Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital. (b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price. (c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties. (d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively. (e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c). (f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) The parties hereto have contemplated that as of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principlesMeasurement Date: (A) the Company’s Working Capital, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulativelyon a consolidated basis, as of the Measurement Date (the “Measurement Date Working Capital”), as calculated in accordance with this Agreement will not deviate with more than 20% from the amount of NOK 286,610,000 (the "Target Working Capital") which is the amount of the Company's working capital as of September 30, 2010 as specified in the form Working Capital statement, attached hereto as Schedule 1.5 Part A (the “Form Working Capital Statement”) and (B) the Company’s Net Debt, on a consolidated basis, as of the Measurement Date (the “Measurement Date Net Debt”), as calculated in accordance with this Agreement and in accordance with and as set forth on the form Net Debt statement, attached hereto as Schedule 1.5 Part B (the “Form Net Debt Statement”) will equal zero (after having excluded: (i) the short term and long term interest bearing debt of the Company and its Subsidiaries to the Guarantor under line items NB745 and NB545 in the Form Net Debt Statement; and (ii) any amounts received from Nera Telecommunications Limited under that certain Trade ▇▇▇▇ Purchase Agreement executed or to be executed between it and the Company); and accordingly, the Purchase Price shall be adjusted, if at all, on a dollar-for-dollar basis, to the extent that the Measurement Date Working Capital deviates with more than 20% from the Target Working Capital and the Measurement Date Net Debt is not zero (after having excluded: (i) the short term and long term interest bearing debt of the Company and its Subsidiaries to the Guarantor under line items NB745 and NB545 in the Form Net Debt Statement; and (ii) any amounts received from Nera Telecommunications Limited under that certain Trade ▇▇▇▇ Purchase Agreement executed or to be executed between it and the Company), such that the Purchase Price payable at the Closing shall be increased or decreased if the Measurement Date Net Debt is higher or lower than zero, and shall be decreased for the exceeding amount, if any, that the Measurement Date Working Capital deviates with more than 20% from the Target Working Capital (i.e. if the Measurement Date Working Capital is below NOK 229,288,000 or above NOK 343,932,000), provided, however, that the calculation of the Measurement Date Net Debt shall assume, and be made on the basis, that the Company and its Subsidiaries shall not have repaid or otherwise decreased, during the period between December 31, 2010 and the Closing, its debts to the Seller Group, referred to in section 1.4 (e) above, and immediately before the effective time of prior to the Closing (i.e. prior to the forgiveness of the debt) - the debt of the Company and its Subsidiaries to the Sellers Group shall not be less than the amount specified in the Form Net Debt Statement (NOK 217,344,000) ("No Reduction in Inter-Debt"); and in the event of any deviation from the aforesaid the calculation of the Measurement Date Net Debt shall be adjusted to reflect the aforesaid . The purpose of the purchase price adjustment, if any, as set forth in this Section 2.05(a)), determined in accordance with Section 2.04(a) 1.5 is to arrive at a correct calculation of the Seller Disclosure Letter, Purchase Price as agreed herein and shall not be used as basis by the principles, methodologies and policies set forth therein and, Parties to renegotiate the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”Purchase Price. For the avoidance of doubt and as illustration with respect to the Working Capital: (1) if the Measurement Date Working Capital is NOK 225,288,000, the Purchase Price shall be reduced with NOK 4 million, (2) if the Measurement Date Working Capital is NOK 230,000,000 or NOK 340,000,000, there shall be no adjustment of the Purchase Price and (3) if the Measurement Date Working Capital is NOK 347,932,000, the Purchase Price shall be increased with NOK 4 million.
(a) For purposes of this Agreement, the Measurement Date Working Capital shall be calculated in accordance with this Agreement to reflect any actual changes in the Working Capital during the period between September 30, 2010 and the Measurement Date; such calculation to be made in accordance with IFRS using the same accounting principles, policies, practices, classifications, judgments and estimation methodologies used in the Financial Statements (all – assuming that are consistent with IFRS), as have been consistently applied by the Company and, for the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded with no adjustments relating to any accounting effects resulting from the determination Transaction itself or the fact that the Purchaser has at Closing become the owner of the Modified Working CapitalCompany and its Subsidiaries.
(b) If On the Purchase Price as finally determined in accordance with this Section 2.04 is less than Closing Date the Estimated Purchase Price, Seller Company shall pay deliver to the Purchaser a certificate signed by the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination Chief Financial Officer of the Purchase PriceCompany that contains a good faith and best estimate (the "Estimated Closing Statement") of the Working Capital as of December 31, to an account designated 2010 and of the Measurement Date Net Debt (the “Estimated Working Capital” and “Estimated Net Debt”, respectively) , accompanied by a certificate signed by the party receiving payment no later than two (2) Business Days after the final determination Chief Financial Officer of the Purchase PriceCompany certifying to the Purchaser that the condition of No Reduction in Inter-Debt set forth in Section 1.5 above has been fulfilled.
