeable independent international accounting firm the Salt Lake City, Utah office of KPMG (the “"Independent Auditor”CPA"), who shall, acting . The parties hereto acknowledge that separate resolutions maybe reached for the CVC Group and the Management Group as an arbitrator, resolve described in Section 8.7. The Independent CPA shall only decide the specific items under dispute by the parties and shall be instructed to determine the Adjustment Items in accordance with the principles set forth in this Agreement. The Independent CPA shall establish procedures giving due regard to the Objection Noticeintention of the parties to resolve disputes as quickly, efficiently and inexpensively as possible. In The parties shall then submit evidence in accordance with the event Buyer procedures so established and Seller are unable to agree on an the Independent Auditor within thirty (30) days after CPA shall decide the expiration dispute or disputes in accordance therewith; provided the Independent CPA shall select a resolution that is the Parent's position, the applicable Holders' Representatives' position, or between such positions. The determination of such 60-day period, at the request of either party dispute by the Independent Auditor CPA shall be appointed by final, binding and conclusive on Parent and the American Arbitration Associationformer holders of Common Shares and of CVC Warrants. The fees, costs fees and expenses of the Independent Auditor CPA shall be borne equally assessed by the parties.
Independent CPA fifty percent (g50%) The parties shall instruct against the Independent Auditor former holders of Common Shares and of CVC Warrants (for whom settlement has not been reached prior to consider only those items the commencement of such arbitration) and amounts which are identified in the Objection Notice as being items which Buyer fifty percent (50%) against Parent, and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided paid by Buyer and Seller (i.e., not on the basis each of an independent review), and the Independent Auditor shall not conduct additional discovery them in any formthose proportions.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 2 contracts
Samples: Merger Agreement (Isg Resources Inc), Merger Agreement (Headwaters Inc)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable following the ----------------------- Closing Date, and in any event within one hundred twenty (but in no event more than five 120) days thereafter, or at such other time as the parties mutually agree, Buyer shall deliver to Seller Buyer's certificate setting forth as of the Closing Date (5"Post-Closing Adjustments") Business Days) following such physical examinationthe Four Month Basic Subscribers Average, such employee the number of Bulk Units, and all Post-Closing Adjustments for amounts due on account of Seller and a representative or employee charges and other obligations payable on account of Seller. Buyer shall summarize deliver to Seller or Seller's representatives copies of all books and records as Seller may reasonably request for purposes of verifying such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Selleradjustments. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, Buyer's certificate shall be final and binding on Buyer and conclusive unless objected to by Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after delivery. Seller and Buyer shall attempt jointly to reach agreement as to the expiration amount of the Closing Adjustments within sixty (60) days after receipt by Buyer of such written objection by Seller, which agreement, if achieved, shall be binding upon both parties to this Agreement and not subject to dispute or review. If Seller and Buyer cannot reach agreement as to the amount of the Closing Adjustments within such sixty (60-) day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration AssociationSeller and Buyer agree to submit promptly any disputed adjustment to Ernst & Young. The fees, costs All fees and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations Ernst & Young pursuant to this Section 3.5 shall be treated as compromise paid one-half by Buyer and settlement negotiations one-half by Seller. Any amounts due Buyer or Seller for purposes of Rule 408 of Post-Closing Adjustments shall be paid by the Federal Rules of Evidence and comparable state rules of evidenceparty owing such amount (or, and all negotiations and submissions to the Independent Auditor extent disputed amounts are held by the Escrow Agent, shall be treated as confidential information. The Independent Auditor paid by the Escrow Agent pursuant to joint written instructions of Buyer and Seller in accordance with such final resolution) not later than five (5) Business Days after such amounts shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be have become final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementconclusive.
Appears in 2 contracts
Samples: Asset Purchase and Sale Agreement (Mediacom LLC), Asset Purchase and Sale Agreement (Mediacom Capital Corp)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) 90 days after following the Closing Date, Buyer the Seller Parties shall prepare and cause deliver to the Company a statement of Closing Date Value, which statement shall be delivered audited and certified by Deloitte & Touche LLP. Such statement shall exclude any adjustments related to fresh-start accounting relating to Advantica's bankruptcy. The costs and expenses of such audit shall be borne equally between the Company and the Seller a certificate Parties. The statement of Closing Date Value shall be set forth in reasonable detail to permit the calculations required by this Section 2.3.
(b) During the preparation of the Chief Financial Officer statement of Buyer certifying (iClosing Date Value as provided in Section 2.3(a) its good faith calculation and the period of any review or dispute as provided in this Section 2.3, each of the Purchase PriceSeller Parties, setting forththe Company and Buyer shall cooperate fully with each other and provide the other parties and their respective authorized representatives with full access to the books and records of the Company Group used in the preparation of such statement, including the provision on a timely basis of all necessary or useful information.
(c) After receipt of the statement of Closing Date Value from Seller Parties, Buyer shall have 30 days to review the statement of Closing Date Value, together with the workpapers used in the preparation thereof. Unless Buyer delivers written notice to the Seller Parties on or prior to the 30th day after Buyer's receipt from the Seller Parties of the statement of Closing Date Value stating that Buyer has objections to the statement of Closing Date Value and describing any such objections in reasonable detail, Buyer shall be deemed to have accepted and agreed to the statement of Closing Date Value. If on or prior to the 30th day after Buyer's receipt from the Seller Parties of the statement of Closing Date Value, Buyer notifies the Seller Parties of its objections to the statement of Closing Date Value, Buyer and Seller Parties shall, within 20 days (or such longer period as the parties may agree) following such notice (the "Resolution Period"), attempt to resolve their differences, and any resolution by them as to any disputed amounts shall be final, binding and conclusive.
(d) Any amounts remaining in dispute at the conclusion of the Resolution Period ("Unresolved Changes") shall be submitted to a good faith calculation nationally recognized firm of independent accountants independent of, and reasonably satisfactory to, Seller Parties, Buyer and their respective Affiliates (such firm being referred to as the "CPA Firm"), within 10 days after the expiration of the Resolution Period. The parties acknowledge that Ernst & Young is a mutually acceptable firm to be designated as the CPA Firm, subject to verification of its independence. Each party agrees to execute, if requested by the CPA Firm, an engagement letter containing reasonable terms. All fees and expenses relating to the work, if any, to be performed by the CPA Firm shall be borne pro rata by Seller Parties and Buyer in proportion to the allocation of the dollar amount of the Unresolved Changes between Buyer and Seller Parties made by the CPA Firm, such that the prevailing party shall pay the lesser proportion of the fees and expenses. The CPA Firm shall act as an arbitrator to determine, based on the provisions of this Section 2.3, only the Unresolved Changes and the determination of each amount in the Unresolved Changes shall made in accordance with GAAP and in any event shall be no less than the lesser of the adjustments amount claimed by either Buyer or Seller Parties and shall be no greater than the greater amount claimed by either Buyer or Seller Parties. The CPA Firm's determination of the Unresolved Changes shall be made within 30 days of the submission of the Unresolved Changes thereto, shall be set forth in Section 3.2 a written statement delivered to Seller Parties and Buyer and shall be final, binding and conclusive on the parties for all purposes. Notwithstanding any provision herein to the contrary, no Unresolved Change shall result in an adjustment to the Purchase Price or the Closing Date Value unless (i) in the “Final Purchase Price”case of an asset (or contra-liability) line item (as such line items are set forth on Exhibit A attached hereto), the amount determined by the CPA Firm is lower than 50% of the corresponding amount reflected in the statement of Closing Date Value prepared by Seller Parties which is the subject of such Unresolved Change, in which event the amount of the adjustment shall be the difference between the amount of such asset (or contra-liability) line item determined by the CPA Firm and the amount reflected in the statement of Closing Date Value prepared by Seller Parties, and (ii) in the case of a balance sheet for liability (or contra-asset) line item (as such line items are set forth on Exhibit A attached hereto), the Business as of immediately prior to amount determined by the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all CPA Firm is more than 150% of the entries contained corresponding amount reflected in Schedule 3.4(athe statement of Closing Date Value prepared by Seller Parties which is the subject of such Unresolved Change, in which event the amount of the adjustment shall be the difference between the amount of such liability (or contra-asset) (line item determined by the “Final Balance Sheet”)CPA Firm and the amount reflected in the statement of Closing Date Value prepare by Seller Parties.
(e) In the event that Buyer and Seller Parties agree to the statement of Closing Date Value, then within five (5) Business Days following such agreement (i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller Parties shall pay to Buyer the amount of such reductionamount, and if any, by which the Closing Date Value exceeds the Base Value, or (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller Parties the amount amount, if any, by which the Base Value exceeds the Closing Date Value (each, a "Post-Closing Adjustment"). In the event that there are Unresolved Changes at the end of such increase the Resolution Period, then (each 1) if Buyer and Seller Parties agree that a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount is owed to one Party regardless of the ultimate resolution of any Unresolved Changes, then the minimum amount which Buyer and Seller Parties agree is owed to such party shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three five (35) Business Days after the final determination end of the amount Resolution Period and any additional amounts owing to such party with respect to the Unresolved Changes shall be paid within five (5) Business Days after resolution thereof by the CPA Firm, or (2) in all other cases, any and all payments shall be made within five (5) Business Days after resolution of such reduction or increase in the Purchase Price in accordance with this Section 3.5Unresolved Changes by the CPA Firm.
(df) Upon receipt of the calculation of the Final Purchase Price, Seller Any payments made pursuant to this Section 2.3 shall be permitted during accompanied by interest at the succeeding forty-five (45) day period (Applicable Rate from the “Review Period”) reasonable access, upon reasonable notice, Closing Date up to (i) and including the Books and Records in the possession date of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheetpayment.
(eg) If Seller disagrees with the Final Balance Sheet or the calculation Any payments made in respect of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller or Unresolved Changes shall be final and binding upon deemed to be adjustments to the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementTax purposes.
Appears in 2 contracts
Samples: Stock Purchase Agreement (Cke Restaurants Inc), Stock Purchase Agreement (Advantica Restaurant Group Inc)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than Within forty-five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (9045) days after the Closing Date, Buyer the Parent shall prepare and cause to be prepared and delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying Purchasers (i) its good faith an adjustment statement setting forth the amount of the Closing Cash, the Vault Cash, the Closing Working Capital and the Closing Indebtedness (the "Preliminary Adjustment Statement") and (ii) based on the Closing Cash, the Vault Cash, the Closing Working Capital and the Closing Indebtedness as derived therefrom, the Parent's written calculation of the Purchase Price, and the adjustments necessary to reconcile the Estimated Purchase Price to the Purchase Price (the "Preliminary Post-Closing Adjustment"). The Preliminary Adjustment Statement shall each be prepared as of 12:01 a.m. on the Closing Date consistent with, and using the same accounting methods, policies, practices and procedures as used in the preparation of the Pro Forma Balance Sheet as if the Closing Date was an interim month end, except that the Preliminary Adjustment Statement shall only reflect those assets and liabilities of the Business necessary to calculate the Closing Cash, the Vault Cash, the Closing Working Capital and the Closing Indebtedness and shall include details reasonably sufficient to enable Purchasers to determine whether it was prepared in accordance with this clause (a).
(b) The Purchasers shall review the Preliminary Adjustment Statement and the Preliminary Post-Closing Adjustment and, if the Purchasers reasonably believe that either was not prepared in accordance with Section 2.6(a), the Purchasers shall so notify the Parent no later than the tenth (10) Business Day after the Purchasers' receipt thereof, setting forth, forth in such notice the Purchasers' objection or objections to the Preliminary Adjustment Statement or the Preliminary Post-Closing Adjustment with particularity and the specific changes or adjustments which the Purchasers claim are required to be made thereto in order to conform the same to the terms of Section 2.6(a). Any notice of objection delivered pursuant to this Section 2.6(b) shall specify in reasonable detaildetail the nature of any disagreement so asserted.
(c) Each Party shall cooperate fully with all representatives of the other Parties in the preparation and review of the Preliminary Adjustment Statement, a including, without limiting the generality of the foregoing, causing the books and records of the Business to be made available after the Closing during normal business hours to such representatives upon reasonable advance notice, and shall cause the necessary personnel of the Business to assist such representatives in the preparation and/or review of the Preliminary Adjustment Statement, including, without limitation, granting such Persons access to the facilities and other assets of the other upon reasonable advance notice.
(d) If the Purchasers timely notify the Parent in accordance with Section 2.6(b) of an objection by the Purchasers to the Preliminary Adjustment Statement or the Preliminary Post-Closing Adjustment, and if the Purchasers and the Parent are unable otherwise to resolve such dispute through good faith calculation negotiations between the Purchasers and the Parent within fifteen (15) days after the Purchasers' delivery of each such notice of objection, then the Parties shall mutually engage and submit such dispute to, and the same shall be finally resolved in accordance with the provisions of this Agreement by, the New York, New York office of BDO Xxxxxxx, LLP, or such other accounting firm of national reputation as shall be mutually acceptable to the Purchasers and the Parent (the "Independent Accountants"). The Independent Accountants shall determine and report in writing to the Purchasers and the Parent as to the resolution of all disputed matters submitted to the Independent Accountants and the effect of such determinations on the Preliminary Adjustment Statement and the Preliminary Post-Closing Adjustment within twenty (20) days after such submission or such longer period as the Independent Accountants may reasonably require, and such determinations shall be final, binding and conclusive as to the Purchasers, the Parent and their respective Affiliates. The fees and disbursements of the Independent Accountants shall be shared equally by the Purchasers on the one hand and the Parent on the other hand.
(e) The Preliminary Adjustment Statement and the Preliminary Post-Closing Adjustment shall become the "Final Adjustment Statement" and the "Final Post-Closing Adjustment," respectively, and as such shall become final, binding and conclusive upon the Purchasers, the Parent and their respective Affiliates for all purposes of this Agreement, upon the earliest to occur of the following:
(i) the mutual acceptance by the Purchasers and the Parent of the Preliminary Adjustment Statement and the Preliminary Post-Closing Adjustment, respectively, with such changes or adjustments thereto, if any, as may be proposed by the Purchasers and consented to by the Parent;
(ii) the expiration of ten (10) Business Days after the Purchasers' receipt of the Preliminary Adjustment Statement and the Preliminary Post-Closing Adjustment, respectively, without timely written objection thereto by the Purchasers in accordance with Section 2.6(b); or
(iii) the delivery to the Purchasers and the Parent by the Independent Accountants of the report of their determination of all disputed matters submitted to them pursuant to Section 2.6(c).
(f) If the Purchase Price, calculated as set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business 2.2, as of immediately prior to the Closing prepared on a basis consistent finally determined in accordance with the accounting methodsthis Section 2.6, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Estimated Purchase Price, then the Purchasers shall pay the amount of such difference to the Parent (to the extent appropriate, as agent of EFC) by means of a wire transfer of immediately available funds to the Parent's Account. If the Purchase Price, calculated as set forth in Section 2.2, as finally determined in accordance with this Section 2.6, is less than the Estimated Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller Parent (if appropriate, as agent of EFC) shall pay to Buyer the amount of such reduction, and (ii) if difference to the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount Purchasers by means of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Purchasers. The Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review PeriodAdjustment, subject to Section 3.5(f) belowif any, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final due and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations payable pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.this
Appears in 2 contracts
Samples: Purchase Agreement (TRM Corp), Purchase Agreement (Efunds Corp)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to Within 60 calendar days following the Closing Date and no more than two (2) Business Days after the Closing DateClosing, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer Purchaser shall prepare and cause to be delivered deliver to Seller a certificate statement setting forth Purchaser’s calculation of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) Working Capital Adjustment and (ii) a balance sheet for the Business as of immediately prior to the Closing Date Net Indebtedness. The calculation of the Closing Date Working Capital shall be prepared in accordance with GAAP applied in a manner consistent with the audited Financial Statements and by otherwise applying the same methodologies and accounting policies used in and otherwise on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all preparation of the entries contained audited Financial Statements, in Schedule 3.4(a) (all cases, except to the “Final Balance Sheet”).
(i) If extent otherwise expressly provided in Exhibit A or in the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price definition of Closing Date Working Capital. The calculation of Closing Date Net Indebtedness shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price prepared in accordance with this Section 3.5.
the definition of “Closing Date Net Indebtedness”. The “Working Capital Adjustment“ means an amount (dwhich amount may be positive or negative) Upon receipt equal to the Closing Date Working Capital minus the Target Working Capital. “Closing Date Working Capital“ means the net amount, as of the calculation Closing (but without giving effect to any actions of Purchaser, or to actions of the Final Purchase Price, Seller shall be permitted during Company or its Subsidiaries taken at the succeeding forty-five (45Closing that are contemplated by this Agreement) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet accounts of the Company and its Subsidiaries, on a consolidated basis, including the aggregate amount of the SEO Rebate Payables and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used adjustment prescribed by Buyer in preparation of the Final Purchase PriceSection 1.04(i), and (ii) excluding the accounting personnel of Buyer supporting the Business Excluded Assets and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Pricerelated Liabilities, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Perioddetermined, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”Sections 1.04(h), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer 1.04(i) and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review1.04(j), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with Exhibit A (for the terms avoidance of this Agreement ordoubt, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation amounts included in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor Closing Date Net Indebtedness shall be final excluded from the determination of the Closing Date Working Capital). “Closing Date Net Indebtedness“ means Net Indebtedness of the Company and binding on its Subsidiaries as of the partiesClosing Date. The decision rendered pursuant to this For purposes of illustration, Exhibit A sets forth the calculation, from the combined balance sheet of the Company and its Subsidiaries as at December 31, 2006, of what the Closing Date Working Capital would be if the Closing Date had been December 31, 2006, without regard for the SEO Rebate Payables or the adjustments prescribed by Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h1.04(i). The other party’s only defense to such a request for specific enforcement or other legal action calculation of Closing Date Working Capital shall be fraud prepared without giving effect to any actions of the Purchaser, or to any actions of the Company or its Subsidiaries taken at the Closing that are contemplated by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementthis Agreement.
Appears in 2 contracts
Samples: Stock Purchase Agreement, Stock Purchase Agreement (NewPage CORP)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than Within ninety (90) calendar days after the Closing Date, Buyer shall prepare and cause to be delivered deliver to Seller a certificate consolidated balance sheet of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business Target Companies as of 11:59 p.m. on the day immediately prior to preceding the Closing Date, prepared in accordance with GAAP and on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods GAAP conventions used to prepare for the Balance Sheet and including all preparation of the entries contained Audited Financial Statements; provided that such balance sheet shall reflect the Transaction Costs accrued as of the Closing and shall include each of the items set forth in Schedule 3.4(athe definition of Closing Working Capital (whether or not otherwise required to be included on a balance sheet prepared in accordance with GAAP), but otherwise shall be calculated without giving effect to the consummation of the Contemplated Transactions and shall exclude any Indebtedness incurred under financing or refinancing arrangements entered into at any time by any of the Buyer Parties or any other transaction entered into by any of the Buyer Parties in connection with the Contemplated Transactions (including with respect to any of the Target Companies) (such balance sheet, the “Proposed Final Balance Sheet”). The Proposed Final Balance Sheet shall also include schedules setting forth the calculation of (i) Closing Working Capital as of 11:59 p.m. on the day immediately preceding the Closing Date as reflected in the Proposed Final Balance Sheet (the “Proposed Final Closing Working Capital”), (ii) Cash of the Target Companies as of 11:59 p.m. on the day immediately preceding the Closing Date as reflected in the Proposed Final Balance Sheet (the “Proposed Final Closing Cash”) and (iii) the Balance Sheet Indebtedness of the Target Companies as of 11:59 p.m. on the day immediately preceding the Closing Date as reflected in the Proposed Final Balance Sheet (the “Proposed Final Balance Sheet Indebtedness”). The Proposed Final Closing Balance Sheet, together with such schedules, is referred to herein as the “Proposed Final Closing Statement”.
(ib) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding will have forty-five (45) day period calendar days following delivery of the Proposed Final Closing Statement during which to notify Buyer in writing (the “Review PeriodNotice of Objection”) reasonable access, upon reasonable notice, of any objections to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Proposed Final Balance Sheet or the calculation of the Proposed Final Purchase PriceClosing Working Capital, on or prior to the last day of the Review PeriodProposed Final Closing Cash, Seller shall notify Buyer in writing of such disagreement with the and Proposed Final Balance Sheet or the calculation of the Final Purchase PriceIndebtedness, which notice shall set in each case, setting forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review)its objections in such detail as will permit Buyer to understand such objections, and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct U.S. dollar amount of each objection. In reviewing the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement Proposed Final Closing Statement, Seller (i) whether or not shall be entitled to reasonable access during normal business hours to all material personnel, accountants, books, records, contracts and documents of the Target Companies that are required by Seller to confirm the accuracy of the Proposed Final Balance Sheet was preparedClosing Statement, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise furnished by the Target Companies such information and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence data that Seller may reasonably request and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.that is readily
Appears in 2 contracts
Samples: Equity Interest Purchase Agreement, Equity Interest Purchase Agreement (NGL Energy Partners LP)
Post-Closing Adjustment. (a) No more than three Following the Closing, Buyer shall cause Xxxxxx Xxxxxxxx L.L.P. or such other "big five" accounting firm selected by Buyer and approved by Seller (3which approval shall not be unreasonably withheld) Business Days prior (the "Auditor") to prepare a valuation of Accounts Receivable and Inventory (the "Auditor Report"). The Auditor Report shall be prepared in accordance with the principles set forth on Exhibit C, and shall set forth the value of Accounts Receivable as of the Closing Date (the "Accounts Receivable Value") and no more than two (2) Business Days after the value of the Inventory as of the Closing DateDate (the "Inventory Value"), an employee in each case in accordance with GAAP applied in accordance with Exhibit C. In addition, the Audit Report shall set forth the value of all deposits and prepayments made by Seller in respect of Assumed Contracts, which deposits and one or more representatives or employees prepayments will inure to the benefit of Buyer and are identified on Schedule 1.05
(a) (the "Deposit/Prepayment Value"). For purposes of this Agreement and the Auditor Report, the aggregate Deposit/Prepayment Value shall calculate not exceed $500,000. The Audit Report shall state the quantity sum of sulfur, rock, ammonia and finished goods included in the Accounts Receivable Value plus the Inventory located at Value plus the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report Deposit/Prepayment Value (the “Inventory Report”) and "Audited Value"). The Auditor shall deliver the Inventory Auditor Report to Buyer and SellerSeller within thirty (30) business days of the Closing Date (the "Audit Report Date"). The Inventory Report shall be executed and delivered by each of Buyer and Seller to shall share equally the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value cost of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance SheetAuditor Report.
(b) As soon as reasonably practicableIf Seller disputes the Auditor Report, but Seller shall so notify Buyer in no event later than ninety writing (90a "Notice of Dispute") within ten (10) days after the Closing Datedate of Seller's receipt of the Auditor Report, specifying its calculation of the Accounts Receivable Value and the Inventory Value and any other points of disagreement. Upon receipt of a Notice of Dispute, Buyer shall prepare promptly consult with Seller with respect to such alternate calculation and cause points of disagreement in an effort to be delivered resolve such dispute (in connection with such effort to Seller a certificate resolve disputes, and in connection with the Auditor's preparation of the Chief Financial Officer Auditor Report, Buyer shall grant to Seller, its agents and the Auditors reasonable access to the books and records of Buyer certifying pertaining to the Inventory and Accounts Receivable). If any such dispute cannot be resolved by Seller and Buyer within five (i5) its good faith calculation days after Buyer receives a Notice of Dispute from Seller, Seller and Buyer shall immediately appoint the Purchase PriceBoston, setting forth, in reasonable detail, a good faith Massachusetts office of Ernst & Young LLP to act as an arbitrator (the "Accounting Arbitrator") to determine the appropriate calculation of each of the adjustments Accounts Receivable Value, the Inventory Value, the Deposit/Prepayment Value, the Audited Value and all other remaining points of disagreement with respect to the Auditor Report (the "Review"). Seller and Buyer understand and agree that, in resolving any dispute with respect to the Auditor Report, the Accounting Arbitrator shall apply GAAP and the standards set forth on Exhibit C. All determinations made by the Accounting Arbitrator shall be final, conclusive and binding. The Accounting Arbitrator shall be directed to hold a hearing within ten (10) days of appointment (which hearing shall be held in Section 3.2 (the “Final Purchase Price”Boston, Massachusetts) and to make a determination within five (ii5) a balance sheet for days after such hearing, unless otherwise mutually agreed by the Business as parties. The fees and expenses of immediately prior to the Closing prepared on a basis consistent Accounting Arbitrator shall be borne equally by Seller and by Buyer. Each of the parties shall bear its own attorneys' and accounting fees and expenses incurred in connection with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all Review.
(c) Within five (5) business days of the entries contained later of (x) the Audit Report Date and (y) in Schedule 3.4(a) (the “Final Balance Sheet”case of any dispute of pursuant to Section 1.05(b)., the resolution of such dispute:
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer Audited Value exceeds $80,300,000 (the amount of such reduction, and (ii) if excess being the Estimated Purchase Price is less than the Final "Additional Purchase Price"), the Purchase Price shall be adjusted upward dollar-for-dollar and then
(A) Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds an amount equal to the Additional Purchase Price and (B) Buyer shall pay to Seller the Retention Amount by wire transfer of immediately available funds. Under no circumstances shall the Additional Purchase Price exceed $25,000,000.
(ii) If the Audited Value is less than $80,300,000, then Buyer shall be entitled to the difference between $80,300,000 and the Audited Value (the "Downward Adjustment Amount"); provided, however, that under no circumstances shall the Downward Adjustment Amount exceed $25,000,000. If the Downward Adjustment Amount exceeds the sum of the Retained Amount plus the Estimated Payment (such excess being herein referred to as the "Required Additional Payment"), then (A) first, the Retention Amount shall be credited to and retained by Buyer and (B) the Escrow Agent shall pay to Buyer from the existing Accounts Receivable/Inventory Holdback Amount by wire transfer of immediately available funds the Required Additional Payment; provided further that if the Downward Adjustment Amount exceeds $20,000,000, Seller shall pay to Buyer by wire transfer of immediately available funds such excess amount up to an account designated amount not to exceed $5,000,000.
(iii) If a Downward Adjustment Amount has been determined and no Estimated Payment was made pursuant to Section 1.04(e), then (A) first, the Retention Amount shall be reduced and credited to Buyer by an amount equal to the Downward Adjustment Amount, and (B) to the extent the Downward Adjustment Amount exceeds the Retention Amount (the "Excess Amount"), the Escrow Agent shall pay to Buyer from the Accounts Receivable/Inventory Holdback Amount by wire transfer of immediately available funds the Excess Amount; provided further that if the Downward Adjustment Amount exceeds $20,000,000, Seller shall pay to Buyer by wire transfer of immediately available funds such excess amount up to an amount not to exceed $5,000,000. Any Retention Amount remaining after the reduction thereto pursuant to subclause (A) above shall be paid by Buyer to Seller by wire transfer of immediately available funds.
(iv) If the Downward Adjustment Amount is less than the sum of Retention Amount and Estimated Payment (such shortfall being herein referred to as the "Required Refund"), then (A) if the Required Refund is less than or equal to the Estimated Payment then Buyer shall pay to the Escrow Agent for deposit into the Accounts Receivable/Inventory Holdback Amount by wire transfer of immediately available funds an amount equal to the Required Refund or (B) if the Required Refund is greater than the Estimated Payment then Buyer shall (x) pay to the Escrow Agent for deposit into the Accounts Receivable/Inventory Holdback Amount by wire transfer of immediately available funds an amount equal to the Estimated Payment and (y) pay to Seller from the Retention Amount an amount equal to the excess of the Required Refund over the Estimated Payment by wire transfer of immediately available funds. Notwithstanding anything to the contrary contained herein, Buyer agrees that under no circumstance shall Escrow Agent release any of the Escrow Amount to Buyer to satisfy any amounts owed to Buyer in respect of the Downward Adjustment Amount except as otherwise permitted pursuant to Section 9.04(b). Any payment by Seller, the Escrow Agent or Buyer required by this subsection (c) shall bear interest at the rate equal to the interest being earned on the Accounts Receivable/Inventory Holdback Amount pursuant to the Post Closing Escrow Agreement from the Closing Date until the date of payment. The Additional Purchase Price or the Downward Adjustment Amount, as the case may be (excluding payments attributable to interest), will be treated by the party receiving payment within three (3) Business Days after parties as an increase or decrease, as the final determination of the amount of such reduction or increase case may be, in the Purchase Price in accordance with this Section 3.5Price.
(d) Upon receipt The allocation for tax purposes of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and will be agreed upon by the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or parties prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties heretoClosing.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 2 contracts
Samples: Asset Purchase Agreement (Converse Inc), Asset Purchase Agreement (Converse Inc)
Post-Closing Adjustment. (ai) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) 60 days after the Closing Date, the Buyer shall cause Holdco to prepare and cause deliver to be delivered to Seller the Representative a certificate consolidated balance sheet of Holdco and Enginetics as of the Chief Financial Officer Determination Time together with a statement (the “Closing Statement”) containing the Buyer’s determination of Buyer certifying (i) its good faith the actual amounts of Closing Working Capital, Cash as of the Determination Time, Debt as of the Closing, Selling Expenses as of the Closing and the Aggregate Preferred Stock Amount as of the Closing, and Buyer’s calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 Price based on such amounts (the “Final Purchase Price”). The Closing Statement and all computations and determinations contained therein shall be made and prepared in accordance with (i) and (ii) GAAP applied in a balance sheet for the Business as of immediately prior to the Closing prepared on a basis manner consistent with the accounting methods, practices, policies, procedures principles and methods (including judgments and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(amethods) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer applied in the preparation of the Final Balance Sheet and Audited Financial Statements for the calculation of the Final Purchase Pricefiscal year ended September 30, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, 2013 and (ii) with the accounting personnel principles of Buyer supporting the Business and involved preparation set forth in the preparation of the Final Purchase Price and the Final Balance SheetSchedule 2.2(a).
(eii) If Seller disagrees with Within 30 days following receipt by the Final Balance Sheet or the calculation Representative of the Final Purchase PriceClosing Statement, on or prior the Representative shall deliver written notice to the last day Buyer of any dispute it has with respect to the preparation or content of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement Closing Statement (the a “Objection Dispute Notice”). If Seller fails to the Representative does not deliver the Objection a Dispute Notice within such 30-day period, such Closing Statement will be final, conclusive and binding on the Review PeriodParties. If the Representative does deliver a Dispute Notice within such 30-day period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller the Representative shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by each disputed item raised therein (each an “Disputed Item”). If the Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable Representative, notwithstanding such good faith effort, fail to resolve any disagreement as contemplated by Section 3.5(e) such dispute within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) 30 days after the expiration Buyer's receipt of the Dispute Notice, the Buyer and the Representative jointly shall engage the Arbitration Firm to resolve each outstanding Disputed Item. As promptly as practicable thereafter (but in no event later than 30 Business Days after the engagement of such 60-day periodArbitration Firm), at the request Buyer and the Representative shall each prepare and submit a brief (to include such party's calculations with regard to any Disputed Items) to the Arbitration Firm (with a copy to the Buyer and/or the Representative, as applicable). As soon as practicable thereafter, the Buyer and the Representative shall cause the Arbitration Firm to choose one of either the party's positions based solely upon the briefs submitted by the Buyer and the Representative. The party whose position is not accepted by the Independent Auditor Arbitration Firm shall be appointed by responsible for all of the American Arbitration Association. The fees, costs fees and expenses of the Independent Auditor shall be borne equally Arbitration Firm. All determinations made by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. FurtherArbitration Firm will be final, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final conclusive and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementParties.
Appears in 2 contracts
Samples: Stock Purchase Agreement (Standex International Corp/De/), Stock Purchase Agreement (Standex International Corp/De/)
Post-Closing Adjustment. The Consideration shall be subject ----------------------- to adjustment after the Closing Date as specified in this Section 1.3.
(a) No more than three Within one hundred twenty (3120) Business Days days following the Closing Date, NII shall cause PricewaterhouseCoopers LLP ("NII's Accountant") to audit the Company's books to determine the accuracy of the information set forth in the Closing Financial Certificate (the "Post-Closing Audit"). Such audit shall be conducted in accordance with Generally Accepted Auditing Standards. The parties acknowledge and agree that for purposes of determining the tangible net worth of the Company as of June 30, 1998 and the earnings before interest and taxes, after giving effect to the Interim Period Add-Backs ("Adjusted EBIT") for the twelve months ended March 31, 1998, the value of the assets of the Company and the earnings of the Company shall, except with prior written consent of NII, be calculated as provided in the last paragraph of Section 6.9. In addition, the parties agree that the Post-Closing Audit will be limited to only a verification of the actual numbers and not whether an add-back adjustment is properly included as an add-back item. The Shareholder shall cooperate and shall use his reasonable efforts to cause the officers and employees of the Company to cooperate with NII and NII's Accountant after the Closing Date in furnishing information, documents, evidence and no more other assistance to NII'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 (2) weeks after the Closing, the Shareholder shall provide NII's Accountant with the information and/or documents requested on the Post-Closing Audit Checklist set forth as Schedule 1.3 hereto in order to facilitate the completion of the Post-Closing Audit by NII's Accountant within the aforementioned time period. In the event that NII's Accountant determines that the actual tangible net worth of the Company as of June 30, 1998 was less than the Certified Closing Net Worth or that the actual net income for the twelve months ended June 30, 1998 was less than $2,430,000 (the "Earnings Threshold"), NII shall deliver a written notice ("Financial Adjustment Notice") to the Shareholder setting forth (i) the determination made by NII's Accountant of the actual tangible net worth of the Company as of June 30, 1998 (the "Actual Company Net Worth") and the actual net income for the twelve months ended June 30, 1998 (the "June 30, 1998 Earnings"), and (ii) the amount of the adjustment to the Consideration (the "Consideration Adjustment") that would have been applicable 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 or had the Adjusted EBIT for the twelve months ended March 31, 1998 been adjusted by the amount that the Earnings Threshold exceeds the June 30, 1998 Earnings, as applicable. The Consideration Adjustment shall take account of the reduction, if any, to the Consideration already taken pursuant to Section 1.2(c) and any adjustments made for breaches of Section 3.9.
(b) The Shareholder shall have thirty (30) days from the receipt of the Financial Adjustment Notice to notify NII if the Shareholder disputes such Financial Adjustment Notice. If NII has not received notice of such a dispute within such 30-day period, NII shall be entitled to receive from the Shareholder the Consideration Adjustment. The Consideration Adjustment shall at Shareholder's election either be paid directly by him or shall be paid out of the Escrow Fund (as defined in Section 1.4). Any remaining unpaid amount of the Consideration Adjustment after such payment out of the Escrow Fund shall be promptly paid by the Shareholder in immediately available funds. To the extent Shareholder elects to pay such amount directly, the parties agree that the Escrow Fund shall be deemed to be reduced by such amount and Shareholder, at his option shall be entitled at any time thereafter to withdraw said amount from the Escrow Fund. If Shareholder elects to pay such amount directly and fails to remit such amount within two (2) Business Days after (as defined in Section 8.5(a), the parties agree that said amount shall be paid out of the Escrow Fund. If, however, the Shareholder has delivered notice of such a dispute to NII within such thirty (30)-day period, then NII's Accountant shall select an independent accounting firm of nationally recognized standing that has not represented any of the parties hereto within the preceding two (2) years to review the Company's books, Closing DateFinancial Certificate and Financial Adjustment Notice (and related information) to determine the amount, an employee if any, of Seller the Consideration Adjustment. Such independent accounting firm shall be subject to approval by the Shareholder and one or more representatives or employees of Buyer NII, which approval shall calculate the quantity of sulfurnot be unreasonably withheld, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than within five (5) Business Days) following such physical examinationdays of its selection, such employee unless there is an actual conflict of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Sellerinterest. The Inventory Report independent accounting firm shall be executed and delivered by each of Buyer and Seller directed to the consider only those agreements, contracts, commitments or other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
documents (bor summaries thereof) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying that were either (i) its good faith calculation of delivered or made available to NII's Accountant in connection with the Purchase Pricetransactions contemplated hereby, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and or (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid reviewed by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted NII's Accountant during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession course of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment AmountAudit. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller The independent accounting firm shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery make its determination of the Objection NoticeConsideration Adjustment, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”)if any, who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Associationits selection. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor independent accounting firm shall be final and binding on the parties. The decision rendered pursuant parties hereto, and upon such determination, NII shall be entitled to receive from the Shareholder the Consideration Adjustment, payable as set forth above in this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h1.3(c). The other party’s only defense to such a request for specific enforcement or other legal action costs of the independent accounting firm shall be fraud borne by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement(either NII or the Shareholder) whose determination of the Company's net worth at Closing was further from the determination of the independent accounting firm, or equally by NII and the Shareholder 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.
Appears in 2 contracts
Samples: Stock Purchase Agreement (Navigant International Inc), Stock Purchase Agreement (Navigant International Inc)
Post-Closing Adjustment. (a) No more than three In accordance with the terms and provisions of this Section 3.3, Buyer shall pay to Seller Representative for the account of the Sellers (3in the same proportions in which the Initial Purchase Price is to be paid to them in accordance with Section 3.1(d) Business Days prior or such other proportions as they shall agree in writing), or Sellers (in the same proportions) shall pay to Buyer (as the Closing Date and no more than two (2) Business Days after the Closing Datecase may be), an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report amount (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating "Net Working Capital on Adjustment Amount") equal to the Closing Date under this Section 3.5. The value amount by which the Final Net Working Capital is greater (in which case Buyer shall pay the Net Working Capital Adjustment Amount to the Seller Representative for the account of the Inventory set forth on Sellers) or is less (in which case Sellers shall pay the Inventory Report shall be determined in accordance with Net Working Capital Adjustment Amount to Buyer) than the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance SheetInitial Net Working Capital.
