Purchase Price Adjustment. a. At least three (3) business days prior to the Closing Date, the Seller and Buyer in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (45) days after the Closing Date, Buyer shall deliver to the Seller the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within thirty (30) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.
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Purchase Price Adjustment. a. At least three Within ten (310) business days prior to the Closing Date, the Seller and Buyer in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (45) days after the Closing Date, Buyer shall deliver to the Seller Dxxx a report showing the Closing Balance Sheet and its determination the calculation of the Closing Net Book ValueActual Cash Purchase Price. d. If After receipt of such report and for a period of up to ten (10) business days thereafter, Dxxx and/or Dana’s accountants shall be afforded the Seller disagrees with opportunity to review Buyer's determination of Closing Net Book Value’s report, and Buyer shall make available to Dxxx and Dana’s accountants all working papers, data, and other related information requested by Dxxx and Dana’s accountants. If, within ten (10) business days after such review, Buyer and Dxxx cannot agree on the report, then unless otherwise agreed, the Seller Parties shall notify submit the dispute for resolution as provided below. If (a) the Estimated Cash Purchase Price is greater than (b) the Actual Cash Purchase Price, then Dxxx shall pay the difference of (a) minus (b) to the Buyer; however, if (a) the Estimated Cash Purchase Price is less than (b) the Actual Cash Purchase Price, then the Buyer shall pay the difference of (b) minus (a) to Dxxx (the amount of such difference in either case shall be referred to as the “Purchase Price Adjustment”) within ten (10) business days after delivery of such Closing Balance Sheet. The Purchase Price Adjustment will be conclusive and binding on the Parties unless Dxxx notifies Buyer in writing that Dxxx objects to the Closing Balance Sheet and the basis of such disagreement objection within ten (10) business days after (x) the delivery of such Closing Balance Sheet, or (y) the resolution of the dispute, if any, whichever is later. (The “Actual Cash Purchase Price” will be calculated in the same manner as the Estimated Cash Purchase Price, except that the Closing Balance Sheet will be substituted for the Estimated Closing Balance Sheet. The Actual Cash Purchase Price, plus the book value of the Assumed Liabilities, shall be referred to herein as the “Purchase Price.”) Any dispute arising under this Section shall be submitted to independent public accountants mutually acceptable to Dxxx and Buyer, who shall promptly resolve the disputed matters according to the provisions of this Agreement and complete the Closing Balance Sheet. Such independent public accountants shall be furnished with the Parties’ computations with respect to the matter in controversy and shall have access to all working papers, data and other information as it shall request to enable it to determine the resolution of the disputed matters in accordance herewith. The independent public accountant shall report to Dxxx and Buyer its determination as expeditiously as possible and in no event later than thirty (30) days after delivery its acceptance of its duties hereunder. The determination by such independent public accountants of any such dispute of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor Actual Cash Purchase Price shall be final and binding on Buyer and all of the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of Parties to this Agreement. f. The Independent Auditor will determine the allocation Each of Dxxx and Buyer shall pay a fraction of the costs and expenses cost of its determination such independent public accountants, the numerator of which is the dollar amount of the Closing Net Book Value based upon issues decided in the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Businessother Party’s favor, and Buyer contests only $500 the denominator of which is the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to the Seller the dollar amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4all disputed matters., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.
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Purchase Price Adjustment. a. At least three In the event that the Adjustment Date Value (3as defined below) business days prior for shares of Acquiror Common Stock is less than the Adjustment Threshold Price (as defined below), Acquiror shall issue additional shares of Acquiror Common Stock to Target's shareholders. The number of shares to be issued pursuant to this Section 5.22 (the Closing Date, the Seller and Buyer in good faith "Additional Shares") shall jointly prepare an estimate of the net book value of CPC, be determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as following formula: A = ((B - C) divided by C) x D, where A equals the Additional Shares, B equals the Adjustment Threshold Price, C equals the Adjustment Date Value and D equals the total number of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable shares issuable pursuant to agree on the Estimated Net Book Value prior to the Closing DateSection 1.6(a); provided, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30however, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but that in no event later than forty-five shall the number of Additional Shares exceed the number of shares of Acquiror Common Stock issued pursuant to Section 1.6(a). Additional Shares shall be issued to Target's shareholders in the same proportion (45i.e., pro rata based on the percentage of Target Capital Stock owned by each such shareholder relative to all issued and outstanding shares of Target Capital Stock) days that Target's shareholders are entitled to receive shares of Acquiror Common Stock pursuant to Section 1.6(a) and shall be delivered to Target's shareholders promptly after the Closing Date, Buyer will cause the management earlier to occur of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation third anniversary of the Closing Balance Sheet and Effective Time or (ii) the work papers date 5 business days after a new registration statement for such shares (on a form to be determined by Acquiror) is declared effective by the SEC (which registration statement shall be filed by Acquiror with the SEC no later than 30 days after a determination has been made that Additional Shares are to be issued). The Shareholders' Agent shall notify Target's shareholders if Additional Shares are to be issued pursuant to this Section 5.22 and of the details of such management during such forty-five-day period and during issuance. The Adjustment Date Value is the thirty-day period after closing price of Acquiror Common Stock, as reported by the delivery National Association of Securities Dealers through the Nasdaq National Market System on the Trading Day immediately preceding the Adjustment Date (as defined below). The Adjustment Threshold Price is an amount equal to 80 percent of the Closing Balance Sheet Price per share. The Adjustment Date is the earlier to occur of (i) the Seller. Within forty-five third anniversary of the Effective Time or (45ii) the date 5 business days after the Closing Date, Buyer shall deliver date the initial registration statement filed on Form S-1 by Acquiror with respect to the Seller the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within thirty (30Acquiror Common Stock issuable pursuant to Section 1.6(a) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value is declared effective by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4SEC., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.
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Samples: Agreement and Plan of Reorganization (Cardiovascular Dynamics Inc)
Purchase Price Adjustment. a. At least three (3) business days prior to In the event that the Closing DateWorking Capital is less than 95% of the Reference Working Capital, the Seller and Buyer in good faith Purchase Price shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then availablebe adjusted downward. In the event the parties are unable to agree on the Estimated Net Book Value prior to that the Closing DateWorking Capital is more than 105% of the Reference Working Capital, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfalladjusted upward. The amount of such increase increases or decrease in reductions, as the Estimated Purchase Price case may be, shall be reflected by a commensurate increase or decrease in referred to herein as the Cash Portion“Adjustment Amount” and shall be determined and paid as set forth below. c. As promptly as practicable, but in no event later than forty-five Within sixty (4560) calendar days after the Closing DateClosing, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (45) days after the Closing Date, Buyer shall prepare and deliver to the Seller a statement (the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within thirty (30“Adjustment Amount Statement”) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer Buyer’s calculation of Closing Working Capital and the Adjustment Amount, which statement shall (A) be prepared in a manner consistent with the Reference Working Capital Statement and (B) include a reconciliation showing the differences between Reference Working Capital and Closing Working Capital. Seller thereafter shall negotiate have twenty (20) calendar days to review the calculations. To the extent there is a dispute regarding the calculations, the parties shall work together in good faith to resolve any such disagreementsdiscrepencies. If Buyer they are not able to resolve such discrepencies, they agree to retain a third-party mediator acceptable to both parties. In the case of a Purchase Price reduction, the Adjustment Amount shall be the amount by which the Reference Working Capital exceeds the Closing Working Capital and the Seller are unable shall pay such Adjustment Amount to resolve any such disagreements the Buyer within thirty (30) calendar days after Seller delivers its response to Buyerof receipt of the Adjustment Amount Statement, Buyer and Seller unless there is a dispute, in which case payment shall submit be made promptly following resolution of the dispute to dispute. In the case of a "Big 6" accounting firm unaffiliated withPurchase Price increase, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer Adjustment Amount shall be the amount by which the Closing Working Capital exceeds the Reference Working Capital and the Seller Buyer shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditor. The resolution of pay such disagreements and the determination of Closing Net Book Value by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay Adjustment Amount to the Seller within thirty (30) calendar days of receipt of the amount Adjustment Amount Statement, unless there is a dispute, in which case payment shall be made promptly following resolution of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4dispute., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.
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Purchase Price Adjustment. a. At least three Buyer and Sellers agree to make an adjustment to the Initial Cash Price (3the "Purchase Price Adjustment"), which may be a positive or negative number, based upon the dollar for dollar variance between the balance sheet items listed below compared to any increase or decrease of the balance sheet of the Company as of the Closing Date (the "Closing Date Balance Sheet"), prepared in accordance with GAAP, applied on a basis consistent with the Company's accounting practices. Within sixty (60) business days after the Closing Date, Buyer shall, at its sole cost and expense, prepare and deliver to Buyer and Sellers (i) the Closing Balance Sheet and (ii) a written statement (the "Adjustment Statement") prepared by the Vice President of Finance and Administration of Buyer certifying the amount of the Purchase Price Adjustment and setting forth the calculation of such amount. The balance sheet items and amounts to be compared to the Closing Balance Sheet for calculation of the Purchase Price Adjustment shall be as follows: ASSETS: NOT LESS THAN: Accounts Receivable $100,000 Machinery and equipment, net $50,000 Inventory $150,000 Due from Barzell 0 Due from Whitmore 0 LIABILITIES: NOT MORE THAN: Accrued Pension Payable 0 Note Payable - Barzell 0 Note Payable - Whitmore 0 Note Payable - Wilson 0 Total Notes Payable $250,000 Total Liabilities $300,000 TOTAL STOCKHOLDERS' EQUITY NOT LESS THAN ZERO Adjustments for any of the above balance sheet items shall only be made to the extent not already included in the Purchase Price Adjustment. For example, if Notes Payable equal $260,000 and Total Liabilities equal $340,000, then the resulting adjustment for these two items combined would be a reduction in the Purchase Price of $40,000. In addition, the Purchase Price Adjustment shall reflect (and the Purchase Price shall be reduced by) the amount of any severance payments due and owing to employees of the Company as a result of any termination of employment in connection with the transactions contemplated by this Agreement, which severance payments are made at or after the Closing Date by Buyer. Notwithstanding the foregoing, if Sellers repay the NTB Obligations prior to the Closing Date, then the Seller and Buyer in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Initial Cash Price payable at Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease payment and not included in the Estimated post-Closing Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (45) days after the Closing Date, Buyer shall deliver to the Seller the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within thirty (30) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.Price
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Purchase Price Adjustment. a. At least three (3) business days prior to As of the Closing Effective Date, the Seller Companies and Buyer in good faith shall jointly prepare an estimate of Commercial Solutions, Inc. (collectively, the “Acquired Companies”) must have a total net book value of CPC, worth (total assets minus total liabilities) determined in accordance with GAAP United States generally accepted accounting principles, consistent with past practice in an amount equal to Thirteen Million Five Hundred Thousand Dollars ($13,500,000.00). If the methodology used Acquired Companies have a total net worth in preparing Exhibit 1 as excess of the close of business on the Closing Date Thirteen Million Five Hundred Thousand Dollars (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"$13,500,000.00), the Estimated Purchase Price shall be increased by dollar-for-dollar in the amount of such the excess. If the Estimated Closing Net Book Value Acquired Companies have a total net worth that is less than the Target Net Book ValueThirteen Million Five Hundred Thousand Dollars ($13,500,000.00), the Estimated Purchase Price shall be decreased by reduced dollar-for-dollar in the amount of such shortfallthe deficiency (collectively the “Purchase Price Adjustment”). The amount of such increase or decrease in Seller shall cause its outside accountants to review the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly Acquired Companies’ books and records as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business soon as of reasonably possible following the Closing (as herein defined). As part of the "Closing Balance Sheet") for review, the purpose of establishing outside accountants will calculate the Net Book Value Acquired Companies’ total net worth as of the close of business on the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to November 30, 2008 in accordance with United States generally accepted accounting principles in a manner consistent with those principles used by the Seller. Within forty-five The outside accountants’ calculation of the Acquired Companies’ net worth shall be final and binding upon the parties unless the Buyer objects to such calculation within fifteen (4515) days after the Closing Date, Buyer shall deliver to the Seller the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Valuereceipt thereof, in which case, the Seller shall notify Buyer in writing of such disagreement within thirty (30) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth described in this Agreement and shall comply with all other applicable terms of this AgreementSection 9.4 to resolve the disagreement. f. The Independent Auditor will determine Promptly upon the allocation calculation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For examplePurchase Price Adjustment, if the Seller claims and the Closing Net Book Value is $1,000 greater than Buyer shall cancel the amount determined by original Promissory Note and the management of the Business, Buyer shall execute and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) deliver a new Promissory Note to the Seller. g. If Closing Net Book Value (as finally determined pursuant The new Promissory Note shall contain all of the terms of the original Promissory Note except the principal amount shall be adjusted to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4reflect the Purchase Price Adjustment., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.
Appears in 1 contract
Samples: Stock Purchase Agreement (Fortune Industries, Inc.)