(c) As promptly In case either the Purchaser or the Seller believes that the actual Measurement Date Working Capital or the actual Measurement Date Net Debt are different than those on the Estimated Closing Statement, and therefore the Purchase Price needs to be further adjusted, that Party (with the Company’s cooperation and assistance) shall be entitled to prepare and deliver to the other (i.e. to the Seller or the Purchaser, as practicable (and, in any eventapplicable), within ninety seventy-five (9075) days after the Closing)Closing Date, Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified the Measurement Date Working Capital, (ii) Closing Capital and of the Measurement Date Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 Debt (the “Closing Statement”), which together with such schedules and data with respect to the determination thereof as may be appropriate to support such Closing Statement (the “Final Working Capital Calculation” and the “Final Net Debt Calculation” respectively), with a special purpose audit by PwC Norway with respect to the Final Working Capital Calculation. The Final Working Capital Calculation and the Final Net Debt Calculation shall be prepared determined in accordance with this Agreement, and shall be in the same form as the Form Working Capital Statement and the Form Net Debt Statement and shall not include any changes in assets or liabilities as a result of purchase accounting principles, methodologies and policies set forth in Section 2.04 adjustments or other changes arising from or resulting as a consequence of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP)Transactions. The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after Following delivery of the Closing Statement, which written notice the Purchaser shall set forth any such disagreement in immediately provide the Seller with reasonable detail (“Disagreement Notice”). If Seller fails access to deliver a Disagreement Notice by the end employees, accountants, facilities and books and records of such 60-day periodthe Company and its Subsidiaries and to all working papers, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included schedules and calculations used in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation preparation of the Closing Statement, and solely for the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range purpose of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in reviewing the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined Statement in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated all in a manner consistent with any allocation agreed not unreasonably disruptive to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness the business of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04Company and its Subsidiaries.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (andpracticable, in any event, within ninety (90) but no later than 90 days after the Closing)Closing Date, the Purchaser shall prepare and deliver to the Seller a statement setting of Modified Working Capital (including the related notes and schedules thereto) as of the close of business on the Closing Date, which shall set forth the Purchaser’s 's determination of the Closing Modified Working Capital and shall set forth in detail the amounts underlying such calculation in the same format and detail as in Schedule 2.06 (the "Initial MWC Statement"). Purchaser shall certify to the Seller at the time of delivery of the Initial MWC Statement that the Modified Working Capital set forth on the Initial MWC Statement was prepared on the basis and using the same accounting policies, principles, methodologies and estimates used in preparing the 1998 Pro Forma Financial Statements and the Statement of Modified Working Capital as of December 31, 1998 as set forth in Schedule 2.06 and using the Specified Accounting Policies referred to in Schedule 2.06, which are more fully described in the Notes to the 1998 Pro Forma Financial Statements included in Section 3.06 of the Disclosure Schedule. At all times during the 45 Business Days immediately following the Seller's receipt of the Initial MWC Statement, the Seller and its representatives will be permitted to review at the Company's offices, or, if the Purchaser so designates, at the Purchaser's offices the Purchaser's working papers (including work papers of its accountants and other advisors) relating to the Initial MWC Statement, as well as all of the books and records relating to the operations and finances of the Business with respect to the period up to and including the Closing Date, and the Purchaser shall make reasonably available the individuals responsible for the preparation of the Initial MWC Statement (including, without limitation, accountants, lawyers and other advisors) in order to respond to the inquiries of the Seller related thereto.
(b) The Seller shall notify the Purchaser in writing (the "Notice of Disagreement") within 45 Business Days after receiving the Initial MWC Statement if the Seller disagrees with the Purchaser's calculation of (i) the Closing Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which Notice of Disagreement shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of reasonable detail the Seller Disclosure Letter (and, to basis for such dispute and the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other Dollar amounts involved and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination Seller's good faith estimate of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”)Modified Working Capital. If the Seller fails to does not deliver a Notice of Disagreement Notice by to the end of Purchaser within such 60-day 45 Business Day period, Seller then the Initial MWC Statement shall be deemed to have been accepted by the Closing Statement delivered by Purchaser. Matters included in Seller, shall become final and binding upon the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice parties and shall be deemed accepted by the Final MWC Statement.
(c) During the 30 Business Days immediately following the delivery of a Notice of Disagreement, the Seller and the Purchaser shall not be subject to further dispute or review. Purchaser and Seller shall negotiate seek in good faith to resolve any differences that they may have with respect to any matter specified in the Notice of Disagreement. If at the end of such disagreement30 Business Day period the Seller and the Purchaser have been unable to agree upon a Final MWC Statement, then the Seller and the Purchaser shall submit to the Independent Accounting Firm for review and resolution any and all matters that remain in dispute with respect to the Notice of Disagreement. The Purchaser and the Seller shall cause the Independent Accounting Firm to use commercially practicable efforts to make a final determination (which determination shall be binding on the parties hereto) of the Closing Modified Working Capital within 30 Business Days from such submission, and any resolution agreed to in writing such final determination shall be the Final MWC Statement. The cost of the Independent Accounting Firm's review and determination shall be paid by the party that has determined an amount of Closing Modified Working Capital that is the greatest amount different from the Closing Modified Working Capital on the Final MWC Statement. During the 30 Business Day review by the Independent Accounting Firm, the Purchaser and the Seller shall will each make available to the Independent Accounting Firm interviews with such individuals and such information, books and records as may be reasonably required by the Independent Accounting Firm to make its final and binding upon the partiesdetermination.
(d) (i) If Purchaser and Seller are unable to resolve any disagreement the Closing Modified Working Capital (as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Final MWC Statement) exceeds the Modified Working Capital as of December 31, 1998, as reflected on Schedule 2.06 hereto, then the Purchaser shall pay to the Seller an amount equal to such excess or $2,000,000, whichever amount is less; or (ii) if the Modified Working Capital as of December 31, 1998, as reflected on Schedule 2.06 hereto, exceeds the Closing Modified Working Capital (as set forth in the Final MWC Statement), then the Seller shall pay to the Purchaser an amount equal to such excess; in either case within five Business Days after the Final MWC Statement becomes final and binding on the parties hereto and, in either case, together with interest on the amount of such excess from the Closing Date until the date of payment at the Interest Rate. If the Closing Modified Working Capital (as set forth in the Final MWC Statement) is equal to which the Modified Working Capital as of December 31, 1998, as reflected on Schedule 2.06 hereto, then neither the Purchaser has disagreed nor the Seller shall owe any amount to the other party pursuant to a Disagreement Notice this Section 2.06.