(b) As soon as reasonably practicable, but in no event later than ninety (90) Within 60 days after the Closing Date, Buyer shall prepare and cause deliver to be delivered to the Seller a certificate of the Chief Financial Officer of Buyer certifying Representative (i) its good faith calculation an unaudited balance sheet of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each Company as of the adjustments set forth in Section 3.2 Closing Date (the “"Final Purchase Price”Balance Sheet") and (ii) a balance sheet for certificate executed by an executive officer of each of Buyer and the Business as Company setting forth their proposed calculation of immediately prior to the Closing prepared on Final Net Working Capital, which shall be made in accordance with and in a basis manner consistent with the accounting methodsillustration set forth in Schedule I. The calculation of Final Net Working Capital set forth in such certificate shall be binding upon the Buyer and Sellers, practices, policies, procedures and estimation methods used unless the Seller Representative objects to prepare such calculation in accordance with clause (c) below.
(c) For a period of 60 days following the delivery of the Final Balance Sheet and including all officers' certificate referred to in clause (b) above, Buyer and the Company shall give to the Seller Representative access during normal business hours to the books and records of the entries contained in Schedule 3.4(a) Company reasonably necessary for the Seller Representative to confirm the accuracy of the Final Net Working Capital. If, within such 60-day period, the Seller Representative notifies Buyer of any objections to the calculation by Buyer of the Final Net Working Capital (the “Final Balance Sheet”date upon which the Seller Representative notifies Buyer of any such objections shall be referred to herein as the "Objection Notification Date"), Buyer and the Seller Representative will attempt in good faith to agree upon the Net Working Capital Adjustment Amount prior to or on the date that is 30 days after the Objection Notification Date.
(d) If Buyer and the Seller Representative agree prior to or on the date that is 30 days after the Objection Notification Date to a Net Working Capital Adjustment Amount that is different from the amount that would be calculated based upon the officers' certificate delivered to the Seller Representative, the payment described in clause (a) above shall be in the agreed upon amount.
(e) If, on the other hand, Buyer and the Seller Representative do not agree prior to or on the date that is 30 days after the Objection Notification Date to a Net Working Capital Adjustment Amount, the matters in dispute (but no other matters) shall be submitted to (i) If a firm of independent public accountants mutually agreed upon by Buyer and the Estimated Purchase Price is greater than the Final Purchase PriceSeller Representative, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and or (ii) if Buyer and the Estimated Purchase Price Seller Representative do not agree upon such independent public accountants within 30 days after the Objection Notification Date, Deloitte & Touche LLP, or (iii) if the firm specified in clause (i) or (ii) above is less unwilling or unable to undertake the engagement contemplated by this provision, a firm of independent public accountants selected by the Seller Representative from among the "big four" accounting firms (other than any firms that have been engaged to audit the financial statements of, or perform any other significant services for, the Sellers or any of their Affiliates at any time during the past five years) (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 Net Working Capital Adjustment Amount as promptly as practicable but no later than 45 days after its appointment. The Final Arbiter shall send its written determination of Final Net Working Capital to Buyer and the Seller Representative, together with a calculation of the Net Working Capital Adjustment Amount that results from that determination, at which point the determination of the Final Purchase PriceArbiter, and the Purchase Price resulting calculation of the Net Working Capital Adjustment Amount, shall be adjusted upward dollar-for-dollar binding on Buyer and Sellers, absent fraud or manifest error. The fees and expenses of the Final Arbiter shall be borne equally by Buyer shall pay to Seller on the amount one hand and Sellers on the other hand.
(f) The payment of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing the Net Working Capital Adjustment Amount shall as contemplated by clause (a) above will be paid made on the day that is five days after the date upon which such amount has been finally determined in accordance with the provisions of this Section 3.3. Such payment will be made to Buyer or the Seller Representative for the account of the Sellers, as the case may be, by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used specified by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase PriceSeller Representative, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties heretoas applicable.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 2 contracts
Samples: Securities Purchase Agreement (Resource America Inc), Securities Purchase Agreement (Atlas America Inc)
Post-Closing Adjustment. (a) No more than three The Seller will complete by December 30, 1999 a physical count of the Inventory which Buyer will have the opportunity to observe and during which Buyer or Buyer's accountant will conduct test counts, and will agree on the Closing Date Working Capital Amount prior to Closing. This agreement will be evidenced by a letter substantially in the form of Exhibit G. In connection therewith, Seller will deliver to Buyer a list of (3i) Business Days prior the Inventory, (ii) the Accounts Receivable at December 30, 1999 and (iii) the Accounts Payable at December 30, 1999, certified by Seller as a true and correct listing of the Inventory, Accounts Receivable and Accounts Payable on Seller's books and records. After the Closing Date, Buyer and its accountants will be permitted to conduct an audit of the Closing Date Working Capital Amount for the purpose of determining whether any adjustment is necessary to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined Amount, in accordance with the generally accepted accounting methods, principles and consistent with Seller's past practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) . As soon promptly as reasonably practicablepossible, but in no event later than ninety any event, within forty-five (9045) days after the Closing Date, the Buyer shall prepare and cause will deliver to be delivered to the Seller a certificate of schedule (the Chief Financial Officer of Buyer certifying (i"Adjustment Schedule") setting forth its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of Working Capital Amount and the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to difference between (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, Closing Date Working Capital Amount and (ii) the accounting personnel Working Capital Amount as calculated by Buyer (such difference the "Working Capital Adjustment"), together with an explanation in reasonable detail of Buyer supporting the Business reasons for and involved in the amount of Buyer's proposed Working Capital adjustment. The Seller shall have the right to observe and comment upon the preparation of such schedule. The failure of Buyer to deliver the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation Adjustment Schedule in a timely manner shall constitute Buyer's acceptance of the Final Purchase Price, on or prior to Closing Date Working Capital Amount as the last day Working Capital Amount. Within seven (7) days after delivery of the Review PeriodAdjustment Schedule, the Seller shall may notify the Buyer in writing of that such disagreement schedule does not, in its opinion, fairly state the Working Capital Adjustment in accordance with the Final Balance Sheet or the calculation provisions of the Final Purchase Pricethis Agreement, which notice shall set setting forth any such disagreement in reasonable detail, detail the specific item of the Final Balance Sheet or the calculation respects in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller it fails to deliver do so. In the Objection Notice within event that the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor so raised within thirty (30) days after delivery of the expiration Adjustment Schedule, they shall appoint a "big five" accounting firm acceptable to both of them, whose expenses will be shared equally by the Seller and the Buyer (the "Independent Accounting Firm"). The Independent Accounting Firm shall, as promptly as possible, determine the items in dispute. The determination of the Working Capital Adjustment by such 60-day period, at the request of either party the Independent Auditor Accounting Firm shall be appointed by the American Arbitration Association. The fees, costs made in a writing delivered to both parties and expenses of the Independent Auditor shall be borne equally by conclusive and binding on the parties.
(gb) The parties shall instruct Within five (5) days after delivery of the report by such Independent Auditor to consider only those items and amounts which are identified in Accounting Firm or after the Objection Notice as being items which Buyer and Seller are unable to resolve. Furthersettlement of any dispute or within ten (10) days following delivery of the Adjustment Schedule if no dispute exists, the Independent Auditor’s determination payment shall be based solely on made (i) by the relevant Books and Records and Seller if the other written information provided Working Capital Adjustment is a positive number, or (ii) by the Buyer and Seller (i.e., not on if the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any formWorking Capital Adjustment is a negative number.
(hc) The parties For purposes of calculating the Closing Date Working Capital, the Working Capital Amount and the Working Capital Adjustment, the term "Working Capital" shall jointly instruct mean the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement sum of (i) whether or not the Final Balance Sheet was preparedInventory, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent AuditorAccounts Receivable, to what extent less (if anyiii) the Final Balance Sheet or Accounts Payable of the Final Purchase Price requires adjustmentBusiness (including in each case CHP), as of December 30, 1999. The Independent Auditor shall provide parties agree that the parties with a written explanation Working Capital of CHP will be valued in reasonable detail United States dollars, and that the conversion into U.S. dollars of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 any amounts reflected on CHP's books and records in Canadian dollars shall be treated as compromise and settlement negotiations accomplished by using the cross-exchange rate for purposes conversion of Rule 408 Canadian dollars into United States dollars appearing in the "Markets Diary" section of the Federal Rules of Evidence and comparable state rules of evidenceThe Wall Street Journal on December 30, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement1999.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Opta Food Ingredients Inc /De)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior The Sellers have 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 and no more than two (2) Business Days Working Capital. The Purchase Price shall be adjusted after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities accordance with this Section 2.2 based upon a physical examination thereofthe actual Closing Working Capital of the accounts shown on Schedule 2.2. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller Notwithstanding anything else contained herein to the other partycontrary, Schedule 2.2 shall include the following liabilities equal to the following amounts and regardless of whether they are required to be reflected as current assets or current liabilities in accordance with GAAP: (i) capital investment costs of $300,000, (ii) severance obligations of $1,400,000, (iii) paid-time off obligations of $400,000, (iv) lease obligations of $640,000 and (v) escrow capital costs of $27,000. Such amounts shall not be subject to adjustment following the quantity Closing. 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 Inventory set forth thereon, absent manifest erroramount, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital referred to as the “Closing Statement.”
(b) The Closing Statement shall be prepared on the Closing Date under this Section 3.5basis of, and using the same accounting principles, methodologies and policies, as specified in Schedule 2.2 and, to the extent not specified therein, as used in preparing the Financial Statements. The value For the avoidance of doubt, in calculating the component line items of the Inventory set forth on the Inventory Report Closing Statement, no effect shall be given to the transactions contemplated by this Agreement. If the Purchase Price as finally determined in accordance with this Section 2.2 is less than the accounting methodsEstimated Purchase Price, practices, policies, procedures and estimation methods used each Seller shall pay to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate Purchaser its Pro Rata Portion of the Chief Financial Officer amount by which the Purchase Price falls short of Buyer certifying (i) its good faith calculation the Estimated Purchase Price, and if the Purchase Price as finally determined in accordance with this Section 2.2 exceeds the Estimated Purchase Price, Purchaser shall pay to each Seller such Seller’s Pro Rata Portion of the amount by which the Estimated Purchase Price falls short of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available U.S. Dollar funds to an account designated by the party or parties receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase Purchase Price.
(c) As promptly as practicable (and, in any event, within 60 days after the Purchase Price Closing), Purchaser shall prepare and deliver to the Sellers the Closing Statement prepared in accordance with this Section 3.5.
(d) Upon receipt 2.2. If the Sellers disagree with the determination of the calculation of Closing Statement, the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller Sellers shall notify Buyer in writing Purchaser of such disagreement with the Final Balance Sheet or the calculation within 30 days after delivery of the Final Purchase PriceClosing Statement, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller the Sellers fails to deliver this notice by the Objection Notice within the Review Periodend of such 30 days, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price Sellers shall be deemed to have been accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement that are not objected to by the Sellers in such notice shall be deemed accepted by Seller the Sellers and shall not be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to further dispute or review. During the 30-day period of the Sellers review of the Closing Statement and the resolution of any disputes that may arise under this Section 3.5(f) below2.2, Buyer Purchaser will provide the Sellers and Seller its accountants access to the books and records and personnel of the Company and all documents, schedules and workpapers used by Purchaser in the preparation of the Closing Statement, provided, that such access shall be in a manner that does not interfere with the normal business operations of Purchaser or the Company. Purchaser and the Sellers shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer Purchaser and Seller the Sellers shall be final and binding upon the parties heretoparties.
(fd) If Buyer Purchaser and Seller the Sellers are unable to resolve any disagreement as contemplated by Section 3.5(e2.2(c) within 60 15 days after delivery by the Sellers of written notice of such disagreement, Purchaser and the Objection Notice, then Buyer and Seller Sellers shall submit the matter for resolution jointly select a partner at Ernst & Young to a mutually agreeable independent international accounting firm resolve such disagreement (the person so selected shall be referred to herein as the “Independent AuditorAccounting Arbitrator”), who shall, acting as an arbitrator, resolve . The parties shall instruct the dispute Accounting Arbitrator to consider only those items and amounts set forth in the Objection NoticeClosing Statement as to which Purchaser and the Sellers have not resolved their disagreement. In Purchaser and the event Buyer Sellers shall use reasonable best efforts to cause the Accounting Arbitrator to deliver to the parties, as promptly as practicable, reach a final, binding resolution of such matters, which final resolution shall not be subject to collateral attack for any reason (other than fraud or manifest error) and Seller are unable to agree shall be (i) in writing and signed by the Accounting Arbitrator, (ii) within the range of the amount of each item in dispute contested by Purchaser and the Sellers on an Independent Auditor within thirty item by item basis, (30iii) furnished to Purchaser and the Sellers as soon as practicable after the items in dispute have been referred to the Accounting Arbitrator, which shall not be more than sixty (60) days after such referral, (iv) made in accordance with this Agreement and using the expiration same accounting principles, methodologies and policies, as specified in Schedule 2.2, and (v) conclusive and binding upon the parties on the date of delivery of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Associationwritten resolution. The fees, costs and expenses of the Independent Auditor Accounting Arbitrator shall be borne equally one-half by Purchaser and one-half by the partiesSellers; provided that if the Accounting Arbitrator determines that one party’s position is completely correct, then such party shall pay none of the fees, costs and expenses of the Accounting Arbitrator and the other party shall pay all such fees, costs and expenses.
(ge) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations Any payments made pursuant to this Section 3.5 2.2 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions an adjustment to the Independent Auditor Purchase Price by the parties for Tax purposes, unless otherwise required by Law.
(f) Notwithstanding anything in this Agreement to the contrary, the Sellers shall be treated as confidential information. The Independent Auditor have no liability (and no amounts shall be bound by a mutually agreeable confidentiality agreement. The procedures count toward the Indemnity Threshold) with respect to any asset or liability to the extent taken into account in the determination of this Section 3.5 are exclusive andfinal Closing Working Capital, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to provided in this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementArticle II.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (StarTek, Inc.)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to As promptly as practicable after the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety 60 days after the Closing Date), the Company Representative will cause the accounting firm of Schexxx & Xssociates SC to prepare and deliver concurrently to Parent and the Company Representative an audited consolidated balance sheet of the Company and its Subsidiaries (90the "Closing Date Balance Sheet"), setting forth the consolidated net worth of the Company and the Subsidiaries immediately prior to the Effective Time on the Closing Date (the "Closing Date Net Worth"). The Closing Date Balance Sheet shall be prepared in accordance with generally accepted accounting principles (including the Accounting Principles) on a basis consistent with the Company's past practices and with the preparation of the Most Recent Balance Sheet, subject, however, to the following requirements, which requirements shall be adhered to irrespective of whether such requirements are in accordance with generally accepted accounting principles (including the Accounting Principles):
(i) no reserves for product warranty claims or product liability claims shall be established with respect to the Company or any Subsidiary or the products sold by them, and the Closing Date Balance Sheet and the Final Closing Date Balance Sheet shall contain no such reserves; and
(ii) the amount of the reserve for worker's compensation claims contained in the Closing Date Balance Sheet and the Final Closing Date Balance Sheet shall not exceed the amount of the reserve for worker's compensation claims contained in the Most Recent Balance Sheet. One-half (1/2) of the fees and expenses of Schexxx & Xssociates SC will be paid or accrued by the Company prior to Closing, and the balance shall be paid by the Parent or the Company after Closing -12- 18 and not accrued by the Company at or prior to Closing. The lesser of $50,000.00 or one-half (1/2) of the total fees and expenses charged by the title insurance company and the surveying company or companies to obtain the title insurance and surveys described in Section 6.14 of this Agreement will be paid or accrued by the Company prior to Closing, and the balance shall be paid by the Parent or the Company after Closing and not accrued by the Company at or prior to Closing.
(b) If either Parent or the Company Representative claims that the Closing Date Balance Sheet has not been prepared in accordance with the requirements of Section 2.6(a), it will deliver to the other party a detailed statement describing the basis for any such claim within 15 days after receiving the Closing Date Balance Sheet. Parent and the Company Representative will use reasonable efforts to resolve any such claims themselves. If they do not obtain a final resolution within 90 days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Pricehowever, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet Parent and the calculation of Company Representative will select another accounting firm from among the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the "Big Six" accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior firms mutually acceptable to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith them to resolve any remaining such disagreement, claims. If Parent and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller Company Representative are unable to agree on the choice of an Independent Auditor within thirty accounting firm, they will select a nationally-recognized accounting firm by lot (30after excluding any such firm affiliated with Parent or the Company Shareholders) (the "Arbitrating Accountant"). Upon submission to the Arbitrating Accountant for resolution, Parent shall indicate in writing its position on each disputed matter and the Company Representative shall do likewise. The Arbitrating Accountant shall choose one of the two positions on each disputed matter no later than 120 days after the expiration Closing Date and such position will be conclusive and binding upon Parent and the Company Representative with respect to that disputed matter if delivered in writing. The proposed Closing Date Balance Sheet will be revised as appropriate to reflect the resolution of any such 60-day periodclaims pursuant to this Section 2.6(b). The term "Final Closing Date Balance Sheet" means the Closing Date Balance Sheet, at together with any revisions thereto pursuant to this Section 2.6(b), and the request term "Final Closing Date Net Worth" means the consolidated net worth of either party the Independent Auditor Company and the Subsidiaries immediately prior to the Effective Time on the Closing Date as set forth on the Final Closing Date Balance Sheet. The Surviving Corporation and the Company Representative (on behalf of the Company Shareholders) each shall be appointed by responsible for and shall pay one-half (1/2) of the American Arbitration Association. The fees, costs fees and expenses of the Independent Auditor shall be borne equally by the partiesArbitrating Accountant.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 1 contract
Samples: Merger Agreement (Neenah Foundry Co)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and The parties agree that no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) 75 days after the Closing Date(or such later date on which such statement reasonably can be prepared and delivered in light of the compliance of Purchaser and the Company with their obligations set forth in next two succeeding sentences), Buyer the Company shall prepare and cause to be delivered prepared and deliver to Seller a certificate of the Chief Financial Officer of Buyer certifying Purchaser (i) its good faith calculation a statement of the Purchase Priceactual Net Financial Assets as of 11:59 p.m., setting forthNew York City time, in reasonable detail, a good faith calculation of each of the adjustments set forth day immediately preceding the Closing Date (the "Closing Statement") certified by PriceWaterhouseCoopers L.L.P., independent accountants for the Company, to be prepared (except as otherwise provided in Section 3.2 (9 of the “Final Purchase Price”Disclosure Schedule) in conformity with GAAP and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methodsbasis used in preparing the Unaudited Financial Statements as of, practicesand for the year ended, policiesDecember 27, procedures 1997 referred to in Section 3.5 hereof and estimation methods used to prepare (ii) a determination (the Balance Sheet and including all "Proposed NFA Adjustment") of the entries contained in Schedule 3.4(a) amount by which the Net Financial Assets as then determined by the Company is less than or greater than the Estimated Net Financial Assets (the “Final Balance Sheet”amount of such excess or shortfall, together with the adjustment, if any, for the amount of the Earnings Adjustment as described below, is referred to herein as the "Adjustment"). Purchaser shall provide the Company and its independent accountants access at all reasonable times to the relevant personnel, properties, books and records of the Business for such purposes and to assist the Company and its independent accountants in preparing the Closing Statement. Purchaser's assistance shall include, without limitation, the closing of the Business's books as of the Closing, the preparation of schedules supporting the amounts set forth in the general ledger and other books and records of the Business, and such other assistance as the Company or its independent accountants may reasonably request. During the 30-day period following the delivery by the Company of the Closing Statement and the Proposed NFA Adjustment referred to in the first sentence of this Section 2.2(a), Purchaser and its independent accountants will be permitted to review the working papers of the Company and its independent accountants relating to the preparation of the Closing Statement, the Proposed NFA Adjustment and the Proposed Earnings Adjustment. If, within 30 days after delivery by the Company of the Closing Statement and the Proposed NFA Adjustment, Purchaser notifies the Company that it disagrees with the Closing Statement and the Proposed NFA Adjustment and/or the Proposed Earnings Adjustment and the Company and Purchaser cannot agree with respect to the Closing Statement and the Proposed NFA Adjustment and/or the Proposed Earnings Adjustment, as the case may be, within five days of the notice of disagreement provided by Purchaser to the Company, then the determination shall be submitted for resolution (the "Resolution") promptly to an independent nationally recognized accounting firm jointly selected by the Company and Purchaser, whose determination (the "Accounting Firm Determination") shall be instructed by the parties to be made within 20 days and be binding upon all parties hereto, and the fees and expenses of which shall be borne equally by Purchaser and the Company. In the event that (whether expressly or by failure of Purchaser to provide notice of any disagreement within the applicable period) the Company and Purchaser agree as to the amount of the Adjustment (an "Adjustment Agreement") without submitting the matter for Resolution, the parties shall deliver a joint certificate to the Adjustment Escrow Agent setting forth the amount of the Adjustment Escrow to be paid to each of the Purchaser and the Company pursuant to this Section 2.2. In the event of an Accounting Firm Determination, the accounting firm shall deliver a certificate to each of Purchaser, the Company and the Adjustment Escrow Agent setting forth the amount of the Adjustment. The amount of Net Financial Assets as of 11:59 p.m., New York City time, on the day immediately preceding the Closing Date, as definitively determined pursuant to this Section 2.2(a) is referred to herein as the "Actual Net Financial Assets."
(b) At the Closing, the Company, Purchaser and such financial institution as shall have been agreed by the parties prior to the Closing Date (together with any successor jointly appointed by the Company and the Purchaser, the "Adjustment Escrow Agent") shall execute and deliver an escrow agreement substantially in the form set forth in Exhibit B hereto (the "Adjustment Escrow Agreement"). From and after the Closing, the Adjustment Escrow Agent shall act as escrow agent, pursuant to the Adjustment Escrow Agreement, in effecting the payment of the amounts held in the Adjustment Escrow as set forth herein.
(c) As soon as practicable after the earlier of an Adjustment Agreement or an Accounting Firm Determination (but in any event within two Business Days after the Adjustment Agreement or the Accounting Firm Determination):
(i) If if the Estimated Purchase Price sum of the Actual Net Financial Assets and the Earnings Adjustment, if any, used to determine the Adjustment is equal to or greater than the Final Purchase Pricesum of the Estimated Net Financial Assets and the Proposed Earnings Adjustment, then:
(A) the Purchase Price shall be adjusted downward dollar-for-dollar and Seller Adjustment Escrow Agent shall pay to Buyer the Company from the Adjustment Escrow the full amount of the Adjustment Escrow, and
(B) Purchaser shall pay to the Company the amount by which the sum of such reduction, the Actual Net Financial Assets and the Earnings Adjustment used to determine the Adjustment exceeds the sum of the Estimated Net Financial Assets and the Proposed Earnings Adjustment;
(ii) if the Estimated Purchase Price sum of the Actual Net Financial Assets and the Earnings Adjustment, if any, used to determine the Adjustment is less than the Final Purchase Price, sum of the Purchase Price shall be adjusted upward dollar-for-dollar Estimated Net Financial Assets and Buyer shall pay to Seller the Proposed Earnings Adjustment but the amount of such increase shortfall does not exceed the sum of $3 million plus the Proposed Earnings Adjustment; then
(each a “Post-Closing A) The Adjustment Amount”Escrow Agent shall pay to Purchaser from the Adjustment Escrow an amount equal to the amount by which the sum of the Estimated Net Financial Assets and the Proposed Earnings Adjustment exceeded the sum of the Actual Net Financial Assets and the Earnings Adjustment used to determine the Adjustment, and
(B) the Adjustment Escrow Agent shall pay to the Company from the Adjustment Escrow the remaining amount of the Adjustment Escrow (after giving effect to clause (A) above). Any Post-Closing ; and
(iii) if the sum of the Actual Net Financial Assets and the Earnings Adjustment, if any, used to determine the Adjustment Amount shall be paid by wire transfer is less than the sum of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after Estimated Net Financial Assets and the final determination of Proposed Earnings Adjustment and the amount of such reduction or increase in shortfall exceeds the Purchase Price sum of $3 million plus the Proposed Earnings Adjustment, then
(A) the Adjustment Escrow Agent shall pay to Purchaser from the Adjustment Escrow the full amount of the Adjustment Escrow, and
(B) the Security Escrow Agent shall pay to the Purchaser from the Security Escrow an amount equal to the amount by which (x) the sum of the Estimated Net Financial Assets and the Proposed Earnings Adjustment exceeds (y) the sum of the Actual Net Financial Assets plus the Earnings Adjustment used to determine the Adjustment plus $3 million plus the Proposed Earnings Adjustment. Each of Purchaser and the Company shall timely give all necessary instructions to the Adjustment Escrow Agent and the Security Agent so that the Adjustment Escrow and (if applicable) the Security Escrow are paid and distributed in accordance with this Section 3.52.2(c). All payments pursuant to this Section 2.2(c) shall be by wire transfer in immediately available funds to the account or accounts designated by the Company and/or Purchaser, as the case may be, no later than two Business Days prior to such payment.
(d) Upon receipt Any interest or other investment income earned for the period from the time that any portion of the calculation Purchase Price is delivered to the Adjustment Escrow Agent pursuant to this Agreement until all amounts held in the Adjustment Escrow have been distributed in accordance with the Adjustment Escrow Agreement while held by the Adjustment Escrow Agent shall be paid to the Company in addition to, and at the same time as, payment of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, Escrow in accordance with the terms of this Agreement orAgreement; provided, alternativelyhowever, (ii) only with respect that, to the disputed items submitted extent that any portion of the Adjustment Escrow is paid to the Independent AuditorPurchaser pursuant to of Section 2.2(c) hereof, to what extent a pro rata portion of such interest or other investment income (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including determined on the basis therefor. All negotiations of the relative portions of the Adjustment Escrow to be paid to Purchaser and the Company, respectively, pursuant to this Section 3.5 2.2(c) hereof) shall be treated as compromise instead paid to Purchaser. Any such interest or other investment income shall be deemed not to constitute Adjustment Escrow.
(e) The Company and settlement negotiations Purchaser shall each be responsible for purposes of Rule 408 one-half of the Federal Rules of Evidence fees and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination expenses of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementAdjustment Escrow Agent.
Appears in 1 contract
Post-Closing Adjustment. (a) No more than three Within 45 days after the Closing Date (3as defined in Section 1.7), the Buyer shall deliver to the Seller a balance sheet of the Corporation as of the opening of business on the Closing Date (the "Closing Date Balance Sheet") Business Days prior to prepared by the Buyer. Such balance sheet shall be prepared in accordance with generally accepted accounting principles consistently applied, with the inventory value determined in a manner consistent with the Latest Balance Sheet. The inventory reflected on the Closing Date Balance Sheet shall be determined by a physical inventory taken as of the start of business on the first business day following the Closing Date and no more than two (2) Business Days after observed by the Closing Date, an employee representatives of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall inventory will be executed and delivered by each valued at the lower of Buyer and Seller to the other party, and the quantity of such Inventory cost or market. The only inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report Balance Sheet shall be determined in accordance with the accounting methodsraw materials, practices, policies, procedures work-in-progress and estimation methods used to prepare the Balance Sheetfinished goods inventory for which there are current or forecasted orders from customers.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after If the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior has any objections to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Date Balance Sheet”).
(i) If , he shall deliver to the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of a statement describing such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment objections within three (3) Business Days 15 days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon Seller's receipt of the calculation of Closing Date Balance Sheet. If no objections are received within such 15 day period, the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Closing Date Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment AmountSeller. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith use reasonable efforts to resolve any objections received during such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice15 day period. In the event Buyer and Seller are unable to agree on an Independent Auditor resolve such objections within thirty (30) a 15-day period following receipt by Buyer of Seller's objections, the Buyer and Seller shall, within ten days after the expiration of such 6015-day period, at the request select a mutually acceptable nationally recognized accounting firm to resolve any remaining objections. The determination of either party the Independent Auditor such accounting firm shall be appointed by made within 30 days of the American Arbitration Associationselection of such accounting firm and shall be conclusive and binding upon the parties hereto. The fees, costs fees and expenses of the Independent Auditor such accounting firm shall be borne shared equally by the partiesBuyer and Seller.
(gc) The parties shall instruct If the Independent Auditor to consider only those items and amounts which are identified in aggregate book value of the Objection Notice Corporation, as being items which Buyer and Seller are unable to resolve. Furtherreflected on the Closing Date Balance Sheet, as finally determined, is greater than the aggregate book value of the Corporation as reflected on the Latest Balance Sheet, the Independent Auditor’s determination Purchase Price shall be based solely adjusted upward by such amount and a corresponding adjustment to the Note shall be made as of the Closing. In the event the aggregate book value of the Corporation, as reflected on the relevant Books and Records and Closing Date Balance Sheet, as finally determined, is less than the other written information provided by Buyer and Seller (i.e., not aggregate book value of the Corporation as reflected on the basis Latest Balance Sheet, the Purchase Price shall be adjusted downward by such amount and a corresponding adjustment to the Note shall be made as of an independent review), and the Independent Auditor Closing. The finalization of the Closing Date Balance Sheet shall not conduct additional discovery affect any rights or remedies of Buyer under this Agreement. In the event a downward adjustment is in any form.
excess of the principal amount of the Note, such excess shall be paid by Seller to Buyer within five (h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (305) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the final determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementadjustment.
Appears in 1 contract
Post-Closing Adjustment. (a) No more As soon as practicable, but in any event no later than three one hundred twenty (3120) Business Days prior to the Closing Date and no more than two (2) Business Days after days following the Closing Date, an employee the Buyer shall cause to be prepared and delivered to the Seller the Audited Closing Date Balance Sheet and a statement setting forth the Working Capital Adjustment as of the close of business on the Closing Date (such statement, as it may be adjusted pursuant to Section 2.8(b), the "Closing Date Statement"). The Closing Date Statement shall be prepared in accordance with GAAP and consistent with the methodologies set forth in Schedule 1.1 of Exhibit B. Upon receipt of the Audited Closing Date Balance Sheet and the Closing Date Statement, the Seller and one the Seller's independent accountants shall be permitted during the succeeding thirty (30) day period to examine the Audited Closing Date Balance Sheet, the Closing Date Statement and the work papers used or more representatives generated in connection with the preparation of such documents and such other documents as the Seller may reasonably request in connection with its review. If, within thirty (30) days following delivery of the Audited Closing Date Balance Sheet and the Closing Date Statement, the Seller shall not have given the Buyer notice of the Seller's objection to the Audited Closing Date Balance Sheet or employees any of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included computations in the Inventory located at Closing Date Statement (which notice shall contain a statement of the Facilities based Basis of such objection), then the Audited Closing Date Balance Sheet and the Closing Date Statement will be final and binding upon the Parties, absent manifest error. If the Seller gives notice to the Buyer of the Seller's objection, and the Buyer and the Seller are unable to resolve the issues in dispute within thirty (30) days after delivery of such notice of objection, each of the Buyer's and the Seller's positions with respect to the Audited Closing Date Balance Sheet and the computation of the Working Capital Adjustment in the Closing Date Statement will be submitted to Deloitte Touche LLP, independent certified public accountants, or such other firm of independent certified public accountants mutually selected by the Parties (the "Accountants") for resolution. If the Audited Closing Date Balance Sheet and the computation of Working Capital Adjustment are submitted to the Accountants for resolution, (x) each Party will furnish to the Accountants such workpapers and other documents and information relating to the disputed issues as the Accountants may request and are available to that Party (or its independent public accountants), and will be afforded the opportunity to present to the Accountants any material relating to such issues and to discuss the same with the Accountants; (y) the Accountant's shall select either the Buyer's or the Seller's position on each disputed matter in the Audited Closing Date Balance Sheet and the Working Capital Adjustment in its entirety and such selection shall be binding and conclusive on the Parties and will be deemed to be the Audited Closing Date Balance Sheet and the final Working Capital Adjustment for the Closing Date Statement; and (z) the fees of the Accountants for such determination will be borne by the Party whose positions have a physical examination thereof. As soon as practicable net negative economic adjustment, taking into account all disputed matters.
(but in no event more than b) Within five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value Days of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate completion of the Chief Financial Officer of Buyer certifying computations required by Section 2.8(a), (i) its good faith calculation of if the Purchase Price, setting forth, Working Capital Balance in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Audited Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Date Balance Sheet and including all of is less than $19 Million, then the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to the Buyer an amount equal to the amount of such reduction, Working Capital Adjustment and (ii) if the Estimated Purchase Price Working Capital Balance in the Audited Closing Date Balance Sheet is less greater than $19 Million, then the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to the Seller an amount equal to the amount of Working Capital Adjustment. In either case, such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount amounts shall be paid by wire transfer of immediately available funds to an such account or accounts of the Buyer or the Seller, as the case may be, as may be designated by the party receiving Buyer or the Seller, as the case may be; provided, however, that amounts owed by the Seller to the Buyer may be netted against amounts owed by the Buyer to the Seller, and vise versa. If payment within three (3) Business Days is being made after the final determination of fifth business day referred to in this Section 2.8(b), the amount of such reduction or increase in the Purchase Price in accordance with payment to be made pursuant to this Section 3.52.8 shall bear interest from and including such fifth business day to, but excluding, the date of payment at a rate per annum equal to seven percent (7%) for the first thirty days such payment is past due and at a rate per annum equal to fifteen percent (15%) for all subsequent periods such payment is past due, in either event not to exceed the maximum rate permitted by Law. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated on the basis of a year of 365 days and the actual number of days for which due.
(c) After the Closing Date, the Seller will furnish, or cause to be furnished to the Buyer, its accountants and auditors, upon request of the Buyer and as promptly as practicable, such information and assistance as is reasonably necessary for the Buyer to cause to be prepared the Audited Closing Date Balance Sheet and the Closing Date Statement.
(d) Upon receipt Except as set forth in Section 2.8(a), the Buyer and the Seller shall each bear its own expenses incurred in connection with the preparation and review of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Audited Closing Date Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance SheetClosing Date Statement.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Alpha Natural Resources, Inc.)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after As soon as reasonably practicable following the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) thirty Business Days) following such physical examinationDays thereafter, such employee the Company shall prepare and deliver to the Buyer and the Shareholders balance sheets of Seller NA and a representative or employee of Buyer shall summarize such Inventory calculations on a report NIG as at November 30, 1998 (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party"Adjustment Date"), and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on unless the Closing Date under occurs at the end of the month whereupon the Closing Date will be the Adjustment Date, prepared in accordance with GAAP applied on a consistent basis as applied in the preparation of the Company Balance Sheets, with only such deviations from GAAP and/or their consistent application as are referred to in the notes to the Company Balance Sheets and in this Section 3.51.5(a) (the "Closing Balance Sheets"), together with a schedule calculating the Net Acquired Assets Calculation (as defined herein) (the "Closing Price Documents"). The Net Acquired Assets Calculation shall be equal to the depreciates or amortized book value of the Inventory Acquired Assets minus the Assumed Liabilities as such amounts are set forth on the Inventory Report Closing Balance Sheets. The parties agree that, based upon the estimated Closing Balance Sheets prepared by the Company, the Net Acquired Assets Calculation will result in an adjustment in excess of $200,000 in favor of Buyer and that the Closing Purchase Consideration will therefore be reduced by $200,000 (the "Estimated Adjustment"). The final determination of the Net Assets Calculation shall be determined made in accordance with this Section 1.5. The intent of this adjustment provision is that Buyer will receive the accounting methodsbenefit of the operation of NA and NIG from November 30, practices1998 until the Closing Date. Notwithstanding the foregoing, policiesif there shall be a material change in the assets or liabilities of the Company between the Adjustment Date and the Closing Date, procedures either Buyer or the Company may change the Adjustment Date to the Closing Date by giving written notice to the other party and estimation methods used in such event all references to prepare the Adjustment Date herein shall be deemed to refer to the Closing Date. In preparing the Closing Balance SheetSheets, (i) accruals and reserves shall not be reduced or increased from the levels reflected in the Company Balance Sheets for reasons other than cash payments and (ii) the Closing Balance Sheets shall exclude the effect of the sale of the Acquired Assets to Buyer, and the other transactions contemplated hereby. The parties shall consult with one another and cooperate in the preparation of the Closing Price Documents in accordance with this Section 1.5, including, without limitation, providing full access to such working papers and information relating to the preparation thereof as reasonably requested by the other party.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Within ten Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection NoticeClosing Price Documents to the Company, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the Company may dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses all or any portion of the Independent Auditor shall be borne equally Closing Price Documents by the parties.
giving written notice (ga "Notice of Disagreement") The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation setting forth in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by any such dispute (any such dispute being hereinafter called a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement."Disagreement"
Appears in 1 contract
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to If the Closing Date and no Cash (as defined below) is less than $550,000, the Sellers shall pay the difference to the Purchaser. If the Closing Date Liabilities (as defined below) are more than two $25,000, the Sellers shall pay the difference to the Purchaser. Any payment shall be accompanied by interest on such amount from the Closing Date to the date of payment at a floating rate equal to the publicly announced prime lending rate of Citibank, N.A. Any payment by the Sellers under this Section 1.5 shall be paid in the Purchaser Shares valued at the Conversion Number.
(2b) Business Days after As promptly as practicable following the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) 45 days following such physical examinationthe Closing Date, such employee the Purchaser shall prepare and deliver to the Representative a consolidated balance sheet setting forth the total assets and total liabilities of Seller the Company and a representative or employee its subsidiaries as of Buyer shall summarize such Inventory calculations on a report the Closing Date (the “Inventory Report”"Closing Date Balance Sheet"), in accordance with clause (f) and deliver the Inventory Report to Buyer and Sellerbelow. The Inventory Report Representative and his accountants will be entitled to observe the preparation of the Closing Date Balance Sheet and shall be executed granted such information and delivered by each access as they may reasonably request in connection therewith.