Purchase Price Adjustment. a. At least three (3) business days prior For the purposes of payments of the Purchase Price to be made on the Closing Date, the Seller parties will calculate Net Value utilizing the Company's balance sheet as of March 31, 1995 as set forth on Schedule 1.2.1. The parties hereby agree that the Net Value is $1,159,228 and Buyer the aggregate Purchase Price for the purposes of Closing payments is $1,872,626. The Purchase Price will be finally determined based upon a Closing Date Balance Sheet (as hereinafter defined) and adjusted accordingly (the "Purchase Price Adjustment") in good faith the same manner as set forth on Schedule 1.2.1. Within thirty (30) days after Closing, Sellers shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 deliver a Closing Date Balance Sheet to LMI as of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease prepared in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing accordance with generally accepted accounting principles (the "Closing Date Balance Sheet") for and a Net Value based thereon. LMI shall have the purpose of establishing the Net Book Value as of the close of business on right to audit the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (45) days after the Closing Date, Buyer shall deliver to the Seller the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within have thirty (30) days after delivery from the date of receipt of the Closing Date Balance Sheet within which to notify Sellers of any objections to the Seller (Closing Date Balance Sheet or the Net Value. If LMI fails to notify Sellers of any such notice setting forth objections, the basis for such disagreement in reasonable detail)Net Value shall be deemed to have been finally determined. If LMI timely notifies Sellers of objections to the Closing Date Balance Sheet or the Net Value, and Buyer LMI and the Seller thereafter shall negotiate in good faith Sellers will endeavor to resolve any such disagreementsobjections. If Buyer LMI and the Seller Sellers are unable to resolve any such disagreements objections within thirty fifteen (3015) days after Seller delivers its response to Buyerdays, Buyer and Seller shall either party may submit the dispute issue to a "Big 6" accounting firm unaffiliated witharbitration under the rules of the American Arbitration Association, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor award thereunder shall be final and binding on Buyer and upon the Seller absent manifest errorparties in accordance with Section 9.2 hereof. The Independent Auditor Parties will share the expense of such arbitration equally. Once the Net Value is finally determined, Sellers will promptly remit to LMI any overpayment if the parties determine that the Sellers were overpaid at Closing and LMI shall comply promptly pay to Sellers any increase if the parties determine that the Sellers were underpaid at Closing. Any downward adjustment in the Purchase Price shall be paid by Sellers in the first instance with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms surrender of this AgreementPreferred Stock at a rate of $3.00 per share. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Purchase Price escrowed at Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will in accordance with Section 1.3.1 shall be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined released pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4such Purchase Price Adjustment., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.
Appears in 1 contract
Purchase Price Adjustment. a. At least three (3) business days prior The Purchase Price shall be adjusted downward to the Closing Date, extent that the Seller and Buyer in good faith shall jointly prepare an estimate Stockholder's Equity of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as Elmagco reflected on the Latest Final Effective Date Balance Sheet attached hereto (adjusted as Exhibit 1hereafter provided) is less than $13,278,481 (which is the amount of Stockholder's Equity reflected on the Base Balance Sheet); provided, however that such adjustment shall be made only if such difference exceeds $300,000. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (The Stockholder's Equity reflected on the "Target Net Book Value"), the Estimated Purchase Price Final Effective Date Balance Sheet shall be increased by the amount of such excess. If any Seller Liabilities (as defined in Section 9.1) reflected on the Estimated Closing Net Book Value is less than the Target Net Book ValueFinal Effective Date Balance Sheet, the Estimated Purchase Price shall be decreased by plus the amount of such shortfallany reserves for Seller Liabilities (as defined in Section 9.1) in excess of $317,000 which are established in preparation of the Final Effective Date Balance Sheet. The amount of such increase or decrease in In the Estimated Purchase Price shall be reflected event the Final Effective Date Balance Sheet has not been prepared by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause the management Seller shall make a good faith estimate of the CPC Business to prepare an unaudited balance sheet Stockholder's Equity of Elmagco as of such date and the parties shall adjust the Purchase Price accordingly; thereafter, upon completion of the CPC Business Final Effective Date Balance Sheet, Seller or Buyer, as appropriate, shall pay the difference between the amount of the Closing (the "Closing Balance Sheet") adjustment for the purpose of establishing the Net Book Value as of the close of business Stockholder's Equity made on the Closing Date (and the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation amount of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (45) days after the Closing Date, Buyer shall deliver to the Seller the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within thirty (30) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value adjustment required based upon the percentage which Final Effective Date Balance Sheet. With respect to the portion foregoing adjustment, the net amount of the contested amount not awarded to a party bears to the amount actually contested by required payment shall be made in cash within five business days after such partydetermination has been made. For exampleThe amount, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Businessany, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will required to be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined paid pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) Section 1.4 shall include bear interest, at the prime rate announced from time to time by The Wall Street Journal from the Closing Date to through the date of payment of such amount, and the total amount of such interest shall be paid at the same time and along with such payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.
Appears in 1 contract
Samples: Stock Purchase Agreement (Boots & Coots International Well Control Inc)
Purchase Price Adjustment. a. At least three The Purchase Price will be adjusted (3the "Purchase Price Adjustment"), if at all, for the amount by which the Net Current Liabilities (as defined below) business days prior of the Business are not equal to $2.125 million (the "Guaranteed Net Current Liabilities"). For example, if (x) the Net Current Liabilities are $2.5 million, then the Net Current Liabilities are deemed greater than the Guaranteed Net Current Liabilities, and (y) conversely, if the Net Current Liabilities are $1.5 million, then the Net Current Liabilities are less than the Guaranteed Net Current Liabilities. An estimated amount of the Purchase Price Adjustment (the "Estimated Purchase Price Adjustment") will be determined by the mutual agreement of the parties on the Closing Date and shall be a Closing document to this transaction. If the Estimated Purchase Price Adjustment shows a calculation that the estimated Net Current Liabilities of the Business (the "Estimated Net Current Liabilities") on the Closing Date to be greater than the Guaranteed Net Current Liabilities, then the Closing Cash Payment and the Purchase Price will be reduced by the amount of the difference. The Estimated Purchase Price Adjustment will be reconciled to the Purchase Price Adjustment after the Closing Date in accordance with the further provisions of this Section 2.2(b). "Net Current Liabilities" shall mean the difference between the current Assets of the Business and the current Assumed Liabilities of the Business computed in accordance with GAAP consistently applied by the Company in the Financial Statements. (i) Promptly following the Closing Date, the Seller and Buyer but in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the any event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less not later than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than fortyone-hundred five (45105) days after the Closing Date, Buyer will the Company shall cause to be prepared and delivered to the management of Purchaser a certification (the CPC Business to prepare an unaudited "Closing Certificate") prepared by Ernst & Young, LLP or such other independent certified public accountant selected by the Company (the "Auditor"). The Closing Certificate shall include: (A) A closing balance sheet of the CPC Business as of on the Closing Date (the "Closing Balance Sheet") prepared in accordance with Section 2.2(b)(iii); (B) A calculation and comparison of the (x) the Estimated Purchase Price Adjustment, and (y) the Purchase Price Adjustment. In the event that: (x) the Estimated Purchase Price Adjustment is a greater number than the Purchase Price Adjustment, the Purchaser shall pay the difference to the Company; and (y) the Estimated Purchase Price Adjustment is of a smaller magnitude than the Purchase Price Adjustment, the difference shall be paid by the Company to the Purchaser; provided, however, that the Purchaser shall first make a claim against the Escrow Fund for the purpose amount due to the Purchaser to the extent of establishing fifty percent (50%) of the original amount of the Escrow Fund and, if that amount is not sufficient to satisfy the Purchaser's claim, the Purchaser shall have the right to have the remainder paid directly by the Company and the Company Parent or through a claim by the Purchaser against the remainder of the Escrow Fund. In illustration of the foregoing, in the event the Estimated Purchase Price Adjustment reduced the Purchase Price paid at the Closing in the amount of $100,000, and the Purchase Price Adjustment shows Net Book Value Current Liabilities of less than the Guaranteed Net Current Liabilities in the amount of $200,000, then the Company would be paid an additional $300,000 ($100,000 deducted plus $200,000 for the savings of Net Current Liabilities). The amount referenced in Section 2.2(b)(i)(B)(x) above, if any, shall be summarized and computed as an amount due to the Company, with interest thereon. The amount referenced in Section 2.2(b)(i)(B)(y) above, if any, shall be summarized and computed as an amount due to the Purchaser, with interest thereon. Interest shall be computed in accordance with Section 2.2(b)(vi) below. (C) Copies of all supplementary documents, work papers, and other data relating to the Closing Certificate; and (D) Such other supplementary evidence as the Purchaser may require either prior to or after delivery of the Closing Certificate. (ii) In connection with the preparation of the Closing Balance Sheet and all other matters arising under the Closing Certificate, each of the Purchaser and the Company shall afford the other and their respective representatives complete access to the books, records, personnel and facilities of or pertaining to the Business to permit the Auditor to review such information as is necessary or desirable to prepare the Closing Balance Sheet and all other statements and documentation arising under the Closing Certificate. (iii) The Closing Balance Sheet shall consist of a special procedures report of the Auditor, based on the balance sheet of the Business as of the close of business on the Closing Date (the "Closing Net Book ValueBalance Sheet Date"). Such ) in accordance with the accounting principles and methods consistently applied by the Company in connection with the Business (including any change in accounting methods or principles disclosed in any Schedule or Supplement) as set forth in the Financial Statements, whether or not such accounting principles are in conformity with GAAP, and without giving effect to the consummation of the transactions contemplated hereby; provided, however, that the Closing Balance Sheet shall exclude be subject to and prepared in strict conformity with year-end accrual and estimation practices of the assets Company used for the Financial Statements, such that all pro-rata adjustments, accruals, reserves, allowances and liabilities set forth on Exhibit 1similar year-end adjustments are prepared for and included in the Closing Balance Sheet, treating the Closing Balance Sheet as the Company's year-end statement for the Business. The Seller will have reasonable access to (i) such management to discuss expense of the preparation of the Closing Balance Sheet by the Auditor shall be borne by the Company. The parties hereby acknowledge and (ii) agree, and the work papers Auditor is directed to act in accordance with the parties' agreement, that regardless of such management during such forty-five-day period and during whether it is otherwise required by GAAP, or whether it is inconsistent with the thirty-day period after past accounting practices of the delivery of Company, the Closing Balance Sheet shall not contain payments or accruals for (i) the fees, costs and/or expenses associated with any Transactional Expenses arising from, incident to or in connection with the Sellertransactions contemplated by this Agreement, (ii) any Excluded Assets, and/or (iii) any Excluded Liabilities. Within forty-five (45iv) If the Purchaser concludes that any matter reported in the Closing Certificate is not accurate, the Purchaser shall, within forty (40) days after its receipt of the Closing DateCertificate (the "Response Period"), Buyer shall deliver to the Seller the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within thirty (30) days after delivery of the Closing Balance Sheet to the Seller (such notice Company a written statement setting forth the basis for such disagreement in reasonable detail), a specific description of each of its objections and Buyer and the Seller thereafter shall negotiate in good faith each of any discrepancies believed to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditorexist. The resolution of such disagreements and the determination of Closing Net Book Value Company shall deliver any further supplemental documentation upon written request by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, Purchaser within five (5) business days after of receipt of the Purchaser's written request. If no notice of any objections or discrepancies is given within the Response Period, then the calculations set forth in the Closing Net Book Value is finally determined Certificate shall be controlling for all purposes of this Agreement, and the Purchaser shall remit the amount to be paid in accordance with the Closing Certificate and pursuant to Section 2.2(vi) below. (v) The Purchaser and the Company shall use good faith efforts to jointly resolve the properly noticed objections and discrepancies within fifteen (15) days of the receipt of the written statement of objections and discrepancies, which resolution, if achieved, shall be fully and completely binding upon all parties to this secAgreement and not subject to further review, appeal or dispute. 4.If the Purchaser and the Company are unable to resolve the objections and discrepancies to their mutual satisfaction within such fifteen (15) day period, pay then the matter shall be submitted to a mutually acceptable accounting firm of national reputation (the "Independent Accountants"). In submitting a dispute to the Seller Independent Accountants, each of the amount parties shall concurrently furnish, at its own expense to the Independent Accountants and the other party such documents and information as the Independent Accountants may request. Each party may also furnish to the Independent Accountants such other information and documents as it deems relevant, with the appropriate copies and notification being concurrently given to the other party. Neither party shall have or conduct any communication, either written or oral, with the Independent Accountants without the other party either being present or receiving a concurrent copy of such excess in immediately available fundsany written communication. If Closing Net Book Value is less The Independent Accountants may conduct a conference concerning the objections and discrepancies between the Company and the Purchaser, at which conference each party shall have the right to (i) present its documents, materials and other evidence (previously provided to the Independent Accountants and the other party), and (ii) to have present its or their advisors, accountants and/or counsel. The Independent Accountants shall promptly (but no later than Estimated Closing Net Book Valuethirty (30) days from the date of engagement of the Independent Accountants) render a decision on the issues presented, which decision shall be final and binding on the Seller shall, within parties. (vi) Within five (5) business days after of the earlier to occur of (i) any failure to object to the Closing Net Book Value Certificate within the Response Period, or (ii) receipt of the Independent Accountants' decision with respect to such dispute, if the Purchaser is finally determined pursuant to owe an amount to the Company, the Purchaser shall pay such amount to the Company, and if the Company is determined to owe an amount to the Purchaser, such amount shall be paid to the Purchaser. All amounts owed by the Purchaser or the Company to the other in accordance with this sec. 4., pay to Buyer in Section 2.2(b) shall be paid by certified or bank cashier's check or by wire transfer of immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, with interest computed thereon from the Closing Date to at the prime rate charged on the date of paymentthe payment becomes due by U.S. Bank National Association, at 8% calculated on the basis of a 365-day year (the "Applicable Rate")Minneapolis, Minnesota. 5.2.3
Appears in 1 contract
Purchase Price Adjustment. a. At least three (3) business days Seller shall deliver to Buyer no later than five Business Days prior to the Closing Date, the Seller and Buyer in a good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date Balance Sheet (the "“Estimated Closing Net Book Value"Balance Sheet”) based on books and records and other information then available. In a good faith estimate of Closing Stockholders’ Equity (the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If “Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"Stockholders’ Equity”), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but possible and in no any event later than fortywithin thirty-five (4535) days Business Days after the Closing Date, Seller shall prepare or cause to be prepared, and shall provide to Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set a written statement setting forth on Exhibit 1. The Seller will have in reasonable access to (i) such management to discuss the preparation detail its good faith determination of the Closing Balance Sheet and the Closing Stockholders’ Equity (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the “Closing Statement”). The Closing Balance Sheet to shall be prepared in accordance with the Sellersame accounting principles and practices used by each Bank in preparing the Recent Balance Sheet. Within forty-five (45) days after If the Closing DateStockholders’ Equity, Buyer shall deliver to the Seller the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within thirty (30) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this secSection 2.05 and Section 2.06, exceeds the Target Closing Stockholders’ Equity, then Buyer shall pay to Seller an amount equal to (i) the amount by which the Closing Stockholders’ Equity exceeded the Target Closing Stockholders’ Equity less (ii) any amount paid to Seller pursuant to Section 2.03(iii); provided, however, if the Closing Stockholders’ Equity exceeded the Target Closing Stockholders’ Equity by an amount less than the amount paid to Seller pursuant to Section 2.03(iii) then Seller shall pay to Buyer an amount equal to the amount by which the Section 2.03(iii) payment exceeded the amount by which the Closing Stockholders’ Equity exceeded the Target Closing Stockholders’ Equity. 4. If the Target Closing Stockholders’ Equity exceeds Estimated the Closing Net Book ValueStockholders’ Equity, Buyer shall, within five (5) business days after Closing Net Book Value is as finally determined pursuant to this sec. 4.Section 2.05 and Section 2.06, then Seller shall pay to the Seller Buyer an amount equal to (i) the amount of such excess by which the Target Closing Stockholders’ Equity exceeded the Closing Stockholders’ Equity less (ii) the amount set forth in immediately available funds. If Section 2.03(ii); provided, however, if the Target Closing Net Book Value is Stockholders’ Equity exceeded the Closing Stockholders’ Equity by an amount less than Estimated the amount set forth in Section 2.03(ii) then Buyer shall pay to Seller an amount equal to the amount by which the Section 2.03(ii) reduction amount exceeded the amount by which the Target Closing Net Book Value, Stockholders’ Equity exceeded the Seller shall, within five (5) business days after Closing Net Book Value is finally determined Stockholders’ Equity. Any payment required to be made pursuant to this secSection 2.05 shall be made within ten days after Buyer’s acceptance of the Closing Statement or, if applicable, within ten days after receipt of a determination and resolution of any dispute over the Closing Statement as provided in Section 2.06. 4.Any such amount payable pursuant to this Section 2.05 shall be paid (i) together with interest (not compounded) thereon equal to LIBOR on the Closing Date, pay to Buyer in plus 100 basis points, from and including the Closing Date through the date immediately preceding the date of payment and (ii) by wire transfer of immediately available funds (in U.S. Dollars) to an account or accounts designated in writing by the amount of party entitled to receive such shortfall. Without duplication, all amounts owed pursuant to this sec.4. payment (g) shall include interest, from the Closing Date or by such other means as are mutually agreeable to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"parties). 5.