(e) The Purchaser agrees that following the Closing through the date on which payment if any, is made by either party pursuant to Section 2.06(d) or if the Final MWC Statement indicates that no such payment is required, then through the date on which the Final MWC Statement becomes effective, the Purchaser will not take any actions with respect to any accounting books or records on which the Initial MWC Statement or the Final MWC Statement is to be based that would make it impossible or impracticable to calculate the Closing Modified Working Capital in the manner and Purchaser and Seller have not resolved their disagreementutilizing the methods required hereby. The scope Purchaser further agrees that following the Closing through the date on which payment, if any, is made pursuant to Section 2.06(b) of the disputes Viacom Stock Purchase Agreement (notice of which the Seller shall provide to be resolved the Purchaser), the Purchaser will not take any actions with respect to any accounting books or records of the Company or the Business that would make it impossible or impracticable to calculate the Closing Net Assets (as such term is defined in the Viacom Stock Purchase Agreement) with respect to the Business in the manner and utilizing the methods required by the Accounting Arbitrator shall Viacom Stock Purchase Agreement.
(f) The parties acknowledge and agree that the purchase price adjustment contemplated by this Section 2.06 is intended to reflect the change in Modified Working Capital solely as a result of operations and activities of the Business in the ordinary course of business between December 31, 1998 and the Closing Date. The parties also acknowledge and agree that the adjustment, if any, contemplated by this Section 2.06 can only be limited to whether such calculation was done in accordance properly determined if the Closing Modified Working Capital is prepared consistent with and using the terms hereof, the accounting methods, standardssame principles, policies, practices, classificationsprocedures, estimation methodologiesmethods and estimates as those used in calculating the Modified Working Capital as of December 31, assumptions or procedures used to prepare 1998. Knowledge obtained in preparing the Closing StatementModified Working Capital of an error, and whether there were mathematical errors omission or other inaccuracy in the calculation of Modified Working Capital as of December 31, 1998, does not constitute a change resulting from operations and activities of the Closing StatementBusiness in the ordinary course, and, accordingly, the effect of any and all such errors, omissions or other inaccuracies shall be excluded in calculating the purchase price adjustment contemplated by this Section 2.06 resulting from the change, if any, in Modified Working Capital between December 31, 1998, and the Accounting Arbitrator Closing Date. Accordingly, the Modified Working Capital as of December 31, 1998, as reflected on Schedule 2.06 hereto shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant be restated to any independent review. In resolving correct for any such disagreementerror, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all partiesomission or other inaccuracies, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining whether the amount thereof exceeds or is less than the Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04Modified Working Capital.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within At least three (3) Business Days after prior to the final determination Closing Date, the Company shall prepare and deliver to the Purchaser a good-faith estimate of the Purchase Price (the “Estimated Purchase Price”), including each of the components thereof, based on the Company’s books and records and other information then available. Prior to the Closing Date, the Sellers agree to consult with the Purchaser with respect to the Estimated Purchase Price, to an account designated by and the party receiving payment no later than two (2) Business Days after the final determination Sellers will consider in good faith and in their sole discretion any of the Purchaser’s good faith comments to the Estimated Purchase Price.
(cb) As promptly as practicable after the Closing, but in no event later than sixty (and, in any event, within ninety (9060) days after the Closing)Closing Date, the Purchaser shall prepare and deliver to Seller the Sellers a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”)) setting forth the Purchaser’s calculation of the Purchase Price, which including each of the components thereof.
(c) The Closing Statement shall (i) be prepared, and Closing Working Capital shall be prepared determined, in accordance with (A) the accounting methods, policies, practices, procedures, conventions, categorizations, definitions, principles, methodologies and policies judgments, assumptions, techniques or estimation methods with respect to financial statements, their classification or presentation or otherwise (including with respect to the nature of accounts, level of reserves or level of accruals) that are set forth in Section 2.04 of on the Seller Disclosure Letter Working Capital Schedule, (and, B) to the extent not inconsistent with the foregoing clause (A), the accounting methods, policies, practices, procedures, conventions, categorizations, definitions, principles, judgments, assumptions, techniques or estimation methods with respect to financial statements, their classification or presentation or otherwise (including with respect to the nature of accounts, level of reserves or level of accruals) adopted in connection with the latest balance sheet included in the Audited Financial Statements, and (C) to the extent not inconsistent with the foregoing clauses (A) or (B), GAAP and, (ii) not include any changes in assets or liabilities as a result of purchase accounting adjustments or other changes arising from or resulting as a consequence of the transactions contemplated hereby.
(d) The post-Closing purchase price adjustment as set forth thereinin this Section 3.03 is not intended to permit the introduction of different accounting methods, in accordance policies, practices, procedures, conventions, categorizations, definitions, principles, judgments, assumptions, techniques or estimation methods with U.S. GAAP). respect to financial statements, their classification or presentation or otherwise (including with respect to the nature of accounts, level of reserves or level of accruals) for the Working Capital Schedule.