(c) Unless within 20 days after its receipt of Buyer and Seller the Closing Date Balance Sheet, the Representative shall deliver to the other partyPurchaser a statement describing its objections thereto, and the quantity of such Inventory set forth thereon, absent manifest error, amounts determined in accordance with clause (b) shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.51.5.
(d) Upon receipt If the Representative shall deliver the statement referred to in clause (c) above, the Representative and the Purchaser will use reasonable efforts to resolve any disputes, but if a final resolution is not reached within 20 days after the Representative has submitted its objections, any remaining disputes will be resolved by the Reviewing Accountants. The Reviewing Accountants shall be instructed to resolve any matters in dispute as promptly as practicable. The determination of the calculation Reviewing Accountants will be final and binding for purposes of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheetthis Section 1.5.
(e) If Seller disagrees with The Purchaser, on the Final Balance Sheet or one hand, and the calculation Sellers, on the other hand, shall each pay one-half of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs fees and expenses of the Independent Auditor Reviewing Accountants and shall be borne equally cooperate, including by furnishing any information reasonably requested, with each other and such accounting firm in the resolution of any disputes. The Sellers shall satisfy such obligation to pay one-half of the Reviewing Accountant's fees and expenses by causing the Representative to deliver to the Purchaser a number of Purchaser Shares (rounded to the nearest whole share) equal to the Seller's portion of such fees and expenses divided by the partiesConversion Number.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 1 contract
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicablePromptly, but in no any event later than ninety (90) within 60 days after the Closing Date, Buyer shall prepare and cause to be delivered deliver to Seller a certificate statement, duly certified by Buyer as accurately setting forth Buyer’s good faith determination of the Chief Financial Officer of Buyer certifying (i) its good faith calculation the Working Capital of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of 11:59 PM Eastern Time on the date immediately prior to the Closing prepared on a basis consistent Date, together with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all balance sheet of the entries contained in Schedule 3.4(aBusiness from which such determinations were derived and (ii) the aggregate amount of all Lease Breakage Costs, including reasonable supporting documentation therefor (such statement, together with such accompanying balance sheet and other documentation, the “Final Balance SheetClosing Statement”).
(ib) If During the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and sixty (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (4560) day period following its delivery of the Closing Statement, Buyer shall provide or cause to be provided to Seller reasonable access to all books and records and work papers (including those of Buyer’s accountants and auditors, subject to entry into customary confidentiality and access letters) relating to the “Review Period”) reasonable access, upon reasonable noticeClosing Statement and, to (i) the Books and Records extent in Buyer’s possession or control, any other items reasonably requested by Seller related thereto, provided, that such access shall be in a manner that does not interfere with the possession normal business operations of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) Buyer. If Seller disagrees with the Final Balance Sheet or the calculation Buyer’s determination of the Final Purchase PriceWorking Capital or any Lease Breakage Costs, as reflected on or prior to the last day Closing Statement, Seller may, within sixty (60) days after receipt of the Review PeriodClosing Statement, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which deliver a written notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Dispute Notice”) to Buyer setting forth Seller’s calculation of each disputed item (each an “Item of Dispute”). If Seller fails to deliver the Objection Buyer does not receive a Dispute Notice within sixty (60) days after delivery by Buyer of the Review PeriodClosing Statement, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price Closing Statement shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final conclusive and binding upon the parties hereto.
(f) each of Buyer and Seller. If Buyer and receives a Dispute Notice from Seller are unable to resolve any disagreement as contemplated by Section 3.5(ewithin sixty (60) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.the
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Post-Closing Adjustment. (a) No more than three (3) Business Days prior Following the end of the sixth complete month after the Closing, Newco shall cause Newco Sub to prepare and deliver to the Closing Contributing Companies a statement of assets and liabilities of each Contributed Sub, setting forth the categories of assets and liabilities of each Contributed Sub as of the date hereof (such date referred to herein as the "Adjustment Date," such statements referred to herein as the "Adjustment Date Statements") consistent with the projected pro forma balance sheets Furnished to the Contributing Companies pursuant to SECTION 5.4(b) and no more than two (2) Business Days after attached as part of the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report Disclosure Schedule (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller"Pro Forma Statements"). The Inventory Report Adjustment Date Statements shall be executed prepared using the same accounting principles, methodologies and delivered by each of Buyer and Seller to assumptions used in connection with the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value preparation of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance SheetPro Forma Statements.
(b) As soon Except as reasonably practicableprovided in paragraph (c) below, but in no event later than ninety (90) within 30 days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate following delivery of the Chief Financial Officer of Buyer certifying Adjustment Date Statements to the Contributing Companies, in the event that any Contributed Sub's Total Net Worth (as hereinafter defined) as set forth on its Adjustment Date Statement varies from its Total Net Worth as set forth on such Contributed Sub's Pro Forma Statement by an amount greater than $100,000, an adjustment shall be made as follows:
(i) if such Contributed Sub's Total Net Worth as set forth on its good faith calculation of Adjustment Date Statement exceeds its Total Net Worth as set forth on its Pro Forma Statement, Newco shall issue an unsecured note payable to the Purchase Price, setting forthContributing Company that transferred such Contributed Sub to Newco in form and substance identical to the Capital Advance Notes (as defined in SECTION 2.7(b) hereof) in an aggregate principal amount equal to the difference, in reasonable detail, a good faith calculation each case subordinate to the prior repayment in full of each of all amounts owing under the adjustments Bridge Loans (as set forth in Section 3.2 (the “Final Purchase Price”on Schedule 2.7(a) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”hereof).
(iii) If the Estimated Purchase Price if such Contributed Sub's Total Net Worth as set forth on its Adjustment Date Statement is greater less than the Final Purchase Priceits Total Net Worth as set forth on its Pro Forma Statement, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller Contributing Company that transferred such Contributed Sub to Newco shall pay to Buyer Newco an amount in cash representing the full amount of such reductionthe difference; provided, and (ii) if however, that at the Estimated Purchase Price is less than the Final Purchase Priceelection of any affected Contributing Company, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount payment of such increase difference may be offset against the first amounts owing to the Contributing Company (each a “Post-Closing Adjustment Amount”)or its current or former equity holders) under any indebtedness issued by Newco. Any Post-Closing Adjustment Amount For purposes of this SECTION 2.6, "Total Net Worth" shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price mean stockholder's equity determined in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, generally accepted accounting principles applied in a consistent manner as was applied to (i) the Books and Records determine stockholder's equity in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance SheetPro Forma Statements.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 1 contract
Post-Closing Adjustment. It is the intention of the parties that, as of the date hereof, the Combined Working Capital (aas hereinafter defined) No more be equal to or greater than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof$6,664,050. As soon as practicable (but in no event more than five (5) Business Days) following such physical examinationused herein, such employee "Combined Working Capital" means the combined current assets minus the combined current liabilities of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, Corporation and the quantity of such Inventory set forth thereonLLC, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methodsprocedures utilized in preparing the audited financial statements as of September 30, practices, policies, procedures 1997 of the Corporation and estimation methods used to prepare the Balance Sheet.
LLC (b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, "Accounting Procedures"). Buyer shall prepare and cause deliver to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of Holders within 90 days after the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) date hereof a balance sheet for of the Business Corporation and the LLC (collectively, the "Companies") as of immediately prior to the date hereof (the "Closing Balance Sheet"), which Closing Balance Sheet shall be prepared in accordance with the Accounting Procedures. From the Closing prepared on a basis consistent with Balance Sheet, Buyer shall determine the accounting methods, practices, policies, procedures and estimation methods used to prepare the Combined Working Capital. The Closing Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final Buyer's determination of the amount Combined Working Capital shall be subject to verification by Holders or their representatives within 30 days of the date of delivery of such reduction information to Holders, during which period Holders or increase in their representatives shall have access to the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, work papers and such other documents and information relating to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Closing Balance Sheet and the calculation determination of the Final Purchase PriceCombined Working Capital as they shall reasonably request. Within that 30 day period, including a reasonable level Holders shall notify Buyer of supporting documentation used by Buyer in preparation of any dispute with respect to the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Closing Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor Combined Working Capital. Any such dispute which cannot be resolved after good faith negotiations within 30 days from the date Buyer is so notified shall be referred to a nationally recognized firm of certified public accountants chosen by the certified public accountants of Buyer and the Holders, whose determination on such matters shall be final and binding on the parties and whose fees and expenses shall be shared equally by the parties. The decision rendered pursuant If the Combined Working Capital is determined to this Section 3.5(h) may be entered as a judgment in less than $6,664,050, any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action deficiency shall be fraud paid by or upon Holders to Buyer, together with interest from the Independent Auditor. Absent date hereof until the date paid at the rate of 6% per annum, within 10 days of such frauddetermination , such other party shall reimburse without regard to any limitations on the party seeking enforcement for its expenses related Sellers' liability to such enforcementBuyer under Article 10 of this Agreement.
Appears in 1 contract
Samples: Capital Stock and Membership Interest Purchase Agreement (Sybron Chemicals Inc)
Post-Closing Adjustment. (a) No more than three On or before May 31, 2003, the Purchaser will cause to be prepared a statement (3the "POST-CLOSING STATEMENT") Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at form of SCHEDULE 2.3(A), which lists (i) the Facilities based upon a physical examination thereof. As soon cash of the Company as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report the Balance Sheet Date (the “Inventory Report”"PURCHASER'S CLOSING CASH BALANCE"), (ii) the amounts of the short-term asset and deliver short-term liability accounts of the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other partyCompany listed thereon, and (iii) the quantity amount calculated by subtracting the sum of such Inventory set forth thereonshort-term liability accounts from the sum of such short-term asset accounts (the "PURCHASER'S CLOSING WORKING CAPITAL BALANCE"), absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance together with the accounting methods, practices, policies, procedures work papers and estimation methods other supporting documents used by the Purchaser to prepare the Balance SheetPost-Closing Statement.
(b) As soon The amounts set forth in the Post-Closing Statement shall be calculated in accordance with SCHEDULE 2.3(B) and to reflect the financial position of the Company on a consolidated basis as reasonably practicableof the Balance Sheet Date in accordance with GAAP consistent, but to the extent such Audited Company Financial Statements are in accordance with GAAP, with those used in the preparation of the Audited Company Financial Statements as of December 31, 2001.
(c) Within 30 days after receipt of the Post-Closing Statement, the Sellers' Representative shall notify the Purchaser whether the Sellers accept or dispute the accuracy of the Post-Closing Statement. If the Sellers' Representative has not given any such notice to the Purchaser within the time period set forth in the preceding sentence or timely accepts the Post-Closing Statement, the Post-Closing Statement shall be deemed to be final for purposes of this Section 2.6 (the "FINAL POST-CLOSING STATEMENT"). If the Sellers' Representative disputes the accuracy of any of such items, it shall in the notice of such dispute set forth in reasonable detail those items that it believes do not fairly present the financial position of the Company on a consolidated basis as of the Balance Sheet Date in accordance with GAAP consistent, to the extent such Audited Company Financial Statements are in accordance with GAAP, with those used in the preparation of the Audited Company Financial Statements as of December 31, 2001. The Purchaser and the Sellers' Representative shall then meet and in good faith use their reasonable best efforts to try to resolve their disagreements over the disputed items. If the Purchaser and the Sellers' Representative resolve their disagreements in accordance with the foregoing sentence, the Post-Closing Statement with those modifications, if any, that shall have been agreed by the Purchaser and the Sellers' Representative shall be deemed to be the Final Post-Closing Statement.
(d) In no event later than ninety (90) days after shall the Sellers' Representative be entitled to dispute any item on the Post-Closing Statement to the extent that the amount for such item is the same as the amount for the corresponding item on the Closing Date, Buyer Statement. Any such item shall prepare not be submitted to the Independent Accountant but shall be conclusively as set forth in the Post-Closing Statement to the extent it is the same as the amount for the corresponding item on the Closing Statement.
(e) If the Purchaser and cause the Sellers' Representative are unable to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying resolve any disagreement (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments other than as set forth in Section 3.2 (2.6(d)) within 30 days after the “Final Purchase Price”) notification of disagreement by the Sellers' Representative pursuant to Section 2.6(c), then Purchaser and (ii) a balance sheet for the Business as of immediately prior Sellers' Representative shall submit the matter to the Independent Accountant pursuant to Section 10.5(b) hereof. With respect to any dispute so submitted, the parties shall instruct the Independent Accountant to consider only those items and amounts set forth in the Post-Closing prepared on a basis consistent with Statement as to which the accounting methods, practices, policies, procedures Purchaser and estimation methods used to prepare the Balance Sheet and including all Sellers' Representative have not resolved their disagreement. The resolution of the entries contained disputed items by the Independent Accountant shall, along with any items resolved between the Purchaser and the Sellers' Representative and the undisputed items in Schedule 3.4(a) (the “Post-Closing Statement, constitute the Final Balance Sheet”)Post-Closing Statement.
(if) If the Estimated Purchase Price is greater than Upon determination of the Final Purchase PricePost-Closing Statement, the Purchase Price shall be adjusted downward dollarby an amount (the "FINAL CLOSING ADJUSTMENT") equal to
(i) the Final Closing Cash Balance, plus
(ii) the Final Closing Working Capital Balance, minus
(iii) the Target Working Capital, and minus
(iv) the Closing Adjustment, giving effect for purposes of such calculation to whether each number is negative or positive. For purpose of this Section 2.6(f), the "FINAL CLOSING CASH BALANCE" shall be the Closing Cash Balance set forth in the Final Post-forClosing Statement, and the "FINAL CLOSING WORKING CAPITAL BALANCE" shall be the Closing Working Capital Balance set forth in the Final Post-dollar Closing Statement. For the avoidance of doubt and Seller by way of example of the foregoing, in the event that the Final Closing Cash Balance is U.S.$4,000,000, the Final Closing Working Capital Balance is U.S.$5,000,000 and the Base Price was increased by $4,000,000 at the Closing as the Closing Adjustment, then the Purchase Price shall be increased post-Closing by U.S.$2,000,000, which is the amount of the excess working capital that was not paid to the Sellers' at the Closing.
(g) If the Final Closing Adjustment is negative, the Sellers shall pay to Buyer Purchaser the amount of such reduction, and (ii) if the Estimated Purchase Price Final Closing Adjustment is less than the Final Purchase Pricepositive, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer Purchaser shall pay to Seller the Sellers the amount of such increase (increase, in each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid case by wire transfer of immediately available U.S. Dollar funds to an account or accounts designated by the party Person or Persons receiving payment within three (3) Business Days business days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during plus interest compounded daily on the succeeding forty-five (45) day period amount paid for the actual number of days elapsed from the Closing to the date of such payment at a rate (the “Review Period”"INTEREST RATE") reasonable accessequal to the annualized weekly average rate of a 90 day Treasury bill, upon reasonable notice, to (i) the Books and Records as published in the possession of and used by Buyer in Wall Street Journal for the preparation of week ended priox xx the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Noticedate hereof. In the event Buyer and Seller are unable that either party fails to agree on an Independent Auditor pay such amount within thirty (30) 30 days after of the expiration final determination of such 60-day periodamount, at the request of either paying party the Independent Auditor shall be appointed by required to pay the American Arbitration Associationother party interest from the date of final determination at an interest rate of 2% over the Interest Rate, plus any reasonable and documented attorney's fees incurred in connection with the collection of such amount. The fees, costs and expenses of Any payment to the Independent Auditor Sellers shall be borne equally by divided amongst the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified Sellers in the Objection Notice same proportion as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any formPurchase Price.
(h) The parties With respect to any decrease in the Purchase Price payable to it under this Section 2.6, subject to Section 10.3, the Purchaser shall jointly instruct be paid any Final Closing Adjustment directly by the Independent Auditor Sellers regardless of the balance of the Holdback Amount or the Escrow Amount. Notwithstanding the foregoing, the Purchaser shall be entitled (but not required) to make a determination as soon as practicable within thirty (30) days (claim under the Escrow Agreement or set-off any amount against the Holdback Amount for any such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect amount payable to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementit.
Appears in 1 contract
Samples: Stock Purchase Agreement (Fresh Del Monte Produce Inc)
Post-Closing Adjustment. The Purchase Price shall be subject to adjustment after the Closing Date as follows:
(a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event Not later than ninety (90) 50 calendar days after the Closing Date, Emerson shall deliver to the Buyer a Statement of Closing Working Capitax, xxxxuding a schedule of all of the line items thereof, which shall be prepared in accordance with GAAP applied consistently with past practice (to the extent such past practices are consistent with GAAP). The cost of the preparation of the Statement of Closing Working Capital shall be paid by Emerson. The Buyer shall prepare afford Emerson and cause Emerson's Auditor reasonable xxxxxx to the books and records xx xxxh Company, each of the Company Subsidiaries and each Asset Buyer during normal business hours for purposes of the preparation of the Statement of Closing Working Capital.
(b) The Statement of Closing Working Capital delivered pursuant to paragraph (a) above shall be accompanied by relevant backup materials, schedules and a statement setting forth the amount, if any, by which the Closing Working Capital is greater than, or less than, the Target Amount.
(c) In the event that the Buyer disputes the Statement of Closing Working Capital or the calculation of the Closing Working Capital, the Buyer shall deliver a Dispute Notice to Emerson stating the amount, nature and basis of such dispute, within 30 xxxxxxxr days after delivery of the Statement of Closing Working Capital. In the event of such a dispute, the Buyer and Emerson shall first use their diligent good faith efforts to resolve sucx xxxxxte between themselves. If the parties are unable to resolve the dispute within 30 calendar days after delivery of the Dispute Notice, then any remaining items in dispute shall be submitted to an Arbitrator selected in writing by Emerson and the Buyer or, if Emerson and the Buyer fail or refuse to selxxx x xirm within 10 calendar xxxx xfter written request therefor by Emerson or the Buyer, such Arbitrator shall be selected in accordance wixx xxx rules of the Boston, Massachusetts office of the American Arbitration Association. All determinations pursuant to this paragraph (c) shall be in writing and shall be delivered to Seller a certificate the Parties. The determination of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business Arbitrator as of immediately prior to the Closing prepared resolution of any dispute shall be binding and conclusive upon all Parties. A judgment on a basis consistent with the accounting methods, practices, policies, procedures determination made by the Arbitrator pursuant to this Section 1.6 may be entered in and estimation methods used enforced by any court having jurisdiction thereover. Nothing herein shall be construed to prepare authorize or permit the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).Arbitrator to:
(i) If determine any questions or matters whatsoever under or in connection with this Agreement except for the Estimated resolution of differences between the Parties regarding the determination of the Closing Working Capital;
(ii) resolve any such differences by making any adjustment to the Statement of Closing Working Capital that is outside of the range defined by amounts as finally proposed by the Parties.
(d) The fees and expenses of the Arbitrator in connection with the resolution of disputes pursuant to paragraph (c) above shall be shared equally by Emerson and the Buyer; provided that if the Arbitrator determines that oxx Xxxxy has adopted a position or positions with respect to the Statement of Closing Working Capital or the calculation of the Closing Working Capital that is frivolous or clearly without merit, the Arbitrator may, in its discretion, assign a greater portion of any such fees and expenses to such Party.
(e) Failure of Buyer to deliver a Dispute Notice within 30 days after receiving the Statement of Closing Working Capital, or notification by the Buyer to Emerson that no Dispute Notice will be given, shall constitute acceptancx xx xxe Closing Working Capital as set forth on the Closing Working Capital Statement and there shall be no additional payment required or adjustment to the Purchase Price is greater than pursuant to this Section. Buyer shall be deemed to accept all portions of the Final Purchase PriceStatement of Closing Working Capital that are not set forth in such Dispute Notice.
(f) Immediately upon the resolution of all disputes, if any, pursuant to this Section 1.6, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer as follows:
(i) If the amount of such reduction, and (ii) if the Estimated Purchase Price Closing Working Capital is less than the Final Purchase PriceTarget Amount, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount then within five (5) business days of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the Closing Working Capital, Emerson shall pay to Buyer, in cash, the amount of such deficiency, xxx xxch payment shall be considered to be a reduction or increase in the Purchase Price in accordance with this Section 3.5allocable to the Merger Consideration.
(dii) Upon receipt of If the calculation of Closing Working Capital is equal to or greater than the Final Purchase PriceTarget Amount, Seller there shall be permitted during no additional payment required or adjustment to the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior pursuant to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the partiesthis Section.
(g) The parties shall instruct If there is a reduction in Closing Working Capital caused by an event or circumstance which would give rise to an indemnification claim under Article VII of this Agreement, and as a result of such reduction in Closing Working Capital, the Independent Auditor Purchase Price is reduced pursuant to consider only those items and amounts which are identified in Section 1.6(f)(i), the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor its Subsidiaries shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor be entitled to make a determination as soon as practicable within thirty (30) days (or indemnification for such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect claim except to the disputed items submitted to extent it exceeds the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 amount of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination reduction of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementPurchase Price.
Appears in 1 contract
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) 60 calendar days after following the Cash Closing Date, Buyer Parent and Purchaser shall jointly prepare and cause to be delivered to Seller a certificate balance sheet which includes a calculation as of the Chief Financial Officer Cash Closing Date of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 Closing Net Debt (the “Final Purchase Price”"Closing Net Debt Statement") and (ii) a balance sheet for Closing Net Worth (the Business as of immediately prior to "Closing Net Worth Statement", together with the Closing Net Debt Statement, the "Closing Statements"), each reviewed by Arthxx Xxxexxxx xxx prepared in accordance with U.S. GAAP on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all preparation of the entries contained September 30, 1997 financial statements set forth in Schedules 3.9(a)(i) and 3.9(a)(ii). For purposes of applying the provisions of this Section 2.4, the comparison of the amounts set forth herein and the amounts for such items in the Closing Statements will be made on a constant currency basis (i.e., calculated using the foreign exchange rates used by Parent in preparing its September 30, 1997 financial statements, as set forth in Schedule 3.4(a1.9(c)) (and will not take into account adjustments made in applying the “Final Balance Sheet”)purchase method of accounting for business combinations to the transactions contemplated by this Agreement.
(b) After receipt of the Closing Statements, Parent and Purchaser shall have 30 days to review the Closing Statements, together with the workpapers used in the preparation thereof. Parent, Purchaser and their respective accountants shall have full access to (i) If all relevant books, records and employees of Parent, Purchaser and the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, International Subsidiaries and (ii) if Parent's and Purchaser's respective accountants and their relevant supporting workpapers. Unless either Parent or Purchaser delivers written notice to the Estimated Purchase Price is less than other on or prior to the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days 30th day after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet Closing Statements, stating that Parent or Purchaser, as the case may be, has objections to the Closing Statements and describing any such objections with particularity, Parent and Purchaser shall be deemed to have accepted and agreed to the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase PriceClosing Statements. If, on or prior to the last 30th day after the preparation of the Review PeriodClosing Statements, Seller either Parent or Purchaser shall notify Buyer the other of its objections to the Closing Statements, Parent and Purchaser shall, within 10 days (or such longer period as the parties may agree) following such notice (the "Resolution Period"), attempt in writing of such disagreement with good faith to resolve their differences, and any resolution by them as to any disputed amounts shall be final, binding and conclusive.
(c) Any amounts remaining in dispute at the Final Balance Sheet or the calculation conclusion of the Final Purchase PriceResolution Period ("Unresolved Changes") shall be submitted to an internationally recognized firm of independent auditors independent of Parent, Purchaser and their respective Affiliates (such firm being referred to as the "Auditing Firm"), within 10 days after the expiration of the Resolution Period. In the event of a dispute among the parties as to which notice firm of independent auditors should be the Auditing Firm, the dispute shall be resolved by an "expert" nominated pursuant to Article 1843-4 of the Civil Code. Each party agrees to execute, if requested by the Auditing Firm, an engagement letter containing reasonable terms. All fees and expenses relating to the work, if any, to be performed by Arthxx Xxxexxxx xx the Auditing Firm in accordance with this Section 2.4 shall be borne equally by Parent and Purchaser. The Auditing Firm shall act as an expert (not as an arbitrator) to determine, based on the provisions of this Section 2.4, only the Unresolved Changes. The Auditing Firm's determination of (i) the amount of Closing Net Debt shall be no greater than the amount of Closing Net Debt claimed by Purchaser and no less than the amount of Net Debt claimed by Parent and (ii) the amount of Closing Net Worth shall be no less than the amount of Closing Net Worth claimed by Purchaser and no greater than the amount of Closing Net Worth claimed by Parent. The Auditing Firm's determination of the Unresolved Changes shall be made within 30 days of the submission of the Unresolved Changes thereto, shall be set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price a written statement delivered to which such disagreement relates Parent and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller Purchaser and shall be final and final, binding and used conclusive on the parties for all purposes.
(d) In the event that Parent and Purchaser agree to the Closing Statements, then within five Business Days following such agreement Parent shall pay to Purchaser the amount, if any, equal to the sum of (i) the amount by which Closing Net Debt exceeds $215,500,000 ("Target Net Debt") and (ii) the amount by which $262,000,000 ("Target Net Worth") exceeds the amount of Closing Net Worth (the "Post-Closing Adjustment"). In the event that there are Unresolved Changes at the end of the Resolution Period, (1) if Parent and Purchaser agree that a Post-Closing Adjustment is owed to Purchaser regardless of the ultimate resolution of any Unresolved Changes, then the minimum amount which Parent and Purchaser agree is owed to Purchaser shall be paid within five Business Days after the end of the Resolution Period and any additional amounts owing to Purchaser with respect to the Unresolved Changes shall be paid within five Business Days after resolution thereof by the Auditing Firm and (2) in computing all other cases, any and all payments shall be made within five Business Days after resolution of the Unresolved Changes by the Auditing Firm.
(e) It is the intent of the parties that the provisions of this Section 2.4 operate to permit Purchaser to acquire the benefits, and be subject to the liabilities, of ownership of the Waste Business as of and from the Cash Closing Date.
(f) Any payments made in respect of the Post-Closing Adjustment Amountor Unresolved Changes shall be deemed to be adjustments to the Cash Consideration for all Tax purposes. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve The portion of any such disagreement, and any resolution agreed payment that is reasonably attributable to an adjustment pertaining to a particular International Subsidiary whose Shares are listed in writing by Buyer and Seller Part One of Schedule 1.1(c) shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable deemed to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery be a reduction of the Objection Notice, then Buyer and Seller shall submit portion of the matter for resolution Consideration allocated to such International Subsidiary in Schedule 5.4. The portion EXECUTION COPY of any such payment that is not reasonably attributable to an adjustment pertaining to a mutually agreeable independent international accounting firm (particular International Subsidiary whose Shares are listed in Part One of Schedule 1.1(c) shall be deemed to reduce the “Independent Auditor”purchase price of each of the International Subsidiaries whose Shares are listed in Part One of Schedule 1.1(c), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree with such reduction calculated on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the partiesa pro rata basis.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 1 contract
Samples: Stock Purchase Agreement (Browning Ferris Industries Inc)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than three (3) Business Days following the date that is ninety (90) days after the Closing Date, Seller shall prepare and cause to be delivered to Buyer a statement (the “Closing Statement”) setting forth, in reasonable detail, its calculations, as of the Effective Time, of (i) the amount (if any) by which Net Working Capital exceeds Target Working Capital or the amount (if any) by which Target Working Capital exceeds Net Working Capital, (ii) the amount of Closing Indebtedness, and (iii) the amount of the Transaction Expenses.
(b) The Closing Statement shall be prepared, and all of the individual elements thereof, as applicable, used to calculate the Final Purchase Price shall be determined, in accordance with the Net Working Capital Methodology.
(c) As soon as reasonably practicable, and in no event more than three (3) Business Days following the date that is ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of statement (the Chief Financial Officer of Buyer certifying (i“Uncollected Receivables Statement”) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation the amounts of each Closing Aged Receivables that have not been collected by Buyer and the Company Group within ninety (90) days after the Closing Date. Buyer shall cause the Company Group to use commercially reasonable efforts to collect such Closing Aged Receivables within such ninety (90) day period; provided, however, that neither Buyer nor any member of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as Company Group shall be required to commence any Legal Proceeding with respect to any Closing Aged Receivables. For purposes of immediately prior matching collected amounts to the appropriate invoices within the Closing prepared on Aged Receivables, the Parties agree that when a basis consistent relevant customer indicates that it is paying a specific invoice, then the Parties shall accept that indication in determining which outstanding invoices have been collected. Otherwise, Buyer shall cause the Company Group to use commercially reasonable efforts, including through reasonably inquiry with the accounting methodsrelevant customer, practicesto identify the appropriate invoice to which a payment is intended to be applied, policiesprovided that, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Priceif, following such efforts, the Purchase Price Company Group is unable to identify the appropriate invoice, Buyer and the Company Group shall be adjusted downward dollarallocate all collected amounts from relevant customers to satisfy the oldest undisputed invoices within the Closing Aged Receivables first before satisfying newer invoiced amounts (i.e., “first-forin, first-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amountout”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.3 Exhibit 10.96
(d) Upon Following receipt of the calculation Closing Statement and the Uncollected Receivables Statement, each of the Final Purchase PriceBuyer and Seller, Seller as applicable, and its accountants (subject to reasonable confidentiality and privilege restrictions) shall be permitted during the succeeding forty-five thirty (45) day 30)-day period (the “Review Period”) reasonable accessaccess during regular business hours to Seller’s or Buyer’s (as applicable) relevant employees and outside accountants, upon reasonable noticeand any documents, to (i) the Books and Records in the possession of and schedules or workpapers used by Seller or Buyer in the preparation of the Final Balance Sheet and Closing Statement or the calculation of the Final Purchase PriceUncollected Receivables Statement, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheetrespectively.
(e) If Seller Buyer disagrees with the Final Balance Sheet or the calculation of the Final Purchase PriceNet Working Capital, Closing Indebtedness or Transaction Expenses, on or prior to the last day of the Review Period, Seller Buyer shall notify Buyer Seller in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase PriceNet Working Capital, Closing Indebtedness or Transaction Expenses, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price Net Working Capital, Closing Indebtedness or Transaction Expenses to which such disagreement relates and the specific (and reasonable) basis for each such disagreement (the “Buyer Objection Notice”). If Seller Buyer fails to deliver the Buyer Objection Notice within the Review Period, the Final Balance Sheet and BuyerSeller’s calculation of the Final Purchase Price Net Working Capital, Closing Indebtedness and Transaction Expenses shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment parties for all purposes hereunder and used in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon computing the Independent Auditor. Absent such fraud, such other party shall reimburse Final Purchase Price and the party seeking enforcement for its expenses related to such enforcement.Post-
Appears in 1 contract
Samples: Purchase Agreement
Post-Closing Adjustment. The Aggregate Consideration shall be subject to adjustment after the Closing Date as specified in this Section 1.7.
(a) No more than three Within ninety (390) Business Days days following the Effective Time, ADAC shall, or shall cause PriceWaterhouseCoopers LLP or any successor accountant appointed by ADAC ("ADAC'S ACCOUNTANT") to, audit the Company's books to determine the accuracy of the 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 ADAC, be calculated as provided in the second sentence of Section 5.12. The Sellers shall cooperate and shall use their reasonable efforts to cause the officers and employees of the Company to cooperate with ADAC or ADAC's Accountant, as applicable, after the Closing Date in furnishing information, documents, evidence and no more than other assistance to ADAC or ADAC's Accountant, as applicable, to facilitate the completion of the Post-Closing Audit within the aforementioned time period. Without limiting the generality of the foregoing, within two (2) Business Days weeks after the Closing Datethe Sellers, an employee through the Sellers' Representative, as defined in Section 1.13, shall provide ADAC or ADAC's Accountant, as applicable, with the information and/or documents reasonably requested by ADAC or ADAC's Accountant, as the case may be, in order to facilitate the completion of Seller the Post-Closing Audit by ADAC or ADAC's Accountant, as the case may be, within the aforementioned time period. In the event that ADAC or ADAC's Accountant determines that the actual Company net worth, calculated in accordance with GAAP consistently applied, and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included as modified in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report accordance with Schedule II (the “Inventory Report”"ACTUAL COMPANY NET WORTH"), as of the Closing Date was less than the Certified Closing Net Worth, ADAC shall deliver a written notice (the "FINANCIAL ADJUSTMENT NOTICE") and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other partySellers' Representative setting forth (i) the determination made by ADAC or ADAC's Accountant, as applicable, of the Actual Company Net Worth and (ii) the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating maximum amount that the Aggregate Consideration could have been reduced pursuant to Section 1.6(b) had the Actual Company Net Working Capital Worth been reflected on the Closing Date under this Section 3.5Financial Certificate instead of the Certified Closing Net Worth (the "AGGREGATE CONSIDERATION ADJUSTMENT"). The value Aggregate Consideration Adjustment shall take account of the Inventory set forth on reduction, if any, to the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used Aggregate Consideration already taken pursuant to prepare the Balance Sheetclause (i) of Section 1.6(b).
(b) As soon as reasonably practicable, but in no event later than ninety The Sellers' Representative shall have thirty (9030) days after from the receipt of the Financial Adjustment Notice to notify ADAC if the Shareholders dispute such Financial Adjustment Notice. If ADAC has not received notice of such a dispute within such 30-day period, ADAC shall be entitled to receive from the shareholders of the Company (which may, without limitation, at ADAC's sole discretion, be offset against any Contingent Merger Amount or Contingent Payment Amount (as defined in Section 9.10) or recovered from the Escrow Amount) the Aggregate Consideration Adjustment. If, however, the Sellers' Representative has delivered notice of such a dispute to ADAC within such 30-day period, then ADAC and the Sellers' Representative shall mutually select in good faith an independent accounting firm that has not represented any of the parties hereto within the preceding two (2) years to review the Company's books, the Closing DateFinancial Certificate, Buyer shall prepare the Financial Adjustment Notice and cause related information to be delivered to Seller a certificate determine the amount, if any, of the Chief Financial Officer of Buyer certifying Aggregate Consideration Adjustment. The independent accounting firm shall be directed to consider only those books, records, agreements, contracts, commitments or other documents (or summaries thereof) that were either (i) its good faith calculation of delivered or made available to ADAC or ADAC's Accountant in connection with the Purchase Pricetransactions contemplated hereby, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and or (ii) a balance sheet for the Business reviewed by ADAC or ADAC's Accountant, as of immediately prior to the Closing prepared on a basis consistent with the accounting methodsapplicable, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession course of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment AmountAudit. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller The independent accounting firm shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery make its determination of the Objection NoticeAggregate Consideration Adjustment, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”)if any, who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed its selection. The determination by the American Arbitration Association. The fees, costs and expenses independent accounting firm of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor Aggregate Consideration Adjustment shall be final and binding on the partiesparties hereto, and upon such determination, ADAC shall be entitled to receive from the shareholders of the Company (which may, without limitation, at ADAC's sole discretion, be offset against any Contingent Merger Amount or Contingent Payment Amount or recovered from the Escrow Amount) the Aggregate Consideration Adjustment. The decision rendered pursuant to this Section 3.5(h) may costs of the independent accounting firm shall be entered borne by the party (either ADAC or the Shareholders as a judgment group) whose determination of the Company's net worth, calculated in accordance with GAAP consistently applied, and as modified in accordance with Schedule II, as of the Closing was further from the determination of the independent accounting firm, or equally by ADAC and the Shareholders 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; PROVIDED, HOWEVER, that if ADAC's determination of the Company's net worth, calculated in accordance with GAAP consistently applied, and as modified in accordance with Schedule II, as of the Closing was further from the determination of the independent accountant than the Certified Closing Net Worth or equidistant with the Certified Closing Net Worth from the determination of the independent accountant (and not closer), in each case because of any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement book, record, agreement, contract, commitment or other legal action document (or summary thereof) that was either not (i) delivered or made available to ADAC or ADAC's Accountant in connection with the transactions contemplated hereby or (ii) reviewed by ADAC or ADAC's Accountant, as applicable, during the course of the Post-Closing Audit, then the Shareholders shall be fraud by or upon bear the Independent Auditor. Absent such fraud, such other party shall reimburse full cost of the party seeking enforcement for its expenses related to such enforcementindependent accounting firm.
Appears in 1 contract
Samples: Merger Agreement (Adac Laboratories)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) Within 120 days after the Closing Date, Buyer shall the Purchaser will use its reasonable best efforts to prepare and cause deliver to be delivered to the Seller a certificate Representative an unaudited consolidated balance sheet of the Chief Financial Officer of Buyer certifying (i) its good faith calculation Acquired Companies as of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 Closing Date (the “Final Purchase Price”"Closing Balance Sheet") and a written statement (ii) a balance sheet for the Business as of immediately prior to together with the Closing prepared on a basis consistent with Balance Sheet, the accounting methods, practices, policies, procedures and estimation methods used to prepare "Closing Statement") setting forth the Balance Sheet and including all of the entries contained in Schedule 3.4(a) Purchaser's calculations (the “Final Balance Sheet”).
(i"Purchaser's Proposed Calculations") If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in Closing Working Capital, the possession of and used by Buyer in Closing Net Debt, the preparation of the Final Balance Sheet Closing Transaction Expenses and the calculation of resulting purchase price adjustment based on the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase PriceClosing Balance Sheet, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price based on the Closing Balance Sheet, the Closing Working Capital, the Closing Net Debt and the Final Closing Transaction Expenses calculated by reference thereto. The Closing Balance SheetSheet and the Purchaser's Proposed Calculations will be prepared in accordance with GAAP and the procedures, policies and methods set forth on, and used in preparing, the Example Statement.