Appears in 1 contract
Samples: Stock Purchase Agreement (Mercantile Bancorp, Inc.)
Purchase Price Adjustment. a. At least three (3) business days prior to As soon as reasonably practical after the Closing Date, the Seller and Buyer in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicableClosing, but in no event later more than forty-five thirty (4530) days after the Closing Date, Buyer will cause the management of the CPC Business to Purchaser shall prepare an unaudited a consolidated balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value Company as of the close of business on the Closing Date (the "Closing Net Book ValueDate Balance Sheet"), together with (ii) a draft schedule (the "Draft Adjustment Report") showing the Purchaser's computation of the Net Asset Adjustment as of the Closing Date and the Purchaser's proposed purchase price adjustment to be made in accordance with this Section 2.3. Such The Closing Date Balance Sheet shall exclude be prepared in accordance with GAAP Consistency. The Purchaser shall deliver the assets Closing Date Balance Sheet and liabilities the Draft Adjustment Report to the Seller within such 30 day period after the Closing Date. During the thirty (30) day-period after the Seller's receipt of the Closing Date Balance Sheet and the Draft Adjustment Report, the Seller and the Purchaser shall cooperate with each other to resolve any disagreements between them with respect to the Draft Adjustment Report. In the event the Seller and the Purchaser agree on the Draft Adjustment Report and the proposed Net Asset Adjustment set forth therein (such agreement to be indicated in writing by the Seller and the Purchaser by signing such Draft Adjustment Report), then the Draft Adjustment Report shall be deemed to be the final Adjustment Report (the "Adjustment Report"), and the Net Asset Adjustment set forth therein shall be conclusive and binding upon the Purchaser and the Seller and shall have the effect of adjusting the Cash Consideration as set forth therein. In the event the Seller and the Purchaser shall not reach agreement on Exhibit 1. The all aspects of the Draft Adjustment Report, including with respect to the Net Asset Adjustment set forth therein, within such thirty (30) day period after the Seller's receipt of the Closing Date Balance Sheet and the Draft Adjustment Report, the Seller will have reasonable access to shall promptly (but in no event later than five (5) days following the expiration of such thirty (30) day period) prepare a written notice of its objections (the "Objection Notice"): (i) such management objecting in good faith to discuss the Closing Date Balance Sheet or the Net Asset Adjustment set forth in the Draft Adjustment Report, (ii) setting forth the items being disputed and the reasons therefor, and (iii) specifying the Seller's calculation of the Net Asset Adjustment as of the Closing Date and the adjustment to be made in accordance with this Section 2.3. In connection with the preparation of the Objection Notice, the Purchaser shall grant the Seller's accountants and other representatives reasonable access to all of the books and records of the Company. If the Seller fails to deliver timely notice of its objection to the Closing Date Balance Sheet or the Net Asset Adjustment as set forth in the Draft Adjustment Report, then the Draft Adjustment Report shall be deemed to be the Adjustment Report, and the Net Asset Adjustment set forth therein shall be conclusive and binding upon the Purchaser and the Seller and shall have the effect of adjusting the Cash Consideration as set forth therein. The matters in dispute shall be determined by a nationally recognized independent public accounting firm mutually satisfactory to the Purchaser and the Seller (iithe "Arbiter"), and the Purchaser and the Seller shall promptly deliver to the Arbiter the Closing Date Balance Sheet, the Draft Adjustment Report and Seller's Objection Notice. Promptly, but not later than thirty (30) days after the work papers acceptance of its appointment, the Arbiter shall determine (based solely on presentations by the Seller and the Purchaser to the Arbiter and not by independent review) only those items in dispute and shall render a report as to its resolution of such management during such forty-five-day period items and during the thirty-day period after the delivery resulting calculation of the Net Asset Adjustment. For purposes of the Arbiter's determination, the amounts to be included shall be the appropriate amounts from the Closing Date Balance Sheet or the Draft Adjustment Report, as the case may be, as to items that are not in dispute, and the amounts determined by the Arbiter, as to items that are submitted for resolution by the Arbiter. In resolving any disputed item, the Arbiter may not assign a value to such item greater than the greatest value for such item claimed by either party in the Closing Date Balance Sheet, Draft Adjustment Report or Objection Notice or less than the lowest value for such item claimed by either party in the Closing Date Balance Sheet, Draft Adjustment Report or Objection Notice. The Purchaser and the Seller shall cooperate with the Arbiter in making its determination and such determination shall be conclusive and binding upon the Purchaser and the Seller. The Purchaser and the Seller shall each bear one-half of the fees and expenses of the Arbiter. Within five Business Days after the final determination of the Net Asset Adjustment in accordance with this Section 2.3: either (x) the Purchaser shall pay the Seller by wire transfer of immediately available funds the amount, if any, by which the Final Net Asset Adjustment is greater than zero; or (y) the Seller shall pay the Purchaser by wire transfer of immediately available funds the amount, if any, by which the Final Net Asset Adjustment is less than zero. Nothing in this Section 2.3 or in the statements, reports or documents contemplated hereby shall affect the parties' rights and obligations in respect of a breach or alleged breach of any representation or warranty herein. Earn-Out Payments Within forty-five (45) days after the Closing Date, Buyer shall deliver to the Seller the Closing Balance Sheet and its determination last day of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Valueeach Earn-Out Period, the Seller Purchaser shall notify Buyer in writing of such disagreement within thirty (30) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Valuefollowing amounts (each, an "Earn-Out Payment" and collectively, the Seller shall"Earn-Out Payments") if, within five (5) business days after Closing Net Book Value and only if, the minimum revenue target specified below for the given Earn-Out Period is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds satisfied: In respect of the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from six calendar month period following the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable RateFirst Earn-Out Period"), one dollar ($1.00) for each seventy cents ($0.70) of ArtToday Revenue in excess of two million six hundred thousand dollars ($2,600,000) (the "First Minimum Revenue Target"), up to a maximum payment in respect of such period of one million dollars ($1,000,000). 5No payment shall be made if ArtToday Revenue for the First Earn-Out Period is below the First Minimum Revenue Target, and in such case the right to any Earn-Out Payment for such period shall terminate. In respect of the six calendar month period following the First Earn-Out Period (the "Second Earn-Out Period"), one dollar ($1.00) for each one dollar and forty cents ($1.40) of ArtToday Revenue in excess of two million six hundred thousand dollars ($2,600,000) (the "Second Minimum Revenue Target"), up to a maximum payment in respect of such period of one million dollars ($1,000,000). No payment shall be made if ArtToday Revenue for the Second Earn-Out Period is below the Second Minimum Revenue Target, and in such case the right to any Earn-Out Payment for such period shall terminate. In respect of the twelve calendar month period following the Second Earn-Out Period (the "Third Earn-Out Period"), one dollar ($1.00) for each one dollar and five cents ($1.05) of ArtToday Revenue in excess of seven million three hundred thousand dollars ($7,300,000) (the "Third Minimum Revenue Target"), up to a maximum payment in respect of such period of two million dollars ($2,000,000). No payment shall be made if ArtToday Revenue for the Third Earn-Out Period is below the Third Minimum Revenue Target, and in such case the right to any Earn-Out Payment for such period shall terminate.
Appears in 1 contract
Samples: Stock Purchase Agreement (International Microcomputer Software Inc /Ca/)
Purchase Price Adjustment. a. At least three (3) business days prior Set forth on Schedule 2.5 attached hereto is an agreement of the parties regarding certain adjustments that will be made to the Closing Date, Share Purchase Price by the Seller and Buyer in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 parties (such adjustments referred to herein collectively as of the close of business on the Closing Date (the "Estimated Closing Net Book ValuePurchase Price Adjustment") based on books and records and other information then available). In At the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing DateClosing, the parties shall use determine the Net Book Value as reflected amount of each adjustment set forth on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30Schedule 2.5 that can be determined at such time (collectively, 1995 (the "Target Net Book ValueClosing Adjustment"), and the Estimated Purchase Price shall be adjusted to be increased by or decreased, as the case may be, by: (i) the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet Adjustment; and (ii) the work papers amount by which the net value of such management during such forty-five-day period all merchandise, decor and during supplies of KMANCO (value of assets in excess of trade payables) is greater or less, as the thirty-day period after the delivery of case may be, than $45,000 on the Closing Balance Sheet to the SellerDate. Within forty-five (45) 90 days after the Closing DateClosing, Buyer the parties shall deliver to prepare a statement reflecting the Seller amount of each adjustment listed on Schedule 2.5 that was not included in the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book ValueAdjustment (collectively, the Seller shall notify Buyer in writing of such disagreement within thirty "Post-Closing Adjustment"); except that any adjustment (30whether or not listed on Schedule 2.5) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth that is addressed elsewhere in this Agreement and shall comply be made in accordance with all other applicable terms the provisions of this Agreement. f. The Independent Auditor will determine If the allocation of Post-Closing Adjustment results in a credit to Buyer, the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) Shareholders shall promptly pay to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to the Seller the amount of such excess Post-Closing Adjustment; if the Post-Closing Adjustment results in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Valuea credit to the Shareholders, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., Buyer shall promptly pay to Buyer in immediately available funds the Shareholders the amount of such shortfallPost-Closing Adjustment. Without duplicationFor purposes of the Purchase Price Adjustment, all amounts owed pursuant inventory shall be valued at its historical cost. At the time of the Post-Closing Adjustment, the parties shall agree in writing to this sec.4. (gappropriate modifications, if any, to the allocation set forth on Schedule 5.2(e) shall include interest, that result from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5Purchase Price Adjustment.