(e) The parties agree to provide each other Purchaser and its Subsidiaries (including the Company and its Subsidiaries) shall (i) permit the Sellers and their respective Representatives representatives to have reasonable access, during normal business hours and upon reasonable notice, access to their respective the books, recordsrecords and other documents (including work papers, work papers and personnel (and any other information which either party reasonably requests schedules, financial statements, memoranda, etc.) pertaining to or used in connection with the extent relating to the Business (including, for the avoidance preparation of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably the Purchaser’s calculation of the Purchase Price and provide the Sellers with copies thereof (as reasonably requested by the operations of such party’s businesses. Notwithstanding Sellers) and (ii) provide the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging Sellers and their obligations pursuant respective representatives reasonable access to the immediately preceding sentence, Purchaser’s (including the Company’s) employees and advisors (yincluding making certain relevant officer(s) provide access and accountants available to respond to reasonable written or disclose information where, upon oral inquiries of the advice of counsel, such access Sellers or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Lawstheir respective representatives). If a Seller disagrees with any part of the determination Purchaser’s calculation of the Purchase Price as set forth on the Closing Statement, such Seller shall notify Purchaser in writing of such disagreement shall, within sixty (60) days after delivery the Sellers’ receipt of the Closing Statement, which written notice shall set forth any notify the Purchaser in writing of such disagreement by setting forth the Sellers’ calculation of the Purchase Price, including each of the components thereof, and describing in reasonable detail the basis for such disagreement (an “Disagreement Objection Notice”). If Seller fails an Objection Notice is delivered to deliver a Disagreement Notice by the end of such 60-day periodPurchaser, Seller shall be deemed to have accepted then the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller the Sellers shall negotiate in good faith to resolve any such disagreement, and any resolution agreed their disagreements with respect to in writing by the computation of the Purchase Price. In the event that the Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller Sellers are unable to resolve any disagreement as contemplated by Section 2.04(c) all such disagreements within thirty (30) days after delivery by Seller the Purchaser’s receipt of a Disagreement such Objection Notice, the Purchaser and Seller the Sellers shall jointly select a mutually acceptable nationally recognized third party accounting firmsubmit such remaining disagreements to KPMG (provided that any individual or individuals at KPMG assigned to resolve such disagreements shall have no past or ongoing relationship in any capacity with the Purchaser, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective its Affiliates or Subsidiaries, or the Sun Consultant and its controlled Affiliates), or a nationally-recognized accounting firm as determined by is acceptable to the reasonable discretion Purchaser and the Sellers (the “Valuation Firm”).
(f) The Valuation Firm shall make a final and binding determination with respect to the computation of Seller and Purchaserthe Purchase Price, including each of the components thereof, to resolve the extent such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller amounts are unable to agree on the appointment of the Accounting Arbitratorin dispute, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or guidelines and procedures used to prepare the Closing Statement, set forth in this Agreement and whether there were mathematical errors in the calculation of the Closing Statement, on Exhibit C. The Purchaser and the Accounting Arbitrator Sellers shall not make any other determination. The Accounting Arbitrator shall make cooperate with the Valuation Firm during the term of its determination based solely on written submissions, presentations engagement and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator Valuation Firm to deliver resolve all remaining disagreements with respect to all partiesthe computation of the Purchase Price, including each of the components thereof, as promptly soon as practicable. The Valuation Firm shall consider only those items and amounts in the Purchaser’s and the Sellers’ respective calculations of the Purchase Price, including each of the components thereof, that are identified as being items and amounts to which the Purchaser and the Sellers have been unable to agree. In resolving any disputed item, the Valuation Firm may not assign a written report setting forth value to any item greater than the resolution greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. The Valuation Firm’s determination of any such disagreement determined in accordance with the terms Purchase Price, including each of this Agreement. Such report the components thereof, shall be final based solely on written materials submitted by the Purchaser and the Sellers (i.e., not on independent review) and on the definitions included herein. The determination of the Valuation Firm shall be conclusive and binding upon the partiesparties hereto and shall not be subject to appeal or further review, absent manifest error. .
(g) The fees, costs and expenses of the Accounting Arbitrator arising Valuation Firm in connection with this Section 2.04 determining the Purchase Price, including each of the components thereof, shall be borne by the Purchaser, on the one hand, and Sellerthe Sellers, on the other hand, in proportion based upon the percentage which the portion of the contested amount not awarded to each party bears to the differences amount actually contested by such party. For example, if the Purchaser claims the Purchase Price are one thousand dollars ($1,000) less than the amount determined by the Sellers, and the Sellers contest only five hundred dollars ($500) of the amount claimed by the Purchaser, and if the Valuation Firm ultimately resolves the dispute by awarding the Purchaser three hundred dollars ($300) of the five hundred dollars ($500) contested, then the costs and expenses of the Valuation Firm will be allocated sixty percent (60%) (i.e., 300 ÷ 500) to the Sellers, in the aggregate, and forty percent (40%) (i.e., 200 ÷ 500) to the Purchaser. Prior to the Valuation Firm’s determination of Purchase Price, (i) the Purchaser, on the one hand, and the Sellers, on the other hand, shall each pay fifty percent (50%) of any retainer paid to the Valuation Firm and (ii) during the engagement of the Valuation Firm, the Valuation Firm will ▇▇▇▇ fifty percent (50%) of the total charges to each of the Purchaser, on the one hand, and the Sellers, on the other hand. In connection with the Valuation Firm’s determination of Purchase Price, the Valuation Firm shall also determine, pursuant to the terms of the first and second sentences of this Section 3.03(g), and taking into account all fees and expenses already paid by each of Purchaser, on the one hand, and the Sellers, on the other hand, as of the date of such determination, the allocation of its fees and expenses between the Purchaser and the Sellers, which such determination shall be conclusive and binding upon the parties hereto.
(h) Within five (5) Business Days after the Purchase Price, including each of the components thereof, is finally determined pursuant to this Section 3.03:
(i) if the Purchase Price as finally determined by pursuant to this Section 3.03 are less than the Accounting Arbitrator Estimated Purchase Price, then the Purchaser and the asserted Sellers shall cause the Escrow Agent to: (A) pay to the Purchaser from the Purchase Price set forth Adjustment Escrow Funds an amount (which in no case shall exceed the Closing Statement amount of the Purchase Price Adjustment Escrow Funds) (the “Purchaser Adjustment Amount”) equal to such deficiency, and (B) pay to the Sellers each Seller’s Allocation Percentage of the amount (if any) by which the amount of the Purchase Price Adjustment Escrow Funds is greater than the Purchaser Adjustment Amount; and
(ii) if the Purchase Price as finally determined pursuant to this Section 3.03 are greater than the Estimated Purchase Price (the amount of such deficiency, the “Seller Adjustment Amount”), then (A) the Purchaser shall pay to the Sellers the Seller Adjustment Amount, and (B) the Purchaser and the Disagreement Notice, respectively.