(eb) If After receipt of the Closing Statement and the Purchaser's Proposed Calculations, the Seller disagrees with Representative will have 30 days (the Final Balance Sheet or "Review Period") to review the Closing Statement and the Purchaser's Proposed Calculations. During the Review Period, the Seller Representative and Sellers' accountants will have reasonable access to the books and records of the Acquired Companies, the personnel of, and work papers prepared by, the Purchaser and/or the Purchaser's accountants to the extent necessary for their evaluation of the Closing Statement and to such historical financial information relating to the Closing Statement and the Purchaser's Proposed Calculations as the Seller Representative may reasonably request for the purpose of reviewing the Closing Statement and the calculation of the Final Purchase PricePrice and, on if necessary, to prepare an Objection Statement (as defined below).
(c) On or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or Sellers may object to the calculation of Closing Statement and the Final Purchase Price, which notice shall set Purchaser's Proposed Calculations by delivering to the Purchaser a written statement setting forth any such disagreement a description in reasonable detail, the specific item detail of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement its objections thereto (the “an "Objection Notice”Statement"). If no Objection Statement is delivered to the Purchaser by the Seller fails to deliver Representative by the Objection Notice within last day of the Review Period, the Final Balance Sheet Closing Statement and Buyer’s calculation of the Final Purchase Price shall Purchaser's Proposed Calculations will be deemed to have been accepted by the Seller Representative, and shall thus the Sellers, and will be final and binding upon the parties for all purposes under this Agreement.
(d) If the Sellers timely deliver an Objection Statement to the Purchaser, then the Purchaser and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall Sellers will negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute objections set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor Statement within thirty (30) 30 days after the delivery of the Objection Statement (the "Resolution Period"), and, if the objections set forth in the Objection Statement are so resolved within the Resolution Period, the Closing Statement and the Purchaser's Proposed Calculations with such changes as may have been previously agreed in writing by the Purchaser and the Sellers, will be final and binding. If the Sellers and the Purchaser fail to reach an agreement with respect to all of the matters set forth in the Objection Statement before expiration of the Resolution Period, then any amount remaining in dispute will be submitted for resolution to PwC or, if PwC is unwilling or unable to serve, then Xxxxx Xxxxxxxx, or if neither PwC or Xxxxx Xxxxxxxx is willing or able to serve, then the Purchaser and the Sellers will engage another mutually agreeable independent accounting firm of recognized national standing, which firm is not the regular auditing firm of the Purchaser, any Seller or any Acquired Company (such 60-day periodselected independent accounting firm, at the request "Independent Accounting Firm"). The Independent Accounting Firm will be required to render a determination of either party the applicable dispute within 30 days (or such other time as the Seller Representative and the Purchaser mutually agree in writing) after referral of the matter to the Independent Auditor shall Accounting Firm, which determination must be appointed by in writing in the American Arbitration AssociationEnglish language and must set forth in reasonable detail the basis therefor. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider Accounting Firm may address only those items and amounts which are identified in the Objection Notice Statement as being items which Buyer the Seller Representative and Seller the Purchaser are unable to resolve. Further, The parties hereto agree that all adjustments will be made without regard to materiality. The resolution of the dispute by the Independent Auditor’s determination shall Accounting Firm will be based solely final and binding on and non-appealable by the parties.
(e) The fees and expenses of the Independent Accounting Firm will be allocated between the Purchaser, on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review)one hand, and the Sellers, on the other hand, based upon the percentage that the amount actually disputed but not awarded to the Sellers or the Purchaser, respectively, bears to the aggregate amount actually disputed by the Seller Representative and the Purchaser. The fee portion payable by the Sellers will be split pro rata based on their Pro Rata Percentages set forth in Schedule I.
(f) For purposes of complying with this Section 1.3, the Purchaser and each Seller will furnish to each other and to the Independent Auditor shall Accounting Firm such work papers and other documents and information relating to the disputed items as the Independent Accounting Firm may reasonably request and are available to such Person (or its accountants) and will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items and to discuss such items with the Independent Accounting Firm.
(g) Upon the final determination, in accordance with this Section 1.3, of the Closing Statement and the final calculation of the amounts of the Closing Working Capital, the Closing Net Debt and the Closing Transaction Expenses calculated by reference thereto, the Final Purchase Price Adjustment will be calculated using such finally determined amounts. If the Final Purchase Price Adjustment is not conduct additional discovery equal to the Estimated Purchase Price Adjustment, then a payment will be made by the Purchaser to the Sellers, or by the Sellers to Purchaser, as follows:
(i) if the Purchase Price, as finally determined in any formaccordance with this Section 1.3, is greater than the Closing Consideration, then the Purchaser will pay the amount of such difference to the Sellers (pro rata based on the Sellers' Pro Rata Percentages); or
(ii) if the Closing Consideration is greater than the Purchase Price, as finally determined in accordance with this Section 1.3, then the Sellers will pay the amount of such difference to the Purchaser (pro rata based on the Sellers' Pro Rata Percentages).
(h) The parties shall jointly instruct Any payment to the Independent Auditor Purchaser pursuant to make a determination Section 1.3(g)(ii) will be made by the Escrow Agent solely from the Adjustment Escrow Amount to the Purchaser's account specified on Schedule II pursuant to the terms of the Escrow Agreement. Notwithstanding the preceding sentence or anything in this Agreement to the contrary, any amounts payable by the Sellers to the Purchaser pursuant to Section 1.3(g)(ii) will be satisfied solely from, and will be exclusively limited to, the Adjustment Escrow Amount. Any payment to the Sellers pursuant to Section 1.3(g) will be paid to the Sellers by the Purchaser by wire transfer of immediately available funds to the accounts specified on Schedule I. Any Adjustment Escrow Amount outstanding as soon of the expiration of the Adjustment Payment Period (as practicable within thirty (30defined below) days (or such other time as will be disbursed to the parties hereto shall agree in writingSellers pursuant to the Escrow Agreement. Any payment made pursuant to this Section 1.3(h) after its engagement will be (i) whether or not made within three Business Days of the Final Balance Sheet was prepared, and date on which the Final Purchase Price was calculated, in accordance with Adjustment is determined (the terms of this Agreement or, alternatively, "Adjustment Payment Period") and (ii) only with respect treated as an adjustment to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide final purchase price by the parties with a written explanation in reasonable detail of each such for Tax purposes, unless otherwise required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. by Law.
(i) The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures purpose of this Section 3.5 are exclusive and1.3 is to determine the final Purchase Price to be paid by the Purchaser under this Agreement. Accordingly, except as set forth below, the determination of the Independent Auditor shall any adjustment pursuant hereto will neither be final and binding on the parties. The decision rendered deemed to be an indemnification pursuant to this Section 3.5(h) may be entered as a judgment in ARTICLE 8, nor preclude any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action from exercising any indemnification rights pursuant to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementARTICLE 8.
Appears in 1 contract
Samples: Share Purchase Agreement (EnerSys)
Post-Closing Adjustment. The Closing Payment shall be subject to adjustment after the Closing Date as follows:
(a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days Within 30 days after the Closing Date, an employee of the Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) prepare and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, Buyer (i) the Closing Statement and (ii) an unaudited balance sheet of the quantity Business as of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5(the "Closing Balance Sheet"). The value Each of the Inventory set forth on Closing Statement and the Inventory Report Closing Balance Sheet shall be determined prepared in accordance with GAAP and on a consistent basis with the accounting methodsprinciples, practices, policiesprocedures, procedures policies and estimation methods used to prepare that were employed in the preparation of the Most Recent Balance Sheet.
(b) As soon The Buyer shall deliver to the Seller, within 30 days after delivery by the Seller to the Buyer of the Closing Statement, either a notice indicating that the Buyer accepts the Closing Statement or a statement describing the Buyer’s objections to the Closing Statement, which statement of objections shall describe in detail the specific nature and amount of each objection and shall state in detail all bases upon which the Buyer believes the Closing Statement is not in conformity with the requirements set forth in Section 1.4(a). During such 30-day period Seller shall, and shall cause its accountants, to respond reasonably to any inquiries from Buyer related to the Closing Working Capital Amount and the Closing Statement. If the Buyer delivers to the Seller a notice accepting the Closing Statement, or the Buyer does not deliver a written objection to the Closing Statement within such 30-day period, then, effective as reasonably practicableof either the date of delivery of such notice of acceptance or as of the close of business on such 30th day, the Closing Statement shall be deemed to be accepted by the Buyer.
(c) If the Buyer timely objects to the Closing Statement, such objections shall be resolved as follows:
(i) The Buyer and the Seller shall first use reasonable efforts to resolve such objections.
(ii) If the Buyer and the Seller are able to resolve such objections within 30 days after delivery to the Seller of such statement of objections, the Buyer and the Seller shall, within 30 days after delivery of such statement of objections, jointly prepare and sign a statement setting forth the Closing Working Capital Amount, which amount shall reflect the resolution of objections agreed to by the Buyer and the Seller.
(iii) If the Buyer and the Seller do not reach a resolution of all objections set forth on the Buyer’s statement of objections within 30 days after delivery of such statement of objections, the Buyer and the Seller shall, within 30 days after the expiration of such 30-day period, (A) jointly prepare and sign a statement setting forth (1) those objections (if any) that the Buyer and the Seller have resolved and the resolution of such objections and (2) the Unresolved Objections and (B) jointly engage the Neutral Accountant to resolve the Unresolved Objections.
(iv) The Buyer and the Seller shall jointly submit to the Neutral Accountant, within five (5) Business Days after the date of the engagement of the Neutral Accountant (as evidenced by the date of the engagement agreement), a copy of the Closing Statement, a copy of the statement of objections delivered by the Buyer to the Seller, and the joint statement referred to in Section 1.4(c)(iii)(A) above. Each of the Buyer and the Seller shall submit to the Neutral Accountant (with a copy delivered to the other Party on the same day), within 30 days after the date of the engagement of the Neutral Accountant, a memorandum (which may include supporting exhibits) setting forth their respective positions on the Unresolved Objections. Each of the Buyer and the Seller may (but shall not be required to) submit to the Neutral Accountant (with a copy delivered to the other Party on the same day), within 45 days after the date of the engagement of the Neutral Accountant, a memorandum responding to the initial memorandum submitted to the Neutral Accountant by the other Party. Unless requested by the Neutral Accountant in no event later writing, neither the Buyer nor the Seller may present any additional information or arguments to the Neutral Accountant, either orally or in writing.
(v) The Buyer and the Seller shall instruct the Neutral Accountant that (A) the scope of its review and authority shall be limited to resolving the Unresolved Objections, (B) in resolving the Unresolved Objections, it shall determine an appropriate value for each Closing Statement item that is the subject of an Unresolved Objection, which value shall be equal to one of, or between, the values proposed by the Seller in the Closing Statement and by the Buyer in its statement of objections, and (C) issue a ruling which sets forth the resolution of each Unresolved Objection and includes a statement setting forth the Closing Working Capital Amount, reflecting the Neutral Accountant’s resolution of the Unresolved Objections.
(vi) The resolution by the Neutral Accountant of the Unresolved Objections shall be conclusive and binding upon the Buyer and the Seller. The Buyer and the Seller agree that the procedure set forth in this Section 1.4(c) for resolving disputes with respect to the Closing Statement shall be the sole and exclusive method for resolving any such disputes; provided that this provision shall not prohibit any Party from instituting litigation to enforce the ruling of the Neutral Accountant.
(vii) The Buyer and the Seller shall share equally the fees and expenses of the Neutral Accountant for its services under this Section 1.4(c).
(d) If the Closing Working Capital Amount as shown on the Final Closing Statement is less than ninety the Target Working Capital Amount, the Closing Payment shall be reduced by such deficiency and the Seller shall pay to the Buyer, by wire transfer or other delivery of immediately available funds, within three Business Days after the date on which the Final Closing Statement is finally determined pursuant to this Section 1.4, an amount equal to such deficiency. If the Closing Working Capital Amount as shown on the Final Closing Statement exceeds the Target Working Capital Amount, the Closing Payment shall be increased by such excess amount and the Buyer shall pay to the Seller an amount equal to such excess (90) the “Adjustment Payment”). The Estimated Adjustment Payment shall be paid into an escrow account at the Closing, and disbursement of the Adjustment Payment from such account shall be deferred until the Buyer has collected, from the receivables included in the Closing Working Capital Amount (the “Closing Receivables”), an amount equal to the amount of the Closing Receivables less the amount of the Adjustment Payment, at which time payments shall be promptly made to the Seller as and when such receivables are collected by the Buyer, and such payments shall not be subject to any right of setoff by the Buyer; provided that if to the extent such Closing Receivables are not collected within 120 days after the Closing Date, Buyer the funds remaining in the escrow shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior released to the Buyer and any Closing prepared on a basis consistent with Receivables received by the accounting methods, practices, policies, procedures and estimation methods used Buyer thereafter shall be promptly remitted to prepare the Balance Sheet and including all of Seller. To the entries contained in Schedule 3.4(a) (extent the “Final Balance Sheet”).
(i) If Adjustment Payment exceeds the Estimated Purchase Price is greater than Adjustment Payment, once the Final Purchase Priceentire Estimated Adjustment Payment has been disbursed from the escrow account, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay the remaining amounts directly to the Seller as and when the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated corresponding receivables are collected by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase Buyer as provided in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller previous sentence. The Buyer shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior provide weekly reports to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted collection of the Closing Receivables, and the Seller shall have the right to audit the Independent Auditorbooks and records of the Buyer with respect to such Closing Receivables, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustmentduring normal business hours following reasonable notice. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 Buyer shall be treated as compromise entitled to receive all interest earned on the escrow account, and settlement negotiations for purposes of Rule 408 the Seller shall bear all the costs and fees of the Federal Rules escrow agent. For the avoidance of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth belowdoubt, the determination Estimated Adjustment Payment does not predetermine, limit or constrain the Closing Working Capital Amount, the amount of which may result in the Independent Auditor shall be final and binding on Adjustment Payment being greater than, equal to, or less than the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementEstimated Adjustment Payment.
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Samples: Purchase and Sale Agreement (Tier Technologies Inc)
Post-Closing Adjustment. (a) No more As promptly as practicable, but no later than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days 45 days, after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer Greystone shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) prepare and deliver to Xxxxxxx a statement setting forth Greystone’s good faith calculation of: (i) the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by Net Asset Value, (ii) the Corporate Net Debt (including, specifically, each of Buyer and Seller to the other partyCorporate Debt, Net of Payoffs, and the quantity Corporate Cash), and (iii) the resulting Contribution Amount (together, the “Closing Statement”), together with reasonably supporting evidence of such Inventory the calculations set forth thereon, absent manifest error, in the Closing Statement. Each of the foregoing items set forth in the Closing Statement shall be calculated by Greystone in a manner consistent with the Agreed Accounting Principles and the definitions set forth herein. Following delivery of the Closing Statement and until the Closing Statement has become final and binding on Buyer as set forth in this Section 1.6, subject to COVID-19 Measures, upon the written request of Xxxxxxx, Greystone, the Greystone Contributed Entities and Seller their Subsidiaries shall provide to Xxxxxxx reasonable access during normal business hours to the personnel and properties of Greystone, the Greystone Contributed Entities and their Subsidiaries as well as the books and records of the Business and access to Greystone’s internal and external accountants and auditors, in each case, in a manner that does not interfere with the Business or the business of any Greystone Affiliate or the normal business operations of Greystone or any of its Affiliates and, in each case, as may be reasonably required for purposes the review and analysis of calculating Net Working Capital on the Closing Date under this Section 3.5. The value Statement or the amounts reflected therein and the resolution of any disputes in connection therewith, including any documents and work papers used in the preparation of the Inventory Closing Statement. Such inspection rights may be exercised by Xxxxxxx through any agent, independent public accountant, or other representative designated by Xxxxxxx provided that such agent, independent public accountant or other representative either (x) is bound by confidentiality obligations at least as restrictive as those set forth on in the Inventory Report shall be determined in accordance with the accounting methodsConfidentiality Agreement, practices(y) is subject to a professional duty of confidentiality, policies, procedures and estimation methods used or (z) enters into a customary access letter reasonably satisfactory to prepare the Balance SheetGreystone.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after If Xxxxxxx disagrees with the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate Statement or the calculations of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments amounts set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on Statement, then, Xxxxxxx shall inform the Chief Executive Officer by telephone call (followed by email to memorialize such telephone call) or email (followed by a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all telephone call for discussion) of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Informal Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet ) and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller Greystone and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller Xxxxxxx shall negotiate in good faith to resolve any disagreement within 60 days after receipt of the Informal Notice (the “Good Faith Discussions” and such disagreementperiod, and any resolution agreed the “Initial Good Faith Discussion Period”). Any item or amount not objected to in writing by Buyer and Seller the Informal Notice shall be become final and binding upon on the parties hereto.
(f) Parties for purposes of this Agreement, except to the extent that an adjustment to a Disputed Item made in accordance with this Section 1.6 requires an offsetting adjustment to be made thereto. If Buyer and Seller are unable Xxxxxxx fails to resolve any disagreement as contemplated by Section 3.5(e) deliver an Informal Notice to Greystone within 60 days after delivery of the Objection Closing Statement to Xxxxxxx, or if Xxxxxxx notifies Greystone in writing that it will not deliver an Informal Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth Closing Statement in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor entirety shall be final and binding on the partiesParties for purposes of this Agreement. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action Closing Statement shall be fraud by or upon revised to reflect the Independent Auditor. Absent such fraud, such other party shall reimburse resolution of each item agreed to in the party seeking enforcement for its expenses related to such enforcementGood Faith Discussions.
Appears in 1 contract
Post-Closing Adjustment. (a) No more As promptly as practicable (but not later than three sixty (360) Business Days prior to the Closing Date and no more than two (2days) Business Days after following the Closing Date, an employee the Seller shall:
(i) prepare, in accordance with the Accounting Principles, a consolidated balance sheet of Seller and one or more representatives or employees the ML Acquired Business of Buyer shall calculate the quantity Acquired Companies as of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report Effective Time (the “Inventory ReportPreliminary Closing Date Flush Balance Sheet”); and
(ii) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other partyPurchaser the Preliminary Closing Date Flush Balance Sheet and a certificate setting forth in reasonable detail the Seller’s calculation of the Working Capital that is allocable to the ML Acquired Business as of the Effective Time, which allocation will be consistent with and determined using the same methodology as used in the Working Capital illustration set forth on Exhibit G (the “Preliminary Flush Working Capital Determination” and, together with the Preliminary Closing Date Flush Balance Sheet, the “Preliminary Flush Closing Statement”). Until such time as the calculation of the amounts shown on the Closing Date Flush Balance Sheet and the quantity of such Inventory set forth thereon, absent manifest error, shall be Closing Date Flush Working Capital determinations are final and binding on Buyer the parties pursuant to this Section 2.6, the Purchaser and its accountants (at their own expense) shall be permitted to discuss with the Seller and its accountants the Preliminary Flush Closing Statement and shall be provided copies of, and have access upon reasonable notice at all reasonable times during normal business hours to, the work papers and supporting records of the Seller and its accountants that were available for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value preparation and calculation of the Inventory set forth on Preliminary Flush Closing Statement so as to allow the Inventory Report shall be determined in accordance with Purchaser and its accountants to become informed concerning all matters relating to the preparation of the Preliminary Flush Closing Statement and the accounting methodsprocedures, practicesmethodologies, policiestests and approaches used in connection therewith; provided, procedures that the Purchaser and estimation methods used its accountants shall have no such right to prepare receive copies of or have access to the Balance SheetSeller’s internal correspondence or analysis to the extent they relate to a matter in dispute between the Purchaser and the Seller.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate Following receipt of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of Preliminary Flush Closing Statement, if the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of Purchaser reasonably determines that the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Preliminary Flush Closing Statement has not been prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained requirements set forth in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final this Agreement concerning determination of the amount of such reduction amounts set forth therein or increase in contains a mathematical or clerical error, the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of Purchaser shall deliver written notice to the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding within forty-five (45) day period (days after the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing date of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Pricereceipt thereof, which notice shall set forth any such disagreement in reasonable detaila specific description of the basis of each objection of the Purchaser, and to the extent then determinable, (i) a specific adjustment to each item of the Final Balance Sheet or Preliminary Flush Closing Statement that the Purchaser believes should be made and (ii) the Purchaser’s calculation in of the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement Preliminary Flush Closing Statement (the “Objection Dispute Notice”). If Seller fails to In the event that the Purchaser does not deliver the Objection a Dispute Notice within the Review Periodsuch forty-five (45)-day period, the Final Preliminary Flush Closing Date Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and Preliminary Flush Working Capital Determination set forth therein shall be final and binding as the “Closing Date Flush Balance Sheet” and used in computing “Closing Date Flush Working Capital,” respectively, for purposes of this Agreement. In the Post-Closing Adjustment Amount. If Seller delivers event such Dispute Notice is delivered, the Objection Notice within Purchaser and the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreementdispute. If the Seller and the Purchaser, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable notwithstanding such good faith efforts, fail to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the such dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses delivery of the Independent Auditor shall be borne equally by Dispute Notice, then each of the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records Purchaser and the other written information provided by Buyer and Seller shall engage the Arbitrator to conduct a special review of the Purchaser’s objections to the Preliminary Flush Closing Date Balance Sheet and/or Preliminary Flush Working Capital Determination, as the case may be, as promptly as reasonably practicable (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor such review to make a determination as soon as practicable within be completed no later than thirty (30) days (or after the Arbitrator is requested to conduct such other time as special review), which review shall be performed consistent with the parties hereto Accounting Principles and Exhibit G. Upon completion of such review, the Arbitrator shall agree deliver written notice to the Purchaser and the Seller setting forth the Arbitrator’s resolution of such objections and the resulting adjustments shall be deemed finally determined for purposes of this Section 2.6. The Arbitrator’s role in writing) after its engagement completing such review shall be limited to resolving such objections and determining the correct calculations to be used with respect to only the disputed portions of the Preliminary Flush Closing Statement. In resolving such objections, the Arbitrator shall apply the provisions of this Agreement concerning determination of the amounts set forth in the Preliminary Flush Closing Statement, and the decision of the Arbitrator shall be solely based on (i) whether or not the Final Balance Sheet such item objected to was prepared, and the Final Purchase Price was calculated, prepared in accordance with the terms of requirements set forth in this Agreement or, alternatively, concerning determination of the amounts set forth therein or (ii) only with respect whether the item objected to contains a mathematical or clerical error. The parties agree that the disputed items submitted to Arbitrator may not assign a value greater than the Independent Auditor, to what extent (if any) greatest value for such item claimed by either party or smaller than the Final smallest value for such item claimed by either party. The Preliminary Flush Closing Date Balance Sheet and the Preliminary Flush Working Capital Determination as agreed by the Seller and the Purchaser or as determined by the Final Purchase Price requires adjustment. The Independent Auditor shall provide Arbitrator, as the parties with a written explanation in reasonable detail of each such required adjustmentcase may be, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on as the parties. The decision rendered pursuant to “Closing Date Flush Balance Sheet” and “Closing Date Flush Working Capital,” respectively, for purposes of this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementAgreement.
Appears in 1 contract
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no any event later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after Closing, Purchaser shall, under the expiration direction and supervision of Xxx X. Xxxxxxxx, Xx., Xxxxx X. Xxxxxxxx and Xxxxxx X. Xxxx, or any of them, prepare and deliver to Seller a balance sheet of American Southern as of the Closing Date (the "Closing Balance Sheet"), prepared in accordance with SAP reporting practices consistently applied (but subject to the provisions of Section 5.04(i)). Without limiting the generality of the foregoing sentence, the parties expressly agree that the Closing Balance Sheet shall include amounts for insurance liability reserves calculated in a manner and using methodologies and assumptions consistent in all respects with American Southern's practice of calculating such 60reserves during the 24-month period immediately prior to the Closing Date.
(b) Seller shall have fifteen (15) days after receipt of the Closing Balance Sheet in which to review such Closing Balance Sheet, and during such 15-day period, at Purchaser shall make available to Seller and its representatives all information regarding preparation of the request Closing Balance Sheet as may be reasonably requested by Seller, including, without limitation, access to all employees, books, records and work papers. If within such 15-day period Seller does not provide Purchaser with written notice of either party any objection to the Independent Auditor Closing Balance Sheet, the Closing Balance Sheet shall be appointed by deemed accepted by, and final and binding upon, both parties. If Seller does provide Purchaser with written notice of any objection within such 15-day period, then the American Arbitration Associationparties shall in good faith attempt to resolve such dispute within fifteen (15) days after Purchaser's receipt of Seller's objection notice. The fees, costs and expenses of the Independent Auditor shall If such dispute cannot be borne equally resolved by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination dispute shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor submitted to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, arbitration in accordance with the terms provisions of this Agreement orArticle 9 hereof, alternatively, except that the third arbitrator selected from a AAA list (iias described in Section 9.02) only with respect to must be an independent certified public accountant knowledgeable about SAP.
(c) Once the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Closing Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be has been deemed final and binding on the parties, whether by failure of Seller to object, agreement of the parties or arbitration, within five (5) business days thereafter, Seller shall pay to Purchaser in immediately available funds the amount, if any, by which the Stockholders' Equity reflected on the Closing Balance Sheet is less than $26,800,000, plus interest thereon at the Prime Rate in effect on the Closing Date for the period of the Closing Date through the date of payment. The decision rendered pursuant If such Stockholders' Equity as reflected on the Closing Balance Sheet is equal to this Section 3.5(hor greater than $26,800,000, neither party shall owe the other any additional amounts.
(d) may be entered as a judgment in Notwithstanding anything to the contrary contained herein, the parties agree that all payables of any court of competent jurisdiction. Either party may seek specific enforcement the Companies to Seller or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action of its affiliates shall be fraud by accrued on the Closing Balance Sheet and paid at Closing or upon paid prior to Closing (in which case the Independent Auditor. Absent Companies shall furnish Seller with satisfactory evidence of such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementpayment).
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Post-Closing Adjustment. (a) No more Not later than three forty-five (345) days ----------------------- following the Closing, the Seller shall prepare and deliver to the Buyer a balance sheet with respect to the ACS Business Days prior to as of the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller"Closing Date Balance Sheet"). The Inventory Report Closing Date Balance Sheet shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined prepared in accordance with the generally accepted accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared principles on a basis consistent with the accounting methods, practices, policies, procedures Seller's past practice and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”)financial reporting.
(ib) If the Estimated Purchase Price is greater than Buyer objects to the Final Purchase PriceClosing Date Balance Sheet, it shall give notice of such objection to the Seller within fifteen (15) days following its receipt thereof. If the Buyer does not object to the Closing Date Balance Sheet within such period, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Date Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and the Seller. If the Buyer objects to the Closing Date Balance Sheet within such period and the Seller and the Buyer are unable to resolve any disagreement as contemplated by Section 3.5(esuch objection within fifteen (15) within 60 days after delivery of the Objection Noticedays, then Buyer and Seller such objection shall submit the matter for resolution be submitted to a mutually agreeable nationally recognized independent international certified accounting firm (jointly selected by the “Independent Auditor”), who shall, acting as an arbitrator, resolve Seller and the dispute set forth in the Objection NoticeBuyer. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration The determination of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor firm shall be final and binding on upon the partiesSeller and the Buyer. The decision rendered pursuant Seller and the Buyer shall each pay one-half of the fees and expenses of such firm in connection with the foregoing.
(c) If the net asset value of the ACS Business ("Net Asset Value", defined to this Section 3.5(hequal the current assets plus fixed assets (at book value plus other assets minus the liabilities of the ACS Business) as determined with reference to the Closing Date Balance Sheet is greater than or less than $544,632.00, and such surplus or shortfall exceeds $5,000.00, then the principal amount under the Promissory Note shall be increased by such surplus or decreased by such shortfall, as the case may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement (and the two equal payment installments under such Promissory Note adjusted accordingly) (such increase or take other necessary legal action to enforce any decision under this Section 3.5(hdecrease, the "Post -Closing Adjustment"). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 1 contract
Samples: Asset Purchase Agreement (Computer Generated Solutions Inc)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) 90 days after following the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Priceshall, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practicesprinciples, policies, procedures practices and estimation methods used to prepare policies employed in the Balance Sheet preparation and including all presentation of the entries contained in Schedule 3.4(a) Financial Statements and, where applicable, the Chicago Cellular Expenditure Budgets or the Central Illinois Expenditure Budgets, as the case may be, prepare and deliver to Seller a statement (the “Final Balance Sheet”"Closing Statement") showing the calculation of the Closing Working Capital, the Closing Long Term Liabilities, the EBITDA Subscriber Amount and the Schedule 2.2 Adjustment (the "Calculation").
(b) After receipt of the Calculation, Seller shall have 30 days to review the Calculation. Buyer shall provide Seller and its authorized representatives reasonable access during normal business hours and without significant disruption to the Business, to (1) all books, records and employees of Buyer and its Subsidiaries having relevant information concerning the Calculation to the extent that such information was used in the Calculation and (2) Buyer's accountants who assisted Buyer in preparing the Calculation and such accountants' relevant supporting workpapers. Unless Seller delivers written notice to Buyer on or prior to the 30th day after Buyer's delivery of the Calculation stating that Seller has objections to the Calculation and describing any such objections with reasonable particularity (including a basis in the books and records of the Companies or accounting principles for such objection), Seller shall be deemed to have accepted and agreed to the Calculation. In addition, any item included in the Calculation which is not objected to by Seller shall be deemed to be accepted by Seller ("Resolved Items") and any amounts included within such item shall be deemed to be final, binding and conclusive. If Seller notifies Buyer of its objections to the Calculation, Seller and Buyer shall, within 10 days (or such longer period as the parties may agree) following such notice (the "Resolution Period"), attempt to resolve their differences, and any written resolution by them as to any disputed amounts shall be final, binding and conclusive.
(c) Any amounts remaining in dispute at the conclusion of the Resolution Period ("Unresolved Items") shall be submitted to KPMG LLP (such firm being referred to as the "CPA Firm") or, if such firm shall be unable or unwilling to serve in such capacity or if the parties shall otherwise mutually agree, such other nationally recognized firm of independent accountants mutually agreed by Seller and Buyer (and, in such case, such firm shall be deemed to be the CPA Firm), within 10 days after the expiration of the Resolution Period. Each party agrees to execute, if requested by the CPA Firm, an engagement letter with the CPA Firm containing reasonable terms. All fees and expenses relating to the work, if any, to be performed by the CPA Firm shall be borne by Seller and Buyer in inverse proportion to the allocation of the dollar amount of the Unresolved Items made by the CPA Firm in favor of Seller or Buyer, as the case may be. The CPA Firm shall act as an arbitrator and not as an expert to determine, based on the provisions of this Section 2.5, only the Unresolved Items. The CPA Firm's determination of the Unresolved Items shall be made within 30 days of the submission of the Unresolved Items to the CPA Firm, and, together with a calculation of the Closing Working Capital, the Closing Long Term Liabilities, the EBITDA Subscriber Amount and the Schedule 2.2 Adjustment based upon the amount of Resolved Items and the CPA Firm's determinations of the Unresolved Items, shall be set forth in a written statement delivered to Seller and Buyer by the CPA Firm and shall be final, binding and conclusive on the parties for all purposes.
(d) Within five Business Days following either (i) If an agreement by Buyer and Seller as to the Estimated Purchase Price is greater than Closing Working Capital, Closing Long Term Liabilities and the Final Purchase PriceEBITDA Subscriber Amount or (ii) the CPA Firm's determination of the Closing Working Capital, the Purchase Price shall be adjusted downward dollar-for-dollar Closing Long Term Liabilities and the EBITDA Subscriber Amount, Seller shall pay to Buyer the amount of such reductionamount, and (ii) if any, by which the Estimated Purchase Price is less than exceeds the Final Purchase Price, final calculation of the Purchase Price shall be adjusted upward dollar-for-dollar and determined in accordance with Section 2.2 after resolution of all disputed items, or Buyer shall pay to Seller the amount amount, if any, by which the final calculation of such increase the Purchase Price exceeds the Estimated Purchase Price (each a “the "Post-Closing Adjustment Amount”Adjustment"). .
(e) Any Post-Closing Adjustment Amount payments made pursuant to this Section 2.5 shall be paid made by wire transfer of immediately available funds to an account designated indicated in writing by the party receiving payment within three to receive such funds and shall be accompanied by interest at the Applicable Rate calculated on the basis of a year of 360 days for the actual number of days elapsed, accrued from the Closing Date up to and including the date of payment.
(3f) Business Days after the final determination Any payments made in respect of the amount of such reduction Post-Closing Adjustment shall be deemed to be adjustments to the Central Illinois Purchase Price or increase in the Chicago Cellular Purchase Price in accordance with this Section 3.5.
(d) Upon receipt the portion of the calculation adjustment pursuant to Section 2.2 (Adjustment of the Final Base Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, attributable to (i) the Books Chicago Cellular and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance SheetCentral Illinois Cellular.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 1 contract
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (practicable, but in no event more than five sixty (560) Business Days) following such physical examinationdays, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer Purchaser shall prepare and cause to be delivered deliver to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation an unaudited consolidated balance sheet of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each Company and the Purchased Subsidiaries as of the adjustments set forth in Section 3.2 close of business on the day immediately preceding the Closing Date (but giving effect to the Pre-Closing Restructuring) (the “Final Purchase PriceClosing Balance Sheet”) and (ii) a balance sheet for statement (the Business as of immediately prior to the “Preliminary Closing Statement”) prepared on in good faith and in a basis manner consistent with the accounting methodsAgreed Accounting Principles and preparation of the Pre-Closing Statement, practicessetting forth the calculation of (A) the Closing Cash, policies(B) the Closing Indebtedness, procedures and estimation methods used to prepare (C) the Company Transaction Expenses, (D) the Closing Working Capital Amount based on the Closing Balance Sheet and including all either the resulting Closing Working Capital Excess or Closing Working Capital Shortfall, as the case may be, and (E) the Estimated Adjustment Amount calculated in accordance with Section 1.3(b), using the amounts of the entries contained in Schedule 3.4(aClosing Indebtedness, the Closing Cash, the Company Transaction Expenses and the Closing Working Capital Excess or Closing Working Capital Shortfall, as applicable, instead of the respective estimated amounts for each such item, along with reasonable supporting detail to evidence such calculation.
(b) Seller shall have sixty (60) days to review the Preliminary Closing Statement from the date of its receipt thereof (the “Final Balance SheetReview Period”). Seller and its Representatives shall have reasonable access during normal business hours to the books and records, personnel and advisors of the Company and the Purchased Subsidiaries in connection with such review. If Seller objects to any component of the Preliminary Closing Statement, Seller must deliver a written notice of objection (the “Objection Notice”) to Purchaser before the expiration of the Review Period, and a reasonably detailed explanation describing such objections; provided that the only bases on which an objection may be set forth in the Objection Notice is that any component of the Preliminary Closing Statement was not calculated in accordance with this Agreement or there was a mathematical or other error in calculation. If Seller delivers an Objection Notice to Purchaser before the expiration of the Review Period as provided in this Section 1.4(b), Purchaser and Seller shall, for a period of thirty (30) days thereafter (the “Resolution Period”), attempt in good faith to resolve the matters contained therein, and any written resolution, signed by each of Purchaser and Seller, as to any such matter shall be final, binding, conclusive and non-appealable for all purposes hereunder. If Seller does not deliver an Objection Notice to Purchaser as provided in this Section 1.4(b) before the expiration of the Review Period, Seller shall be deemed to have agreed to the Preliminary Closing Statement in its entirety and the Preliminary Closing Statement shall be final, binding, conclusive and non-appealable for all purposes hereunder.
(c) If, by the end of the Resolution Period, Purchaser and Seller have not reached agreement with respect to all disputed matters set forth in the Objection Notice, then within thirty (30) days thereafter, Purchaser and Seller shall submit for resolution such matters remaining in dispute to PricewaterhouseCoopers LLP, or if such firm is unavailable or unwilling to so serve, to a nationally-recognized independent accounting or financial consulting firm selected by Seller and reasonably acceptable to Purchaser (the “Neutral Arbitrator”). The Neutral Arbitrator shall act as an arbitrator to resolve (based solely on the written presentations of Purchaser and Seller and not on independent review) only those matters submitted to it in accordance with the first sentence of this Section 1.4(c). Purchaser and Seller shall direct the Neutral Arbitrator to render a resolution of all such disputed matters within thirty (30) days after its engagement or such other period agreed upon in writing by Purchaser and Seller. In resolving the disputed matters, the Neutral Arbitrator shall be bound by, and resolve the disputed items in accordance with, the provisions of this Section 1.4(c) and may not assign a value to any item greater than the greatest value claimed for such item or less than the smallest value claimed for such item either by Purchaser in the Preliminary Closing Statement or by Seller in the Objection Notice. The resolution of the Neutral Arbitrator shall be set forth in a written statement delivered to Purchaser and Seller and, absent Fraud, intentional misconduct or arithmetical error, shall be final, binding, conclusive and non-appealable for all purposes hereunder. The Preliminary Closing Statement, once modified and/or finally agreed to in accordance with Section 1.4(b) and/or this Section 1.4(c), shall become the “Final Statement” and the Estimated Adjustment Amount shall become the “Final Adjustment Amount”.
(d) All fees and expenses relating to the work performed by the Neutral Arbitrator shall be allocated equally between Seller, on the one hand, and Purchaser, on the other hand, and all other costs and expenses incurred by the Parties in connection with resolving any dispute hereunder before the Neutral Arbitrator shall be borne by the Party incurring such cost or expense.