Appears in 1 contract
Purchase Price Adjustment. a. At least three (3) business days prior to the Closing Date, the Seller and Buyer in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude be deemed final for the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to purposes of this Section 2.06 upon the earliest of (iA) such management to discuss the preparation failure of the Closing Balance Sheet and (ii) Stockholder Representative to notify the work papers Purchaser, on behalf of such management during such forty-five-day period and during the thirty-day period after Stockholders, of a dispute within 30 Business Days of the Purchaser's delivery of the Closing Balance Sheet to the SellerStockholder Representative, (B) the resolution of all disputes, pursuant to Section 2.06(b)(ii), by the Stockholders' Accountants and the Purchaser's Accountants and (C) the resolution of all disputes, pursuant to Section 2.06(b)(ii), by the Independent Accounting Firm. Within forty-five (45) days after the Closing Date, Buyer shall deliver Subject to the Seller limitation set forth in Section 2.06(b)(v), an adjustment to the Purchase Price shall be made as follows: (i) in the event that the Book Value reflected on the Reference Balance Sheet exceeds the Book Value reflected on the Closing Balance Sheet and its determination of by at least the Closing Net Book Value. d. If Designated Amount, then the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller Purchase Price shall notify Buyer be adjusted downward in writing of an amount equal to such disagreement within thirty (30) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements excess over the Closing Net Book Value as soon as practicableDesignated Amount. Promptly following such determination, but in any event within 60 days after submission three (3) Business Days, the Purchaser shall deliver written notice to the Escrow Agent and the Stockholder Representative specifying the amount of such downward adjustment of the disputes Purchase Price, and the Escrow Agent shall, within three (3) Business Days of its receipt of such notice and in accordance with the terms of the Escrow Agreement, pay such amount to the Independent AuditorPurchaser out of the Adjustment Escrow Fund by wire transfer in immediately available funds. The resolution In the event that the Adjustment Escrow Fund is insufficient to cover the amount of such disagreements downward adjustment, then the Escrow Agent shall distribute the entire Adjustment Escrow Fund to the Purchaser as provided above and the determination of Closing Net Book Value Stockholders shall pay, on or prior to the date on which the Escrow Agent distributes the Adjustment Escrow Fund to the Purchaser, an amount to the Purchaser, by wire transfer in immediately available funds to an account designated by the Independent Auditor shall be final and binding on Buyer and Purchaser in a written notice to the Seller absent manifest error. The Independent Auditor shall comply with the definitions used hereinStockholder Representative, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears equal to the amount actually contested by of such partydeficiency. For example, if In the Seller claims the Closing Net Book Value is $1,000 greater than event that any Stockholder shall fail to pay the amount determined by of such deficiency within the management period specified in the immediately preceding sentence, the Purchaser may deliver written notice to the Escrow Agent and the Stockholder Representative specifying such amount, and the Escrow Agent shall, within three Business Days of its receipt of such notice and in accordance with the terms of the BusinessEscrow Agreement, and Buyer contests only $500 pay such amount to the Purchaser out of the amount claimed Indemnity Escrow Fund by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 wire transfer in immediately available funds. No failure of the $500 contestedPurchaser to deliver a notice of the type specified in the immediately preceding sentence shall relieve the Stockholders of the obligation to pay the amount of such deficiency to the Purchaser. In the event that the amount of funds in the Adjustment Escrow Fund exceeds the amount of the downward adjustment of the Purchase Price provided for in the first sentence of this Section 2.06(c)(i), then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) Escrow Agent shall, after paying the amount due to the Seller. g. If Closing Net Purchaser as provided in such sentence, pay the remaining amount of funds in the Adjustment Escrow Fund to the Stockholder Representative; and (ii) in the event that the Book Value (as finally determined pursuant reflected on the Closing Balance Sheet exceeds the Book Value reflected on the Reference Balance Sheet by at least the Designated Amount, then the Purchase Price shall be adjusted upward in an amount equal to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer such excess over the Designated Amount and the Purchaser shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4.three Business Days of such determination, pay to the Seller the amount of such excess to the Stockholders by wire transfer in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book ValueIn such event, the Seller Purchaser shall, within five three (53) business days after Closing Net Book Value is finally determined Business Days, deliver written notice to the Escrow Agent of such an event and the Escrow Agent shall, within three (3) Business Days of its receipt of such notice and in accordance with the terms of the Escrow Agreement, pay all funds in the Adjustment Escrow Fund to the Stockholder Representative. (e) Any payments required to be made by the Stockholders, the Purchaser or the Escrow Agent pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (gSection 2.06(c) shall include interest, bear interest from the Closing Date to through the date of payment, payment at 8% calculated on the basis of a 365-day year (the "Applicable Rate")8.0%. 5.ARTICLE III
Appears in 1 contract
Purchase Price Adjustment. a. At least The Cash Payment amount due at Closing or any other amount otherwise due Sellers hereunder shall be adjusted downward if the Company's "Net Current Asset Value" (as defined herein) as of the Closing Date is less than the Company's average Net Current Asset Value for the three (3) business month period ending March 31, 2005. For this purpose, the term "Net Current Asset Value" means the book value of the Company's current assets as of the applicable measurement date minus the Company's current liabilities as of the same date, each of which shall be determined in accordance with GAAP. Within ninety (90) days prior to following the Closing, Buyer shall provide Sellers with a Schedule prepared by Buyer in good faith showing (i) the Net Current Asset Value as of the Closing Date, (ii) the Seller average Net Current Asset Value for the three month period ended March 31, 2005, and Buyer in good faith shall jointly prepare (iii) an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as amount of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior adjustment to the Closing DatePurchase Price, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 if any (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book ValueBuyer's Adjustment Schedule"). Such Closing Balance Sheet In order for Buyer to prepare its Buyer's Adjustment Schedule, the Sellers shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation provide Buyer a copy of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet Company's April 2005 financial statements on or before May 31, 2005. Unless Sellers shall provide Buyer with written objection to the Seller. Within forty-five (45) days after the Closing Date, Buyer shall deliver to the Seller the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement Adjustment Schedule within thirty (30) days after delivery following Sellers' receipt thereof, the Buyer's Adjustment Schedule shall become final, binding and conclusive upon the parties for purposes of this Agreement and Buyer shall be entitled to have the Closing Balance Sheet Purchase Price adjustment amount reflected in the Buyer's Adjustment Schedule released to Buyer from the Escrow Amount or otherwise. If Sellers timely provide said objection to the Seller (such notice setting forth the basis for such disagreement in reasonable detail)Buyer's Adjustment Schedule, and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller parties are unable to resolve any reach a mutual agreement as to the Purchase Price adjustment amount within a period of thirty (30) days following such disagreements objection by Sellers, then within seven (7) days thereafter, the calculation of the Purchase Price adjustment shall be submitted to an independent certified public accountant mutually selected, in writing, by the parties for such purpose ("Independent Accountant"). Each party shall thereupon furnish to the Independent Accountant such work papers and other documents and information requested by the Independent Accountant. The Independent Accountant shall determine the Purchase Price adjustment within thirty (30) days after Seller delivers following the date of its response to Buyerappointment, Buyer and Seller which determination shall submit the dispute to a "Big 6" accounting firm unaffiliated withbe final, binding, and mutually acceptable to, Buyer and Seller (conclusive upon the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditorparties. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor parties shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used hereinbear all costs, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs fees and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4Accountant equally., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.
Appears in 1 contract
Purchase Price Adjustment. a. At least three The Purchase Price shall be reduced, on a ------------------------- dollar-for-dollar basis, (3the "Purchase Price Reduction") business days prior to by the Closing Dateamount, the Seller and Buyer in good faith shall jointly prepare an estimate of if any, by which the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 Roche as of the close of business shown on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 is less than Nine Million Nine Hundred Twenty-Five Thousand US dollars (the US $9,925,000) ("Target Net Book ValueNBV Target"), the Estimated . The Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Valueincreased, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by on a commensurate increase or decrease in the Cash Portion. c. As promptly as practicabledollar- for-dollar basis, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing (the "Purchase Price Increase") by the amount, if any, by which the net book value of Roche as shown on the Closing Balance Sheet is more than the NBV Target. For the purposes hereof, the net book value of Roche shall be converted to US dollars based on the daily noon spot rate of the Bank of Canada on December 31, 1998, being Cdn $1.5305, or US $0.6534. Any Purchase Price Reduction shall be payable by Vendors to Purchaser solely by compensation (deduction and set off) against (a) any First EBIT Payment payable to Vendors, and (b) if the First EBIT Payment is insufficient to cover all or any of the Purchase Price Reduction, then against any Second EBIT Payment payable to Vendors. For greater certainty, if no First EBIT Payment and Second EBIT Payment are payable hereunder, any Purchase Price Reduction shall not be payable by Vendors. Any Purchase Price Increase shall be payable by Purchaser to Vendors by certified cheque, bank draft or wire transfer to the Collection Account on the date the First EBIT Payment is required to be made or, if no First EBIT Payment is made, on the date the First EBIT Payment would have been paid had it been payable. For the purposes hereof and the Closing Balance Sheet", net book value shall (a) for exclude the purpose of establishing Management Pension Plan Surplus, any assets associated with the Net Book Value as Pembroke Project and any associated liabilities to the extent assumed and paid by Vendors up to the date hereof, and any current and deferred income Taxes associated with the Pembroke Project, (b) exclude the effects of the close of business Reorganization, (c) include the reserve for disputed Pembroke-related claims referred to in Section 3.1.36 (if still outstanding on the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation date of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (45) days after the Closing Date, Buyer shall deliver to the Seller the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within thirty (30) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detailSheet), and Buyer and the Seller thereafter shall negotiate an equivalent credit in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission recognition of the disputes to the Independent Auditor. The resolution Vendors' assumption of such disagreements and claims, (d) include the determination of Closing Net Book Value by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures litigation reserves set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the BusinessSchedule -------- 3.1.26, and Buyer contests only $500 of (e) incorporate the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 divprinciples set forth in Schedule 2.4. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.------ ------------
Appears in 1 contract
Purchase Price Adjustment. a. At least three (3a) business Within 90 days prior to the Closing Date, the Seller and Buyer in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (45) days after following the Closing Date, Buyer shall deliver to the Seller the Closing Balance Sheet and its determination Parent a final adjustments spreadsheet showing Buyer’s good faith calculation of unpaid Target Transaction Expenses as of the Closing, Target Debt, Net Working Capital (including reasonably detailed work papers that support the Net Working Capital calculation, and the resultant Working Capital Surplus or Working Capital Shortfall), and Closing Net Book ValueCash, in each case, prepared using the same basis and methodologies and in accordance with the same principles used in connection with the calculations set forth in the Initial Adjustments Spreadsheet (the “Final Adjustments Spreadsheet”). d. If Parent objects to all or part of the Seller disagrees with Final Adjustments Spreadsheet as delivered by Buyer's determination , Parent must deliver written notice of Closing Net Book Valuesuch objections (the “Objection Notice”) to Buyer not more than 45 days after the date Parent receives such Final Adjustments Spreadsheet from Buyer. Any Objection Notice shall specify, in reasonable detail, the Seller nature and amount of any and all items in dispute, the amounts of any proposed adjustments and the basis for Parent’s proposed adjustments. If Parent does not deliver an Objection Notice to Buyer within such 45-day period, Parent shall notify be deemed to have accepted the Final Adjustments Spreadsheet delivered by the Buyer. If Parent delivers an Objection Notice to Buyer in writing within such 45-day period, Buyer and Parent shall use commercially reasonable efforts to resolve all objections relating to the Final Adjustments Spreadsheet. If Buyer and Parent do not reach a final resolution of all such disagreement objections within thirty (30) 30 days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement all objections in reasonable detailaccordance with this Section 2.5(a), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller Parent shall submit the dispute all unresolved objections to a "Big 6" accounting firm unaffiliated with, and an “Independent Accountant,” to be mutually acceptable to, agreed upon between Buyer and Seller (Parent, to review and make a determination solely as to the "subject matter of such disagreement. The Independent Auditor") for resolution. e. Accountant shall determine only the unresolved objections so submitted by Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes or Parent to the Independent AuditorAccountant, and shall not make an independent review of all items included in the Final Adjustments Spreadsheet. Any documents submitted by a party to the Independent Accountant, either unilaterally or at the Independent Accountant’s request, shall be simultaneously submitted to the other party. Buyer and Parent shall provide all such documents and records as the Independent Accountant shall reasonably request to be furnished. The determination of the Independent Accountant shall be set forth in writing and shall be conclusive and binding. The Final Adjustments Spreadsheet shall be revised by Buyer and Parent reflecting the numbers established in the resolution of any such disagreements and objections between the determination of Closing Net Book Value parties or by the Independent Auditor shall be final and binding on Accountant in accordance with this Section 2.5(a). Buyer and its advisors shall make available to Parent and its advisors from the Seller absent manifest error. The Independent Auditor shall comply with time the definitions used hereinFinal Adjustments Spreadsheet is delivered to Parent until the Final Purchase Price is determined, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if Independent Accountant in the Seller claims event any unresolved objections to the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if Final Adjustments Spreadsheet are submitted to the Independent Auditor ultimately resolves Accountant any supporting documentation, information and calculations reasonably requested by Parent and/or the dispute by awarding Seller $300 of the $500 contestedIndependent Accountant, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4applicable., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.