(e) Purchaser and Sellers shall cause the Escrow Agent to pay to the each Seller agree that any such Seller’s Allocation Percentage of the Purchase Price Adjustment Escrow Funds. All payments to be made pursuant to this Section 2.04 3.03(h) shall (x) be treated by all parties for tax purposes as adjustments to the Purchase Price and (y) be made by wire transfer of immediately available funds to the account(s) designated by the Purchaser or the Sellers, as applicable. The payments described in Section 3.03(h)(i) shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash the sole and Cash Equivalents and Indebtedness exclusive remedy of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate Purchaser for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection any and all claims arising under this Agreement with the adjustments pursuant respect to this Section 2.043.03.
Appears in 1 contract
Sources: Share Purchase Agreement (Huntsman International LLC)
Purchase Price Adjustment. (a) Section 2.04(a) Prior to the Closing Date, the Company shall prepare and deliver to Buyer a certificate of an officer of the Seller Disclosure Letter sets Company setting forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts its good faith estimate of the Business, cumulatively, as of Net Working Capital immediately before the effective time of prior to the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Estimated Net Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital).
(b) If the The Initial Purchase Price as finally determined in accordance with this Section 2.04 is less than shall be either (i) increased, if the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 Net Working Capital exceeds the Estimated Purchase PriceReference Net Working Capital, Purchaser shall pay by an amount equal to Seller the total amount of such excess, in either or (ii) decreased, if the Reference Net Working Capital exceeds the Estimated Net Working Capital, by an amount equal to such excess (such increase or decrease, as the case by wire transfer of immediately available U.S. dollar fundsmay be, within three (3) Business Days after being the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price“Estimated Closing Adjustment”).
(c) As promptly as practicable (and, in any event, within Within ninety (90) days after following the Closing)Closing Date, Purchaser Buyer shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of Sellers the following (collectively, the “Preliminary NWC Statement”):
(i) Modified Working Capitalan unaudited combined balance sheet of the Company and its Subsidiaries immediately prior to the Closing (the “Preliminary Closing Balance Sheet”), prepared by Buyer in accordance with the Closing Balance Sheet Principles;
(ii) a certificate of an officer of Buyer certifying that the Preliminary Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be Balance Sheet has been prepared in accordance with the accounting principles, methodologies Closing Balance Sheet Principles; and
(iii) a reasonably detailed calculation by Buyer of Net Working Capital immediately prior to the Closing based on the Preliminary Closing Balance Sheet (the “Preliminary Net Working Capital”). Sellers agree to cooperate with Buyer in connection with the preparation of the Preliminary Closing Balance Sheet and policies to provide such relevant information and documents and access to its finance personnel as Buyer may reasonably request in connection therewith.
(d) Drawbridge shall have thirty (30) days following receipt of the Preliminary NWC Statement to review the Preliminary Closing Balance Sheet and the calculation of Preliminary Net Working Capital and to notify Buyer in writing if it disputes the amount of the Preliminary Net Working Capital set forth on the Preliminary NWC Statement (the “Dispute Notice”), specifying the reasons therefor in Section 2.04 reasonable detail. Drawbridge shall provide a copy of any such Dispute Notice to PIPV and PIPV-I concurrently with delivery to Buyer.
(e) In connection with Drawbridge’s review, Buyer will, and will cause the Seller Disclosure Letter (andCompany to, provide to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other Drawbridge and their respective its Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective booksall relevant work papers, recordsschedules, work papers memoranda and other documents in Buyer’s reasonable discretion and to furnish personnel (of Buyer and its Subsidiaries with knowledge of information relevant to the preparation of the Preliminary Closing Balance Sheet and/or the determination of Net Working Capital as of the Closing Date, and any other information which either party Drawbridge reasonably requests (to the extent relating within the possession or control of Buyer or its Affiliates), and Buyer shall, and shall cause its Subsidiaries to, cooperate reasonably with Drawbridge and its Representatives in connection therewith.
(f) In the event that Drawbridge shall deliver a Dispute Notice to the Business (including, for the avoidance of doubtBuyer, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller parties hereto shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate cooperate in good faith to resolve such dispute as promptly as practicable and, upon such resolution, if any, any adjustments to the Preliminary Closing Balance Sheet and Preliminary Net Working Capital shall be made in accordance with the agreement of Buyer and Drawbridge. Buyer shall provide notice of any such disagreement, adjustment to PIPV and any resolution agreed to in writing by Purchaser PIPV-I. If Buyer and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller Drawbridge are unable to resolve any disagreement as contemplated by Section 2.04(c) such dispute within thirty (30) days after (or such longer period as Buyer and Drawbridge shall mutually agree in writing) of delivery by Seller of a Disagreement such Dispute Notice, Purchaser and Seller such dispute shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined be resolved by the reasonable discretion of Seller Independent Accounting Firm, and Purchaser, to resolve such disagreement (the firm so selected determination shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser final and Seller are unable to agree binding on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firmparties. The parties Independent Accounting Firm shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has Buyer and Drawbridge have disagreed pursuant to a Disagreement Notice within the time periods and Purchaser and Seller have not resolved their disagreementon the terms specified above. The scope of the disputes Independent Accounting Firm may rely only upon information submitted to be resolved it by the Buyer or Drawbridge. The Independent Accounting Arbitrator Firm shall be limited instructed to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable best efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, Buyer and Sellers a written report setting forth the resolution of each disputed matter within thirty days of submission of the Preliminary Closing Balance Sheet and Preliminary Net Working Capital to it and, in any case, as promptly as practicable after such disagreement determined submission. Any expenses relating to the engagement of the Independent Accounting Firm in accordance with the terms respect of its services pursuant to this Agreement. Such report Section 2.4(f) shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne shared equally by PurchaserSellers, on the one handhand (in proportion to each Seller’s Percentage Interest), and SellerBuyer, on the other hand. The Preliminary Closing Balance Sheet and the Preliminary Net Working Capital, in proportion (i) if no Dispute Notice has been timely delivered by Drawbridge, as originally submitted by Buyer, or (ii) if a Dispute Notice has been timely delivered by Drawbridge, as determined pursuant to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth resolution of such dispute in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to accordance with this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York2.4(f), shall be used to convert such amounts into U.S. dollars for purposes of determining be, respectively, the “Final Closing Balance Sheet” and the “Final Net Indebtedness in connection with the adjustments pursuant to this Section 2.04Working Capital.”