(e) Amounts payable pursuant to the determination of the Final Adjustment Amount on the Final Statement will be paid as follows:
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price Adjustment Amount is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Estimated Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment , then Seller shall, within three (3) Business Days after the final determination date on which the Preliminary Closing Statement becomes the Final Statement, pay or cause to be paid to Purchaser the difference between the Estimated Adjustment Amount and the Final Adjustment Amount by wire transfer of immediately available funds to the amount of account or accounts designated in writing by Purchaser at least two (2) Business Days prior to such reduction or increase in the Purchase Price in accordance with this Section 3.5payment date.
(dii) Upon receipt of the calculation of If the Final Purchase PriceAdjustment Amount is greater than the Estimated Adjustment Amount, then Purchaser shall, within three (3) Business Days after the date on which the Preliminary Closing Statement becomes the Final Statement, pay or cause to be paid to Seller shall be permitted during the succeeding forty-five (45) day period (difference between the “Review Period”) reasonable accessFinal Adjustment Amount and the Estimated Adjustment Amount, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer same manner as Seller received the Closing Cash Payment Amount or in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer such other manner as Seller may direct in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties heretowriting.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller Any payments made under this section shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting be treated as an arbitratoradjustment to the Purchase Price for all U.S. federal and state income tax purposes, resolve and all Parties shall file all Tax Returns and take all positions for tax purposes consistent with the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the partiesforegoing.
(g) The parties If any payment required to be made to a Party under this Agreement is made after the date on which such payment is due, interest shall instruct accrue on such amount from (but not including) the Independent Auditor due date of the payment to consider only those items (and amounts which are identified in including) the Objection Notice as being items which Buyer and Seller are unable date such payment is actually made at five percent (5.0%) per annum. All computations of interest pursuant to resolve. Further, the Independent Auditor’s determination this Agreement shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not made on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculatedyear of 365 days, in accordance with each case, for the terms actual number of this Agreement or, alternatively, days from (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if anybut not including) the Final Balance Sheet or first day to (and including) the Final Purchase Price requires adjustment. The Independent Auditor shall provide last day occurring in the parties with a written explanation in reasonable detail of each period for which such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementinterest is payable.
Appears in 1 contract
Samples: Purchase and Sale Agreement (VEREIT Operating Partnership, L.P.)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after following the Closing Date, Buyer shall prepare and cause deliver to Seller a calculation of the Closing Working Capital (the "Closing Working Capital Statement"), the Closing Net Indebtedness (the "Closing Net Indebtedness Statement"), the Franchisee Adjustment Amount (the "Franchisee Adjustment Amount Statement"), the EBITDA Adjustment Amount, to the extent a variance from the Reference EBITDA Adjustment Amount is permitted to be claimed pursuant to the terms of Section 6.13(f) (the "EBITDA Adjustment Amount Statement"), and the Capex Adjustment (the "Capex Statement", together with the Closing Working Capital Statement, the Closing Net Indebtedness Statement, the EBITDA Adjustment Amount Statement, if any, and the Franchisee Adjustment Amount Statement, the "Calculation"). The Calculation shall also set forth the amount, if any, by which the calculation of the Purchase Price differs from the Estimated Purchase Price. The Calculation shall be set forth in sufficient detail to permit Seller to make any objections it may seek to have. Buyer shall cause a full closing of the financial statements in respect of the Company and its Subsidiaries to occur for the period from July 1, 2002 to the Closing Date, calculated on the basis that the Closing was effective at 11:59 p.m. on the day prior to the Closing Date as if such date were a fiscal year end and such that the unaudited financial statements produced with respect to the period ended on the day prior to the Closing Date are similar in all material respects to the U.K. GAAP Company Financial Statements (the "Closing Date Financial Statements"). Seller shall, and shall cause Diageo and its Affiliates, to provide Buyer with reasonable access to data within its control to the extent necessary in connection with the preparation of the Calculation and the Closing Date Financial Statements. Buyer shall provide the unaudited Closing Date Financial Statements to Seller together with reasonable back-up documentation reasonably necessary to evaluate or understand the Closing Date Financial Statements and the Calculation at the time of delivery of the Calculation.
(b) During the period of any review or dispute as provided in this Section 2.5, Buyer and Seller shall, and shall cause each of their Affiliates to: (i) provide each other party and its representatives with reasonable access to its and its Affiliates' relevant books, records and employees (to the extent any of such books, records or employees relate to the Calculation) and (subject, in the case of accountant or auditor work papers, to providing any customary confidentiality, hold harmless or other agreements reasonably requested by the accountant or auditor) relevant work papers of accountants or auditors and permit copies to be made of any of the foregoing documentation and (ii) cooperate fully with such other party and its authorized representatives, including the provision on a timely basis of all information relevant for purposes of the Calculation; provided that, without prejudice to any of Buyer's other rights under this Agreement, after the submission of the Calculation, Seller shall be required to provide such access and cooperation only to the extent relevant to items disputed by Seller pursuant to Section 2.5(c).
(c) After receipt of the Calculation, Seller shall have sixty (60) days to review the Calculation. Unless Seller delivers written notice to Buyer on or prior to the sixtieth (60th) day after Buyer's delivery of the Calculation stating that Seller has objections to the Calculation, Seller shall be deemed to have accepted and agreed to the Calculation. Matters included in the Calculation, which are not objected to in writing by Seller, shall be deemed to be accepted by Seller ("Resolved Items") and any amounts included within such items shall be deemed to be final, binding and conclusive. If Seller notifies Buyer in writing of its objections to the Calculation, Buyer and Seller shall, within forty-five (45) days (or such longer period as Buyer and Seller may agree in writing) following such notice (the "Resolution Period"), attempt to resolve their differences, and any written resolution by them as to any disputed amounts shall be final, binding and conclusive.
(d) Any amounts remaining in dispute at the conclusion of the Resolution Period ("Unresolved Items") shall be submitted by Buyer and Seller to Deloitte and Touche LLP (such firm being referred to as the "CPA Firm") or, if such firm shall be unable or unwilling to serve in such capacity or if Seller and Buyer shall otherwise mutually agree in writing, such other nationally recognized firm of independent accountants mutually agreed in writing by Seller and Buyer (and, in such case, such firm shall be deemed to be the CPA Firm), within 10 days after the expiration of the Resolution Period or as soon as practicable after Buyer and Seller have engaged the CPA Firm. Seller and Buyer agree to use their commercially reasonable efforts to engage the CPA Firm as promptly as practicable. Each party agrees to execute, if requested by the CPA Firm, an engagement letter with the CPA Firm containing reasonable terms and to provide the CPA Firm such work papers and other documents and information related to the Unresolved Items as the CPA Firm may reasonably request if available to such party or its Affiliates (or their accountants or auditors). All fees and expenses relating to the work, if any, to be performed by the CPA Firm shall be borne 50% by Buyer and 50% by Seller. The CPA Firm shall act as an arbitrator and not as an expert, to determine, based on the provisions of this Section 2.5, only the Unresolved Items; provided, however, that the CPA Firm shall have authority to determine, and the term "Unresolved Items" as used in this Section 2.5 shall mean, only the amount(s) of the Calculation and no other matter whatsoever, absent an express written agreement to the contrary by Buyer and Seller. Seller and Buyer shall request that the CPA Firm provide its determination of the Unresolved Items within 30 days after the submission of the Unresolved Items to the CPA Firm, and a calculation of the Closing Working Capital Statement, the Closing Net Indebtedness Statement, the Capex Statement, the EBITDA Adjustment Amount Statement and the Franchisee Adjustment Amount Statement, based upon the amount of Resolved Items and the CPA Firm's determination of the Unresolved Items, shall be set forth in a written statement delivered to Seller a certificate of and Buyer by the Chief Financial Officer of CPA Firm and shall be final, binding and conclusive on Buyer certifying and Seller.
(e) Within five (5) Business Days following either (i) its good faith an agreement or deemed agreement by Buyer and Seller as to the Closing Working Capital, the Closing Net Indebtedness, the Capex Adjustment, the EBITDA Adjustment Amount, if any, and the Franchisee Adjustment Amount, or (ii) the CPA Firm's determination of all Unresolved Items, Seller shall pay to Buyer the amount, if any, by which the Estimated Purchase Price exceeds the final calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and or Buyer shall pay to Seller the amount amount, if any, by which the final calculation of such increase the Purchase Price exceeds the Estimated Purchase Price (each a “the "Post-Closing Adjustment Amount”Adjustment"). .
(f) Any Post-Closing Adjustment Amount payments made pursuant to this Section 2.5 shall be paid made by wire transfer of immediately available U.S. Dollar funds to an account designated indicated by the party receiving payment within three (3) Business Days after to receive such funds and shall be accompanied by interest at the final determination Applicable Rate calculated on the basis of a year of 365 days for the amount actual number of such reduction or increase in days elapsed, accrued from the Purchase Price in accordance with this Section 3.5Closing Date up to and including the date of payment.
(dg) Upon receipt Any payments made in respect of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers shall be deemed to be adjustments to the Objection Notice within the Review Period, subject Base Purchase Price pursuant to Section 3.5(f) below2.2, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties heretofor all tax purposes.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 1 contract
Post-Closing Adjustment. (a) No more than three Following the Closing, the Selling Parties shall prepare and deliver to Silgan a statement setting forth the Closing Indebtedness, the Closing Date Book Cash Balances and the Closing Working Capital, in each case separately identifying the amounts attributable to each of the Subject Companies (3such statement, in its final and binding form, the "Closing Statement"). Silgan shall provide the Selling Parties and their representatives and accountants full access upon reasonable advance request to the books and records of the Business, including working papers of its accountants, and to any employees, to the extent necessary for the Selling Parties to prepare the Closing Statement, such access to continue until the agreement or determination of the final and binding Closing Statement. The calculations of the Closing Indebtedness, the Closing Date Book Cash Balances and the Closing Working Capital shall be prepared as provided in this Section 2.5.
(b) Business Days For the purpose of preparing the Closing Statement, the Selling Parties shall cause the Subject Companies to conduct a physical inventory as of an agreed upon date (or dates) on or prior to Closing of the Subject Companies' Inventory which shall be valued in accordance with the Amcor Financial Procedures and Controls. Silgan and its representatives shall be entitled to observe such physical inventory and shall have full access to the relevant books and records of the Selling Parties upon reasonable advance request and to request copies of supporting documents for the purpose of verifying the amounts set forth therein. As soon as practical following the Closing Date and no more than two in any event within ninety (290) Business Days after days thereof, the Selling Parties shall prepare and deliver to Silgan their proposed Closing Statement. For purposes of preparing the Closing Statement and determination of the Final Purchase Price (as defined in clause (f) below), the Parties hereby agree that (i) the Selling Parties shall translate all amounts denominated in local currencies into Euros using the Exchange Rate as of the Closing Date, an employee and (ii) cash received by the Subject Companies on the Closing Date shall be for the account of Seller the Purchasers.
(c) Silgan shall, within sixty (60) days after the delivery by the Selling Parties of the proposed Closing Statement, complete its review of the proposed Closing Statement. The Selling Parties shall provide Silgan, its Affiliates and one their respective representatives and accountants with reasonable access to the books and records, including working papers, used by the Selling Parties and their accountants to prepare the proposed Closing Statement, such access to continue until the agreement or more representatives or employees determination of Buyer the final and binding Closing Statement. The proposed Closing Statement shall calculate be binding and conclusive upon, and deemed accepted by, Silgan, unless Silgan shall notify the quantity Selling Parties in writing within sixty (60) days after delivery of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon Closing Statement of any good faith objection thereto (a physical examination thereof"Silgan's Objection"). As soon as practicable (but in no event Silgan may not deliver more than five (5) Business Days) following such physical examinationone Silgan's Objection and may not amend its Silgan's Objection once it has been delivered to the Selling Parties other than to delete objections. A Silgan's Objection shall set forth a description in reasonable detail of the basis of the Silgan's Objection and the adjustments to the Closing Indebtedness, such employee of Seller the Closing Date Book Cash Balances and the Closing Working Capital reflected on the proposed Closing Statement that Silgan believes should be made. Any items not disputed in a representative or employee of Buyer Silgan's Objection shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report be deemed to Buyer and Sellerhave been accepted by Silgan. The Inventory Report Parties agree that they shall be executed not object to or otherwise challenge the Target Working Capital Amount.
(d) If the Selling Parties and delivered Silgan are unable to resolve in good faith all of their disputes with respect to the proposed Closing Statement within thirty (30) days following the Selling Parties' receipt of a Silgan's Objection, they shall refer their remaining differences for decision to Deloitte & Touche LLP; provided that the individuals reviewing such Silgan's Objection shall not have worked on any matters for Amcor Australia or Silgan, provided, however, that if Deloitte & Touche LLP refuses to serve, is unable to serve or is not independent of the Parties, the Selling Parties shall select another internationally recognized firm of independent public accountants that is independent of both the Selling Parties and Silgan (Deloitte & Touche LLP or such other accountants being referred to as the "CPA Firm"). If the Parties do not resolve their disputes within the first fifteen (15) days of such thirty (30) day period, the Chief Executive Officers of Amcor Australia and Silgan (or the respective members of senior management designated by each of Buyer them) shall attempt in good faith to resolve any such dispute within the final fifteen (15) days of such thirty (30) day period. The CPA Firm shall resolve any such disagreements (based solely on its review of the written presentations of Silgan and Seller to the other partySelling Parties), and the quantity of such Inventory set forth thereon, absent manifest error, its decision shall be final and binding on Buyer and Seller for purposes the Parties upon delivery of calculating Net Working Capital on the Closing Date under this Section 3.5written opinion set forth in sub-clause (iii) below. The value of the Inventory set forth on the Inventory Report procedure and schedule under which any dispute shall be determined in accordance with submitted to the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.CPA Firm shall be as follows:
(bi) As soon as reasonably practicable, but in no event later than ninety Within fifteen (9015) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate end of the Chief Financial Officer thirty (30) day period referred to above, each of Buyer certifying Silgan and the Selling Parties shall submit any unresolved elements of the Closing Statement to the CPA Firm in writing (with a copy to each other), supported by any documents and/or affidavits upon which it relies.
(ii) The CPA Firm shall deliver its written opinion within twenty (20) days following its receipt of the information provided for in sub-clause (i) above, or such longer period of time as the CPA Firm determines is necessary not to exceed thirty (30) days. The scope of the disputes to be resolved by the CPA Firm is limited to the unresolved portion of the Silgan's Objection. Silgan and the Selling Parties shall make readily available to the CPA Firm all relevant books and records and any working papers (including those of the Parties' respective accountants) relating to the proposed Closing Statement and all other items reasonably requested by the CPA Firm, it being understood that the CPA Firm shall have the right to request additional submissions from the Parties.
(iii) Any expenses relating to the engagement of the CPA Firm shall be allocated between Silgan, on the one hand, and the Selling Parties, jointly and severally, on the other hand, so that Silgan's share of such costs shall be in the same proportion that (x) the aggregate amount of the disputed items submitted by Silgan to the CPA Firm that are unsuccessfully disputed bears to (y) the total amount of all disputed items submitted by Silgan to the CPA Firm. The Selling Parties, jointly and severally, and Silgan shall each bear the fees of their respective counsel, auditors and other representatives incurred in connection with the determination and review of the proposed Closing Statement.
(e) The proposed Closing Statement shall become final and binding on the Parties upon the earliest of (i) if no Silgan's Objection has been given with respect to the proposed Closing Statement, the expiration of the period within which Silgan must make its good faith calculation objection pursuant to Section 2.5(c); (ii) the date of agreement in writing between the Selling Parties and Silgan that the proposed Closing Statement, together with any modifications thereto agreed in writing by the Selling Parties and Silgan, shall be final and binding; and (iii) the date on which the CPA Firm shall issue and deliver to Silgan and Amcor Australia its written determination with respect to any dispute relating to the proposed Closing Statement.
(f) Promptly after the Closing Statement and the determination of the Closing Indebtedness, the Closing Date Book Cash Balances and the Closing Working Capital become final and binding under clause (e) above, the Purchase Price shall, to the extent required, be recalculated by giving effect to such components of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments Price as are set forth in Section 3.2 the Closing Statement (as recalculated, the “"Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior "). Subject to the Closing prepared on a basis consistent with the accounting methodsany adjustments made pursuant to Section 2.5(h), practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If if the Estimated Purchase Price is greater than the Final Purchase Price, the Selling Parties, jointly and severally, shall, and if the Final Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if is greater than the Estimated Purchase Price is less than the Final Purchase Price, Silgan shall, or shall cause the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase Purchasers to, within five (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (35) Business Days after the Closing Statement becomes final determination and binding on the Parties, make payment by wire transfer to an account specified by Silgan or the Selling Parties, as the case may be, in immediately available funds of the amount of such reduction or increase in difference, together with interest thereon from the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt Closing Date to the date of payment at the calculation of the Final Purchase PriceClosing Date Interest Rate, Seller which interest shall be permitted during calculated on the succeeding fortybasis of a 360-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet year and the calculation actual number of days elapsed. Notwithstanding anything herein to the Final Purchase Pricecontrary, including a reasonable level of supporting documentation used any amounts that are owed by Buyer in preparation of one Party to the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation other pending final resolution of the Final Purchase Price that are not in dispute between the Selling Parties and Purchaser in the Selling Parties' proposed Closing Statement shall promptly be paid (plus any interest calculated in accordance with this clause (f)) by the relevant Party no later than five (5) Business Days following delivery by the Selling Parties of the proposed Closing Statement and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation disputed portion of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement paid as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the partiesprovided above.
(g) The parties Notwithstanding anything herein to the contrary, the Silgan Indemnitees shall instruct the Independent Auditor not be entitled to consider only those items and amounts which are identified make any claim for indemnification pursuant to this Agreement if such claim was raised by Silgan in the Silgan's Objection Notice as being items which Buyer and Seller are unable to resolve. Further, for the Independent Auditor’s determination shall be based solely on purpose of adjusting the relevant Books and Records and Estimated Purchase Price in determining the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any formFinal Purchase Price.
(h) The parties shall jointly instruct In the Independent Auditor event that pursuant to make a determination as soon as practicable within thirty (30) days (or such other time as Section 3.4, any of the parties hereto shall agree in writing) after its engagement (i) whether or Specified Interests are not transferred to the Final Balance Sheet was preparedapplicable Purchaser prior to the date the Closing Statement becomes binding and final, and for the purpose of determining the Final Purchase Price, the Target Working Capital Amount shall be reduced by the applicable Specified Interest Target Working Capital Amount, each of the Closing Date Book Cash Balances and the Closing Date Working Capital shall be reduced by the respective amounts attributable to such Specified Interests and the Closing Indebtedness shall be increased or decreased, as applicable, by the respective amounts attributable to such Specified Interest, as set forth in the Closing Statement and the Selling Parties or Silgan and the Purchasers, as applicable, shall pay any amounts due under Section 2.5(f) only for the Purchased Equity and Purchased Assets transferred to the Purchasers prior to the Closing Statement becoming final and binding. The applicable Selling Party or the applicable Purchaser shall pay the portion of the adjustment to the Purchase Price was calculated, calculated in accordance with Section 2.5(f) and this Section 2.5(h) attributable to any Specified Interest not transferred to the terms of this Agreement or, alternatively, applicable Purchaser prior to the date the Closing Statement becomes binding and final (iithe "Specified Interest Adjustment Amount") only with respect at such time, if any, as such Specified Interest is sold pursuant to Section 3.4(b). If such Specified Interest is not sold to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth belowapplicable Purchaser, the determination of Specified Interest Adjustment Amount shall not be paid by either the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement applicable Purchaser or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementSelling Party.
Appears in 1 contract
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Post-Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereofDetermination. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) Within 180 days after the Closing Date, the Buyer shall prepare prepare, and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior deliver to the Closing prepared on a basis consistent with the accounting methodsStockholders, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation Buyer’s determinations of the Final Balance Sheet Cash Amount and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase PriceIndebtedness Payoff Amount, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Actual Purchase Price (collectively, the “Draft Computation”). The Draft Computation shall be prepared and the Cash Amount and the Indebtedness Payoff Amount shall be determined on a basis using the same accounting methods, policies, principles, practices and procedures, with consistent classifications, judgments and estimation methodology, as were used in preparation of the Buyer’s consolidated balance sheet as of the fiscal year ended December 31, 2007 or, to the extent applicable, in accordance with any changes to such accounting methods, policies, principles, practices and procedures which are documented in the Buyer’s books and records prior to the Closing, and shall not include any changes in assets or liabilities as a result of purchase or other changes arising from or resulting as a consequence of the transactions contemplated hereby. The Buyer and its auditors will make available to the Stockholders all records and work papers used in preparing the Draft Computation, and its employees and advisors, provided that such access shall be upon reasonable notice and at reasonable times so as not to interfere unduly with the business of the Buyer. If any of the Stockholders disagrees with any aspect of the Draft Computation, such Stockholder may, on behalf of all Stockholders and within 60 days after receipt of the Draft Computation, deliver a notice (an “Objection Notice”) to the Buyer setting forth the Stockholders’ determination of the Cash Amount and the Indebtedness Payoff Amount and the Stockholders’ calculation of the Actual Purchase Price, and identifying the specific items and amounts of disagreement. The Stockholders will upon request make available to the Buyer and its auditors reasonable access to all records and work papers used in preparing the Objection Notice, and to its advisors, provided that such access shall be upon reasonable notice and at reasonable times. If none of the Stockholders delivers an Objection Notice to the Buyer within 60 days after receipt of the Draft Computation, then the parties hereto will be deemed to have agreed to the Draft Computation and the components of such Draft Computation shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amountfinally determined as set forth therein. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, The Buyer and Seller the Stockholders shall negotiate in good faith use reasonable efforts to resolve any such disagreementdisagreements as to the Draft Computation and the Objection Notice, and any but if they do not obtain a final resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Buyer has received the Objection Notice, then the Buyer and Seller the Stockholders shall submit the matter for resolution to a mutually agreeable independent international accounting firm jointly retain Xxxx Xxxxx LLP (the “Independent AuditorFirm”), who shall, acting as an arbitrator, ) to resolve the dispute set forth in the Objection Noticeany remaining disagreements. In the event The Buyer and Seller are unable the Stockholders shall direct the Firm to agree on an Independent Auditor render a determination within thirty (30) 30 days after its retention and the expiration of such 60-day periodBuyer, at the request of either party Stockholders and their respective agents shall cooperate with the Independent Auditor shall be appointed by the American Arbitration AssociationFirm during its engagement. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to Firm may consider only those items and amounts which are identified in the Draft Computation or Objection Notice as being items which the Buyer and Seller the Stockholders are unable to resolve. FurtherIn resolving any disputed item, the Independent AuditorFirm may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. The Firm’s determination shall be based solely on written submissions by the relevant Books and Records and the other written information provided by Buyer and Seller jointly by the Stockholders (i.e., not on the basis of an independent review)) and on the definitions included herein. The determination of the Firm shall be conclusive and binding upon the Buyer and the Stockholders. Until the Firm makes its determination, the costs and expenses of the Firm shall be borne equally by the Buyer, on the one hand, and the Independent Auditor shall not conduct additional discovery Stockholders (in accordance with their respective Indemnity Allocation Percentages), on the other hand; provided that, when the Firm makes its determination, any form.
costs and expenses (hincluding costs and expenses previously advanced) The parties shall jointly instruct of the Independent Auditor Firm that are allocable to make a the party whose determination as soon as practicable within thirty (30) days (or such other time as of the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Actual Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect closest to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the Firm’s determination of the Independent Auditor same shall be final and binding on paid by the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 1 contract
Post-Closing Adjustment. (a) No more than three As soon as reasonably practicable, but in no event later then one hundred and twenty (3120) Business Days prior to the Closing Date and no more than two (2) Business Days days after the Closing Date, an employee of Buyer will deliver to Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report preliminary closing statement (the “Inventory ReportPreliminary Closing Statement”) and deliver setting forth Buyer’s good faith estimate of the Inventory Report to Buyer and SellerWorking Capital of the Companies, together with supporting records as of the Closing Date (the “Closing Date Working Capital”). The Inventory Report This calculation shall be executed prepared in accordance with GAAP and delivered by each in the same manner as the statement of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller Estimated Working Capital that was used for purposes of calculating Net the Closing pursuant to Section 2.4 and the Example Calculation of Working Capital set forth on in Schedule 2.4(a) and shall be updated to reflect receipts, disbursements and other activity based on the Records, data and information received subsequent to the Closing Date under this Section 3.5covering the period prior to the Closing Date. The value Buyer will make available to the Seller and its Representatives, as reasonably requested by Seller, all Records and other documents used by Buyer in preparing the Preliminary Closing Statement and personnel of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures Buyer responsible for preparing or maintaining such Records and estimation methods used to prepare the Balance Sheetdocuments.
(b) As soon as reasonably practicable, but in no event later than ninety thirty (9030) days after the Seller receives the Preliminary Closing DateStatement (the “Objection Period”), the Seller shall deliver to Buyer shall prepare and cause a written report containing all changes (if any) that the Seller proposes to be delivered made to Seller a certificate such Preliminary Closing Statement (the “Objection Notice”). Such changes shall be specified in reasonable detail with reasonable supporting documentation, if applicable, and include Seller’s calculation of the Chief Financial Officer Closing Date Working Capital. All items on the Preliminary Closing Statement for which Seller does not propose changes in the Objection Notice shall be deemed to be final and binding on the Parties. If the Seller fails to deliver to Buyer the Objection Notice within the Objection Period, the Preliminary Closing Statement as delivered by Buyer will be deemed to be final and binding on the Parties.
(c) As soon as reasonably practicable, but in no event later than fifteen (15) days after Buyer receives the Objection Notice, the senior management of Buyer certifying and Seller shall meet and undertake to agree on the final adjustments to the Preliminary Closing Statement and, specifically, the Closing Date Working Capital. If the Buyer and Seller fail to agree on the final adjustments within fifteen (15) days after Buyer’s receipt of the Objection Notice, the Buyer or the Seller may submit the disputed items to the Independent Accountant for resolution. The Buyer and Seller shall direct the Independent Accountant to resolve the disputes within thirty (30) days after the relevant materials are submitted for review. Buyer and Seller shall each be entitled to submit supporting arguments and work papers to the Independent Accountant in support of their respective positions. The Independent Accountant shall consider only those items or amounts in the Preliminary Closing Statement as to which Seller proposed changes in the Objection Notice and that remain in dispute between the Buyer and Seller, shall render its decision based solely on written materials submitted by the Buyer and Seller and the terms of this Agreement, and shall not assign a value to any item greater than the greatest value for such item claimed by the Buyer or Seller or less than the smallest value for such item claimed by the Buyer or Seller. The Independent Accountant shall have exclusive jurisdiction over, and resort to the Independent Accountant as provided in this Section 2.5(c) shall be the sole recourse and remedy of the Parties against one another or any other Person with respect to, any disputes arising out of or relating to the Preliminary Closing Statement. The decisions of the Independent Accountant regarding the Preliminary Closing Statement and the Closing Date Working Capital will be binding on and non-appealable by the Parties, absent manifest error, and shall be enforceable in a court of law. The fees and disbursements of the Independent Accountant shall be allocated between Buyer and Seller in the same proportion that the aggregate amount of unsuccessfully disputed items submitted by each such Party (as finally determined by the Independent Accountant) bears to the total amount of disputed items so submitted.
(d) The Preliminary Closing Statement shall become final and binding on the Buyer and Seller with respect to the determination of the Closing Date Working Capital upon the earliest of (i) its good faith calculation written acceptance by Seller of the Purchase PriceBuyer’s Preliminary Closing Statement, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if no Objection Notice has been given within the Estimated Purchase Price Objection Period and Seller has not provided written notice of acceptance, the expiration of the Objection Period, (iii) if an Objection Notice has been given during the Objection Period, upon the agreement by the Buyer and Seller that such Preliminary Closing Statement, together with any modifications thereto agreed to in writing by the Buyer and Seller, is final and binding and (iv) if an Objection Notice has been given but there is no agreement between the Buyer and Seller regarding Seller’s proposed changes, the date on which the Independent Accountant issues a valid decision with respect to any dispute referred to the Independent Accountant in accordance with Section 2.5(c), giving effect to any items reflected in the Objection Notice as to which the Buyer and Seller were able to reach agreement prior to such referral. The Preliminary Closing Statement, as adjusted, if applicable, pursuant to any agreement between the Buyer and Seller or pursuant to the decision of the Independent Accountant, when final and binding with respect to the determination of the Closing Date Working Capital, is herein referred to as the “Final Closing Statement.”
(e) If the Final Closing Statement indicates that the Closing Date Working Capital is less than the Estimated Working Capital (such amount, a “Final Purchase PriceDeficiency”), the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer Seller shall pay to Seller the amount of such increase the Final Deficiency to Buyer within five (each a “Post-5) Business Days after the determination of the Final Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid Statement by wire transfer of immediately available funds to an a bank account designated in writing by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase PriceBuyer; provided, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to that: (i) Seller, in its sole discretion, may satisfy its obligation under this Section 2.5(e) to pay the Books and Records in the possession of and used Final Deficiency, or any portion thereof, by directing Buyer in writing to reduce the preparation principal and interest amount of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used Buyer Note by Buyer in preparation of the Final Purchase Pricesuch amount, and (ii) to the accounting personnel of Buyer supporting the Business and involved in the preparation of extent Seller fails to either pay the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet Deficiency or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify direct Buyer in writing to reduce the principal and interest amount of the Buyer Note by such disagreement with amount, Buyer, in its sole discretion, may elect to reduce the principal and interest amount of the Buyer Note by such amount in satisfaction of Seller’s obligation to pay the Final Balance Sheet Deficiency, or any portion thereof, under this Section 2.5(e), or withhold and offset the calculation Final Deficiency from any Earnout Payment as provided in Section 2.6(i). Any reduction of principal or interest of the Final Purchase Price, which notice Buyer Note pursuant to this Section 2.5(e) shall set forth any such disagreement in reasonable detail, the specific item be made first to accrued and unpaid interest and then to principal of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties heretoNote.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection NoticeFinal Closing Statement indicates that the Closing Date Working Capital is greater than the Estimated Working Capital (such amount, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent AuditorFinal Surplus”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not pay the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect Surplus to the disputed items submitted to the Independent Auditor, to what extent Seller within five (if any5) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, Business Days after the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant Final Closing Statement by wire transfer of immediately available funds to this Section 3.5(h) may be entered as a judgment bank account designated in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud writing by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementSeller.
Appears in 1 contract
Samples: Membership Interest and Stock Purchase Agreement (Spark Energy, Inc.)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) Within 60 days after the Closing Date, Buyer shall Moldflow will prepare and cause deliver to be delivered to Seller a certificate Husky written notice (the "Adjustment Notice") containing (A) an unaudited balance sheet of the Chief Financial Officer Business as of the close of business on the Closing Date (the "Closing Balance Sheet"), (B) Moldflow's calculation of the Net Working Capital as at the Closing Date (the "Closing Net Working Capital") determined based on the Closing Balance Sheet and (C) Moldflow's calculation of the amount of any payment required pursuant to Section 2.6(i). Except as set forth in Section 3.4(b) of the Seller Disclosure Schedule, the Closing Balance Sheet will be prepared in a manner consistent with the Interim Balance Sheet. For the purposes of valuing all non U.S. dollar denominated assets and liabilities on the Closing Balance Sheet, the source of exchange rates will be those found on xxx.Xxxxxxxxxxxxxx.xxx taken as of the close of business on June 29, 2007.
(b) During the period from the Closing Date until the date of delivery of the Closing Balance Sheet, Husky shall give Moldflow such assistance and access to the books and records relating to the Business and comprising part of the Purchased Assets as Moldflow may reasonably request in order to enable it to prepare the Closing Balance Sheet.
(c) Forthwith after the Closing Date until the date of delivery of the Closing Balance Sheet, and in the event that such information is available in the sole discretion of Seller acting reasonably, Seller will use reasonable efforts to provide Buyer certifying with preliminary drafts or portions of certain financial information (the "Preliminary Information") that will be used by Seller to prepare the Closing Balance Sheet. Any such Preliminary Information will be provided to Buyer as it becomes available on an as is basis, will not be audited, will not constitute the Closing Balance Sheet and will be in preliminary form, subject to material change. Buyer expressly agrees that Seller makes no representations and warranties about any such Preliminary Information, which shall be provided on an "as is" basis and that the use of such Preliminary Information by Buyer is at its sole risk.
(d) For the purpose of assisting and facilitating Buyer in confirming that the Closing Balance Sheet is being and will be prepared in a manner consistent with the Interim Balance Sheet (except as set forth in Section 3.4(b) of the Seller Disclosure Schedule) including the application of Seller's accounting principles, policies and practices, Moldflow will, at Buyer's request, use commercially reasonable efforts to assist Buyer and its independent accountant in carrying out the specified procedures listed in Exhibit D (the "Specified Procedures"), provided that:
(A) the covenant to assist Buyer and its independent accountant in Section 2.6(d) in no way changes the basis for the preparation of the Closing Balance Sheet set out in Sections 2.6 and 3.4(b) and does not expand or change the scope of the representation and warranty of Moldflow in Section 3.4;
(B) Moldflow shall only be obligated to provide such assistance if requests for assistance hereunder do not unduly interfere with the ordinary conduct of business by the Seller; and
(C) Moldflow shall not be responsible for the costs of Husky's independent accountant in carrying out the Specified Procedures. Notwithstanding the foregoing, nothing herein obligates Moldflow to disclose any information, records, files or other data to Buyer or its independent accountant to the extent such disclosure is prohibited by any applicable Laws or if the consent of any Person or Governmental Authority is required to permit Moldflow to release such information, records, files or data to Husky and such consent has not been obtained following commercially reasonable efforts diligently made by Moldflow to obtain it.
(e) Within 30 days after delivery of the Adjustment Notice, Husky will deliver to Moldflow a written response in which Husky will either:
(i) its good faith agree in writing with Moldflow's calculation of the Purchase Price, setting forthClosing Net Working Capital as set forth in the Adjustment Notice, in which case such calculation of the Closing Net Working Capital will be final and binding on the parties for purposes of Section 2.6(i); or
(ii) dispute Moldflow's calculation of the Closing Net Working Capital as set forth in the Adjustment Notice by delivering to Moldflow a written notice (a "Dispute Notice") setting forth in reasonable detaildetail the basis for each such disputed item and certifying that all such disputed items are being disputed in good faith.
(f) If Husky fails to take either of the foregoing actions within 30 days after delivery of the Adjustment Notice, then Husky will be deemed to have irrevocably accepted Moldflow's calculation of the Closing Net Working Capital as set forth in the Adjustment Notice, in which case, such calculation of the Closing Net Working Capital will be final and binding on the parties for purposes of Section 2.6(i).
(g) If Husky delivers a Dispute Notice to Moldflow within 30 days after delivery of the Adjustment Notice, then Husky and Seller will attempt in good faith faith, for a period of 30 days, to agree in writing on the calculation of the Closing Net Working Capital for purposes of Section 2.6(i). Any resolution by Husky and Moldflow during such 30-day period as to any disputed items will be final and binding on the Parties for purposes of Section 2.6(i). If Husky and Moldflow do not resolve all disputed items by the end of 30 days after the date of delivery of the Dispute Notice, then Husky and Moldflow will submit the remaining items in dispute to Deloitte & Touche USA LLP for resolution, or if that firm is unwilling or unable to serve, Husky and Moldflow will engage another mutually agreeable independent accounting firm of recognized national standing, which firm is not the regular auditing firm of, or adviser to, either Husky or Moldflow and is otherwise independent of each of the adjustments Parties. If Husky and Moldflow are unable to jointly select such independent accounting firm within 10 days after such 30-day period, Husky, on the one hand, and Moldflow, on the other hand, will each select an independent accounting firm of recognized national standing and each such selected accounting firm will select a third independent accounting firm of recognized national standing, which firm is not the regular auditing firm of, or adviser to, either Husky or Moldflow; provided, that if either Husky, on the one hand, or Moldflow, on the other hand, fail 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 is deemed to be the independent accounting firm selected by the Parties for purposes of this Section 2.6 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the "Independent Accounting Firm"). Husky and Moldflow will instruct the Independent Accounting Firm to render its determination with respect to the items in dispute referred to in the Dispute Notice in a written report that specifies the conclusions of the Independent Accounting Firm as to each such item in dispute and the resulting calculation of the Closing Net Working Capital. Husky and Moldflow will instruct the Independent Accounting Firm to render its determination as soon as practicable after referral of the items to such firm but in any event within 30 days following such referral. The determinations of the Independent Accounting Firm with respect to the Closing Net Working Capital as set forth in its report will be final and binding on the Parties for purposes of Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to 2.6(i). Moldflow will revise the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all the calculation of the entries contained Closing Net Working Capital as appropriate to reflect the resolution of the issues in Schedule 3.4(adispute pursuant to this Section 2.6(g). The fees and expenses of the Independent Accounting Firm will be shared by Husky and Moldflow in inverse proportion to the relative amounts of the disputed amount determined to be for the account of Husky and Moldflow, respectively.
(h) For purposes of complying with this Section 2.6, the Parties will furnish to each other and to the Independent Accounting Firm as soon as practicable such work papers and other documents and information relating to the disputed issues as the Independent Accounting Firm may request and are available to that Party (or its independent public accountants) and will be afforded the “Final Balance Sheet”)opportunity to present to the Independent Accounting Firm any material related to the disputed items and to discuss the items with the Independent Accounting Firm. Either Party may require that the Independent Accounting Firm enter into a customary form of confidentiality agreement with respect to the work papers and other documents and information regarding the Party provided to the Independent Accounting Firm pursuant to this Section 2.6.