Appears in 1 contract
Purchase Price Adjustment. a. At least three As soon as practicable but within thirty (3) business days prior to the Closing Date, the Seller and Buyer in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will the Sellers, at their own expense, shall cause the management Xxxxxx X. Xxxxx, an independent certified public accountant, to prepare combined balance sheets of the CPC Business Companies immediately prior to prepare an unaudited balance sheet of the CPC Business as of the Closing Effective Time (the "Closing Effective Time Balance Sheet") for setting forth the purpose of establishing the Net Book Value as tangible net worth of the close of business on the Closing Date Companies using accrual accounting and in conformance with generally accepted accounting principles (the "Closing Tangible Net Book ValueWorth"). Such Closing A copy of the Effective Time Balance Sheet shall exclude be promptly furnished to the assets and liabilities set forth on Exhibit 1Buyer. The Seller will have reasonable access If the Buyer disagrees with the Tangible Net Worth, the Buyer shall engage an independent public accounting firm, at its expense, to (i) such management to discuss audit the preparation of the Closing Effective Time Balance Sheet and deliver a certified written report to the Seller confirming the Tangible Net Worth (ii"Audited Tangible Net Worth"). If the Seller fails to notify the Buyer within fifteen (15) days after receiving the work papers report from the accounting firm selected by the Buyer, such report shall be deemed accepted for purposes of calculating Tangible Net Worth. If the Seller should so notify the Buyer of a dispute concerning Audited Tangible Net Worth, the Buyer shall then engage another big-five independent accounting firm that is mutually acceptable to the Buyer and the Seller to resolve such dispute and such firm shall notify the Buyer and the Seller of its resolution of such management during dispute within two weeks of its engagement by the Buyer. The cost of services provided by such fortybig-five-day period five accounting firm shall be borne equally by the Buyer and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (45) days after Any such resolution shall be final and binding on all parties hereto for the Closing Datepurposes of calculating Tangible Net Worth. In the event the Tangible Net Worth is less than $1,705,000, Buyer the Sellers shall deliver pay such deficit portion to the Seller the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within thirty (30) days after delivery following the later of its determination of the Closing Balance Sheet Tangible Net Worth, the Buyer's audit or the resolution of any dispute by such big-five accounting firm on a dollar-for-dollar basis. In the event the Tangible Net Worth is greater than $1,705,000, the Buyer shall pay the excess amount, on a dollar-for-dollar basis, to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements Sellers within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit following the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission later of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its either Xxxxxx X. Xxxxx'x determination of the Closing Tangible Net Book Value based upon Worth or the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.determination
Appears in 1 contract
Samples: Stock Purchase Agreement (Thermoview Industries Inc)
Purchase Price Adjustment. a. At least three (3a) business days No later than two (2) Business Days prior to the an anticipated Closing Date, Seller Parent shall allow Buyer Parent and its Representative to inspect the Seller quantity and Buyer in good faith shall jointly prepare an estimate quality of the net book value Inventory and the Tangible Personal Property. At or prior to such inspection, Seller Parent shall provide Buyer Parent with details of CPCthe Inventory and the Tangible Personal Property in the form and manner, determined and calculated in accordance with GAAP consistent with the methodology used rules and procedures, set forth in preparing Exhibit 1 Schedule 2.06. (b) At least five (5) Business Days prior to an anticipated Closing Date, Seller Parent shall prepare and deliver to Buyer Parent a good faith and reasonable estimate by Seller Parent of the Inventory Value as of the close Value Determination Time and the Tangible Personal Property Value as of business on the Value Determination Time, respectively, presented in the form and manner, and calculated in accordance with the rules and procedures, set forth in Schedule 2.06 (such amount, the “Preliminary Inventory Value” and the “Preliminary Tangible Personal Property Value,” respectively). (c) The “Preliminary Closing Purchase Price” shall be the Closing Date Purchase Price as adjusted by the Closing Adjustment. As used herein, the “Closing Adjustment” shall be an amount equal to the Preliminary Inventory Value, less $7,722,759 (the "Estimated Closing Net Book Value") based on books and records and other information then available. In value of the event Inventory as shown in the parties are unable to agree on balance sheet of the Estimated Net Book Value prior to Business as of the Closing Balance Sheet Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet a copy of which is attached hereto as Exhibit Appendix 1. b. If Estimated Closing Net Book Value exceeds Net Book Value ), plus the Preliminary Tangible Personal Property Value, and less $1,462,934 (the value of the inventories and the value of the property, plant & equipment, respectively, as shown in the balance sheet of the Business as of June 30the Balance Sheet Date, 1995 (a copy of which is attached hereto as Appendix 1); provided, however, that any excess of the "Target Net Book Value")difference between $1,462,934 and the Preliminary Tangible Personal Property Value over $2,000,000 shall be disregarded. If the Closing Adjustment is a positive number, the Estimated Closing Purchase Price shall be increased by the an amount of such excess. If the Estimated Closing Net Book Value Adjustment is less than the Target Net Book Valuea negative number, the Estimated Closing Purchase Price shall be decreased by the an amount of such shortfalldeficiency. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45d) Within thirty (30) days after following the Closing Date, Buyer will cause the management Parent shall prepare and deliver to Seller Parent a good faith and reasonable calculation by Buyer Parent of the CPC Business to prepare an unaudited balance sheet of the CPC Business actual Inventory value as of the Closing (Value Determination Time and the "Closing Balance Sheet") for the purpose of establishing the Net Book Value actual Tangible Personal Property value as of the close of business on Value Determination Time, each presented in the Closing Date form and manner, and calculated in accordance with the rules and procedures, set forth in Schedule 2.06 (such amount, the "Closing Net Book “Proposed Final Inventory Value"” and the “Proposed Final Tangible Personal Property Value,” respectively). Such Closing Balance Sheet (e) Until the Final Inventory Value and the Final Section Tangible Personal Property Value are determined pursuant to Section 2.06(f) Buyer Parent shall exclude the assets provide Seller Parent and liabilities set forth on Exhibit 1. The any auditors or other representatives of Seller will have Parent, at all reasonable times, with reasonable access to (i) such management to discuss the preparation books and records of the Closing Balance Sheet applicable Subsidiary of Buyer Parent and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (45) days after personnel involved in determining the Closing Date, Buyer shall deliver to Proposed Final Inventory Value and the Seller the Closing Balance Sheet and its determination of the Closing Net Book Proposed Final Tangible Personal Property Value. d. If the (f) Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller Parent shall notify Buyer in writing of such disagreement within have thirty (30) days after delivery receipt of the Closing Balance Sheet Proposed Final Inventory Value and the Proposed Final Tangible Personal Property Value to the Seller (such notify Buyer Parent of any disputes, which notice setting shall set forth in reasonable detail the basis for any such disagreement in reasonable detail)disputes. If Seller Parent fails to notify Buyer Parent of any such disputes within such thirty (30) day period, and Buyer then the Proposed Final Inventory Value and the Proposed Final Tangible Personal Property Value shall be the “Final Inventory Value” and the “Final Tangible Personal Property Value”, respectively. If Seller thereafter Parent notifies Buyer Parent of any such disputes within such thirty (30) day period, then Buyer Parent and Seller Parent and their respective accountants shall negotiate cooperate in good faith to resolve any such disagreementsdisputes as promptly as possible. If Buyer Parent and the Seller are unable to Parent do not resolve any such disagreements disputes within thirty (30) days after Seller delivers its response to BuyerParent notifies Buyer Parent of any such disputes, then Buyer Parent and Seller Parent shall submit the dispute to a "Big 6" engage an accounting firm unaffiliated with, and that is mutually acceptable to, to Buyer Parent and Seller Parent (the "“Independent Auditor"Accountants”) for resolutionto resolve any remaining disputes. e. Buyer Parent and the Seller Parent shall use their best efforts to cause instruct the Independent Auditor Accountants not to resolve all disagreements over assign a value to any item greater than the Closing Net Book Value as soon as practicablegreatest value for such item assigned to it by Buyer Parent, but in any event within 60 days after submission of on the disputes one hand, or Seller Parent, on the other hand, or less than the smallest value for such item assigned to it by Buyer Parent, on the one hand, or Seller Parent, on the other hand. Buyer Parent and Seller Parent shall each furnish to the Independent AuditorAccountants such documents and information relating to the disputed items as such Independent Accountants may reasonably request. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor Accountants shall be final set forth in writing and shall be conclusive and binding on upon Buyer Parent and the Seller Parent absent fraud or manifest error. Seller Parent shall revise the Proposed Final Inventory Value or the Proposed Final Tangible Personal Property Value, as the case may be, to reflect the resolution of any and all disputes thereto pursuant to this Section 2.06(f) and promptly distribute such revised calculations to Buyer Parent, and the Proposed Final Inventory Value and the Proposed Final Tangible Personal Property Value, as each so revised, as applicable, shall be the “Final Inventory Value” and the “Final Tangible Personal Property Value” respectively. (g) If Buyer Parent and Seller Parent engage Independent Accountants as contemplated by Section 2.06(f), then Buyer Parent and Seller Parent shall share responsibility for the fees and expenses of the Independent Accountants as follows: (a) if the Independent Accountants resolves all of the remaining disputes in favor of Buyer Parent (the sum of the Final Inventory Value and the Final Tangible Personal Property Value so determined is referred to herein as the “Low Value”), then Seller Parent shall be responsible for all of the fees and expenses of the Independent Accountants; (b) if the Independent Accountants resolves all of the remaining disputes in favor of Seller Parent (the sum of the Final Inventory Value and the Final Tangible Personal Property Value so determined is referred to herein as the “High Value”), then Buyer Parent shall be responsible for all of the fees and expenses of the Independent Accountants; and (c) if the Independent Accountants resolves some of the remaining disputes in favor of Buyer Parent and some of the remaining disputes in favor of Seller Parent (the sum of the Final Inventory Value and the Final Tangible Personal Property Value so determined is referred to herein as the “Actual Value”), then Seller Parent shall be responsible for that fraction of the fees and expenses of the Independent Accountants equal to (1) the difference between the High Value and the Actual Value over (2) the difference between the High Value and the Low Value, and Buyer Parent shall be responsible for the remainder of the fees and expenses of the Independent Accountants. (h) The Independent Auditor “Final Closing Purchase Price” shall comply with be the definitions Purchase Price as adjusted by the Post-Closing Adjustment, less the XXX Purchase Price. As used herein, the “Post-Closing Adjustment” shall follow be an amount equal to the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine Final Inventory Value, less $7,722,759 (the allocation value of the costs and expenses of its determination Inventory as shown in the balance sheet of the Closing Net Book Value based upon the percentage which the portion Business as of the contested Balance Sheet Date, a copy of which is attached hereto as Appendix 1), plus the Final Tangible Personal Property Value, less $1,462,934 (the value of the inventories and the value of the property, plant & equipment, respectively, as shown in the balance sheet of the Business as of the Balance Sheet Date, a copy of which is attached hereto as Appendix 1); provided, however, that any excess of the difference between $1,462,934 and the Final Tangible Personal Property Value over $2,000,000 shall be disregarded. If the Post-Closing Adjustment is a positive number, the Final Closing Purchase Price shall be increased by an amount not awarded of such excess. If the Post-Closing Adjustment is a negative number, the Final Closing Purchase Price shall be decreased by an amount of such deficiency. (i) Once the Final Closing Purchase Price is determined pursuant to a party bears to the amount actually contested by such party. For example, Section 2.06(h) above: (i) if the Seller claims the Final Closing Net Book Value Purchase Price is $1,000 greater than the Preliminary Closing Purchase Price, then Buyer Parent shall pay to Seller Parent an amount equal to such excess by delivery of cash, payable by wire transfer or delivery of other immediately available funds, within ten (10) Business Days after the date on which the Final Inventory Value and the Final Tangible Personal Property Value are determined pursuant to Section 2.06(f); or (ii) if the Final Closing Purchase Price is less than the Preliminary Closing Purchase Price, then such deficiency shall be paid to Buyer Parent by the management Escrow Agent from the Escrow Amount pursuant to the terms of the BusinessEscrow Agreement. Notwithstanding anything contained herein, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will no upward or downward adjustment shall be allocated 60% (i.e. 300 div. 500) made pursuant to Buyer and 40% (i.e. 200 div. 500this Section 2.06(i) to the Sellerextent that the absolute value of the difference between the Final Closing Purchase Price and the Preliminary Closing Purchase Price is less than $10,000. g. If (j) XXX Purchase Price shall be adjusted to reflect (i) the XXX Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Inventory Value, which shall be prepared and delivered by Seller Parent to Buyer shall, within Parent at least five (5) Business Days prior to an anticipated XXX Closing Date, presented in the form and manner, and calculated in accordance with the rules and procedures, set forth in Schedule 2.06 and (ii) any event applicable to a Tangible Personal Property of the XXX Assets not in the ordinary course of business days after between the Closing Net Book Value is finally determined and the XXX Closing. (k) For the purpose of calculating the Purchase Price adjustment pursuant to this sec. 4., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book ValueSection 2.06, the Seller shall, within five (5) business days after Closing Net Book Value value of the XXX Assets denominated in RMB shall be converted into the United States Dollars using the average exchange rate published by the People’s Bank of China on the last Business Day prior to which such value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4calculated. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"l). 5.
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Samples: Master Purchase Agreement
Purchase Price Adjustment. a. At least three (3a) business days prior The Purchase Price shall be adjusted in the amount equal to the Closing DateNet Asset Adjustment. For purposes hereof, the Seller and Buyer in good faith "Net Asset Adjustment" shall jointly prepare an estimate equal -------------------- the difference of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on (i) the Closing Date Net Assets (as defined in Section 1.4(d)) as -------------- of 11:59 p.m. on October 7, 2000 minus (ii) $177,000,000 (the "Estimated Net Asset --------- Threshold"). If the Net Asset Adjustment is positive (i.e., Closing Net Book Value") based on books and records and other information then available. In the event the parties Assets --------- are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use greater than the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"Asset Threshold), the Estimated Purchase Price shall be increased by the amount of the Net Asset Adjustment. Any such excesspositive Net Asset Adjustment shall be paid by the execution and delivery by the Purchaser to the Seller within five days of the Determination Date (as defined below) of a note in the original principal amount of the Net Asset Adjustment, in the form attached hereto as Exhibit B (the "Adjustment Note"), which shall bear interest --------- --------------- at the Stated Rate (as defined in the Note) from the Closing Date and shall be guaranteed by the Company and one or more of its Non-Corporate Subsidiaries under the Guaranty. If the Estimated Net Asset Adjustment is negative (i.e., if Closing Net Book Value is Assets are less than the Target Net Book ValueAsset Threshold), the Estimated Purchase Price shall be decreased by the amount of the Net Asset Adjustment. Any such shortfall. The negative Net Asset Adjustment shall be made by a reduction to the principal amount of the Note, such increase or decrease in the Estimated Purchase Price shall reduction to be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business effective as of the Closing (Date. If the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business Note is no longer outstanding on the Closing Date (Determination Date, or has been assigned by the "Closing Seller as permitted under the Note, any such negative Net Book Value"). Such Closing Balance Sheet Asset Adjustment shall exclude be made by a cash payment by the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (45) days after the Closing Date, Buyer shall deliver to the Seller the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within thirty (30) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 Purchaser of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contestedNet Asset Adjustment, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, plus interest from the Closing Date to at the date Stated Rate. Any such reduction of payment, at 8% calculated on the basis Note or payment shall be made within five days of a 365-day year (the "Applicable Rate"). 5Determination Date.
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Purchase Price Adjustment. a. At least three (3) business days prior to the Closing Date, the Seller and Buyer in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event Not later than forty-five thirty (4530) days after the Closing Date, Buyer will cause Seller shall begin to calculate the management Purchase Price based on the actual statutory capital and surplus of the CPC Business to prepare an unaudited balance sheet of Company shown on the CPC Business as of the Closing (the "Final Closing Balance Sheet") for . Upon Seller's request, Buyer shall provide Seller with all books, records, documents and any other information in its possession that Seller reasonably determines is necessary to prepare and complete the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book Value"). Such Final Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the SellerSheet. Within forty-five sixty (4560) days after the Closing Date, Seller shall provide to Buyer shall deliver to the Seller the Final Closing Balance Sheet and its determination of the underlying documentation to enable Buyer to validate the Final Closing Net Book ValueBalance Sheet. d. If The Buyer shall notify the Seller disagrees of any disagreement with Buyer's determination of the Final Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within thirty Balance Sheet no later than fifteen (3015) days after delivery Buyer's receipt of the Final Closing Balance Sheet. If Buyer does not deliver such notice to Seller within the fifteen (15) day period, the Final Closing Balance Sheet shall be deemed final for purposes of this Section. If Buyer delivers such notice to the Seller (such notice setting forth the basis for such disagreement in reasonable detail)Seller, and Buyer and the Seller thereafter shall negotiate work together in good faith to resolve any such disagreementsthe dispute prior to the ninetieth (90th) day following the Closing Date. If In the event Seller and Buyer and the Seller are unable to resolve any such disagreements agree on the Final Closing Balance Sheet within thirty ninety (3090) days after the Closing, Seller delivers its response to Buyerand Buyer shall retain an independent, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, nationally recognized and mutually acceptable to, accounting firm to determine the Final Closing Balance Sheet. The fees of such accounting firm shall be borne equally by Seller and Buyer. Seller and Buyer and Seller (shall abide by the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission decision of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor accounting firm, which shall be final and binding on both parties. If the actual capital and surplus of the Company determined from the Final Closing Balance Sheet or by the accounting firm, whichever applies, is greater than the capital and surplus of the Company determined from the Preliminary Closing Balance Sheet, Buyer shall pay such excess to Seller. If the actual capital and surplus of the Company determined from the Final Closing Balance Sheet or by the accounting firm, whichever applies, is less than the capital and surplus of the Company determined from the Preliminary Closing Balance Sheet, Seller absent manifest errorshall pay such difference to Buyer. The Independent Auditor Any payment due under this Section shall comply be made within fifteen (15) days after the earlier of the date (i) the Final Closing Balance Sheet becomes final, (ii) the parties' mutually agree to the Final Closing Balance Sheet, or (iii) written notice of the accounting firm's decision. Notwithstanding any provision of this Agreement to the contrary, the agreement of the parties or the determination of the mutually acceptable accounting firm with respect to the definitions used hereinFinal Closing Balance Sheet shall under no circumstances be deemed to constitute a bar or limitation on the right of either party to recover fully from the other party for the other party's breach of any warranty, shall follow the procedures set forth representation or covenant made in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears merely because such warranty, representation or covenant is related to the amount actually contested by such party. For example, if information or documents used in completing the Seller claims the Final Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4Balance Sheet., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.