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.Inventory Adjustment
(bi) If the Purchase Price Closing Inventory Adjustment as finally determined in accordance with this Section 2.04 2.2.3.1 is less higher than the Estimated Purchase PriceClosing Inventory Adjustment, Seller the Main Sellers, acting on their own behalf and as agent of the Other Sellers and the EMEA Sellers, shall pay or cause to Purchaser be paid to the total Purchaser, acting on its own behalf and as agent of the Designated Purchasers (if applicable), an amount of such deficitequal to the positive difference between the Closing Inventory Adjustment and the Estimated Closing Inventory Adjustment.
(ii) If, and if instead, the Purchase Price Closing Inventory Adjustment as finally determined in accordance with this Section 2.04 exceeds 2.2.3.1 is lower than the Estimated Purchase PriceClosing Inventory Adjustment, Purchaser the Purchaser, acting on its own behalf and as agent of the Designated Purchasers, shall pay to Seller the total Distribution Agent, as distribution agent for the Sellers and the EMEA Sellers, an amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after equal to the final determination of positive difference between the Purchase Price, to an account designated by Estimated Closing Inventory Adjustment and the party receiving payment no later than two (2) Business Days after the final determination of the Purchase PriceClosing Inventory Adjustment.
(cb) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of Companies Net Working Capital Adjustment
(i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which If the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement Companies Net Working Capital as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement finally determined in accordance with Section 2.2.3.1 is lower than the terms of this Agreement. Such report shall be final Estimated Closing Companies Net Working Capital, the Main Sellers, acting on their own behalf and binding upon the parties, absent manifest error. The fees, costs and expenses as agent of the Accounting Arbitrator arising in connection with this Section 2.04 Other Sellers and the EMEA Sellers, shall pay or cause to be borne by paid to the Purchaser, acting on its own behalf and as agent of the one handDesignated Purchasers (if applicable), and Seller, on the other hand, in proportion an amount equal to the differences positive difference between the Purchase Price as determined by the Accounting Arbitrator Estimated Closing Companies Net Working Capital and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelyCompanies Net Working Capital.
(eii) Purchaser If, instead, the Closing Companies Net Working Capital as finally determined in accordance with Section 2.2.3.1 is higher than the Estimated Closing Companies Net Working Capital, the Purchaser, acting on its own behalf and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness as agent of the Business denominated in currencies other than U.S. dollarsDesignated Purchasers, shall pay to the Applicable Exchange Rate Distribution Agent, as distribution agent for each such currency as of immediately before the effective time of Sellers and the EMEA Sellers, an amount equal to the positive difference between the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Companies Net Working Capital and the Estimated Closing Companies Net Indebtedness in connection with the adjustments pursuant to this Section 2.04Working Capital.
Appears in 1 contract
Sources: Asset and Share Sale Agreement (Nortel Networks LTD)
Purchase Price Adjustment. (a) Section 2.04(a) For the purposes of clarification only, Seller is retaining all accounts payable and accounts receivable with respect to each Country Unit arising out of the Seller Disclosure Letter sets forth certain current assets operation and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness conduct of the Business denominated in currencies other than U.S. dollars, before the Applicable Exchange Rate Closing Date for each such currency as of immediately before Country Unit and the effective time only purchase price adjustment with respect to changes in the working capital of the Business after any Closing as published by Bloomberg (BGN New York), shall will be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
(b) Within 120 days after the Applicable Closing Date, Seller shall prepare and deliver to Buyer a statement in the form of Schedule 2.04(b) (in its draft form, the “Price Adjustment Statement”), setting forth its calculation as of the Applicable Closing Date of the actual (i) Closing Inventory for such applicable Country Units and (ii) only in the case of the Principal Closing Date, the Prepaid Tax Amount (the “Final Prepaid Tax Amount”). To the extent that the Closing Inventory, with respect to the applicable Country Unit (once final and binding pursuant to the provisions of Section 2.04(f)) is greater than the applicable Inventory Target, with respect to such applicable Country Units, or less than the applicable Inventory Target, with respect to such applicable Country Units, the Purchase Price shall be adjusted as described in Section 2.04(f) below. To the extent that the Final Prepaid Tax Amount (once final and binding pursuant to the provisions of this Section 2.04) is greater than the Estimated Prepaid Tax Amount or less than the Estimated Prepaid Tax Amount, the Purchase Price shall be adjusted as described in Section 2.04(g) below.
(c) In connection with the preparation of each Price Adjustment Statement, Buyer shall (A) assist, and shall cause its Affiliates to assist, Seller, its accountants, advisors and other representatives in its preparation of each Price Adjustment Statement and (B) afford to Seller, its accountants, advisors and other representatives, reasonable access during normal business hours to the personnel, properties, books and records of the Business in the possession of Buyer or its Affiliates (and its and their accountants, subject to executing customary access letters) to the extent relevant to the preparation of any Price Adjustment Statement (including any taking and preparing of physical counts of Inventory). For purposes of this Section 2.04, the calculation of book value of the Inventory will be determined in a manner consistent with Seller’s inventory and other relevant accounting policies used in the preparation of the 2015/2016/2017 Draft Financial Statements, as set forth in Schedule 2.04(c) (collectively, the “Accounting Policies”).