(i) If the Estimated Purchase Price Closing Net Working Capital as finally determined pursuant to this Section 2.6 is less than the Interim Net Working Capital, then Moldflow will pay to Husky the amount of such difference in cash plus interest thereon (calculated based on the actual number of days elapsed in a year consisting of 365 days) from the Closing Date through and including the date of such payment at a rate of 5% per annum. If the Closing Net Working Capital as finally determined pursuant to this Section 2.6 is greater than the Final Purchase PriceInterim Net Working Capital, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall then Husky will pay to Buyer Moldflow the amount of such reductiondifference in cash plus interest thereon (calculated based on the actual number of days elapsed in a year consisting of 365 days) from the Closing Date through and including the date of such payment at a rate of 5% per annum.
(j) Any payment to Husky pursuant Section 2.6(i) will be effected by wire transfer of immediately available funds from Moldflow to an account designated by Husky, and (iiany payment to Moldflow pursuant to Section 2.6(i) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall will be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid effected by wire transfer of immediately available funds to an account designated by the party receiving payment Moldflow. Such payments will be made within three (3) five Business Days after following the final determination of the amount of such reduction or increase in the Purchase Price Closing Net Working Capital in accordance with this Section 3.52.6.
(dk) Upon receipt The payment pursuant to Section 2.6(i) (other than the portion thereof that is attributable to the payment of interest pursuant to Section 2.6(i)) will be treated by the calculation of Parties as an adjustment to the Final Initial Purchase Price, Seller shall be permitted during . The Initial Purchase Price as so adjusted is referred to in this Agreement as the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final "Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement."
Appears in 1 contract
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to The Sellers' Representative may dispute the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Final Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated calculated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth at any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor time within thirty (30) days after the expiration date the Sellers receive the calculation thereof, by delivery to the Buyer of a Notice of Dispute. Upon receipt of any Notice of Dispute by the Buyer, the Sellers' Representative and the Buyer shall promptly consult with each other with respect to the specified points of disagreement in an effort to resolve the dispute. If any such dispute cannot be resolved by the Sellers' Representative and the Buyer within thirty (30) calendar days after the receipt of the Notice of Dispute, the Sellers' Representative and the Buyer shall jointly refer the dispute to the Arbiter, as an arbitrator to finally resolve, as soon as practicable, and in any event within thirty (30) calendar days after such reference, all points of disagreement with respect to the Final Net Working Capital reflected on the Closing Balance Sheet. For purposes of such 60-day periodarbitration the Sellers' Representative and the Buyer shall each submit a proposed calculation of the Final Net Working Capital. The Arbiter shall apply the terms of Section 2.4 of this Agreement, at the request accounting principles and methodology set forth in Schedule 2.5(a) to this Agreement, and the other provisions of either party this Agreement relating to the Independent Auditor Closing Balance Sheet, and shall be appointed by otherwise conduct the arbitration under such procedures as the Parties may agree or, failing such agreement, under the then prevailing Commercial Rules of the American Arbitration Association. Each of the Parties shall bear its own expenses in connection with the arbitration, unless the Arbiter otherwise directs. The fees, costs fees and expenses of the Independent Auditor Arbiter incurred in connection with the arbitration of the Final Net Working Capital shall be borne equally allocated between the Sellers and the Buyer by the parties.
(g) The parties shall instruct Arbiter in proportion to the Independent Auditor to consider only those extent either of such Parties did not prevail on items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only dispute with respect to the disputed items submitted to Final Net Working Capital reflected on the Independent AuditorClosing Balance Sheet; provided, to what extent (if any) that such fees and expenses shall not include, so long as a Party complies with the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth belowSection, the determination of other Party's outside counsel or accounting fees. All determinations by the Independent Auditor Arbiter shall be final final, conclusive and binding on the parties. Buyer and the Sellers with respect to the Final Net Working Capital and the allocation of arbitration fees and expenses, in the absence of fraud or manifest error.
(b) The decision rendered Purchase Price shall be finally paid, or overpayment refunded, as follows, based on the Final Net Working Capital determined pursuant to this Section 3.5(hSections 2.4 and 2.5:
(i) may The Escrow Agent shall pay to the Buyer the amount by which the Estimated Working Capital Payment exceeds the Adjustment Amount (for the avoidance of doubt, by way of example, if Final Net Working Capital is determined to be entered as a judgment negative $250,000 resulting in an Adjustment Amount of $500,000 in favor of Buyer, then the Escrow Agent shall pay to the Buyer the Amount of $2,000,000); provided, however, that if such amount exceeds the Escrow Amount, then Sellers shall promptly pay to Buyer any court such excess over the Escrow Amount, or
(ii) the Buyer shall pay to each of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(hthe Sellers and Custodians such Seller's and Custodian's Pro Rata Portion of the amount by which the Adjustment Amount exceeds the Estimated Working Capital Payment (provided, however, that in no event shall the aggregate of the Adjustment Amount and the Estimated Working Capital Payment exceed Three Million Dollars ($3,000,000)). The other party’s only defense Any payment so required to such a request for specific enforcement be made by either the Sellers or other legal action the Buyer shall be fraud by or upon wire transfer of immediately available funds, not more than seven (7) Business Days after final determination thereof, to an account to be designated by the Independent Auditor. Absent such fraud, such other party shall reimburse payee at least two (2) Business Days prior to the party seeking enforcement for its expenses related to such enforcementdue date.
Appears in 1 contract
Post-Closing Adjustment. (a) No more As soon as practicable but in no event later than three thirty (330) Business Days prior to the Closing Date and no more than two (2) Business Days after days following the Closing Date, an employee Sellers’ Agent shall, with the assistance of Seller and one or more representatives or employees the Companies’ Auditors, deliver to Buyer a calculation of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report LLC Closing Adjusted Working Capital (the “Inventory ReportLLC Closing Adjusted Working Capital Statement”). The LLC Closing Adjusted Working Capital Statement shall be set forth in sufficient detail to inform Buyer as to the substance of the calculation. Sellers’ Agent shall provide the LLC Closing Adjusted Working Capital Statement to Buyer together with back-up documentation reasonably necessary to evaluate or understand the LLC Closing Adjusted Working Capital Statement at the time of its delivery (the “LLC Closing Adjusted Working Capital Statement Date”).
(b) During the period of any review or dispute as provided in this Section 2.3, Buyer and Sellers shall, and shall cause each of their Affiliates to: (i) provide each other Party and its representatives with reasonable access to its and its Affiliates’ relevant books, records and employees (to the extent any of such books, records or employees relate to the LLC Closing Adjusted Working Capital Statement) and deliver relevant work papers of accountants or auditors and permit copies to be made of any of the Inventory Report foregoing documentation; and (ii) cooperate fully with each other Party and its authorized representatives, including the provision on a timely basis of all information relevant for purposes of the LLC Closing Adjusted Working Capital Statement.
(c) Buyer may, by notice given to Sellers’ Agent within twenty (20) days after the LLC Closing Adjusted Working Capital Statement Date (the “LLC Resolution Period”), dispute any items in such LLC Closing Adjusted Working Capital Statement (the “LLC Closing Statement Dispute Notice”). Such LLC Closing Statement Dispute Notice shall set forth in reasonable detail Buyer’s objections to the LLC Closing Adjusted Working Capital Statement and Buyer and Seller. The Inventory Report shall be executed and delivered by each deemed to have agreed with all other items contained in the LLC Closing Adjusted Working Capital Statement (the “LLC Resolved Items”). If Buyer does not deliver a LLC Closing Statement Dispute Notice to Sellers’ Agent within twenty (20) days after the LLC Closing Adjusted Working Capital Statement Date, the calculation of Buyer and Seller to the other party, and the quantity of such Inventory LLC Closing Adjusted Working Capital as set forth thereon, absent manifest error, in the LLC Closing Adjusted Working Capital Statement shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Sellers. If Buyer delivers a LLC Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing DateStatement Dispute Notice, Buyer and Sellers’ Agent shall prepare and cause use their respective commercially reasonable efforts to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its attempt in good faith calculation of to resolve the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase disputed items identified in the Purchase Price in accordance with this Section 3.5LLC Closing Statement Dispute Notice.
(d) Upon receipt Any amounts remaining in dispute at the conclusion of the calculation of the Final Purchase Price, Seller LLC Resolution Period (“LLC Unresolved Items”) shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing submitted by Buyer and Seller Sellers’ Agent to the CPA Firm within ten (10) days after the expiration of the LLC Resolution Period. Each Party agrees to provide the CPA Firm, with copies to the other Party, such work papers and other documents and information related to the LLC Unresolved Items as the CPA Firm may reasonably request if available to such Party or its Affiliates (or their accountants or auditors). All fees and expenses relating to the work, if any, to be performed by the CPA Firm shall be final and binding upon the parties hereto.
borne fifty percent (f50%) If by Buyer and Seller are unable to resolve any disagreement as contemplated fifty percent (50%) by Section 3.5(e) within 60 days after delivery Sellers (in accordance with each Seller’s ownership of the Objection Noticeparticular LLCs to which the dispute relates). The CPA Firm shall act as an arbitrator and not as an expert, then to determine, based on the provisions of this Section 2.3, only the LLC Unresolved Items in the LLC Closing Adjusted Working Capital Statement and no other matter whatsoever, other than as expressly set forth herein or in a subsequent express written agreement by Buyer and Seller Sellers’ Agent acting on behalf of Sellers. Sellers’ Agent and Buyer shall submit request that the matter for resolution to a mutually agreeable independent international accounting firm (CPA Firm provide its determination of the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor LLC Unresolved Items within thirty (30) days after the expiration submission of such 60-day periodthe LLC Unresolved Items to the CPA Firm, at and a calculation of the request LLC Closing Adjusted Working Capital Statement, based upon the amount of either party LLC Resolved Items and the Independent Auditor CPA Firm’s determination of the LLC Unresolved Items, shall be appointed set forth in a written statement delivered to Sellers’ Agent and Buyer by the American Arbitration Association. The feesCPA Firm and shall be final, costs binding and expenses conclusive on Buyer and Sellers.
(e) Within five (5) Business Days following the earlier of: (i) an agreement or deemed agreement by Buyer and Sellers as to the LLC Closing Adjusted Working Capital, or (ii) the CPA Firm’s determination of all LLC Unresolved Items:
(i) if LLC Closing Adjusted Working Capital is greater than LLC Estimated Adjusted Working Capital, Buyer shall deliver by wire transfer of immediately available funds the amount of the Independent Auditor LLC Difference to Sellers, which shall be borne equally payable to each Seller pro-rata in accordance with such Seller’s right, title and interest in and to the LLC Interests to which such LLC Difference relates; and
(ii) if LLC Closing Adjusted Working Capital is less than LLC Estimated Adjusted Working Capital, Sellers shall deliver (in accordance with each Seller’s ownership of the particular LLCs to which the dispute relates) by wire transfer of immediately available funds the amount of the LLC Difference to Buyer.
(f) Any payments made to Sellers pursuant to this Section 2.3 shall be made by wire transfer of immediately available U.S. Dollar funds to an account or accounts indicated by the partiesSellers’ Agent. Any payments made to Buyer pursuant to this Section 2.3 shall be made by wire transfer of immediately available U.S. Dollar funds to an account indicated by Buyer.
(g) The parties shall instruct Any payments made in respect of the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination LLC Post-Closing Adjustment shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor deemed to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect be adjustments to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 purchase price of the Federal Rules of Evidence and comparable state rules of evidence, and LLC Interests for all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementtax purposes.
Appears in 1 contract
Samples: Purchase, Sale and Merger Agreement (Massey Energy Co)
Post-Closing Adjustment. (a) No more The Company agrees that as of the Closing, the Net Acquired Assets will not be less than three $0, as determined by a calculation of the Net Acquired Assets as at the Closing Date (3the "Net Acquired Assets Calculation"). Subject to the dispute resolution procedure described in this paragraph, if the Net Acquired Assets are less than $0, the Closing Purchase Consideration shall be reduced by an amount (the "Shortfall Amount") Business Days equal to the amount by which Net Acquired Assets are less than $0. The Net Acquired Assets Calculation shall be prepared on the basis of the book value of the Acquired Assets on the Company's balance sheet as of immediately prior to the Closing, in accordance with GAAP consistent with the accounting principles used to prepare the Company Balance Sheet. Buyer shall prepare and deliver the Net Acquired Assets Calculation to Company not later than 30 days after the Closing Date and no more than two (2) Business Days after the Closing DateCompany and its independent certified public accountants shall have the opportunity to review such balance sheet and the books and records of the Company relating thereto. If the Company does not notify Buyer within 30 days of its receipt of the Net Acquired Assets Calculation that it objects to any item included in such Net Acquired Assets Calculation, an employee then such Net Acquired Assets Calculation shall be deemed to be final for purposes of Seller and determining any adjustment pursuant to this Section. If the Company objects to one or more representatives or employees of Buyer items in such Net Acquired Assets Calculation, it shall calculate the quantity of sulfur, rock, ammonia and finished goods included specify its objection in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report writing to Buyer and Seller. The Inventory Report the parties shall be executed and delivered by each of Buyer and Seller attempt to resolve such differences within 15 days after the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value Buyer's receipt of the Inventory set forth on Company's objection. If such objection is not resolved within such 15 day period, an Independent Accounting Firm shall act as arbiter (the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used "Arbiter") to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event resolve such dispute not later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate . The determination of the Chief Financial Officer of Buyer certifying (i) its good faith calculation Arbiter shall be final. The fees of the Purchase Price, setting forth, Arbiter shall be shared equally by Buyer and Company. The Company shall promptly remit to Buyer an amount equal to the Shortfall Amount by Wire Transfer. The amount payable described in reasonable detail, a good faith calculation the immediately preceding sentence shall be accompanied by interest thereon calculated at the prime rate of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet The Chase Manhattan Bank for the Business as of immediately prior period from the Closing Date to the Closing prepared date on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”)which such payment is made.
(ib) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated payment made by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject Company pursuant to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 1.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions an adjustment to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementTotal Purchase Consideration.
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Post-Closing Adjustment. (a) No more The parties agree that no later than seventy-five (75) days after the Transfer Date (or such later date on which such statement reasonably can be prepared and delivered in light of the compliance of Purchaser and the Company with their obligations set forth in next two succeeding sentences), the Company shall deliver to Purchaser, in the form received by the Company from Gannett (i) a statement of the actual Net Financial Assets as of 11:59 p.m., New York City time, on the day immediately preceding the Transfer Date (the "CLOSING STATEMENT") certified by PriceWaterhouseCoopers L.L.P., independent accountants for Gannett, to be prepared (except as otherwise provided in Section 9 of the Disclosure Schedule to the Gannett Purchase Agreement) in conformity with GAAP and on a basis consistent with the basis used in preparing the Unaudited Financial Statements as of, and for the year ended, December 27, 1997, referred to in Section 3.5 of the Gannett Purchase Agreement, except to the extent of any position taken as the result of such statements being prepared on a consolidated basis, and (ii) a determination of the amount by which the actual Net Financial Assets are less than or greater than the Estimated Net Financial Assets. Purchaser shall provide the Company and Gannett, and Gannett's independent accountants, access at all reasonable times to the relevant personnel, properties, books and records of the Business for such purposes and to assist the Company and Gannett, and Gannett's independent accountants, in preparing the Closing Statement. Purchaser's assistance shall include, without limitation, the closing of the books of the Business as of the Transfer Date, the preparation of schedules supporting the amounts set forth in the general ledger and other books and records of the Business, and such other assistance as the Company, Gannett or Gannett's independent accountants may reasonably request. During the twenty-five (25) day period following the delivery by the Company of the Closing Statement referred to in the first sentence of this Section 2.4(a), Purchaser and its independent accountants will be permitted to review the working papers of the Company and of Gannett and its independent accountants relating to the preparation of the Closing Statement to the same extent as such working papers have been made available to the Company by Gannett pursuant to the Gannett Purchase Agreement. If, within twenty-five (25) days after - 12 - delivery by the Company of the Closing Statement, Purchaser notifies the Company that it disagrees with the Closing Statement, the Company shall attempt to resolve the disagreement with Gannett. In the event the Company and Purchaser cannot agree with respect to the Closing Statement within five (5) days of the notice of disagreement provided by Purchaser to the Company, then the determination shall be submitted for resolution promptly to an independent nationally recognized accounting firm (the "ACCOUNTING FIRM"), jointly selected by the Company and Purchaser, whose determination (the "ACCOUNTING FIRM DETERMINATION") shall be instructed by the parties to be made within twenty (20) days and be binding upon all parties hereto, and the fees and expenses of which shall be borne equally by Purchaser and the Company to the extent that such fees and expenses are allocable to the transactions contemplated by this Agreement. The Purchaser agrees that the accounting firm selected by Gannett and the Company pursuant to Section 2.3(a) of the Gannett Purchase Agreement shall be the Accounting Firm hereunder as long as such firm has not been engaged by Gannett or the Company during the three (3) Business Days year period prior to the date hereof. In the event that (whether expressly or by failure of Purchaser to provide notice of any disagreement within the applicable period) Purchaser agrees with the determination of the final Net Financial Assets set forth in the Closing Date and no more Statement without submitting the matter for an Accounting Firm Determination, the Net Financial Assets set forth in the Closing Statement shall be the final determination of the Net Financial Assets. The amount of Net Financial Assets as of 11:59 p.m., New York City time, on the day immediately preceding the Closing Date, as definitively determined pursuant to this Section 2.4(a) is referred to herein as the "ACTUAL NET FINANCIAL ASSETS".
(b) If the Actual Net Financial Assets are greater than the Estimated Net Financial Assets, then Purchaser shall pay the Company in cash, within two (2) Business Days after following the Closing Datedetermination of the Actual Net Financial Assets, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfuramount equal to such difference, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations plus interest on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and difference at the rate of eight percent (ii8%) if per annum from the Estimated Purchase Price is Transfer Date to the date of such payment to the Company. If the Actual Net Financial Assets are less than the Final Purchase PriceEstimated Net Financial Assets, then the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer Company shall pay the Purchaser in cash within two (2) Business Days following the determination of the Actual Net Financial Assets, an amount equal to Seller such difference, plus interest on the amount of such increase difference at the rate of eight percent (each a “Post-Closing Adjustment Amount”)8%) per annum from the Transfer Date to the date of such payment to Purchaser. Any Post-Closing Adjustment Amount The amounts paid pursuant to this Section 2.4(b) shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior for credit to the last day of the Review Period, Seller shall notify Buyer in writing of recipient at a bank account identified by such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree recipient in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
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Post-Closing Adjustment. The Purchase Price set forth in Section 2.2 shall be subject to adjustment after the Closing Date as follows:
(a) No more than three Within forty-five (345) Business Days prior to the Closing Date and no more than two (2) Business Days days after the Closing Date, an employee of Seller and one or more representatives or employees of the Buyer shall calculate prepare and deliver to the quantity Seller the Preliminary Closing Balance Sheet. The Buyer shall prepare the Preliminary Closing Balance Sheet in accordance with Tax Accounting applied on a basis consistent with the application of sulfurTax Accounting to the preparation of the Financial Statements, rockwhich shall set forth the Net Book Value.
(b) The Seller may request in writing all additional supporting Information as reasonably may be necessary to verify the Preliminary Closing Balance Sheet, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable Buyer shall promptly (but in no event more than five three (53) Business Days) business days following such physical examinationrequest) provide to the Seller any such Information that is in the possession or control of the Buyer, provided that any delay in providing such employee Information shall extend the Objection Deadline Date by the number of Seller and a representative or employee days any such delivery of Information by the Buyer shall summarize is delayed beyond such Inventory calculations on a report three (the “Inventory Report”3) and deliver the Inventory Report to Buyer and Sellerbusiness day period. The Inventory Report Seller shall deliver to the Buyer, by the Objection Deadline Date, either a notice indicating that the Seller accepts the Preliminary Closing Balance Sheet or a reasonably detailed statement describing its objections (if any) to the Preliminary Closing Balance Sheet. If the Seller delivers to the Buyer a notice accepting the Preliminary Closing Balance Sheet, or the Seller does not deliver a written objection to the Preliminary Closing Balance Sheet by the Objection Deadline Date, then, effective as of either the date of delivery of such notice of acceptance or as of the close of business on the Objection Deadline Date, the Preliminary Closing Balance Sheet shall be executed deemed to be the Final Closing Balance Sheet and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on the Parties. If the Seller timely objects to the Preliminary Closing Balance Sheet, such objections shall be resolved as follows:
(i) The Buyer and the Seller for purposes shall first use Reasonable Best Efforts to resolve such objections.
(ii) If the Buyer and the Seller do not reach a resolution of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory all objections set forth on the Inventory Report shall be determined in accordance with Seller’s statement of objections within thirty (30) days after delivery of such statement of objections, the accounting methodsBuyer and the Seller shall, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicablepromptly, but in no event later more than ninety thirty (9030) days after following the Closing Dateexpiration of such thirty (30) day period, Buyer shall prepare engage the Accountant, pursuant to an engagement agreement executed by the Buyer, the Seller and cause the Accountant, to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments resolve any remaining objections set forth in Section 3.2 on the Seller’s statement of objections (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance SheetUnresolved Objections”).
(iiii) If The Buyer and the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay jointly submit to Buyer the amount Accountant, within ten (10) days after the date of such reductionthe engagement of the Accountant (as evidenced by the date of the engagement agreement), a copy of the Preliminary Closing Balance Sheet, a copy of the statement of objections delivered by the Seller to the Buyer, and (ii) if a statement setting forth the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay resolution of any objections agreed to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after Buyer and the final determination Seller. Each of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit to the matter for resolution Accountant (with a copy delivered to a mutually agreeable independent international accounting firm (the “Independent Auditor”other Party on the same day), who shallwithin fifteen (15) days after the date of the engagement of the Accountant, acting as an arbitrator, resolve a memorandum (which may include supporting exhibits) setting forth their respective positions on the dispute set forth in Unresolved Objections. Each of the Objection Notice. In the event Buyer and the Seller are unable may (but shall not be required to) submit to agree the Accountant (with a copy delivered to the other Party on an Independent Auditor the same day), within thirty (30) days after the expiration date of such 60-day periodthe engagement of the Accountant, at a memorandum responding to the request of either party initial memorandum submitted to the Independent Auditor shall be appointed Accountant by the American Arbitration Associationother Party. The fees, costs and expenses of the Independent Auditor shall be borne equally Unless requested by the partiesAccountant in writing, neither Party may present any additional information or arguments to the Accountant, either orally or in writing.
(giv) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and the Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable Accountant that (A) within thirty forty-five (3045) days (or such other time as after the parties hereto shall agree in writing) after date of its engagement (i) hereunder, the Accountant shall determine whether or not the Final objections raised by the Seller are appropriate and shall issue a ruling which shall include a balance sheet, comprised of the Preliminary Closing Balance Sheet was prepared, as adjusted pursuant to any resolutions to objections agreed upon by the Buyer and the Final Purchase Price was calculated, in accordance with Seller and pursuant to the terms Accountant’s resolution of this Agreement or, alternativelythe Unresolved Objections, (iiB) only with respect in resolving any Unresolved Objection, the Accountant shall select a value for such item that is equal to or between the disputed items submitted to value for such item proposed by the Independent Auditor, to what extent (if any) Buyer in the Final Preliminary Balance Sheet or by the Seller in its statement of objections, and (C) the scope of the Accountant’s review shall be limited to resolving the Unresolved Objections. The balance sheet issued by the Accountant pursuant to the foregoing sentence shall be deemed to be the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise Closing Balance Sheet and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the partiesParties.
(v) The resolution by the Accountant of the Unresolved Objections shall be final and binding upon the Buyer and the Seller. The decision rendered Buyer and the Seller agree that the procedure set forth in this Section 2.5(b) for resolving disputes with respect to the Preliminary Closing Balance Sheet shall be the sole and exclusive method for resolving any such disputes; provided that this provision shall not prohibit either Party from instituting litigation to enforce the ruling of the Accountant.
(vi) The Buyer and the Seller shall share the fees and expenses of the Accountant equally.
(c) If the Net Book Value as shown on the Final Closing Balance Sheet is less than the Target Amount, the Purchase Price shall be reduced by such deficiency and the Seller shall pay to the Buyer, by wire transfer or other delivery of immediately available funds, within three (3) business days after the date on which the Final Closing Balance Sheet is finally determined pursuant to this Section 3.5(h2.5, an amount equal to such deficiency.
(d) may If the Net Book Value as shown on the Final Closing Balance Sheet exceeds the Target Amount, the Purchase Price shall be entered as a judgment in any court increased by such excess amount and the Buyer shall pay to the Seller, by wire transfer or other delivery of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action immediately available funds, within three (3) business days after the date on which the Final Closing Balance Sheet is finally determined pursuant to enforce any decision under this Section 3.5(h). The other party’s only defense 2.5, an amount equal to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementexcess.
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Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicablePromptly, but in no any event later than ninety within forty-five (9045) days after the Closing Date, Buyer Parent and its auditors shall prepare prepare, or shall cause the Company to prepare, and cause deliver to be delivered to Seller the Representative a certificate statement, duly certified by Parent as accurately setting forth Parent’s good faith determination of the Chief Financial Officer of Buyer certifying (i) its good faith calculation Working Capital of the Purchase Price, setting forth, Acquired Companies (in reasonable detail, a good faith calculation of each case as of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for close of business on the Business as of Day immediately prior to the Closing prepared and determined on a consolidated basis in accordance with GAAP applied on a basis consistent with the accounting methodsmethodologies, practices, policiesestimation techniques, procedures assumptions and estimation methods principles used to prepare in the preparation of the Most Recent Balance Sheet and including all the Working Capital Schedule attached hereto), together with (x) the consolidated balance sheet of the entries contained in Schedule 3.4(aAcquired Companies from which such determinations were derived and (y) such other relevant information on which the calculations reflected thereon are based (such statement, together with such accompanying balance sheet and other information, the “Final Balance SheetClosing Statement”).
(ib) If the Estimated Purchase Price is greater than Representative disagrees with Parent’s determination of Working Capital, in each case as reflected on the Final Purchase PriceClosing Statement, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reductionRepresentative may, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after receipt of the expiration Closing Statement, deliver a written notice (the “Dispute Notice”) to Parent setting forth the Representative’s calculation of each disputed amount (each an “Item of Dispute”). The Representative shall have access to all books and records and work papers (including those of Parent’s and the Acquired Companies’ accountants and auditors) relating to the Closing Statement and all other items reasonably requested by the Representative related thereto during normal business hours, subject to entering into such 60-day periodconfidentiality agreements as may be reasonably required by such accountants and auditors in order to provide such access. If the Representative does not deliver a Dispute Notice to Parent within thirty (30) days after delivery by Parent to the Representative of the Closing Statement, at the request of either party the Independent Auditor Closing Statement shall be appointed conclusive and binding upon each of the Parties. If the Representative delivers a Dispute Notice to Parent within thirty (30) days after delivery by Parent of the Closing Statement, Parent and the Representative shall work in good faith to resolve each Item of Dispute, and, if any Item of Dispute is so resolved, the Closing Statement shall be modified to the extent necessary to reflect such resolution. If any Item of Dispute remains unresolved as of the twentieth (20th) day after delivery by the American Arbitration AssociationRepresentative of the Dispute Notice, Parent and the Representative shall jointly retain an independent valuation firm of recognized national standing to resolve such remaining disagreement who shall be KPMG LLP; provided that, if such firm is unable or unwilling to serve, or if Parent and the Representative are unable to agree with such firm on terms for its engagement that are reasonably satisfactory to Parent and the Representative, then an alternative firm that is a nationally recognized valuation firm shall be selected by lot, after excluding one firm designated by Parent and one firm designated by the Representative (the firm actually retained pursuant to this sentence, the “Valuation Firm”). Parent and the Representative shall request that the Valuation Firm render a determination as to each unresolved Item of Dispute within thirty (30) days after its retention, and Parent and the Representative shall, and Parent shall cause the Acquired Companies and each of their respective agents and representatives to, cooperate fully with the Valuation Firm so as to enable it to make such determination as quickly and accurately as reasonably practicable, including the provision by Parent and the Acquired Companies of all books and records and work papers (including those of their accountants and auditors) relating to the Closing Statement and all other items reasonably requested by the Valuation Firm (in each case in such a manner so as not to waive or eliminate any privilege applicable to any such information). The Valuation Firm shall consider only those items and amounts that were set forth on the Closing Statement and the Dispute Notice and that remain unresolved by Parent and the Representative. In resolving any Item of Dispute, the Valuation Firm may not assign a value to any item greater than the greatest value for such item claimed by either Party, or less than the smallest value for such item claimed by either Party, on the Closing Statement or the Dispute Notice, as applicable. The Valuation Firm’s determination(s) shall be based upon the definitions of Working Capital included herein. The Valuation Firm’s determination of each Item of Dispute submitted to it shall be in writing, shall conform with this Section 3.05 and shall be conclusive and binding upon each of the Parties, and the Closing Statement shall be modified to the extent necessary to reflect such determination(s). The fees, costs and expenses of the Independent Auditor Valuation Firm shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely allocated between Parent on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review)one hand, and the Independent Auditor shall Representative on the other hand, based upon the percentage which the portion of the contested amount not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor awarded to make a determination as soon as practicable within thirty (30) days (or each such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect Party bears to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustmentamount actually contested by such Party. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations Working Capital as finally determined pursuant to this Section 3.5 shall be treated 3.05 is referred to herein as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement“Actual Working Capital”.
Appears in 1 contract
Samples: Merger Agreement (DST Systems Inc)
Post-Closing Adjustment. (ai) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after Within 90 days following the Closing Date, an employee of Seller the Purchaser shall in good faith prepare and one or more representatives or employees of Buyer shall calculate deliver to the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon Sellers a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report statement (the “Inventory ReportClosing Statement”) setting forth the Net Working Capital (the “Closing Net Working Capital”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other partyCash Balances, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value both as of the Inventory set forth close of business on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the resulting Purchase Price, setting forth, specifying in reasonable detail, a good faith calculation of each detail such calculations.
(ii) Following receipt of the adjustments Closing Statement, the Sellers will be afforded a period of 20 Business Days (the “20-Day Period”) to review the Closing Statement. At or before the end of the 20-Day Period, the Sellers will either (A) accept the Closing Net Working Capital and Cash Balances, and the resulting Purchase Price, as set forth in Section 3.2 the Closing Statement in its entirety or (the “Final Purchase Price”B) and (ii) a balance sheet for the Business as of immediately prior deliver to the Closing prepared on Purchaser a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which written notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”)) containing written explanation, setting forth in reasonable detail, those items in the Closing Statement that the Sellers dispute, in which case the items specifically identified by the Sellers shall be deemed in dispute. If Seller fails The failure by the Sellers to deliver the Objection Notice within the Review Period20-Day Period shall constitute each Seller’s acceptance of the Closing Net Working Capital and Cash Balances, and the Purchase Price, as set forth in the Closing Statement. Each Seller may make inquiries of the Purchaser and its accountants and appropriate employees and have reasonable access to the Purchaser’s books and records regarding questions concerning, or disagreements with, the Final Balance Sheet Closing Statement arising in the course of its review thereof, and Buyer’s calculation of the Final Purchase Price Purchaser shall be deemed use reasonable efforts to have been accepted cause any such employees and accountants to cooperate with, respond to such inquiries and provide such requested information in a timely manner (subject to each Seller entering into any confidentiality and other agreements reasonably required by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amountaccountants). If Seller delivers the Sellers deliver the Objection Notice within the Review 20-Day Period, subject then, within a further period of 20 Business Days from the end of the 20-Day Period, the Purchaser and the Sellers, and if desired, their accountants, will attempt to Section 3.5(f) below, Buyer and Seller shall negotiate resolve in good faith to resolve any disputed items and reach a written agreement (the “Settlement Agreement”) with respect thereto. Failing such disagreementresolution, and any resolution agreed to in writing by Buyer and Seller shall the unresolved disputed items will be referred for final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a certified public accounting firm mutually agreeable independent international accounting firm to the Parties (the “Independent AuditorArbitrating Accountants”), who shallprovided that if the Purchaser and the Sellers cannot agree on the Arbitrating Accountants, acting as the Purchaser and the Sellers shall each nominate an arbitrator, resolve the dispute set forth accounting firm experienced in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records healthcare industry and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor nominated accounting firms shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make choose a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.third accounting firm that
Appears in 1 contract
Samples: Securities Purchase Agreement (Addus HomeCare Corp)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior The Purchaser shall use its commercially reasonable efforts to prepare and deliver to the Seller within 45 days following the Closing Date (and shall, in any event, cause to be prepared and delivered to the Seller by no more later than two (2) Business Days after 60 days following the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report written notice (the “Inventory ReportAdjustment Notice”) containing (i) an unaudited consolidated balance sheet of the Acquired Companies as of 11:59 P.M. Pacific time on the day immediately preceding the Closing Date (the “Closing Balance Sheet”), attaching such summary supporting documentation and deliver other materials as may be appropriate to evidence the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each basis for such calculation, (ii) the Purchaser’s calculation of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Closing Net Working Capital based on the Closing Date under this Balance Sheet (the “Final Closing Net Working Capital”), and (iii) the Purchaser’s calculation of the amount of any payments required pursuant to Section 3.52.4(f) (the “Adjustment Calculation”). The value of the Inventory set forth on the Inventory Report shall Closing Balance Sheet will be determined prepared in good faith in accordance with GAAP in a manner consistent with the accounting methods, practices, policies, procedures methods and estimation methods practices used to prepare the Interim Balance Sheet.
(b) As soon Following Closing, Purchaser shall provide Seller and its representatives with reasonable and timely access, during normal business hours and in a manner so as reasonably practicablenot to interfere with the normal business operations of Purchaser and the Acquired Companies, but to all work papers and other information utilized by Purchaser in no event later than ninety preparing the calculation of the Closing Balance Sheet, the Final Closing Net Working Capital and the Adjustment Calculation. Within 30 days after delivery of the Adjustment Notice, the Seller will deliver to the Purchaser a written response in which the Seller will either:
(90i) 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(f); or
(ii) dispute in good faith the Adjustment Calculation by delivering to the Purchaser a written notice (a “Dispute Notice”) setting forth in reasonable detail the basis for each such disputed item. For purposes of this Section 2.4(b), the Seller may only deliver a Dispute Notice on the basis of a good faith dispute of the accuracy of Purchaser’s determination of the Final Closing Net Working Capital.
(c) If 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(f).
(d) If the Seller timely delivers a Dispute Notice to the Purchaser, then the Purchaser and the Seller will attempt in good faith, for a period of 30 days, to agree on the Adjustment Calculation for purposes of Section 2.4(f). Any resolution by the Purchaser and the Seller during such 30-day period as to any disputed items will be final and binding on the parties for purposes of Section 2.4(f). If the Purchaser and the Seller do not resolve all disputed items by the end of 30 days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate date of delivery of the Chief Financial Officer Dispute Notice, then the Purchaser and the Seller will submit the remaining items in dispute to Deloitte LLP for resolution, or if that firm is unwilling or unable to serve, the Purchaser and the Seller will engage another mutually agreeable independent accounting firm of Buyer certifying (i) its good faith calculation recognized national standing, which firm is not the regular auditing firm of the Purchase PricePurchaser or the Acquired Companies. If the Purchaser and the Seller are unable to jointly select such independent accounting firm within 10 days after such 30-day period, setting forththe Purchaser, in reasonable detailon the one hand, and the Seller, on the other hand, will each select an independent accounting firm of recognized national standing and such firms together shall select a good faith calculation third independent accounting firm of each recognized national standing, which firm is not the regular auditing firm of the adjustments set forth in Seller, 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 3.2 2.4 (such selected independent accounting firm, whether pursuant to this sentence or the preceding sentence, the “Final Purchase PriceIndependent Accounting Firm”) and (ii) ). The Independent Accounting Firm shall adjudicate each item in dispute in accordance with the terms of this Agreement, including, without limitation, by resolving each item in dispute that has a balance sheet for the Business as of immediately prior nexus to the Closing prepared on GAAP by applying GAAP with respect thereto in a basis manner consistent with the accounting methods, practices, policies, procedures methods and estimation methods practices used to prepare the Interim Balance Sheet. The Purchaser and the Seller will instruct the Independent Accounting Firm to render its determination with respect to the items in dispute in a written report that specifies the conclusions of the Independent Accounting Firm as to each item in dispute and the resulting Adjustment Calculation. The Purchaser and the Seller will each use their commercially reasonable efforts to cause the Independent Accounting Firm to render its determination within 30 days after referral of the items to such firm or as soon thereafter as reasonably practicable. The Independent Accounting Firm’s determination of the Adjustment Calculation as set forth in its report will be final, conclusive and binding on the parties for purposes of Section 2.4(f) and shall constitute an arbitral award upon which judgment may be entered. The Purchaser will revise the Closing Balance Sheet and including all the calculation of the entries contained Final Closing Net Working Capital as appropriate to reflect the resolution of the issues in Schedule 3.4(a) (dispute pursuant to this Section 2.4(d). The fees and expenses of the “Final Balance Sheet”)Independent Accounting Firm will be shared by the Purchaser and the Seller in inverse proportion to the relative amounts of the disputed amount determined to be for the account of the Purchaser and the Seller, respectively.
(ie) For purposes of complying with this Section 2.4, the Purchaser and the Seller will furnish to each other and to the Independent Accounting Firm such work papers and other documents and information relating to the disputed items as the Independent Accounting Firm may request and are available to that party (or its independent public accountants) and will be afforded the opportunity to present to the Independent Accounting Firm any material related to the disputed items and to discuss the items with the Independent Accounting Firm. The Purchaser may require that the Independent Accounting Firm enter into a customary form of confidentiality agreement with respect to the work papers and other documents and information relating to the Acquired Companies provided to the Independent Accounting Firm pursuant to this Section 2.4.