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Purchase Price Adjustment. a. At least three (3) business days prior to To the Closing Dateextent that the Company’s EBITDA in 2008 is less than the 2007 EBITDA, the Seller Purchase Price shall be automatically adjusted to an amount in Reais equal to seven (7) times the Company’s EBTIDA in 2008 (the “2008 Adjusted Purchase Price”). For the purposes of determining the Company’s EBITDA in 2008, within up to 90 (ninety) days after December 31, 2008, the Purchaser shall cause the Company to provide the Sellers with a written and Buyer audited statement describing the Company’s EBITDA in good faith shall jointly prepare an estimate 2008, prepared in accordance with Brazilian GAAP and in a manner consistent with the manner in which the 2007 EBITDA was determined by the Parties. Should the Purchaser and the Sellers agree on the amounts so presented as the Company’s EBITDA in 2008, then the amount of the net book value of CPC, difference between the Purchase Price and the 2008 Adjusted Purchase Price (plus the amount to be determined in accordance with Section 2.07(b)(i), if any) shall, within 30 (thirty) Business Days after the presentation of the mentioned statement by the Company, be released from the Escrow Account in benefit of the Purchaser, provided however that in no event the adjustment shall exceed the amount equivalent to 20% of the Purchase Price accrued of interests (if any), obtained with the investments permitted under the Escrow Agreement, specifically in relation to the portion of Retained Amount corresponding to the 2008 Adjusted Purchase Price. Should the Purchaser and the Sellers disagree with the amounts presented by the Company as the Company’s EBITDA in 2008, and should the Parties and their respective external auditors not be able to reach an agreement upon such values within 30 (thirty) Business Days as from the presentation of referred original statement, then the Parties shall jointly appoint (and equally bear the costs of) another auditing firm selected among Deloitte Touche Tomahatsu, KPMG, Ernst&Young or PriceWaterhouseCoopers. Should the Parties not reach an agreement as to the third auditing firm within the immediately subsequent 5 (five) Business Days, then it shall be chosen following the order that they appear above. The retained third auditing firm shall, within 15 (fifteen) Business Days following its engagement, issue a final and binding statement contemplating the Company’s EBITDA in 2008 (the third auditing firm shall prepare and issue its final statement in accordance with Brazilian GAAP and in a manner consistent with the methodology used manner in preparing Exhibit 1 as of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (45) days after the Closing Date, Buyer shall deliver to the Seller the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within thirty (30) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount 2007 EBITDA was determined by the management Parties). The payment of the Business, and Buyer contests only $500 of Adjusted Purchase Price (plus the amount claimed to be determined in accordance with Section 2.07(b)(i), if any), if any, derived from the final statement by the Sellers, and if third auditing firm shall be made within 5 (five) Business Days as from the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to the Seller the amount issuance of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4final statement., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.
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Purchase Price Adjustment. a. At least three (3a) business days prior to the Closing Date, the Seller and Buyer in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date Within sixty (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (4560) days after the Closing Date, Buyer shall prepare and deliver to Parent a proposed Closing Date Balance Sheet conforming to the Seller requirements set forth in this Section 1.6 (the "Proposed Closing Date Balance Sheet"). The Proposed Closing Date Balance Sheet shall be a pro forma unaudited consolidated balance sheet of the Combined Business as of the Closing Date reflecting only Acquired Assets, Assumed Liabilities, Herndon Purchased Assets and Herndon Assumed Liabilities, prepared in accordance with GAAP on a basis consistent with thx Xxxxxce Sheet (including, wxxxxxx limitation, accounting for Inventory in accordance with the procedures and criteria set forth on Schedule 1.6(a)) and presenting fairly the financial condition of the Combined Business as of the Closing Date; provided, however, that the Proposed Closing Date Balance Sheet shall not include (i) as an asset any future tax benefits that relate to the allowance for doubtful accounts or (ii) as a Liability any allowance for doubtful accounts (which is $2,263,000 on Schedule 2.6). During the period following the Closing Date and prior to the delivery of the Closing Date Balance Sheet, Parent shall make available to Buyer the appropriate personnel and the books and records of the Companies to assist in the preparation of the Closing Date Balance Sheet. The Proposed Closing Date Balance Sheet shall include appropriate adjustments as if it were prepared for a fiscal year-end and will set forth and designate the net worth, on a combined basis, of the Combined Business as of the Closing Date ("Closing Date Net Worth"). (b) In connection with the preparation of the Proposed Closing Date Balance Sheet, Sellers, the Herndon Sellers, Parent and Buyer shall, at Buyer's option upon notice to Parent as provided in Schedule 1.6(b), cooperaxx xxxx each other in the taking of a physical count of the Inventory in accordance with the procedures set forth in Schedule 1.6(b). Parent and Sellers shall be entitled to have a representative present to observe the taking of the physical count of the inventory described in this Section 1.6(b). (c) Following the Closing, Buyer shall provide to Parent and Sellers, and their respective employees, agents and advisers, upon not less than two business days prior written request, reasonable access during regular business hours to the financial books and records, personnel and facilities relating to the Combined Business necessary for the review and analysis of the Proposed Closing Date Balance Sheet. If Parent fails to give written notice of its disagreement with any item on such Proposed Closing Date Balance Sheet within sixty (60) days after receipt of such Proposed Closing Date Balance Sheet (the "Review Period"), such Proposed Closing Date Balance Sheet shall be deemed accepted and shall become the Closing Date Balance Sheet and its determination be final and binding upon the parties hereto. If, before the expiration of the Review Period, Parent provides Buyer with a written notice setting forth in reasonable detail its disagreement with one or more items on the Proposed Closing Net Book ValueDate Balance Sheet (a "Dispute Notice"), Buyer and Parent shall negotiate in good faith to resolve all matters set forth in the Dispute Notice ("Disputes") during the sixty (60) day period following receipt of the Dispute Notice by Parent (the "Resolution Period"). d. If Items on the Seller disagrees with Buyer's determination Proposed Closing Date Balance Sheet shall be deemed final to the extent they are not referenced in the Dispute Notice. To the extent Disputes are resolved to the mutual satisfaction of Buyer and Parent during the Resolution Period, such resolutions shall be reflected on the Proposed Closing Net Book ValueDate Balance Sheet and deemed final, and if all Disputes are so resolved, the Seller Proposed Closing Date Balance Sheet, as modified to reflect the resolution of such Disputes shall notify be deemed final and become the Closing Date Balance Sheet. (d) If all Disputes cannot be resolved within the Resolution Period, then within fifteen (15) days of the end of the Resolution Period, Parent and Buyer (i) shall set forth in writing their respective positions on the Disputes still at issue and (ii) shall submit the unresolved Disputes to a Big Six accounting firm (other than the principal outside accountants for either Parent or Buyer or any of their Affiliates) mutually acceptable to Parent and Buyer (the "Firm"). (e) The Firm shall make a determination with respect to the Disputes so submitted as well as such disagreement modifications, if any, to be made to the Proposed Closing Date Balance Sheet in accordance with such determination within thirty (30) days after delivery the engagement of the Firm and the Proposed Closing Date Balance Sheet as so modified shall be deemed final and shall become the Closing Date Balance Sheet; provided, however, that in no event shall the Firm determine, with respect to any Dispute submitted to it, an amount that is outside of the Seller (such notice setting forth range of the basis for such disagreement amounts submitted by Parent and Buyer nor shall it address or consider any issue other than the issues involved in reasonable detail)the Disputes. Such determinations by the Firm shall be conclusive and binding upon, and Buyer shall not be appealable by the parties hereto. The fees and expenses of the Seller thereafter Firm shall negotiate in good faith to resolve any such disagreementsbe shared equally by Parent and Buyer. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30f) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated withPromptly, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days five Business Days, after submission of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor shall be Date Balance Sheet becomes final and binding on the parties hereto: (i) If Closing Date Net Worth is equal to the Estimated Closing Date Net Worth, Buyer shall take all steps reasonably practical (including, without limitation, giving notice to the Escrow Agent), to cause the release and delivery to Sellers, in the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures proportions set forth on Annex A to the Escrow Agreement, of all the Purchase Price Escrow Shares. (ii) If Closing Date Net Worth is more than Estimated Closing Date Net Worth, (A) Buyer shall take all steps reasonably practical (including, without limitation, giving notice to the Escrow Agent), to cause the release and delivery to Sellers, in this Agreement the proportions set forth on Annex A to the Escrow Agreement, of all the Purchase Price Escrow Shares and (B) AlliedSignal shall comply with all other applicable terms issue and Buyer shall deliver to Sellers, in the proportions set forth on Annex A to the Escrow Agreement, an additional number of this Agreement. f. The Independent Auditor will determine shares of AlliedSignal Common Stock having a value (based on the allocation of the costs and expenses of its determination Average Trading Price as of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears Date) (rounded to the amount actually contested by such partynearest whole share) equal to the excess of Closing Date Net Worth over Estimated Closing Date Net Worth. For example(iii) If Estimated Closing Date Net Worth is more than Closing Date Net Worth, if (A) a number of Purchase Price Escrow Shares having a value (based on the Seller claims Average Trading Price) (rounded to the nearest whole share) equal to the excess of Estimated Closing Date Net Book Value is $1,000 greater than Worth over Closing Date Net Worth (the amount determined by the management of the Business"Shortfall Amount") shall be released from escrow and returned to AlliedSignal, and Buyer contests only $500 of shall take all steps reasonably practical (including, without limitation, giving notice to the amount claimed by Escrow Agent), to cause the release and delivery to the Sellers, in the proportions set forth on Annex A to the Escrow Agreement, of the balance, if any, of the Purchase Price Escrow Shares and (B) if the Independent Auditor ultimately resolves value (based on the dispute by awarding Seller $300 Average Trading Price as of the $500 contested, then Closing Date) of all of the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value Purchase Price Escrow Shares is less than Estimated Closing Net Book Valuethe Shortfall Amount, (x) all of the Seller shallPurchase Price Escrow Shares shall be released from escrow and returned to AlliedSignal and (y) Parent shall indemnify AlliedSignal for, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., and shall promptly pay to Buyer AlliedSignal in cash, an amount equal to the excess of the Shortfall Amount over the value (based on the Average Trading Price as of the Closing Date) of the Purchase Price Escrow Shares. Such payment shall be made by wire transfer of immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from a bank account designated by AlliedSignal to Parent within five Business Days after the Closing Date to Balance Sheet has become final and binding upon the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate")parties hereto. 5.1.7
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Purchase Price Adjustment. a. At least three (3) business days prior to the Closing Date, the Seller and Buyer in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated The Purchase Price shall be increased or decreased (the "Purchase Price Adjustment") on a dollar-for-dollar basis for the cumulative net adjustment required by the amount of such excess. If following: the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased adjusted by a dollar amount (positive or negative) of the Net Working Capital of Seller on the Closing Date. As used herein, the term "Net Working Capital" shall mean (i) Current Assets minus (ii) Current Liabilities, as such amounts are reflected on the Closing Date Balance Sheet (as hereinafter defined), and (iii) if at Closing the number of actual ending Qualified Subscribers for the System ("Actual Qualified Subscriber Number") is less than 33,400 (the "Minimum Qualified Subscriber Number"), then there shall be deducted from the Purchase Price an amount equal to Three Hundred and Fifty Dollars ($350.00) times the difference between the Minimum Qualified Subscriber Number for the System as of the month prior to Closing and the Actual Qualified Subscriber Number. b. The initial adjustments to the Purchase Price based on Net Working Capital will be made at the Closing using a good faith estimate by Seller of the Net Working Capital of Seller (the "Initial Adjustment Amount") based upon an unaudited balance sheet to be prepared by Seller as of the end of the month immediately preceding the Closing Date, such estimate to be delivered by Seller to Buyer at least seven (7) Business Days prior to Closing along with such balance sheet. If after receipt of the Seller's estimate of the Initial Adjustment Amount Buyer notifies Seller not later than three (3) Business Days prior to Closing that Buyer disagrees with that estimate, then that portion of the Initial Adjustment Amount which Buyer disputes in good faith (provided that the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price dispute must be at least three hundred thousand dollars ($300,000)) shall be reflected by a commensurate increase or decrease deposited with the Escrow Agent and shall be resolved in accordance with the Cash Portionprocedures set forth in Section 2.7(c). c. As promptly as practicable, practicable after the Closing Date (but in no event later than forty-five sixty (4560) days after the Closing Date, thereafter) Seller shall prepare and deliver to Buyer will cause the management of the CPC Business to prepare an unaudited for its review and comment (i) a balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value dated as of the close of business on the Closing Date (the "Closing Net Book ValueDate Balance Sheet"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet and (ii) an accompanying closing statement (the work papers "Closing Statement") reasonably detailing as of the close of business on the Closing Date Seller's determination of each element of the Purchase Price Adjustment. The Closing Date Balance Sheet shall fairly present the financial position of the Seller as at the close of business on the Closing Date in accordance with GAAP (except for the omission of certain footnotes and other presentation items required by GAAP with respect to such management during such forty-five-day period and during financial statements). If Buyer objects to any amount reflected on the thirty-day period Closing Date Balance Sheet or the Closing Statement, Buyer must, within thirty (30) days after the delivery Buyer's receipt of the Closing Date Balance Sheet and Closing Statement, give written notice (the "Objection Notice") to Seller specifying in reasonable detail its objections, or Seller's determination of the Purchase Price Adjustment shall be final, binding and conclusive on the parties. With respect to any disputed amounts, the parties shall meet in person to negotiate in good faith during the thirty (30) day period (the "Resolution Period") after the date of Seller's receipt of the Objection Notice to resolve any such disputes. Within If the parties are unable to resolve all such disputes within the Resolution Period, then within five (5) Business Days after the expiration of the Resolution Period, all disputes shall be submitted to Deloitte & Touche, LLP or, if such firm is unavailable or unwilling to resolve such disputes, to another nationally recognized accounting firm mutually acceptable to Buyer and Seller (the "Independent Accountant") who shall be engaged to provide a final and conclusive resolution of all unresolved disputes within forty-five (45) days after such engagement. Buyer and Seller each represent and warrant that, as to itself, it is not currently retaining nor during the prior three (3) years has it or any predecessor entity controlled by its management group retained Deloitte & Touche, LLP to provide accounting or other services and agrees on behalf of itself and its Affiliates not to retain such firm until a final determination of the Purchase Price Adjustment has been made. The determination of the Independent Accountant shall be final, binding and conclusive on the parties hereto, and the fees and expenses of the Independent Accountant shall be borne by the party, who, in the Independent Accountant's determination submitted a disputed amount that differs more significantly from the amount finally determined by the Independent Accountant. From and after the Closing Date, Buyer shall deliver will provide Seller with access to the books, records and personnel of Buyer that Seller the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within thirty (30) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4reasonably requests., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.