(d) Each Price Adjustment Statement shall become final and binding upon the parties on the 30th day following receipt thereof by Buyer unless Buyer gives written notice of its disagreement (a “Notice of Disagreement”) to Seller on or prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature and amount of any disagreement so asserted. If a timely Notice of Disagreement is received by Seller, then the relevant Price Adjustment Statement (as revised in accordance with clause (x) or (y) below) shall become final and binding upon the parties on the earlier of (x) the date the parties hereto resolve in writing any differences they have with respect to any matter specified in the Notice of Disagreement or (y) the date any matters in dispute are resolved in writing by an accounting firm (in accordance with the procedure set forth in this Section 2.04) selected by Seller and Buyer or, if the parties are unable to agree, an independent accounting firm selected by Seller’s and Buyer’s independent accounting firms (such firm, the “Accounting Firm”).
(e) Buyer and Seller acknowledge and agree that the dispute resolution provisions set forth in Section 11.12 shall not apply to any dispute described in this Section 2.04. During the 30-day period immediately following the delivery of a Notice of Disagreement, Seller and Buyer shall seek in good faith to resolve in writing any differences they may have with respect to any matter specified in the Notice of Disagreement. At the end of such 30-day period, Seller and Buyer shall submit for review and resolution by the Accounting Firm any and all matters which remain in dispute and which were included in the Notice of Disagreement, and the Accounting Firm shall make a final determination in writing of the values set forth on the relevant Price Adjustment Statement (and shall use such determination to prepare the relevant final Price Adjustment Statement), which determination shall be binding on the parties; provided, however, that the scope of such determination by the Accounting Firm shall be limited to: (i) those matters that remain in dispute and that were included in the Notice of Disagreement, (ii) whether, for each calculation of Inventory and the Prepaid Tax Amount, such calculation was prepared in accordance with this Section 2.04, and specifically, whether, in the case of Inventory, the Accounting Policies were used, and (iii) whether there were mathematical errors in the relevant Price Adjustment Statement, and the Accounting Firm is not authorized or permitted to make any other determination. The parties shall jointly request that the Accounting Firm render a written decision resolving the matters set forth in this Section 2.04(e) within 30 days after such submission. Without limiting the generality of the foregoing, the Accounting Firm is not authorized or permitted to make any determination as to the accuracy of Section 3.06 or any other representation or warranty in this Agreement or as to compliance by Seller or any of its Affiliates with any of the covenants in this Agreement (other than this Section 2.04). The relevant Price Adjustment Statement shall become final and binding on Buyer and Seller on the date the Accounting Firm delivers in writing the relevant final Price Adjustment Statement to the parties. The fees and expenses of the Accounting Firm pursuant to this Section 2.04 shall be borne one-half each by Buyer and Seller.
(f) If the Price Adjustment Statement discloses that the book value of the applicable Closing Inventory exceeds the applicable Inventory Target, then the amount of such excess shall be added on a dollar-for-dollar basis to the Purchase Price. If the Price Adjustment Statement discloses that the book value of the applicable Closing Inventory is less than the applicable Inventory Target, then the Purchase Price shall be reduced on a dollar-for-dollar basis by the amount of such deficit. If the Price Adjustment Statement discloses that the book value of the applicable Closing Inventory is equal to the applicable Inventory Target, then there shall be no adjustment to the Purchase Price in respect of the Applicable Closing.
(g) If the Price Adjustment Statement discloses that the Final Prepaid Tax Amount exceeds the Estimated Prepaid Tax Amount, then the amount of such excess shall be added on a dollar-for-dollar basis to the Purchase Price. If the Price Adjustment Statement discloses that the Final Prepaid Tax Amount is less than the Estimated Prepaid Tax Amount, then the Purchase Price shall be reduced on a dollar-for-dollar basis by the amount of such
Appears in 1 contract
Purchase Price Adjustment. The Estimated Purchase Price and the Adjusted Purchase Price shall be determined as follows:
(a) Section 2.04(aAt least two Business Days before the Closing, Seller 1 will deliver to Buyer a statement calculating the Estimated Net Working Capital. The Estimated Net Working Capital will be used to calculate the Estimated Purchase Price.
(b) of Within 60 days after the Closing Date, Buyer shall prepare and deliver the Closing Statement to Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain 1. The Closing Statement shall be prepared on a basis consistent with the accounting principles, methodologies practices, policies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as methods expressly set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein on Schedule 1.5 and, to the extent not specifically detailed on Schedule 1.5, the accounting principles, practices, policies and procedures required or permitted by GAAP and applied in preparing the 2013 Baseline Financial Statements underlying the 2013 Audited Financial Statements. At the request of Seller 1, Buyer shall deliver to Seller 1 or its advisors the work papers used by Buyer to prepare the Closing Statement.