(f) If the Final Closing Net Working Capital as finally determined pursuant to this Section 2.4 is less than the Estimated Purchase Price Closing Net Working Capital, then the Seller will pay to the Purchaser the amount of such difference in cash. If the Final Closing Net Working Capital as finally determined pursuant to this Section 2.4 is greater than the Final Purchase PriceEstimated Closing Net Working Capital, then the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall Purchaser will pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase difference in cash.
(each a “Post-Closing Adjustment Amount”). g) Any Post-Closing Adjustment Amount shall payment to the Purchaser pursuant Section 2.4(f) will be paid effected by wire transfer of immediately available funds from the Seller to an account designated by the Purchaser, and any payment to the Seller pursuant to Section 2.4(f) will be effected by wire transfer of immediately available funds to an account designated by the party receiving payment Seller. Such payments will be made within three (3) five Business Days after following the final determination of the amount of such reduction or increase in the Purchase Price Adjustment Calculation in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form2.4.
(h) The parties shall jointly instruct purpose of this Section 2.4 is to determine the Independent Auditor final Purchase Price to make be paid by the Purchaser under this Agreement. Accordingly, any adjustment pursuant hereto will neither be deemed to be an indemnification pursuant to Article 8 or Article 9, nor preclude the Purchaser from exercising any indemnification rights pursuant to Article 8 or Article 9; provided, however, that in no event will the Seller be obligated to indemnify any Purchaser Indemnified Party for any Loss as a determination as soon as practicable within thirty (30) days (result of, or based upon or arising from, any Liability, to the extent, but only to the extent, such other time as Liability is accrued or reserved for on the parties hereto shall agree Closing Balance Sheet and taken into account in writing) after its engagement (i) whether or not determining the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations Closing Net Working Capital as finally determined pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information2.4. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered Any payment made pursuant to this Section 3.5(h) may 2.4 will be entered treated by the parties for all purposes as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action an adjustment to enforce any decision under this Section 3.5(h)the Initial Purchase Price. The other party’s only defense payment pursuant to such a request for specific enforcement or other legal action shall Section 2.4(f) will be fraud by or upon applied as an adjustment to the Independent AuditorInitial Purchase Price. Absent such fraud, such other party shall reimburse The Initial Purchase Price as so adjusted is referred to in this Agreement as the party seeking enforcement for its expenses related to such enforcement“Purchase Price.”
Appears in 1 contract
Samples: Stock Purchase Agreement (Volt Information Sciences, Inc.)
Post-Closing Adjustment. (a) No more than three (3) Business Days Following the Closing Date, the Purchaser shall prepare or cause to be prepared an actual balance sheet of Amalco in accordance with GAAP as of the end of the day prior to the Closing Date (the "ACTUAL CLOSING BALANCE SHEET") and no more than two a related calculation of the Net Working Capital Adjustment based on the Actual Closing Balance Sheet. Within thirty (230) Business Days after days following the Closing Date, an employee the Purchaser shall deliver the Actual Closing Balance Sheet to the Vendor, together with a computation of Seller the Net Working Capital Adjustment.
(b) The Vendor shall have thirty (30) days following the delivery of the Actual Closing Balance Sheet during which to review the Actual Closing Balance Sheet and one or more representatives or employees the computation of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located Net Working Capital Adjustment at the Facilities Vendor's expense. The Purchaser shall provide such access to the financial books and records of the Purchased Companies to the Vendor and the Vendor's accountants during normal business hours in connection with the determinations to be made pursuant to this Section 3.1 as the Vendor may reasonably request. If the Vendor has not delivered to the Purchaser a proposed modification to the Actual Closing Balance Sheet pursuant to Subsection 3.1(2)(c) within 30 days after delivery to the Vendor of the Actual Closing Balance Sheet, then the Net Working Capital Adjustment, based on the Actual Closing Balance Sheet, shall be determined to be final and binding and shall be paid in accordance with subsection 3.1(2)(d).
(c) If the Vendor delivers to the Purchaser a proposed modification to the Actual Closing Balance Sheet or the Net Working Capital Adjustment, in writing setting forth (i) the amount of the proposed modification, (ii) the item or items to which such proposed modification relates, and (iii) the facts and circumstances supporting the reasonableness and propriety of such modifications, then the Vendor and the Purchaser shall use their Best Efforts for fifteen (15) days after any such proposed modifications to settle each dispute related to the Actual Closing Balance Sheet and to agree upon a physical examination thereofthe Net Working Capital Adjustment. As soon as practicable Upon the expiration of such 15-day period, any party may submit in writing for resolution to any major international accounting firm (but in no event more other than five (5PWC) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report mutually agreed by the parties (the “Inventory Report”"INDEPENDENT ACCOUNTANTS") and deliver the Inventory Report any dispute with respect to Buyer and Sellersuch matters which has not been resolved. The Inventory Report Vendor and the Purchaser shall use their Best Efforts to cause the Independent Accountants to render a decision within fifteen (15) days following submission for resolution of any such dispute. The costs of the Independent Accountants shall be executed divided equally between the Purchaser and delivered by each the Vendor. The decision of Buyer and Seller the Independent Accountants with respect to the other party, and Actual Closing Balance Sheet or the quantity computation of such Inventory set forth thereon, absent manifest error, the Net Working Capital Adjustment shall be final and binding on Buyer each of the parties hereto. If the final and Seller for purposes of calculating binding Net Working Capital on Adjustment is a positive number, then the Closing Date under this Section 3.5. The value of Purchaser shall, within five (5) business days following the Inventory set forth on date the Inventory Report shall Net Working Capital Adjustment is deemed to be final and binding pursuant to subsection 3.1(2)(b) or agreed upon or determined in accordance with the accounting methodspursuant to subsection 3.1(2)(c), practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer shall prepare and pay or cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to such account as will have been designated by the Vendor in writing an amount equal to (w) the Net Working Capital Adjustment plus (x) 7.00% interest per annum on such amount from the Closing Date through the date of payment thereof (less any applicable withholding tax). If the Net Working Capital Adjustment is a negative number, then the Vendor shall, within five (5) business days following the date the Net Working Capital Adjustment is deemed to be final and binding pursuant to subsection 3.1(2)(b) or agreed upon or determined pursuant to subsection 3.1(2)(c) pay by wire transfer of immediately available funds to such account designated by the party receiving payment within three (3) Business Days after the final determination of the Purchaser in writing, an amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, equal to (iy) the Books and Records in Net Working Capital Adjustment plus (z) 7.00% interest per annum on such amount from the possession Closing Date through the date of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and payment thereof (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheetless any applicable withholding tax).
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 1 contract
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days As promptly as possible after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicableClosing, but in no event later than ninety (90) days after following the Closing DateClosing, Buyer the Purchaser shall prepare and cause deliver to be delivered to Seller the Sellers a certificate of report (the Chief “Closing Date Financial Officer of Buyer certifying Report”) setting forth (i) its good faith calculation a statement of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) Closing Date Net Working Capital; and (ii) a balance sheet for calculation of the Business as of immediately prior Working Capital Adjustment based on such report. The Purchaser shall bear any third-party expenses or fees incurred in preparing the Closing Date Financial Report. The Purchaser shall deliver or make available to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reductionSellers promptly, and in any event within five (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (35) Business Days after the final determination of the amount of such reduction any written request, any work papers or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and other information used by Buyer the Purchasers in connection with the preparation of the Final Balance Sheet and Closing Date Financial Report requested by the calculation of Sellers. If the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer Sellers do not object in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior writing to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor Date Financial Report within thirty (30) days after its delivery to the expiration Sellers, such Closing Date Financial Report will automatically become final and conclusive and the Closing Date Net Working Capital and the Working Capital Adjustment therein shall be the final Closing Date Net Working Capital and the final Working Capital Adjustment, respectively; provided that such 30-day period shall be tolled while Sellers are waiting to receive any work papers or other information reasonably requested by Sellers that were used by the Purchaser in connection with its preparation of the Closing Date Financial Report. In the event that the Sellers object in writing to the Closing Date Financial Report within such 6030-day period, at as extended, the request of either party Sellers and the Independent Auditor Purchaser shall be appointed by promptly meet and endeavor to reach agreement as to the American Arbitration Association. The fees, costs and expenses content of the Independent Auditor shall be borne equally by Closing Date Financial Report. If the parties.
(g) The parties shall instruct Sellers and the Independent Auditor to consider only those items Purchaser agree on the content of the Closing Date Financial Report, such Closing Date Financial Report will become final and amounts which are identified in conclusive. If the Objection Notice as being items which Buyer Sellers and Seller the Purchaser are unable to resolve. Furtherreach agreement within fifteen (15) days after the delivery of such objection by the Sellers to the Closing Date Financial Report, then the Independent Auditor’s Accountants will promptly be retained to undertake a determination shall of the Closing Date Financial Report, which determination will be based solely on the relevant Books and Records and the other written information provided made as quickly as possible. Only disputed items (plus any items deemed by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor Accountants to make be reasonably necessary to a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items items) will be submitted to the Independent AuditorAccountants for review. In resolving any disputed item, the Independent Accountants may not assign a value to what extent (if any) such item greater than the Final Balance Sheet greatest value for such item claimed by either Party or less than the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation lowest value for such item claimed by either Party, in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated case as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions presented to the Independent Auditor shall be treated as confidential informationAccountants. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall Accountants will be final and binding on the partiesSellers and the Purchaser and the Closing Date Net Working Capital and the Working Capital Adjustment, determined by the Independent Accountants shall be the final Closing Date Net Working Capital and the final Working Capital Adjustment, respectively. The decision rendered pursuant to this Section 3.5(h) may fees and expenses of the Independent Accountants will be entered paid by the Purchaser and the Sellers in the same proportion as a judgment the dollar amount of the determination in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other such party’s only defense favor reflected in the Closing Date Financial Report bears to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementtotal dollar amount of all disputed items.
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Post-Closing Adjustment. (a) No more than three (3) Business Days prior The Base Merger Consideration shall be subject to adjustment after the Closing Date and no more than two as specified in this Section 3.1.
(2b) Business Days after Within one hundred twenty (120) days following the Closing DateEffective Time, an employee of Seller and one or more representatives or employees of Buyer CCC shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report cause CCC's Accountant to audit (the “Inventory Report”"Post-Closing Audit") and deliver the Inventory Report ------------------ Surviving Company's books to Buyer and Sellerdetermine the actual Company net worth as of Closing without regard to the impact of the award, payment or redemption of stock appreciation rights granted pursuant to the January 1998 Stock Appreciation Rights Plan of the Company (the "Actual Closing Net Worth"). The Inventory Report shall be executed ------------------------ parties acknowledge and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating agree that Actual Closing Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report Worth shall be determined in accordance with GAAP, provided that no increase in intangible assets (including without limitation goodwill, franchises and intellectual property) accounted for after December 31, 1997 shall be taken into account and no write- offs shall be proposed, other than regular depreciation between December 31, 1997 and March 31, 1998 in accordance with GAAP consistently applied. The Stockholders shall cooperate and shall use their reasonable efforts to cause the accounting methods, practices, policies, procedures officers and estimation methods used employees of the Company to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days cooperate with CCC and CCC's Accountant after the Closing DateDate in furnishing information, Buyer shall prepare documents, evidence and cause other assistance to be delivered CCC's Accountant to Seller a certificate facilitate the completion of the Chief Financial Officer of Buyer certifying (i) its good faith calculation Post-Closing Audit within the aforementioned time period. Without limiting the generality of the Purchase Priceforegoing, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to within two weeks after the Closing prepared on a basis consistent the Stockholders shall provide CCC's Accountants with the accounting methods, practices, policies, procedures and estimation methods used to prepare information and/or documents reasonably requested by them. In the Balance Sheet and including all of event that CCC's Accountant determines that the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is Actual Closing Net Worth was less than the Final Purchase PriceNet Worth Target, the Purchase Price CCC shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each deliver a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period written notice (the “Review Period”"Financial Adjustment Notice") reasonable access, upon reasonable notice, to the Stockholders setting forth (i) the Books and Records in the possession of and used --------------------------- determination made by Buyer in the preparation CCC's Accountant of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase PriceActual Closing Net Worth, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation amount of the Final Purchase Price and Adjustment to the Final Balance Sheet.Base Merger Consideration pursuant to the provisions of Section 2.2(c) (the "Merger Consideration Adjustment"). -------------------------------
(ec) If Seller disagrees with The Stockholders shall have thirty (30) days from the Final Balance Sheet or the calculation receipt of the Final Purchase Price, on or prior Financial Adjustment Notice to the last day of the Review Period, Seller shall notify Buyer in writing CCC if they dispute such Financial Adjustment Notice. If CCC has not received notice of such disagreement with a dispute within such 30-day period, CCC shall be entitled to receive the Final Balance Sheet or the calculation of the Final Purchase PriceMerger Consideration Adjustment, which notice shall set forth any such disagreement as provided in reasonable detailSection 2.2(c). If, however, the specific item Stockholders have delivered notice of the Final Balance Sheet or the calculation in the Final Purchase Price such a dispute to which CCC within such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post30-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Noticeday period, then Buyer and Seller CCC's Accountant shall submit the matter for resolution to select a mutually agreeable partner at an independent international accounting firm that has not represented any of the parties hereto within the preceding two (2) years to review the “Independent Auditor”)Surviving Corporation's books and Financial Adjustment Notice (and related information) to determine the amount, who shallif any, acting as an arbitratorof the Merger Consideration Adjustment. The independent accounting firm shall make its determination of the Merger Consideration Adjustment, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor if any, within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed its selection. The determination made by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor accounting firm shall be final and binding on the parties. The decision rendered pursuant parties hereto, and upon such determination, CCC shall be entitled to this receive the Merger Consideration Adjustment (which shall be from the Pledged Assets as defined in Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h3.2). The other party’s only defense to such a request for specific enforcement or other legal action costs of the independent accounting firm shall be fraud borne by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement(either CCC or the Stockholders) whose determination of the Company's net worth at Closing was further from the determination of the independent accounting firm, or equally by CCC and the Stockholders in the event that the determination by the independent accounting firm is equidistant between the disputed determinations by CCC and the Stockholders.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Consolidation Capital Corp)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no any event later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after Closing, Purchaser shall, under the expiration direction and supervision of Roy X. Xxxxxxxx, Xx., Xxotx X. Xxxxxxxx xxx Calvxx X. Xxxx, xx any of them, prepare and deliver to Seller a balance sheet of American Southern as of the Closing Date (the "Closing Balance Sheet"), prepared in accordance with SAP reporting practices consistently applied (but subject to the provisions of Section 5.04(i)). Without limiting the generality of the foregoing sentence, the parties expressly agree that the Closing Balance Sheet shall include amounts for insurance liability reserves calculated in a manner and using methodologies and assumptions consistent in all respects with American Southern's practice of calculating such 60reserves during the 24-month period immediately prior to the Closing Date.
(b) Seller shall have fifteen (15) days after receipt of the Closing Balance Sheet in which to review such Closing Balance Sheet, and during such 15-day period, at Purchaser shall make available to Seller and its representatives all information regarding preparation of the request Closing Balance Sheet as may be reasonably requested by Seller, including, without limitation, access to all employees, books, records and work papers. If within such 15-day period Seller does not provide Purchaser with written notice of either party any objection to the Independent Auditor Closing Balance Sheet, the Closing Balance Sheet shall be appointed by deemed accepted by, and final and binding upon, both parties. If Seller does provide Purchaser with written notice of any objection within such 15-day period, then the American Arbitration Associationparties shall in good faith attempt to resolve such dispute within fifteen (15) days after Purchaser's receipt of Seller's objection notice. The fees, costs and expenses of the Independent Auditor shall If such dispute cannot be borne equally resolved by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination dispute shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor submitted to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, arbitration in accordance with the terms provisions of this Agreement orArticle 9 hereof, alternatively, except that the third arbitrator selected from a AAA list (iias described in Section 9.02) only with respect to must be an independent certified public accountant knowledgeable about SAP.
(c) Once the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Closing Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be has been deemed final and binding on the parties, whether by failure of Seller to object, agreement of the parties or arbitration, within five (5) business days thereafter, Seller shall pay to Purchaser in immediately available funds the amount, if any, by which the Stockholders' Equity reflected on the Closing Balance Sheet is less than $26,800,000, plus interest thereon at the Prime Rate in effect on the Closing Date for the period of the Closing Date through the date of payment. The decision rendered pursuant If such Stockholders' Equity as reflected on the Closing Balance Sheet is equal to this Section 3.5(hor greater than $26,800,000, neither party shall owe the other any additional amounts.
(d) may be entered as a judgment in Notwithstanding anything to the contrary contained herein, the parties agree that all payables of any court of competent jurisdiction. Either party may seek specific enforcement the Companies to Seller or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action of its affiliates shall be fraud by accrued on the Closing Balance Sheet and paid at Closing or upon paid prior to Closing (in which case the Independent Auditor. Absent Companies shall furnish Seller with satisfactory evidence of such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementpayment).
Appears in 1 contract
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) Within 60 days after the Closing Date, the Buyer shall prepare and cause to be prepared and delivered to the Seller a certificate written statement calculating the Closing Adjustment as reflected on the Closing Balance Sheet (the “Closing Adjustment Statement”). The Buyer shall provide a reasonable description of any differences between the Closing Adjustment Statement and the Closing Financial Statements, to the extent such differences exist; however, in any event the Closing Adjustment Statement shall be prepared in accordance with Schedule 1.24 and Section 1.28. Subject to the confidentiality provisions of Section 6.3(a) hereof, the Buyer shall permit the Seller and its accountants to review promptly upon request, on-site or otherwise, during normal business hours at the Seller’s sole discretion, all records reasonably necessary for the evaluation by the Seller of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase PriceClosing Adjustment, setting forthand to take copies of such records.
(b) If the Seller disputes the Closing Adjustment, Inventory Report or Accounts Receivable Report as determined by the Buyer, the Seller shall deliver to the Buyer a Notice of Dispute not more than 30 days after the date the Seller receives the Buyer’s written determination of the Closing Adjustment. If the Seller fails to deliver a Notice of Dispute within such 30-day period, the Seller shall be deemed to have accepted the Closing Adjustment, the Inventory Report and/or the Accounts Receivable Report as determined by the Buyer. Upon receipt of the Notice of Dispute, the Seller and the Buyer shall promptly consult with each other with respect to the specified points of disagreement in reasonable detailan effort to resolve the dispute. If any such dispute cannot be resolved by the Seller and the Buyer within 30 days after the Buyer receives the Notice of Dispute, a good faith calculation the Seller may refer the dispute to the New York Office of Ernst & Young (the “Arbiter”), as an arbitrator to finally resolve, as soon as practicable, and in any event within 45 days after such reference, all points of disagreement with respect to the Closing Adjustment reflected on the Closing Adjustment Statement, the Inventory Report and/or the Accounts Receivable Report. If the Seller does not refer the dispute to the Arbiter within 15 days after the expiration of such 30-day period, ESCO and the Seller shall be deemed to have accepted the Closing Adjustment, the Inventory Report and/or the Accounts Receivable Report, as the case may be, as determined by the Buyer. For purposes of such arbitration each of the adjustments Seller and the Buyer shall submit a proposed calculation of the Closing Adjustment, the Inventory Report and/or the Accounts Receivable Report, as the case may be, as of the Effective Time and such proposed calculations shall be consistent with the initial calculations set forth in Section 3.2 (the “Final Purchase Price”) Buyer’s Closing Adjustment Statement, the Inventory Report and/or the Accounts Receivable Report and (ii) a balance sheet for the Business Seller’s Notice of Dispute. The Arbiter shall apply the terms of Sections 2.4 and 2.5, and shall otherwise conduct the arbitration under such procedures as the Parties may agree or, failing such agreement, under the then prevailing Commercial Rules of immediately prior the American Arbitration Association. Each of the Parties shall bear its own expenses, including but not limited to the fees and expenses of legal counsel and accountants, in connection with such arbitration. The fees and expenses of the Arbiter incurred in connection with such arbitration shall be allocated equally between the Seller and the Buyer. All determinations by the Arbiter shall be final, conclusive and binding with respect to the Closing prepared on a basis consistent with Adjustment, the accounting methodsInventory Report and/or the Accounts Receivable Report and the allocation of arbitration fees and expenses, practices, policies, procedures and estimation methods used to prepare in the Balance Sheet and including all absence of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”)fraud or manifest error.
(ic) If the Estimated Purchase Price is greater than the Final Purchase Price, the The Purchase Price shall be adjusted downward dollar-for-dollar and as follows, based on the Closing Adjustment determined pursuant to this Section 2.5: the Seller shall pay to the Buyer the amount of by which such reduction, and (ii) if the Estimated Purchase Price Closing Adjustment is less than the Final Purchase Price, Estimated Closing Adjustment and the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to the Seller the amount of by which such increase (each a “Post-Closing Adjustment Amount”)is greater than the Estimated Closing Adjustment. Any Post-Closing Adjustment Amount payment so required to be made under this Section 2.5(c) by the Seller shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) funds, not more than five Business Days after the earliest of (i) the Seller failing to deliver a Notice of Dispute in a timely fashion, (ii) the Seller failing to refer the dispute to the Arbiter in a timely fashion, and (iii) the Arbiter making a final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable noticedispute, to (i) an account to be designated by the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the payee at least two Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or Days prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Noticedue date. In the event Buyer and Seller are unable event, but only in the event, the party owing payment hereunder fails to agree on an Independent Auditor pay the adjustment amount within thirty (30) days after the expiration of such 60time period provided, interest shall be compounded annually, calculated using a 365-day period, at year from the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect Closing Date through one day prior to the disputed items submitted to the Independent Auditor, to what extent date of payment at an annual rate of five and one-half percent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h51/2%). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 1 contract
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) 90 days after the Closing Date, Buyer the KM Member shall prepare and cause deliver to be delivered to Seller the Buyer a certificate of written statement setting forth the Chief Financial Officer of Buyer certifying (i) its KM Member’s good faith final calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 Price (the “Final Purchase Price”) based upon (a) the KM Member’s calculation of (i) Closing Working Capital and (ii) a balance sheet for the Business as of immediately prior to the Closing Working Capital Adjustment, in each case, together with reasonable supporting documents and prepared (x) on a basis consistent with GAAP, (y) in accordance with the principles and using the same line items set forth in Schedule 3.3(a) and (z) in accordance with the past practices of the Company; provided, however, that in the event of a conflict between foregoing clauses (x), (y) and (z), Schedule 3.3(a) shall prevail, (b) the Long-Term Indebtedness Adjustment, together with reasonable supporting documents, and (c) the Interim Capital Contributions, together with reasonable supporting documents (collectively, the “Final Closing Items”). Together with the Final Closing Items, the KM Member shall provide a worksheet showing the difference, if any, between any Estimated Closing Item and the corresponding Final Closing Item.
(b) The KM Member, the Buyer and the Company shall promptly provide to each other all documents reasonably requested by the other to verify any of the items set forth in the Final Closing Items calculations. The Buyer shall have the right for 30 days following receipt of the Final Closing Items to object to any item therein and the proposed calculation of the Final Purchase Price. The Buyer and its representatives shall be entitled to reasonable access during normal business hours to all books and records of the Company as may be reasonably requested by the Buyer for the purpose of this Section 3.4(b). Any objection made by the Buyer shall be made in writing and shall set forth such objection and the basis therefor in reasonable detail. The Buyer shall be deemed to have waived any rights to object under this Section 3.4(b) unless the Buyer furnishes its written objections to the KM Member within such 30 day period. If the Buyer delivers an objection within such 30 day period, then the Buyer and the KM Member shall negotiate in good faith for 15 days to resolve the objections. If, at the end of such 15-day period, there are any objections that remain in dispute, then the remaining objections in dispute shall be submitted for resolution to the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all firm of the entries contained in Schedule 3.4(a) Xxxxx Xxxxxxxx LLP (the “Final Balance SheetClosing Item Arbitrator”).
. If any objections are submitted to the Closing Item Arbitrator for resolution, (i) If each of the Estimated KM Member, the Buyer and the Company shall promptly 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 each of the KM Member and the Buyer 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; (ii) the Closing Item Arbitrator shall determine the Final Purchase Price as promptly as reasonably practicable following receipt of such workpapers and other documents and information; (iii) the Closing Item Arbitrator must not adopt an amount for any component of the Final Purchase Price that is greater than the greater amount submitted by the KM Member or the Buyer or less than the lesser amount submitted by KM Member or the Buyer; and (iv) the determination by the Closing Item Arbitrator of the Final Purchase Price, as set forth in a written notice delivered to both the Buyer and the KM Member by the Closing Item Arbitrator, shall be made in accordance with this Agreement 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. The Buyer and the KM Member (on behalf of itself and the Company) shall each bear their own legal fees and other costs in connection with any such objection; provided that the Buyer, on one hand, and the KM Member, on the other hand, shall bear one-half of the costs and expenses of the Closing Item Arbitrator. Notwithstanding anything in this Agreement to the contrary, the Closing Item Arbitrator and procedures set forth herein shall be the sole method for resolving any disputes regarding the Final Purchase Price or the provisions of this Section 3.4.
(c) Following the final determination of the Final Purchase Price pursuant to this Section 3.4, the following amount shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer promptly (but in any event within five Business Days of the amount determination of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be ) paid by wire transfer of in immediately available funds to an account designated by the party receiving payment within three applicable payee as follows:
(3i) Business Days after If such finally determined Final Purchase Price is greater than the final determination of Estimated Purchase Price, then the Buyer shall pay to the KM Member an amount in cash equal to the amount of such reduction excess.
(ii) If such finally determined Final Purchase Price is less than the Estimated Purchase Price, then the KM Member shall pay to the Buyer an amount in cash equal to the amount of such shortfall.
(iii) If such finally determined Final Purchase Price is equal to the Estimated Purchase Price, then no payment to any Party shall be required. For the avoidance of doubt, no adjustment or payment pursuant to this Section 3.4(c) shall increase in or decrease the KM Member’s or the Buyer’s relative holdings of Membership Interests. Any payments made pursuant to this Section 3.4(c) shall constitute an adjustment of the Purchase Price in accordance with this Section 3.5for Tax purposes and shall be treated as such by the Buyer, the KM Member and the Company on their Tax Returns.
(d) Upon receipt of If required by Schedule 3.4, the calculation of consideration for the Final Purchase Price, Seller SoCo Interest shall be permitted during the succeeding forty-five further adjusted upwards by an amount equal to $50,000,000 (45) day period (such amount, the “Review PeriodDeferred Consideration”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor Deferred Consideration, if any, shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct be paid by the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, Buyer in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as conditions set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementSchedule 3.4.
Appears in 1 contract
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing DateAs promptly as practicable, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) any event, within 60 days following such physical examinationthe Closing, such employee Sellers shall, at their expense, prepare, or cause to be prepared, and deliver to Purchaser a combined balance sheet of Seller and a representative or employee the Grove Companies as of Buyer shall summarize such Inventory calculations on a report the Determination Date (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller"Closing Balance Sheet"). The Inventory Report Closing Balance Sheet shall be executed and delivered audited by each of Buyer and Seller to the other partyErnst & Young LLP, and the quantity of such Inventory set forth thereon, absent manifest error, Sellers' independent accountants. The Closing Balance Sheet shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined prepared in accordance with the accounting methodsprinciples, practicesmethods and examples set forth in Section 1.1(a) of the Disclosure Schedule, policiesand shall reflect the taking of a physical inventory, which shall occur with reasonable advance notice to Purchaser and its accountants, who shall have the opportunity to review and observe the taking of such inventory count. The physical inventory shall be taken in a manner consistent with the past practice of the Grove Operations; provided, however, that at Purchaser's election, more extensive inventory procedures and estimation methods used to prepare the Balance Sheetnot inconsistent with GAAS shall be employed.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after Within two Business Days following issuance of the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”)., the following adjustment payment, if any, shall be made:
(i) If the Estimated Purchase Price amount of the Closing Net Worth as set forth on the Closing Balance Sheet is less than the Base Net Worth, the Sellers shall make an adjustment payment in an amount equal to the excess of (x) the Base Net Worth over (y) the Closing Net Worth as set forth on the Closing Balance Sheet.
(ii) If the amount of the Closing Net Worth as set forth on the Closing Balance Sheet is greater than the Final Purchase PriceBase Net Worth, the Purchase Price Purchaser shall make an adjustment payment in an amount equal to the excess of (x) the Closing Net Worth as set forth on the Closing Balance Sheet over (y) the Base Net Worth; provided, however, that the Purchaser's adjustment payment shall in no event exceed $17,000,000.
(c) During the 90-day period referred to in Section 2.8(d), Purchaser or its representatives may request from Sellers, and Sellers shall deliver promptly, any additional information reasonably required by Purchaser for its review of the Closing Balance Sheet.
(d) Purchaser and Purchaser's accountants shall, within 90 days after the delivery by the Sellers of the Closing Balance Sheet, complete their review of the Closing Balance Sheet. In the event that Purchaser does not agree with Sellers' Closing Balance Sheet and the calculation of Closing Net Worth therein, Purchaser shall inform Sellers in writing (the "Purchaser's Objection"), setting forth a specific description of the basis of Purchaser's Objection and the adjustments to such Closing Net Worth which Purchaser believes should be adjusted downward dollar-for-dollar and Seller shall pay to Buyer made, on or before the amount last day of such reduction, 90-day period.
(e) Sellers shall have 30 days to review and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay respond to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”)Purchaser's Objection. Any Postfurther adjustment resulting from the resolution of any aspects of Purchaser's Objection by the parties within such 30-Closing Adjustment Amount day period shall be paid promptly by the party required to make such payment to the party entitled to receive it on or prior to the end of such 30-day period.
(f) If Sellers and Purchaser are unable to resolve any of their remaining disagreements with respect to Purchaser's Objection within 10 days following Sellers' response to Purchaser's Objection, they shall refer their remaining disagreements to Deloitte & Touche LLP, or another internationally recognized firm of independent public accountants as to which the Sellers and Purchaser mutually agree (the "CPA Firm"), who shall determine on the basis of the standards set forth in Section 1.1(a) of the Disclosure Schedule, and only with respect to the remaining disagreements so submitted, whether and to what extent, if any, Closing Net Worth as derived from the Closing Balance Sheet, requires adjustment. Sellers and Purchaser shall direct the CPA Firm to use its best efforts to render its determination within 45 days. The CPA Firm's determination shall be conclusive and binding upon Purchaser and the Sellers. The fees and disbursements of the CPA Firm shall be shared equally by Purchaser, on the one hand, and Sellers, on the other hand. Purchaser and the Sellers shall make readily available to the CPA Firm and to each other all relevant books and records and any work papers (including those of the parties' respective accountants) relating to the Closing Balance Sheet and all other items reasonably requested by the CPA Firm or a party hereto.
(g) In the event the CPA firm makes a determination in the favor of one party, the other party shall promptly make an adjustment payment to the party in whose favor the determination was made in accordance with such determination.
(h) All payments required to be made by this Section 2.8 shall include interest thereon from the Closing Date through the date of payment at the LIBOR rate; provided, however, that, with respect to any amount paid after the date of delivery of Purchaser's Objection (the "Objection Date"), the interest rate shall be increased to the LIBOR rate plus 2.75% from the Objection Date through the date of payment; and further provided that if any payment under this Section 2.8 is not made within 10 days of the date payable, the applicable rate of interest shall be increased by 2% per annum for the period from the day following such date through the date such payment is made. All adjustment payments payable pursuant to this Section 2.8 shall be paid in dollars by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after entitled to receive the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5adjustment payment.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct provide each other and their accountants and their representatives reasonable access during normal business hours to the Independent Auditor to consider only those items books and amounts which are identified in records of the Objection Notice as being items which Buyer and Seller are unable to resolve. FurtherGrove Companies, the Independent Auditor’s determination shall be based solely on the other relevant Books and Records and the other written information provided by Buyer and Seller (i.e.information, not on the basis including work papers of an independent review)their accountants, and to any employees to the Independent Auditor shall not conduct additional discovery in any formextent necessary for the Sellers to prepare the Closing Balance Sheet and for Purchaser to respond thereto.
(hj) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations Any adjustment payment made pursuant to this Section 3.5 2.8 shall be treated allocated among the Specified Grove Corporations and the Specified Grove Assets (as compromise an entirety) other than Grove France and settlement negotiations for purposes of Rule 408 Delta Manlift SAS in proportion to the amounts set forth in Section 2.2 of the Federal Rules of Evidence Disclosure Schedule other than amounts allocated to Grove France and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcementDelta Manlift SAS.
Appears in 1 contract
Samples: Stock and Asset Purchase Agreement (Grove Holdings Capital Inc)
Post-Closing Adjustment. The Base Purchase Price shall be subject to adjustment after the Closing Date as follows:
(a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days Within 45 days after the Closing Date, an employee the Seller shall prepare and deliver to the Buyer a combined balance sheet of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report Group (the “Inventory Report”"Closing Balance Sheet") and deliver as of the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each close of Buyer and Seller to business on the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on day immediately preceding the Closing Date under this Section 3.5(the "Closing Balance Sheet Date"). The value of the Inventory set forth on the Inventory Report Closing Balance Sheet shall be determined prepared in accordance with the generally accepted accounting methods, practices, policies, procedures and estimation methods principles ("GAAP")
(i) applied on a basis consistent with that used to prepare the December 31, 1999 Balance Sheet, a copy of which is attached hereto as Attachment 1.4(a); (ii) as if it were a year-end balance sheet, and (iii) in a format identical to the December 31, 1999 Balance Sheet. Parent and Buyer agree with the accounting methods and procedures used by Seller in connection with the preparation of the December 31, 1999 Balance Sheet. The accounting procedures used to prepare the Closing Balance Sheet shall include the taking of a physical inventory as of the close of business on the last day of business immediately preceding the Closing Date. The combined net worth of the Group as reflected on the Closing Balance Sheet (i.e., the excess of combined total assets over combined total liabilities, in each case as determined on the basis set forth in this Section 1.4(a)), is referred to herein as the "Closing Date Net Worth." Notwithstanding any provision of this Agreement, the Closing Date Net Worth shall not include intercompany liabilities or assets between the Group or individual Group Members and the Seller. If the net amount of any intercompany transactions is carried as an asset on the books of a Group Member, such asset shall be eliminated by charging such amount against shareholders' or owners' equity, as the case may be. If the net amount of any intercompany transactions is carried on the books of any Group Member as a liability, such liability shall be eliminated by crediting such amount to shareholders' or owners' equity, as the case may be. During the foregoing 45 day period, the Buyer shall grant the Seller reasonable access to the books, records and personnel of the Group for purposes of determining the Closing Balance Sheet. The Buyer shall have the right to have representatives present at any physical count of the inventory taken in connection with the Closing Balance Sheet.
(b) As soon If the Buyer, in good faith, disputes the Closing Date Net Worth as reasonably practicableshown on the Closing Balance Sheet prepared by the Seller, but in no event later than ninety (90) the Buyer shall deliver to the Seller within 30 days after receiving the Closing Date, Balance Sheet a notice setting forth the basis for such dispute and a statement of what the Buyer shall prepare and cause to be delivered to Seller a certificate of believes is the Chief Financial Officer of Buyer certifying correct Closing Balance Sheet (i) its good faith calculation of determined on the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments basis set forth in Section 3.2 1.4(a)) and the correct Closing Date Net Worth and describing in reasonable detail the basis for such belief (the “"Dispute Notice"). The Parties shall use reasonable efforts to resolve such dispute for a period of 30 days after the Buyer has given the Dispute Notice. If the Parties resolve such dispute, the Closing Date Net Worth agreed to by the Parties shall be deemed to be the "Final Purchase Price”Closing Date Net Worth" and the Closing Balance Sheet agreed to by the Parties shall be deemed to be the "Final Closing Balance Sheet."
(c) If the Parties do not reach a final resolution within 30 days after the Buyer has given the Dispute Notice, unless the Buyer and Seller mutually agree to continue their efforts to resolve such differences, KPMG LLP or such other firm as the Buyer and the Seller shall agree upon (the "Neutral Accountants") shall resolve such dispute in the manner provided below. The Buyer and the Seller shall each be entitled to make a presentation to the Neutral Accountants, pursuant to procedures to be agreed to among the Buyer, the Seller and the Neutral Accountants, advocating the merits of the position espoused by such Party; and the Neutral Accountants shall be required to resolve the dispute between the Buyer and the Seller and determine the Closing Date Net Worth within 15 business days thereafter. The Closing Date Net Worth determined by the Neutral Accountants shall be deemed to be the Final Closing Date Net Worth and the Closing Balance Sheet, as adjusted to reflect such determination, shall be deemed to be the Final Closing Balance Sheet. Such determination by the Neutral Accountants shall be conclusive and binding upon the Parties, absent fraud or manifest error. Nothing herein shall be construed to authorize or permit the Neutral Accountants (i) to determine any questions or matters whatsoever under or in connection with this Agreement except for the resolution of the dispute between the Buyer and the Seller regarding the Closing Date Net Worth, (ii) a balance sheet for the Business as of immediately prior to resolve any such dispute by making an adjustment to the Closing Balance Sheet that is outside of the range defined by the respective amounts in the Closing Balance Sheet prepared on a basis consistent with by the Seller and the Dispute Notice or (iii) to apply any accounting methods, practicestreatments, policies, principles or procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained other than as described in Schedule 3.4(a) (the “Final Balance Sheet”Section 1.4(a).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt The Seller, on the one hand, and the Buyer, on the other hand, shall share equally the fees and expenses of the calculation Neutral Accountants. If the Neutral Accountants request indemnification or assurance of payment, each party hereby agrees to provide the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) Neutral Accountants with reasonable access, upon reasonable notice, to (i) the Books and Records in the possession indemnification or assurance of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheetpayment.