Appears in 1 contract
Samples: Asset Purchase Agreement (Vanguard Cellular Systems Inc)
Purchase Price Adjustment. a. At least three (3a) business days prior to the Closing Date, the Seller and Buyer in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date Within sixty (the "Estimated Closing Net Book Value"60) based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) calendar days after the Closing Date, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (45) days after the Final Closing Date, Buyer shall prepare and deliver to Sellers a statement setting forth, as of 11:59 p.m. PDT on the Seller Initial Closing Date, (i) the Closing Balance Sheet and its determination Applicable NAV Statement with respect to each of the Specified Financing and Lease Assets, Equity Assets and Assets Held for Sale or Lease, (ii) the calculation of the Adjusted Book Value of the Assets with respect to the Specified Financing and Lease Assets, Equity Assets, Assets Held for Sale or Lease and the Book Value of the Assumed Liabilities, in each case with respect to clauses (i) and (ii), only with respect to those assets that were transferred (including equitable assignment pursuant to Section 5.2(d)) to Buyer on or before the Final Closing Net Date and (iii) the amount of any cash that has not been reconciled or applied as of the date that the Draft Closing Book Value. d. If Value of the Seller disagrees with Buyer's determination of Closing Net Book ValueAssets Statement is delivered pursuant hereto (the “Unapplied Cash”) (such statement, the Seller “Draft Closing Book Value of the Assets Statement”). The Draft Closing Book Value of the Assets Statement shall notify also include a statement of the Applicable NAV as of 11:59 p.m. PDT on the Initial Closing Date of the Opt-out Assets and those Equity Assets and other interests subject to the Option Agreement. Sellers shall cooperate with Buyer in writing of such disagreement within thirty (30) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated connection with, and mutually acceptable toshall furnish to Buyer all such information as Buyer may reasonably require, Buyer and Seller (in the "Independent Auditor") for resolution. e. Buyer and preparation of the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Draft Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent AuditorAssets Statement. The resolution of such disagreements and the determination of Draft Closing Net Book Value by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs Assets Statement will be prepared using the Accounting Principles, and expenses will not include any changes in assets or liabilities as a result of its determination purchase accounting or other adjustments arising from or resulting as a consequence of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4transactions contemplated hereby., pay to the Seller the amount of such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date to the date of payment, at 8% calculated on the basis of a 365-day year (the "Applicable Rate"). 5.
Appears in 1 contract
Purchase Price Adjustment. a. At least three (3a) business days prior to the Closing Date, the Seller and Buyer in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event Not later than forty-five thirty (4530) days after the Closing Date, Seller will prepare and deliver to Buyer will cause a statement (the management "Closing Date Net Asset Value Statement"), certified by an appropriate senior executive officer of Seller, setting forth Seller's calculation of the CPC Business to prepare an unaudited balance sheet Closing Date Net Asset Value of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book Value")Date. Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the Upon delivery of the Closing Balance Sheet Date Net Asset Value Statement, Seller shall provide Buyer and its representatives with reasonable access during business hours to the Sellerbooks and records of the Business in order to allow Buyer and its representatives to verify the accuracy of the calculation of the Closing Date Net Asset Value Statement. Within forty-five (45b) (i) In the event that Buyer does not object to the Closing Date Net Asset Value Statement delivered by Seller by written notice of objection (the "Notice of Objection") delivered to Seller within ten (10) business days after the Closing Date, Buyer shall deliver to the Seller date on which the Closing Balance Sheet and its determination of the Closing Date Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within thirty (30) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response Asset Value Statement was delivered to Buyer, such Notice of Objection to describe in reasonable detail Buyer's proposed adjustments to the Closing Date Net Asset Value Statement, the Closing Date Net Asset Value Statement shall be deemed final and binding. (ii) If Buyer delivers a timely Notice of Objection to Seller, then all undisputed amounts shall be released to the appropriate party and any remaining matters in dispute shall be resolved as follows: (A) Seller and Buyer shall submit promptly endeavor to agree upon the dispute Closing Date Net Asset Value Statement. In the event that a written agreement as to the Closing Date Net Asset Value Statement has not been reached within ten (10) business days after the date of delivery by Buyer of the Notice of Objection, Seller's Closing Date Net Asset Value Statement, together with a "Big 6" accounting firm unaffiliated withdescription of any unresolved dispute, and mutually acceptable toshall be submitted to the Dallas, Buyer and Seller Texas office of the American Arbitration Association (the "Independent AuditorArbitrator"). (B) for resolution. e. Buyer and Within thirty days of the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over submission of any dispute concerning the Closing Date Net Book Asset Value as soon as practicableStatement to the Arbitrator, but the Arbitrator shall render a decision in any event within 60 days after submission accordance with this Section 5.2 along with a statement of reasons therefor. The decision of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor Arbitrator shall be final and binding on upon each party hereto and deemed to be an arbitral award which may be entered in any court having competent jurisdiction. In the event Seller and Buyer and submit any unresolved disputes to the Seller absent manifest error. The Independent Auditor Arbitrator for resolution pursuant to this Section 5.2(b)(ii), the losing party shall comply with pay the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs fees and expenses of its determination the Arbitrator and of counsel for the prevailing party. (c) If the Closing Date Net Asset Value of the Business as of the Closing Date as reflected on the final Closing Date Net Book Asset Value based upon Statement is less than the percentage which the portion of the contested amount not awarded Estimated Net Asset Value, then Seller shall be obligated to a party bears pay to Buyer the amount actually contested by of any such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, deficiency within five (5) business days after the determination of the final Closing Date Net Book Asset Value Statement by (i) wire transfer of immediately available funds to an account designated in writing by Buyer, if Buyer and Seller agree that such amount is finally determined pursuant to this secbe paid in Cash, (ii) a decrease in the equity interest in the Buyer by an appropriate adjustment to the Equity Purchase Price, if Buyer and Seller agree that such amount is to be paid in equity, or (iii) cancellation of the Seller Note in exchange for a substitute promissory note duly executed by Buyer with the only change to such Seller Note being the appropriate decrease to the principal amount of the Seller Note and the corresponding principal payments, if Buyer and Seller agree that such amount is to be paid by adjusting the Seller Note. 4.If the Closing Date Net Asset Value of the Business as of the Closing Date as reflected on the final Closing Date Net Asset Value Statement exceeds the Estimated Net Asset Value, then Buyer shall be obligated to pay to the Seller the amount of any such excess in immediately available funds. If Closing Net Book Value is less than Estimated Closing Net Book Value, the Seller shall, within five (5) business days after the determination of the final Closing Date Net Book Asset Value is finally determined pursuant to this sec. 4., pay to Buyer in Statement at Buyer's election by (i) wire transfer of immediately available funds to an account designated in writing by Seller, if such amount is to be paid in Cash, (ii) an increase in the equity interest in the Buyer by an appropriate adjustment to the Equity Purchase Price, if such amount is to be paid in equity, or (iii) cancellation of the Seller Note in exchange for a substitute promissory note duly executed by Buyer with the only change to such Seller Note being the appropriate increase to the principal amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date Seller Note and the corresponding adjustment to the date principal payments, if such amount is to be paid by adjusting the Seller Note. Buyer and Seller shall make appropriate amendments to the Partnership Agreement, Seller Note or other appropriate documents in such components of payment, at 8% calculated on the basis Purchase Price are adjusted and shall adjust the allocation of a 365-day year (the "Applicable Rate"). 5Purchase Price as provided in Section 5.3 below.
Appears in 1 contract
Samples: Asset Purchase Agreement (Frozen Food Express Industries Inc)
Purchase Price Adjustment. a. At least three (3) business days prior to The aggregate monthly recurring revenue from the Closing Date, the Seller and Buyer in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business Purchased Contracts calculated on the Closing Date (is referred to herein as the "Estimated Closing Net Book ValueMRR") based on books and records and other information then available. In On the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as one-year anniversary of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause calculate (using the management of the CPC Business same methods and procedures used to prepare an unaudited balance sheet of the CPC Business as of calculate the Closing (MRR) the "Closing Balance Sheet") monthly recurring revenue for the purpose Purchased Contracts that are still active or that have renewed their contract term ("Anniversary MRR"), plus any monthly recurring revenue from new managed service contracts pursuant to the Sales Agency Agreement that are being invoiced at the one year anniversary of establishing the Net Book Value as of the close of business on the Closing Date ("New MRR") (Anniversary MRR plus New MRR is referred to herein as the "Closing Net Book ValueTotal MRR"). Such Closing Balance Sheet The Cash Consideration, the amount due under the Note and the number of shares issuable pursuant to the Warrant shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to be adjusted as follows: (i) such management to discuss the preparation of the Closing Balance Sheet and (iix) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (45) days after Cash Consideration shall be decreased on the Closing Date, Buyer shall deliver to the Seller the Closing Balance Sheet and its determination of the Closing Net Book Value. d. If the Seller disagrees with Buyer's determination of Closing Net Book Value, the Seller shall notify Buyer in writing of such disagreement within thirty (30) days after delivery of the Closing Balance Sheet to the Seller (such notice setting forth the basis for such disagreement in reasonable detail), and Buyer and the Seller thereafter shall negotiate in good faith to resolve any such disagreements. If Buyer and the Seller are unable to resolve any such disagreements within thirty (30) days after Seller delivers its response to Buyer, Buyer and Seller shall submit the dispute to a "Big 6" accounting firm unaffiliated with, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. Buyer and the Seller shall use their best efforts to cause the Independent Auditor to resolve all disagreements over the Closing Net Book Value as soon as practicable, but in any event within 60 days after submission of the disputes to the Independent Auditor. The resolution of such disagreements and the determination of Closing Net Book Value by the Independent Auditor shall be final and binding on Buyer and the Seller absent manifest error. The Independent Auditor shall comply with the definitions used herein, shall follow the procedures set forth in this Agreement and shall comply with all other applicable terms of this Agreement. f. The Independent Auditor will determine the allocation of the costs and expenses of its determination of the Closing Net Book Value based upon the percentage which the portion of the contested amount not awarded to a party bears to the amount actually contested by such party. For example, if the Seller claims the Closing Net Book Value is $1,000 greater than the amount determined by the management of the Business, and Buyer contests only $500 of the amount claimed by the Sellers, and if the Independent Auditor ultimately resolves the dispute by awarding Seller $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e. 300 div. 500) to Buyer and 40% (i.e. 200 div. 500) to the Seller. g. If Closing Net Book Value (as finally determined pursuant to this sec. 4. exceeds Estimated Closing Net Book Value, Buyer shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to the Seller the amount of such excess Customer Prepayments, if any; (y) the principal balance of the Note shall be decreased by an amount equal to the product of the MRR Percentage Decrease multiplied by the Multiple Price, and (z) the Warrant Percentage shall be decreased by the MRR Percentage Decrease, if any. For clarity, the Purchase Price shall not be adjusted upward for any increase in immediately available fundsmonthly recurring revenue after Closing. If Closing Net Book Value (a) the Customer on line 47 of the table provided on Schedule 2.2(a) does not renew its contract, or (b) a Purchased Contract is less than Estimated Closing Net Book Valuenot renewed because Buyer failed to perform required services satisfactorily thereunder, or (c) a Purchased Contract does not renew because Buyer materially changed the Seller shall, within five (5) business days after Closing Net Book Value is finally determined pursuant to this sec. 4., pay to Buyer in immediately available funds terms of the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from the Closing Date renewal contract offered to the date Customer, then, such non-renewals shall not be included as revenue lost in the calculation of payment, at 8% calculated on MRR Percentage Decrease. "MRR Percentage Decrease" shall be equal to one minus the basis quotient of a 365-day year (the "Applicable Rate"). 5Total MRR divided by Closing MRR.
Appears in 1 contract
Samples: Asset Purchase Agreement (Go2green Landscaping, Inc.)