(e) If Seller disagrees with Failure of the Final Buyer to deliver a Dispute Notice within 30 days after receiving the Closing Balance Sheet or the calculation shall constitute acceptance of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall Closing Date Net Worth set forth any on the Closing Balance Sheet, whereupon such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price Closing Date Net Worth shall be deemed to have been accepted by Seller be the Final Closing Date Net Worth and the Closing Balance Sheet shall be deemed to be the Final Closing Balance Sheet. Delivery by the Buyer of a Dispute Notice shall constitute final and binding and used acceptance by the Buyer of all portions of the Closing Balance Sheet other than those specifically identified in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Dispute Notice within the Review Period, as being subject to Section 3.5(f) below, Buyer and Seller shall negotiate in a good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties heretodispute.
(f) If the Final Closing Date Net Worth is less than $25,400,047, then the Seller shall pay to the Buyer an amount equal to the difference between $25,400,047 and Seller are unable to resolve any disagreement as contemplated the Final Closing Date Net Worth. Payment shall be made by Section 3.5(e) wire transfer or other delivery of immediately available funds, within 60 five business days after delivery of the Objection Notice, then Buyer and Seller shall submit date on which the matter for resolution Final Closing Date Net Worth is determined pursuant to a mutually agreeable independent international accounting firm (this Section 1.4 to an account or accounts designated by the “Independent Auditor”), who shall, acting as an arbitrator, resolve Buyer. If such payment is not made within the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) five business days after the date on which the Final Closing Date Net Worth is determined, interest at a rate equal to 12% per annum shall compound daily beginning on the expiration of such 60-five day period, at period an ending on the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses date of the Independent Auditor shall be borne equally by the partiespayment.
(g) The parties shall instruct For purposes of this Agreement, "Adjusted Purchase Price" means the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. FurtherBase Purchase Price minus, if applicable, the Independent Auditor’s determination shall amount of the payment required to be based solely on made by the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations Buyer pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h1.4(f). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 1 contract
Samples: Stock Purchase and Sale Agreement (Aztec Technology Partners Inc /De/)
Post-Closing Adjustment. Within 45 (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90forty-five) days after the Closing Date, Sellers shall determine the Net Working Capital Surplus (as defined below) of the Company as of February 1, 1998 and shall deliver to the Buyer a certificate (the "Certificate") setting forth such "Net Working Capital Surplus." "Net Working Capital Surplus" shall mean the excess of X minus Y, where X equals the sum of current assets plus security deposits and Y equals the sum of current liabilities minus the "Litigation Contingency." All amounts shall be determined by reference to the interim financial statements of the Company dated as of January 31, 1998, certified by the President of the Company and reviewed by Merdinger, Fruchter, Rosen & Corso, P.C. and delivered pursuant to Section 2.9. The "Litxxxxxon Contingency" shall be $25,000 which shall be reserved on the books of the Company for expenses incurred in connection with (including amounts in settlement of) all litigation as to which the Company is a defendant on the Closing Date. If, within 5 (five) business days following receipt by the Buyer of the Certificate, Buyer has not given Sellers notice of its objection to the Certificate (which notice must contain a statement of the basis of Buyer's objection), then, Buyer shall prepare and cause deliver to be delivered to Seller a certificate Emanuel Zimmer, Esq., on behalf of the Chief Financial Officer Sellers, a check payable to Xxxxxxx Xxxxxx, Esq. in the amount of Buyer certifying (i) its good faith calculation Net Working Capital Surplus sxx xxxxx xx xxe Certificate plus interest on such Net Working Capital Surplus at the Prime Rate from February 1 to the payment date, which amounts shall be deemed part of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing distributed to the Post-Closing Adjustment AmountSellers on a pro rata basis. If Seller delivers Buyer gives notice of objection, then the Objection Notice within the Review Periodissue in dispute will be submitted to Ernst & Young LLP, subject to Section 3.5(f) belowaccountants for resolution, each of Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery Sellers bearing 50% of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration fees of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the partiesaccountants for such determination.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 1 contract
Samples: Stock Purchase Agreement (Guardian International Inc)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to 2.5.1 As promptly as practicable after the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after March 15, 1996), the Closing DateCompany Stockholders, Buyer shall prepare and with Purchaser's cooperation, will cause to be delivered to Seller a certificate the Minneapolis office of the Chief Financial Officer accounting firm of Buyer certifying (i) its good faith calculation Coopers & Lybrand to prepare xxx xxxiver concurrently to Purchaser and the Company Stockholders a consolidated balance sheet of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 Company (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the "Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Date Balance Sheet”").
(i) If , calculating the Estimated Purchase Price is greater than Company's and the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price Subsidiary's "Net Working Capital" in accordance with this Section 3.5and as defined in the accounting policies and procedures set forth on Schedule 2.4. The fees and expenses of Coopers & Lybrand will be sharex xxxxxly by Purchaser and the Company Stockholders.
(d) Upon receipt 2.5.2 For purposes of this Agreement, the "Post Closing Adjustment" shall be calculated by subtracting the "Adjusted Net Working Capital" of the calculation of Company from the Final Purchase PriceCompany's Bid Balance Sheet, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books as determined in accordance with and Records as defined in the possession of accounting policies and used by Buyer in procedures set forth on Schedule 2.4, from the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance SheetNet Working Capital.
(e) 2.5.3 If Seller disagrees with either Purchaser or the Final Company Stockholders' Agent claims that the Closing Date Balance Sheet or the calculation of the Final Purchase PricePost Closing Adjustment has not been prepared or calculated in accordance with the accounting policies and procedures set forth on Schedule 2.4, on or prior it will deliver to the last day of other party a detailed statement describing the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth basis for any such disagreement in reasonable detail, claim within 15 days after receiving the specific item of the Final Closing Date Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates Sheet. Purchaser and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith Company Stockholders will use reasonable efforts to resolve any such disagreementclaims themselves. If they do not obtain a final resolution within 15 days after receiving the Closing Date Balance Sheet, however, Purchaser and any resolution agreed the Company Stockholders' Agent will select another accounting firm mutually acceptable to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable them to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of remaining such claims. If Purchaser and the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller Company Stockholders' Agent are unable to agree on the choice of an Independent Auditor within thirty (30) days after accounting firm, they will select an Arbitrating Accountant. Upon submission to the expiration of such 60-day periodArbitrating Accountant for resolution, at Purchaser shall indicate in writing its position on each disputed matter and the request of either party the Independent Auditor Company Stockholders shall be appointed by the American Arbitration Associationdo likewise. The fees, costs and expenses Arbitrating Accountant shall choose one of the Independent Auditor shall two positions on each disputed matter no later than May 15, 1996 and such position will be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items conclusive and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records binding upon Purchaser and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only Company Stockholders with respect to that disputed matter. Purchaser will revise the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Closing Date Balance Sheet or and the Final Purchase Price requires adjustment. The Independent Auditor shall provide Post Closing Adjustment as appropriate to reflect the parties with a written explanation in reasonable detail resolution of each any such required adjustment, including the basis therefor. All negotiations claims pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information2.5.3. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive andterms "Final Closing Date Balance Sheet" and "Final Post Closing Adjustment" mean the Closing Date Balance Sheet and the Post Closing Adjustment, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered together with any revisions thereto pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h)2.5.3 and Schedule 2.4. The other Arbitrating Accountant shall determine the proportion of its fees and expenses to be paid by each of the Purchaser and the Company Stockholders, the greater the degree to which the Arbitrating Accountant has accepted the position of a party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon , the Independent Auditor. Absent such fraud, such other party shall reimburse smaller the party seeking enforcement for its proportion of fees and expenses related to such enforcementassessed.
Appears in 1 contract
Post-Closing Adjustment. (a) No more The parties agree that no later than seventy-five (75) days after the Transfer Date (or such later date on which such statement reasonably can be prepared and delivered in light of the compliance of Purchaser and the Company with their obligations set forth in next two succeeding sentences), the Company shall deliver to Purchaser, in the form received by the Company from Gannett (i) a statement of the actual Net Financial Assets as of 11:59 p.m., New York City time, on the day immediately preceding the Transfer Date (the "CLOSING STATEMENT") certified by PriceWaterhouseCoopers L.L.P., independent accountants for Gannett, to be prepared (except as otherwise provided in Section 9 of the Disclosure Schedule to the Gannett Purchase Agreement) in conformity with GAAP and on a basis consistent with the basis used in preparing the Unaudited Financial Statements as of, and for the year ended, December 27, 1997, referred to in Section 3.5 of the Gannett Purchase Agreement except to the extent of any position taken as the result of such statements being prepared on a consolidated basis, and (ii) a determination of the amount by which the actual Net Financial Assets are less than or greater than the Estimated Net Financial Assets. Purchaser shall provide the Company and Gannett, and Gannett's independent accountants, access at all reasonable times to the relevant personnel, properties, books and records of the Business for such purposes and to assist the Company and Gannett, and Gannett's independent accountants, in preparing the Closing Statement. Purchaser's assistance shall include, without limitation, the closing of the books of the Business as of the Transfer Date, the preparation of schedules supporting the amounts set forth in the general ledger and other books and records of the Business, and such other assistance as the Company, Gannett or Gannett's independent accountants may reasonably request. During the twenty-five (25) day period following the delivery by the Company of the Closing Statement referred to in the first sentence of this Section 2.4(a), Purchaser and its independent accountants will be permitted to review the working papers of the Company and of Gannett and its independent accountants relating to the preparation of the Closing Statement to the same extent as such working papers have been made available to the Company by Gannett pursuant to the Gannett Purchase Agreement. If, within twenty-five (25) days after delivery by the Company of the Closing Statement, Purchaser notifies the Company that it disagrees with the Closing Statement, the Company shall attempt to resolve the disagreement with Gannett. In the event the Company and Purchaser cannot agree with respect to the Closing Statement within five (5) days of the notice of disagreement provided by Purchaser to the Company, then the determination shall be submitted for resolution promptly to an independent nationally recognized accounting firm (the "ACCOUNTING FIRM"), jointly selected by the Company and Purchaser, whose determination (the "ACCOUNTING FIRM DETERMINATION") shall be instructed by the parties to be made within twenty (20) days and be binding upon all parties hereto, and the fees and expenses of which shall be borne equally by Purchaser and the Company to the extent that such fees and expenses are allocable to the transactions contemplated by this Agreement. The Purchaser agrees that the accounting firm selected by Gannett and the Company pursuant to Section 2.3(a) of the Gannett Purchase Agreement shall be the Accounting Firm hereunder as long as such firm has not been engaged by Gannett or the Company during the three (3) Business Days year period prior to the date hereof. In the event that (whether expressly or by failure of Purchaser to provide notice of any disagreement within the applicable period) Purchaser agrees with the determination of the final Net Financial Assets set forth in the Closing Date and no more Statement without submitting the matter for an Accounting Firm Determination, the Net Financial Assets set forth in the Closing Statement shall be the final determination of the Net Financial Assets. The amount of Net Financial Assets as of 11:59 p.m., New York City time, on the day immediately preceding the Closing Date, as definitively determined pursuant to this Section 2.4(a) is referred to herein as the "ACTUAL NET FINANCIAL ASSETS".
(b) If the Actual Net Financial Assets are greater than the Estimated Net Financial Assets, then Purchaser shall pay the Company in cash, within two (2) Business Days after following the Closing Datedetermination of the Actual Net Financial Assets, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfuramount equal to such difference, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations plus interest on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount of such reduction, and difference at the rate of eight percent (ii8%) if per annum from the Estimated Purchase Price is Transfer Date to the date of such payment to the Company. If the Actual Net Financial Assets are less than the Final Purchase PriceEstimated Net Financial Assets, then the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer Company shall pay the Purchaser in cash within two (2) Business Days following the determination of the Actual Net Financial Assets, an amount equal to Seller such difference, plus interest on the amount of such increase difference at the rate of eight percent (each a “Post-Closing Adjustment Amount”)8%) per annum from the Transfer Date to the date of such payment to Purchaser. Any Post-Closing Adjustment Amount The amounts paid pursuant to this Section 2.4(b) shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior for credit to the last day of the Review Period, Seller shall notify Buyer in writing of recipient at a bank account identified by such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties hereto.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree recipient in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 1 contract
Post-Closing Adjustment. (a) No more than three That portion of the Purchase Price payable in accordance with Subsection 2.5(a)(v) will be subject to increase or decrease by a post-Closing adjustment pursuant to this Section 2.6.
(3b) Business Days prior Within one hundred fifty (150) days after the Closing, the Purchaser shall prepare and deliver to the Vendors a statement (the “NWC Adjustment Statement”) setting forth the Purchaser’s reasonably detailed calculation of the Net Working Capital as of the Closing Date (the “Purchaser’s Net Working Capital”) and the related Purchase Price adjustment, if any, required under this Section 2.6. The Purchaser’s Net Working Capital will be prepared (i) in the same format as the Reference NWC Statement, and (ii) in accordance with the standards and methodologies set out therein, in each case, using the relevant Business Records as of the Closing Date. For greater certainty, in calculating the Purchaser’s Net Working Capital following Closing and delivering the NWC Adjustment Statement, the Purchaser shall in no more than two way be bound, or otherwise limited, by the Estimated Net Working Capital.
(2c) If requested by the Vendors in writing, the Purchaser will allow the Vendors and their representatives reasonable access to review all working papers and other documentation used or prepared in connection with the preparation of, or which otherwise form the basis of, the NWC Adjustment Statement and the Purchaser’s Net Working Capital, as well as all Business Records relating to the operations and finances of the Vendors with respect to the period up to and including the Closing Date, and the Purchaser will make reasonably available the individuals in its employ responsible for and knowledgeable about the information used in, and the preparation or calculation (as applicable) of, the NWC Adjustment Statement and the Purchaser’s Net Working Capital in order to respond to the reasonable inquiries of the Vendors, in each case as and to the extent reasonably necessary for, and for the sole purpose of, the Vendors’ review of the NWC Adjustment Statement and the Purchaser’s Net Working Capital and provided that any of the Vendors outside representatives requesting any such access will first have executed and delivered a customary confidentiality and hold harmless agreement relating to such access to the extent requested by the Purchaser’s Counsel.
(d) If the Vendors object in good faith to any item in the NWC Adjustment Statement, including the calculation of the Purchaser’s Net Working Capital, on the bases provided in this Section 2.6 (each, a “NWC Disputed Item”), the Vendors shall deliver written notice of such objection to the Purchaser within fifteen (15) Business Days after the Closing Date, an employee receipt of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, NWC Adjustment Statement and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Purchaser’s Net Working Capital on calculation by the Closing Date under this Section 3.5Vendors (such notice, a “Notice of NWC Disagreement”). The value Notice of NWC Disagreement will set out in reasonable detail each NWC Disputed Item and the reasons for the Vendors’ objection to such item, the amount in dispute and reasonable details of the Inventory set forth calculation of such amount. If requested by the Purchaser in writing, the Vendors will allow the Purchaser and its representatives reasonable access to review the working papers and other documentation used or prepared in connection with the preparation of, or which otherwise form the basis of, the Vendors’ objection to each NWC Disputed Item. The Vendors may not challenge any item in the NWC Adjustment Statement, including the calculation of the Purchaser’s Net Working Capital, on the Inventory Report shall be determined any basis other than that it contains arithmetic error or was not prepared in accordance with the accounting methods, practices, policies, procedures requirements of this Agreement. The Vendors will be conclusively deemed to have accepted all items and estimation methods used to prepare amounts contained in the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after NWC Adjustment Statement and the Closing Date, Buyer shall prepare and cause to be delivered to Seller a certificate of the Chief Financial Officer of Buyer certifying (i) its good faith calculation of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”).
(i) If the Estimated Purchase Price is greater Purchaser’s Net Working Capital other than the Final Purchase Price, the Purchase Price shall be adjusted downward dollar-for-dollar and Seller shall pay to Buyer the amount NWC Disputed Items for which a timely Notice of such reduction, and (ii) if the Estimated Purchase Price NWC Disagreement is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price delivered in accordance with this Section 3.5.
(d) Upon receipt of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet2.6.
(e) If Seller disagrees the Parties cannot reach agreement on any NWC Disputed Item within fifteen (15) Business Days after a Notice of NWC Disagreement is delivered in accordance with Section 2.6, then any unresolved NWC Disputed Items (collectively, a “NWC Dispute”) will be submitted for final and binding arbitration to a senior audit partner at the Final Balance Sheet or Toronto office of KPMG LLP chosen by the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing managing partner of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement office (the “Objection NoticeNWC Arbitrator”). If Seller fails In the event that KPMG LLP is unwilling or unable to deliver serve as the Objection Notice NWC Arbitrator, a senior audit partner at the Toronto office of Grant Thxxxxxx XXX xxxsen by the managing partner of such office will serve as the NWC Arbitrator. In the event that both KPMG LLP and Grant Thxxxxxx XXX xxx unwilling or unable to serve as the NWC Arbitrator, either the Vendors or the Purchaser may request that the ICC International Centre for Expertise appoint as NWC Arbitrator, within ten (10) days from the Review Perioddate of such request or as soon as practicable thereafter, an audit partner in an internationally recognized accounting firm that is not the Final Balance Sheet and Buyer’s calculation auditor or independent accounting firm of any of the Final Purchase Price shall be deemed Parties, who is a certified public accountant or chartered accountant in Canada and who is independent of the Parties and impartial. The Vendors and the Purchaser will, to have been accepted by Seller the extent required, enter into a customary engagement letter with the NWC Arbitrator in a form satisfactory to each of the Vendors and shall be final the Purchaser, acting reasonably, which will include reasonable and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers the Objection Notice within the Review Period, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties heretocustomary confidentiality provisions.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(eWithin fifteen (15) within 60 days after delivery of the Objection Noticeappointment of the NWC Arbitrator, then Buyer the Vendors and Seller shall submit the matter Purchaser will provide to the NWC Arbitrator a copy of the NWC Adjustment Statement and the Purchaser’s Net Working Capital, and will each provide a written submission that states, for resolution to each unresolved NWC Disputed Item, the dollar amount in dispute, a mutually agreeable independent international accounting firm (narrative description of how the “Independent Auditor”), who shall, acting as dollar amount was calculated or derived and an arbitrator, resolve explanation of the dispute set forth rationale for the Party’s position. The Vendors and the Purchaser will request that the NWC Arbitrator thereafter determine all matters in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor NWC Dispute within thirty (30) days after such materials are submitted for the expiration of such 60-day period, at NWC Arbitrator’s review. Upon the request of either party the Independent Auditor shall be appointed NWC Arbitrator, the Vendors and the Purchaser will provide or make available all working papers, documents and information as are reasonably required by the American Arbitration Association. The feesNWC Arbitrator to make his or her determination; provided, costs and expenses however, that the outside auditors of the Independent Auditor shall Vendors or the Purchaser will not be borne equally obligated to make any working papers available to the NWC Arbitrator unless and until the NWC Arbitrator has executed and delivered a customary confidentiality and hold harmless agreement relating to such access in form and substance reasonably acceptable to such outside auditors, to the extent requested by such outside auditors. Neither the Vendors nor the Purchaser will disclose to the NWC Arbitrator, and the NWC Arbitrator will not consider for any purpose, any settlement discussions or settlement offer made by the partiesVendors or the Purchaser with respect to any objection under Subsection 2.6(g), unless otherwise agreed in writing by the Vendors and the Purchaser.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall NWC Arbitrator will be final and binding on the partiesParties (for greater certainty, with no right of appeal or judicial review on any grounds other than for fraud or manifest error on the part of the NWC Arbitrator), and may only be corrected for arithmetic error or to cause the NWC Disputed Items to be prepared in accordance with this Agreement, on written application to the NWC Arbitrator delivered within fifteen (15) days of the date of his or her determination. The decision rendered pursuant NWC Adjustment Statement and the Purchaser’s Net Working Capital will be (or not be, as applicable) adjusted in accordance with the NWC Arbitrator’s determination. In resolving the NWC Dispute, the NWC Arbitrator will be limited to addressing any particular NWC Dispute referred to in the Notice of NWC Disagreement and will make all calculations in a manner consistent with this Section 3.5(h) may 2.6; provided that such calculation will, with respect to any NWC Disputed Item, be entered as a judgment no greater than the higher amount calculated by the Vendors or the Purchaser, and no less than the lower amount calculated by the Vendors or the Purchaser, in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action the Parties’ submissions to enforce any decision the NWC Arbitrator under this Section 3.5(h)2.6, as the case may be. The NWC Arbitrator’s review and determination will be based solely on the grounds presented by the Vendors and the Purchaser, and will be limited to correcting arithmetic errors in respect of the NWC Disputed Items or causing the NWC Disputed Items to be prepared in accordance with this Agreement and the NWC Arbitrator shall have no power or authority to address or resolve any other party’s only defense to such a request issues. Each of the Parties shall bear its own costs and expenses of this arbitration under this Section 2.6. The costs and expenses of the NWC Arbitrator (and the ICC International Centre for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraudExpertise, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.if applicable) under this Section
Appears in 1 contract
Samples: Master Asset Purchase Agreement (Venus Concept Inc.)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety (90) days after 90 Business Days following the Closing Date, Buyer Purchaser shall prepare and cause to be delivered deliver to Seller a certificate calculation of the Chief Financial Officer Net Working Capital of Buyer certifying the Subject Company Group as of the close of business on the Closing Date (such calculation of Net Working Capital, the “Closing Statement of Net Working Capital”). The Closing Statement of Net Working Capital shall be accompanied by a certification of Purchaser’s chief accounting officer, on behalf of Purchaser, stating that such statement presents fairly in all material respects the Net Working Capital of the Subject Company Group as of the Closing Date.
(b) During the preparation of the Closing Statement of Net Working Capital and the period of any review or dispute within the contemplation of this Section 2.4, Purchaser, on the one hand, and Seller, on the other hand, shall (i) its good faith calculation provide each other and each other’s authorized representatives with full access at all reasonable times, and in a manner so as not to interfere with the normal business operations of Seller, Purchaser, or any member of the Purchase PriceSubject Company Group, setting forthin each case, respectively, to all relevant books, records, work papers, information and employees of such Persons, and (ii) cooperate fully with each other and each other’s authorized representatives, in each case (i) and (ii), as necessary or useful for the preparation, calculation and review of the Closing Statement of Net Working Capital or for the resolution of any dispute between Seller and Purchaser relating thereto.
(c) After receipt of the Closing Statement of Net Working Capital, Seller shall have 30 Business Days to review the Closing Statement of Net Working Capital together with the work papers used in the preparation thereof. Unless Seller delivers written notice to Purchaser on or prior to the 30th Business Day after Seller’s receipt of the Closing Statement of Net Working Capital stating that it has specific, material objections thereto, Seller shall be deemed to have accepted and agreed to the Closing Statement of Net Working Capital. If, however, Seller notifies Purchaser, in reasonable detail, a of material objections to the Closing Statement of Net Working Capital, Purchaser and Seller shall in good faith calculation of each of the adjustments set forth in Section 3.2 attempt to resolve, within 30 Business Days (or such longer period as Purchaser and Seller may agree) following such notice (the “Final Purchase Price”) and (ii) a balance sheet for the Business as of immediately prior to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance SheetResolution Period”).
(i) If the Estimated Purchase Price is greater than the Final Purchase Price, the Purchase Price their differences with respect to such material objections, and any resolution by them as to any disputed amounts shall be adjusted downward dollar-for-dollar final, binding and Seller shall pay to Buyer the amount of such reduction, and (ii) if the Estimated Purchase Price is less than the Final Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and Buyer shall pay to Seller the amount of such increase (each a “Post-Closing Adjustment Amount”). Any Post-Closing Adjustment Amount shall be paid by wire transfer of immediately available funds to an account designated by the party receiving payment within three (3) Business Days after the final determination of the amount of such reduction or increase in the Purchase Price in accordance with this Section 3.5conclusive.
(d) Upon receipt All amounts remaining in dispute at the conclusion of the calculation of the Final Purchase Price, Seller Resolution Period (“Unresolved Matters”) shall be permitted during the succeeding forty-five (45) day period submitted to an internationally recognized firm of independent public accountants as to which Seller and Purchaser mutually agree (the “Review PeriodCPA Firm”), who, acting as experts and not as arbitrators, shall determine on the basis of the standards for calculating the Closing Statement of Net Working Capital as set forth in this Agreement, and only with respect to the Unresolved Matters so submitted, whether and to what extent, if any, the Closing Statement of Net Working Capital requires adjustment. Seller and Purchaser shall instruct the CPA Firm to deliver its written determination to Seller and Purchaser no later than the 20th calendar day, unless otherwise agreed by Seller and Purchaser, after the Unresolved Matters are referred to the CPA Firm. The CPA Firm’s determination shall be final, conclusive and binding upon Seller and Purchaser. The fees and disbursements of the CPA Firm shall be shared equally by Seller and Purchaser. Seller and Purchaser shall (and Purchaser shall cause each member of the Subject Company Group to) reasonable accessmake readily available to the CPA Firm all relevant Books and Records and any work papers (including those of Seller’s and Purchaser’s respective accountants) relating to the Closing Statement of Net Working Capital and all other items reasonably requested.
(e) Once the Closing Statement of Net Working Capital has been finalized in accordance with the above process, upon reasonable notice, to (i) the Books and Records in Initial Aggregate Purchase Price shall be decreased by the possession amount, if any, by which Net Working Capital as reflected on such Closing Statement of and used by Buyer in Net Working Capital is less than an amount equal to (A) the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, Base Working Capital minus (B) U.S.$100,000 and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Initial Aggregate Purchase Price shall be deemed increased by the amount, if any, by which Net Working Capital as reflected on such Closing Statement of Net Working Capital is greater than an amount equal to have been accepted by Seller the sum of (A) the Base Working Capital and shall be final and binding and used in computing (B) U.S.$100,000, the amount of any such decrease or increase being referred to herein as the “Post-Closing Adjustment”. Any such Post-Closing Adjustment Amount. If Seller delivers shall be paid promptly by wire transfer to the Objection Notice within account of the Review Periodrelevant Party, subject to Section 3.5(f) below, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to specified in writing to the other Party by Buyer and Seller shall be final and binding upon such relevant Party plus interest on such amount at the parties hereto.
(f) If Buyer and Seller are unable Applicable Rate from the Closing Date to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration date of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the partiespayment.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
Appears in 1 contract
Samples: Purchase Agreement (Chefford Master Manufacturing Co Inc)
Post-Closing Adjustment. (a) No more than three (3) Business Days prior to the Closing Date and no more than two (2) Business Days after the Closing Date, an employee of Seller and one or more representatives or employees of Buyer shall calculate the quantity of sulfur, rock, ammonia and finished goods included in the Inventory located at the Facilities based upon a physical examination thereof. As soon as practicable (but in no event more than five (5) Business Days) following such physical examination, such employee of Seller and a representative or employee of Buyer shall summarize such Inventory calculations on a report (the “Inventory Report”) and deliver the Inventory Report to Buyer and Seller. The Inventory Report shall be executed and delivered by each of Buyer and Seller to the other party, and the quantity of such Inventory set forth thereon, absent manifest error, shall be final and binding on Buyer and Seller for purposes of calculating Net Working Capital on the Closing Date under this Section 3.5. The value of the Inventory set forth on the Inventory Report shall be determined in accordance with the accounting methods, practices, policies, procedures and estimation methods used to prepare the Balance Sheet.
(b) As soon as reasonably practicable, but in no event later than ninety March 31, 2003, Buyer shall deliver to Seller a calculation of the Closing Working Capital (90the “Closing Working Capital Statement”), the Closing Net Indebtedness (the “Closing Net Indebtedness Statement”), the Franchisee Adjustment Amount (the “Franchisee Adjustment Amount Statement”), the Capex Payables (the “Capex Payables Statement”) days after and the Capex Adjustment (the “Capex Statement”, together with the Closing Working Capital Statement, the Closing Net Indebtedness Statement, the Franchisee Adjustment Amount Statement and the Capex Payables Statement, the “Calculation”). The Calculation shall also set forth the amount, if any, by which the calculation of the Cash Purchase Price differs from the Estimated Cash Purchase Price. The Calculation shall be set forth in sufficient detail to permit Seller to make any objections it may seek to have. Buyer shall cause a full closing of the financial statements in respect of the Company and its Subsidiaries to occur for the period from July 1, 2002 to the Closing Date, calculated on the basis that the Closing was effective at 11:59 p.m. on the day prior to the Closing Date as if such date were a fiscal year end and such that the unaudited financial statements produced with respect to the period ended on the day prior to the Closing Date are similar in all material respects to the U.K. GAAP Company Financial Statements (the “Closing Date Financial Statements”). Seller shall, and shall cause Diageo and its Affiliates, to provide Buyer with reasonable access to data within its control to the extent necessary in connection with the preparation of the Calculation and the Closing Date Financial Statements. Buyer shall prepare and cause to be delivered provide the unaudited Closing Date Financial Statements to Seller a certificate together with reasonable back-up documentation reasonably necessary to evaluate or understand the Closing Date Financial Statements and the Calculation at the time of delivery of the Chief Financial Officer Calculation.
(b) During the period of any review or dispute as provided in this Section 2.5, Buyer certifying and Seller shall, and shall cause each of their Affiliates to: (i) provide each other party and its good faith calculation representatives with reasonable access to its and its Affiliates’ relevant books, records and employees (to the extent any of such books, records or employees relate to the Calculation) and (subject, in the case of accountant or auditor work papers, to providing any customary confidentiality, hold harmless or other agreements reasonably requested by the accountant or auditor) relevant work papers of accountants or auditors and permit copies to be made of any of the Purchase Price, setting forth, in reasonable detail, a good faith calculation of each of the adjustments set forth in Section 3.2 (the “Final Purchase Price”) foregoing documentation and (ii) cooperate fully with such other party and its authorized representatives, including the provision on a balance sheet timely basis of all information relevant for purposes of the Business as Calculation; provided that, without prejudice to any of immediately prior Buyer’s other rights under this Agreement, after the submission of the Calculation, Seller shall be required to provide such access and cooperation only to the Closing prepared on a basis consistent with the accounting methods, practices, policies, procedures and estimation methods used extent relevant to prepare the Balance Sheet and including all of the entries contained in Schedule 3.4(a) (the “Final Balance Sheet”items disputed by Seller pursuant to Section 2.5(c).
(c) After receipt of the Calculation, Seller shall have sixty (60) days to review the Calculation. Unless Seller delivers written notice to Buyer on or prior to the sixtieth (60th) day after Buyer’s delivery of the Calculation stating that Seller has objections to the Calculation, Seller shall be deemed to have accepted and agreed to the Calculation. Matters included in the Calculation, which are not objected to in writing by Seller, shall be deemed to be accepted by Seller (“Resolved Items”) and any amounts included within such items shall be deemed to be final, binding and conclusive. If Seller notifies Buyer in writing of its objections to the Calculation, Buyer and Seller shall, within forty-five (45) days (or such longer period as Buyer and Seller may agree in writing) following such notice (the “Resolution Period”), attempt to resolve their differences, and any written resolution by them as to any disputed amounts shall be final, binding and conclusive.
(d) Any amounts remaining in dispute at the conclusion of the Resolution Period (“Unresolved Items”) shall be submitted by Buyer and Seller to Deloitte and Touche LLP (such firm being referred to as the “CPA Firm”) or, if such firm shall be unable or unwilling to serve in such capacity or if Seller and Buyer shall otherwise mutually agree in writing, such other nationally recognized firm of independent accountants mutually agreed in writing by Seller and Buyer (and, in such case, such firm shall be deemed to be the CPA Firm), within 10 days after the expiration of the Resolution Period or as soon as practicable after Buyer and Seller have engaged the CPA Firm. Seller and Buyer agree to use their commercially reasonable efforts to engage the CPA Firm as promptly as practicable. Each party agrees to execute, if requested by the CPA Firm, an engagement letter with the CPA Firm containing reasonable terms and to provide the CPA Firm such work papers and other documents and information related to the Unresolved Items as the CPA Firm may reasonably request if available to such party or its Affiliates (or their accountants or auditors). All fees and expenses relating to the work, if any, to be performed by the CPA Firm shall be borne 50% by Buyer and 50% by Seller. The CPA Firm shall act as an arbitrator and not as an expert, to determine, based on the provisions of this Section 2.5, only the Unresolved Items; provided, however, that the CPA Firm shall have authority to determine, and the term “Unresolved Items” as used in this Section 2.5 shall mean, only the amount(s) of the Calculation and no other matter whatsoever, absent an express written agreement to the contrary by Buyer and Seller. Seller and Buyer shall request that the CPA Firm provide its determination of the Unresolved Items within 30 days after the submission of the Unresolved Items to the CPA Firm, and a calculation of the Closing Working Capital Statement, the Closing Net Indebtedness Statement, the Capex Statement, the Capex Payables Statement and the Franchisee Adjustment Amount Statement, based upon the amount of Resolved Items and the CPA Firm’s determination of the Unresolved Items, shall be set forth in a written statement delivered to Seller and Buyer by the CPA Firm and shall be final, binding and conclusive on Buyer and Seller.
(e) Within five (5) Business Days following either (i) If an agreement or deemed agreement by Buyer and Seller as to the Estimated Purchase Price is greater than the Final Purchase PriceClosing Working Capital, the Purchase Price shall be adjusted downward dollar-for-dollar Closing Net Indebtedness, the Capex Adjustment and the Franchisee Adjustment Amount, or (ii) the CPA Firm’s determination of all Unresolved Items, Seller shall pay to Buyer the amount of such reductionamount, and (ii) if any, by which the Estimated Cash Purchase Price is less than exceeds the Final final calculation of the Cash Purchase Price, the Purchase Price shall be adjusted upward dollar-for-dollar and or Buyer shall pay to Seller the amount amount, if any, by which the final calculation of such increase the Cash Purchase Price exceeds the Estimated Cash Purchase Price (each a the “Post-Closing Adjustment AmountAdjustment”). .
(f) Any Post-Closing Adjustment Amount payments made pursuant to this Section 2.5 shall be paid made by wire transfer of immediately available U.S. Dollar funds to an account designated indicated by the party receiving payment within three (3) Business Days after to receive such funds and shall be accompanied by interest at the final determination Applicable Rate calculated on the basis of a year of 365 days for the amount actual number of such reduction or increase in days elapsed, accrued from the Purchase Price in accordance with this Section 3.5Closing Date up to and including the date of payment.
(dg) Upon receipt Any payments made in respect of the calculation of the Final Purchase Price, Seller shall be permitted during the succeeding forty-five (45) day period (the “Review Period”) reasonable access, upon reasonable notice, to (i) the Books and Records in the possession of and used by Buyer in the preparation of the Final Balance Sheet and the calculation of the Final Purchase Price, including a reasonable level of supporting documentation used by Buyer in preparation of the Final Purchase Price, and (ii) the accounting personnel of Buyer supporting the Business and involved in the preparation of the Final Purchase Price and the Final Balance Sheet.
(e) If Seller disagrees with the Final Balance Sheet or the calculation of the Final Purchase Price, on or prior to the last day of the Review Period, Seller shall notify Buyer in writing of such disagreement with the Final Balance Sheet or the calculation of the Final Purchase Price, which notice shall set forth any such disagreement in reasonable detail, the specific item of the Final Balance Sheet or the calculation in the Final Purchase Price to which such disagreement relates and the specific basis for each such disagreement (the “Objection Notice”). If Seller fails to deliver the Objection Notice within the Review Period, the Final Balance Sheet and Buyer’s calculation of the Final Purchase Price shall be deemed to have been accepted by Seller and shall be final and binding and used in computing the Post-Closing Adjustment Amount. If Seller delivers shall be deemed to be adjustments to the Objection Notice within the Review Period, subject Base Purchase Price pursuant to Section 3.5(f) below2.2, Buyer and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Buyer and Seller shall be final and binding upon the parties heretofor all tax purposes.
(f) If Buyer and Seller are unable to resolve any disagreement as contemplated by Section 3.5(e) within 60 days after delivery of the Objection Notice, then Buyer and Seller shall submit the matter for resolution to a mutually agreeable independent international accounting firm (the “Independent Auditor”), who shall, acting as an arbitrator, resolve the dispute set forth in the Objection Notice. In the event Buyer and Seller are unable to agree on an Independent Auditor within thirty (30) days after the expiration of such 60-day period, at the request of either party the Independent Auditor shall be appointed by the American Arbitration Association. The fees, costs and expenses of the Independent Auditor shall be borne equally by the parties.
(g) The parties shall instruct the Independent Auditor to consider only those items and amounts which are identified in the Objection Notice as being items which Buyer and Seller are unable to resolve. Further, the Independent Auditor’s determination shall be based solely on the relevant Books and Records and the other written information provided by Buyer and Seller (i.e., not on the basis of an independent review), and the Independent Auditor shall not conduct additional discovery in any form.
(h) The parties shall jointly instruct the Independent Auditor to make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after its engagement (i) whether or not the Final Balance Sheet was prepared, and the Final Purchase Price was calculated, in accordance with the terms of this Agreement or, alternatively, (ii) only with respect to the disputed items submitted to the Independent Auditor, to what extent (if any) the Final Balance Sheet or the Final Purchase Price requires adjustment. The Independent Auditor shall provide the parties with a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 3.5 shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations and submissions to the Independent Auditor shall be treated as confidential information. The Independent Auditor shall be bound by a mutually agreeable confidentiality agreement. The procedures of this Section 3.5 are exclusive and, except as set forth below, the determination of the Independent Auditor shall be final and binding on the parties. The decision rendered pursuant to this Section 3.5(h) may be entered as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 3.5(h). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or upon the Independent Auditor. Absent such fraud, such other party shall reimburse the party seeking enforcement for its expenses related to such enforcement.
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