Purchase Price Adjustment. a. At least three (3a) business days prior to the Closing Date, the Seller and Buyer in good faith shall jointly prepare an estimate of the net book value of CPC, determined in accordance with GAAP consistent with the methodology used in preparing Exhibit 1 as of the close of business on the Closing Date Within sixty (the "Estimated Closing Net Book Value") based on books and records and other information then available. In the event the parties are unable to agree on the Estimated Net Book Value prior to the Closing Date, the parties shall use the Net Book Value as reflected on the Latest Balance Sheet attached hereto as Exhibit 1. b. If Estimated Closing Net Book Value exceeds Net Book Value as of June 30, 1995 (the "Target Net Book Value"), the Estimated Purchase Price shall be increased by the amount of such excess. If the Estimated Closing Net Book Value is less than the Target Net Book Value, the Estimated Purchase Price shall be decreased by the amount of such shortfall. The amount of such increase or decrease in the Estimated Purchase Price shall be reflected by a commensurate increase or decrease in the Cash Portion. c. As promptly as practicable, but in no event later than forty-five (45) days after the Closing Date, Buyer will cause the management of the CPC Business to prepare an unaudited balance sheet of the CPC Business as of the Closing (the "Closing Balance Sheet") for the purpose of establishing the Net Book Value as of the close of business on the Closing Date (the "Closing Net Book Value"). Such Closing Balance Sheet shall exclude the assets and liabilities set forth on Exhibit 1. The Seller will have reasonable access to (i) such management to discuss the preparation of the Closing Balance Sheet and (ii) the work papers of such management during such forty-five-day period and during the thirty-day period after the delivery of the Closing Balance Sheet to the Seller. Within forty-five (4560) days after the Closing Date, Buyer shall prepare and deliver to the Seller the Closing Balance Sheet and its determination Sellers (i) a statement setting forth Buyer’s calculation of the Closing Date Net Book ValueWorking Capital, the Closing Date Indebtedness, the Closing Date Cash and the Conveyed Entity Transaction Expenses (such statement, as delivered to the Sellers, the “Purchase Price Adjustment Statement”) and (ii) reasonable supporting information and documentation used by Buyer in the preparation of each component of the Purchase Price Adjustment Statement. d. The Purchase Price Adjustment Statement shall be prepared on a basis consistent with the methods, 18 policies, practices, procedures, assumptions, conventions and adjustments set forth on Annex B. For the avoidance of doubt, the Parties agree that in determining the Closing Date Net Working Capital, Closing Date Indebtedness, Closing Date Cash and Conveyed Entity Transaction Expenses, (x) the accounting methods, policies, practices, procedures, assumptions, conventions and adjustments set forth on Annex B shall be utilized, (y) the amount of Closing Date Net Working Capital shall be calculated in U.S. dollars, using the applicable foreign currency exchange rates set forth on Annex B and (z) all other amounts shall be converted into U.S. dollars at the noon buying rate as quoted by the Wall Street Journal on the Business Day immediately prior to the Closing Date. (b) The Base Consideration Amount, plus (i) the Net Working Capital Adjustment Amount (if a positive number), minus (ii) the absolute value of the Net Working Capital Adjustment Amount (if a negative number), minus (iii) the Closing Date Indebtedness as set forth on the Purchase Price Adjustment Statement, plus (iv) the Closing Date Cash as set forth on the Purchase Price Adjustment Statement, minus (v) the Conveyed Entity Transaction Expenses as set forth on the Purchase Price Adjustment Statement, as such may be adjusted and finally determined pursuant to this Section 2.3, shall be known as the “Final Closing Consideration Amount”. If the Seller disagrees Final Closing Consideration Amount is greater than the Estimated Closing Consideration Amount, then Buyer shall pay the Sellers the amount by which the Final Closing Consideration Amount is greater than the Estimated Closing Consideration Amount pursuant to Section 2.3(g). If the Final Closing Consideration Amount is less than the Estimated Closing Consideration Amount, the Sellers shall pay Buyer the amount by which Final Closing Consideration Amount is less than Estimated Closing Consideration Amount pursuant to Section 2.3(g). (c) Each Party shall reasonably cooperate with the other and, during normal business hours and upon prior written notice, each Party shall provide the other Party and its representatives with reasonable access to financial records and work papers pertaining to, or used in connection with, the preparation of the Closing Date Statement, the Purchase Price Adjustment Statement and any Objection Dispute, and to relevant personnel, during the preparation of the Purchase Price Adjustment Statement and the resolution of any disputes that may arise under this Section 2.3; provided that the accountants of each of Buyer, the Sellers and the Conveyed Entities shall not be obligated to make any work papers available except in accordance with such accountants’ normal disclosure procedures and then only after the non-client party has signed a customary agreement relating to such access to work papers in form and substance reasonably acceptable to such accountants. (d) If the Sellers disagree with Buyer's determination ’s calculation of the Closing Date Net Book ValueWorking Capital, Closing Date Cash, Closing Date Indebtedness or Conveyed Entity Transaction Expenses as set forth on the Purchase Price Adjustment Statement, the Seller Sellers shall notify Buyer in writing of such disagreement disagreement, specifying the nature and amount of any dispute as to Closing Date Net Working Capital, Closing Date Cash, Closing Date Indebtedness or Conveyed Entity Transaction Expenses within thirty (30) days after delivery of the Closing Balance Sheet Purchase Price Adjustment Statement to the Seller Sellers (the “Objection Disputes”). The Sellers shall conclusively be deemed to have agreed with all items and amounts of Closing Date Net Working Capital, Closing Date 19 Cash, Closing Date Indebtedness and Conveyed Entity Transaction Expenses to which the Sellers have not specifically objected in the written notice of Objection Dispute, and such items and amounts shall not be subject to review under Section 2.3(e). Any Objection Dispute may only reference objections based on mathematical errors or based on amounts of the Closing Date Net Working Capital, Closing Date Cash, Closing Date Indebtedness or Conveyed Entity Transaction Expenses not being calculated on a basis consistent with the methods, policies, practices, procedures, assumptions conventions and adjustments set forth on Annex B. The failure of the Sellers to deliver a written notice setting forth of an Objection Dispute to Buyer within thirty (30) days after delivery of the basis for such disagreement in reasonable detailPurchase Price Adjustment Statement to the Sellers shall conclusively be deemed acceptance of the Purchase Price Adjustment Statement and agreement to the Purchase Price Adjustment amount by the Sellers. (e) Subject to Section 2.3(d), and Buyer and the Seller thereafter Sellers shall negotiate in good faith to resolve any such disagreementsObjection Dispute and any resolution agreed to in writing by Buyer and the Sellers shall be final and binding upon the Parties. If Buyer and the Seller Sellers are unable to resolve any such disagreements all Objection Disputes within thirty twenty (3020) days after Seller delivers its response of delivery of a valid written notice of such Objection Disputes by the Sellers to Buyer, Buyer and Seller then the disputed matters shall submit be submitted to the dispute to a "Big 6" accounting firm unaffiliated withAccounting Expert for final determination, and mutually acceptable to, Buyer and Seller (the "Independent Auditor") for resolution. e. any discussions between Buyer and the Seller Sellers during the previously referenced twenty (20) day period shall use (unless otherwise agreed by Buyer and the Sellers) be governed by Rule 408 of the Federal Rule of Evidence and any applicable similar state rule. Buyer and the Sellers shall jointly select an accounting firm to serve as the Accounting Expert; provided that such accounting firm shall be of national standing and shall not be an independent auditor of (and shall not otherwise serve as a consultant to) either Buyer or the Sellers (or their best efforts respective Affiliates). If Buyer and the Sellers are unable to cause agree upon an accounting firm within fifteen (15) days, then an accounting firm of international standing shall be designated by the Independent Auditor American Arbitration Association in New York, New York; provided, that such firm shall not be the independent auditor of (or otherwise serve as a consultant to) either Buyer or the Sellers (or their respective Affiliates) (such accounting firm as determined in accordance with this Section 2.3(e), the “Accounting Expert”). The Accounting Expert shall only consider those items and amounts set forth on the Purchase Price Adjustment Statement as to which Buyer and the Sellers have disagreed within the time periods and amounts and on the terms specified in Section 2.3(d) and must resolve all disagreements over unresolved Objection Disputes in accordance with the Closing Net Book Value terms and provisions of this Agreement. The Accounting Expert shall deliver to Buyer and the Sellers, as soon promptly as practicable, but practicable and in any event within 60 sixty (60) days after submission its appointment, a written report setting forth the resolution of any unresolved Objection Disputes determined in accordance with the disputes to the Independent Auditorterms herein. The Accounting Expert shall select as a resolution of for each Objection Dispute a value no greater than the greatest value assigned to such disagreements item by Buyer, on the one hand, or the Sellers, on the other hand, or less than the smallest value assigned to such item by Buyer, on the one hand, or the Sellers, on the other hand (based solely on presentations and the determination of Closing Net Book Value supporting material provided by the Independent Auditor Parties and not pursuant to any independent review), and may not impose an alternative resolution. Such report shall be final and binding on upon all of the Parties to this Agreement, absent manifest error or fraud. Upon the agreement of Buyer and the Seller absent manifest error. The Independent Auditor shall comply with Sellers or the definitions used hereindecision of the Accounting Expert, shall follow or if the procedures set forth Sellers fail to deliver written notice of disagreement to Buyer within the thirty (30) day period provided in this Agreement and shall comply with all other applicable Section 2.3(d), the Purchase Price Adjustment Statement, as adjusted if 20 necessary pursuant to the terms of this Agreement, shall be deemed to be the Purchase Price Adjustment Statement for purposes of calculating the Purchase Price Adjustment pursuant to this Section 2.3. f. (f) The Independent Auditor will determine the allocation of the fees, costs and expenses of its determination of the Closing Net Book Value Accounting Expert shall be borne by Buyer, on the one hand, and the Sellers on the other hand, based upon the percentage which the portion of the contested disputed amount not awarded to a party each Party bears to the amount actually contested disputed by such partyParty. For example, if the Seller Buyer claims the Closing Net Book Value Consideration Amount is $1,000 greater less than the amount determined by the management of the BusinessSellers, and Buyer contests the Sellers contest only $500 of the amount claimed by the SellersBuyer, and if the Independent Auditor Accounting Expert ultimately resolves the dispute by awarding Seller Buyer $300 of the $500 contested, then the costs and expenses of arbitration the Accounting Expert will be allocated 60% 60 percent (i.e. i.e., 300 div. 500) to Buyer and 40% (i.e. 200 div. ÷ 500) to the SellerSellers and 40 percent (i.e., 200 ÷ 500) to Buyer. g. If Closing Net Book Value (g) Any Purchase Price Adjustment shall be paid by Buyer or the Sellers, as finally determined pursuant applicable, by wire transfer of immediately available funds to this sec. 4. exceeds Estimated Closing Net Book Valuean account designated by the Party, Buyer shallor its designee, receiving such payment within five (5) business days Business Days after the final determination of the Purchase Price Adjustment, with interest thereon from and including the Closing Net Book Value is finally determined pursuant Date to this sec. 4., pay but not including the date of payment at an annual rate equal to the Seller prime lending rate prevailing at such time, as published in the amount Wall Street Journal, provided, however, that any portion of such excess in immediately available funds. If Closing Net Book Value the Purchase Price Adjustment as to which there is less than Estimated Closing Net Book Value, the Seller shall, no dispute or as to which agreement has been reached shall be paid within five (5) business days Business Days after Closing Net Book Value is finally determined its determination or after reaching such agreement. (h) The Sellers and Buyer agree to treat any payment made pursuant to this secSection 2.3 as an adjustment to the Closing Consideration Amount for all Tax purposes. 4.For the avoidance of doubt, pay any such adjustment shall be taken into account in the determination of liability for Taxes under Section 5.13(a). (i) Notwithstanding anything in this Agreement to the contrary, no item shall be counted more than once in the determination of Closing Date Indebtedness, Closing Date Cash, Closing Date Net Working Capital or Conveyed Entity Transaction Expenses. Any item used in determining Estimated Closing Date Indebtedness, Estimated Closing Date Cash, Estimated Closing Date Net Working Capital or Estimated Conveyed Entity Transaction Expenses shall retain that classification in the preparation of the Purchase Price Adjustment Statement. To the extent an adjustment is made to the Closing Consideration Amount under this Section 2.3, Buyer may not bring a claim under any other provision of this Agreement seeking recovery for Losses in immediately available funds respect of such adjustment. (j) The Parties agree that in determining the amount of such shortfall. Without duplication, all amounts owed pursuant to this sec.4. (g) shall include interest, from inventory for purposes of determining the Closing Date Net Working Capital, the Sellers and Buyer shall jointly conduct a physical count of all the inventory of the Conveyed Entities three (3) Business Days prior to the Closing Date, or on such other date as mutually agreed, which physical count shall be conducted in accordance with policies and procedures to be agreed by the Parties, based upon the applicable policies and procedures used by the Conveyed Entities in conducting physical counts of all Inventory during the 2017 calendar year as previously provided to Buyer. The physical counting process shall be observed by representatives of one accounting firm chosen by Buyer 21 and one accounting firm chosen by the Sellers. For purposes of this Agreement, the term “Inventory Amount” shall mean the physical count of inventory of the Conveyed Entities, as rolled forward or backward from the date of paymentthe account, at 8% calculated so as to be the amount of inventory of the Conveyed Entities existing as of 11:59 P.M. on the basis of a 365-day year (date immediately prior to the "Applicable Rate"Closing Date, as agreed to by the Sellers and Buyer in accordance with this Section 2.3(j). 5.If the Sellers and Buyer agree on such count, the Inventory Amount, as so agreed, shall be used by the Sellers for purposes of determining the Estimated Closing Date Net Working Capital and by the Parties for purposes of determining Closing Date Net Working Capital for purposes of the Purchase Price Adjustment Statement. If the Sellers and Buyer cannot agree on the results of such count, the Sellers shall use their calculation of the Inventory Amount for purposes of determining the Estimated Closing Date Net Working Capital and Buyer shall use its calculation of the Inventory Amount for purposes of determining Closing Date Net Working Capital for purposes of the Purchase Price Adjustment Statement, and any disputes shall then be settled by the Accounting Expert in accordance with Section 2.3(e). Section 2.4
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Samples: Iii Stock Purchase Agreement