(c) Seller 1 shall deliver to Buyer, within 45 days after Buyer’s delivery of the
(d) If Seller 1 objects to the Closing Statement and any such objections are not resolved by Seller 1 and Buyer within 45 days after Seller 1’s delivery to Buyer of Seller 1’s objection statement pursuant to Section 1.5(c), Buyer and Seller 1 shall promptly (1) jointly prepare and sign a statement setting forth (A) those objections (if any) that Buyer and Seller 1 have resolved and the resolution of such objections and (B) those objections that remain unresolved and (2) engage the Neutral Accountant to resolve such unresolved objections, including entering into a customary engagement letter with the Neutral Accountant in which the scope of the Neutral Accountant’s engagement is specified in reasonable detail that is consistent with this Agreement. Buyer shall deliver promptly to the Neutral Accountant the work papers used by Buyer to prepare the Closing Statement and to determine the basis of any unresolved objection by Buyer described in the preceding sentence, and Seller 1 shall deliver promptly to the Neutral Accountant the work papers used by Seller 1 to prepare the objection statement described in Section 1.5(c) and to determine the basis of any unresolved objection by Seller 1 described in the preceding sentence. Each of Buyer and Seller 1 shall provide to the Neutral Accountant any information of such Party that the Neutral Accountant reasonably requests for purposes of resolving such unresolved objections. Buyer and Seller 1 shall instruct the Neutral Accountant that (x) the scope of its review and authority shall be limited to resolving such unresolved objections based solely on the provisions of this Agreement and on written submissions and presentations by Buyer and Seller 1 (or their respective Representatives) provided to Neutral Accountant in accordance herewith, and not on independent review by the Neutral Accountant, (y) the Neutral Accountant’s resolution of each unresolved objection shall be within the range for such unresolved objection defined by the amount of such item proposed by Buyer in its Closing Statement delivered pursuant to Section 1.5(b) and the amount of such item proposed by Seller 1 in Sellers’ statement of objections delivered pursuant to Section 1.5(c) and (z) the Neutral Accountant shall issue, within 60 days of its engagement, a ruling that sets forth (1) the resolution of each such unresolved objection and (2) the Closing Statement and the Adjusted Purchase Price, in each case reflecting the Neutral Accountant’s resolution of such unresolved objections. The resolution by the Neutral Accountant of such unresolved objections and the Closing Statement and the Adjusted Purchase Price giving effect to the Neutral Accountant’s resolution shall be final, conclusive and binding upon the Parties and each Party agrees that it will not make any claim with regard to the Neutral Accountant’s decision or ask for a review by any Governmental Entity or otherwise. The procedures set forth thereinin this Section 1.5(d) for resolving disputes with respect to the Closing Statement shall be the sole and exclusive method for resolving any such disputes, except that this Section 1.5(d) shall not prohibit any Party from instituting litigation to enforce the Neutral Accountant’s determination of the Closing Statement and the Adjusted Purchase Price in a court of competent jurisdiction in accordance with U.S. GAAP, Section 12.11. Buyer and Seller 1 shall constitute share equally the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses fees and Pension Plan Purchase Price Adjustment shall be excluded from the determination expenses of the Modified Working Capital.
Neutral Accountant for its services under this Section 1.5(d). (be) If the Adjusted Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, then Seller 1 shall pay to Purchaser the total amount of such deficitBuyer, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination date on which the Final Closing Statement is finally determined pursuant to this Section 1.5, an amount equal to the difference of (A) the Estimated Purchase Price minus (B) the Adjusted Purchase Price. If the Adjusted Purchase Price is greater than the Estimated Purchase Price, then Buyer shall pay to an account designated Seller 1, by the party receiving payment no later than two (2) wire transfer of immediately available funds, within three Business Days after the final determination of date on which the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Final Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price Statement is finally determined pursuant to this Section 2.04 1.5, an amount equal to the difference of (A) the “Closing Statement”), which shall be prepared Adjusted Purchase Price minus (B) the Estimated Purchase Price. Payment in accordance with this Section 1.5(e) shall be the accounting principles, methodologies sole and policies set forth in Section 2.04 exclusive remedy of the Seller Disclosure Letter (and, to Parties for disputes regarding the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other Estimated Net Working Capital and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentenceActual Net Working Capital, and (y) provide access Article VI shall not apply to or disclose information where, upon the advice any such dispute in respect of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, Estimated Net Working Capital and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelyActual Net Working Capital.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aWithin sixty (60) days after the Closing, the Seller shall prepare and deliver to the Buyer a written statement, together with supporting work papers with respect to the calculation of the Seller Disclosure Letter sets amounts set forth certain current assets therein (the "Adjustment Statement"), which reflects (i) the Capital Expenditures Adjustment Amount, (ii) the Working Capital Adjustment Amount and current liabilities accounts and certain accounting principles, methodologies and policies used in (iii) the determination Cash Adjustment Amount (the sum of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (amounts as set forth on the Adjustment Statement shall be the "Adjustment Amount"). The items reflected in Section 2.05(a)), the Adjustment Amount shall be determined in accordance with Section 2.04(a) GAAP applied on the same basis, and using the same principles, policies and methods as the Seller has applied and used in connection with the determination of the items reflected in the Estimated Adjustment Amount (including the Target Working Capital Amount). The Buyer agrees to cooperate with the Seller Disclosure Letterin connection with the preparation of the Adjustment Statement and related information, and the principles, methodologies and policies set forth therein and, shall provide to the extent not set forth Seller and the Seller's Representatives such books, records, information, and access to such of the Companies' employees and properties during normal business hours, as may be reasonably requested from time to time by the Seller.
(b) The Buyer may dispute the Adjustment Amount, the Adjustment Statement and the items reflected therein; provided, however, that the Buyer shall notify the Seller in accordance writing of any disputed amounts, and provide a reasonably detailed description of the basis of such dispute, within sixty (60) days after the Buyer's receipt of the Adjustment Statement. In the event of a dispute with U.S. GAAPrespect to the Adjustment Amount, the Buyer and the Seller shall constitute attempt to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the “Modified Working Capital”parties. If the Buyer and the Seller are unable to reach a resolution of any such differences within thirty (30) days after the Seller's receipt of the Buyer's written notice of dispute, the Buyer and the Seller shall submit the amounts remaining in dispute for determination and resolution to the Independent Accounting Firm, which shall be instructed to determine and report to the parties, within thirty (30) days after such submission, a resolution of such remaining disputed amounts, and such resolution shall be final, binding and conclusive on the parties hereto with respect to the remaining amounts disputed. The fees and disbursements of the Independent Accounting Firm shall be allocated between the Buyer and the Seller so that the Buyer's share of such fees and disbursements shall be in the same proportion that the aggregate amount of such remaining disputed amounts so submitted to the Independent Accounting Firm that is unsuccessfully disputed by the Buyer (as finally determined by the Independent Accounting Firm) bears to the total amount of such remaining disputed amounts so submitted by the Buyer to the Independent Accounting Firm. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment Amount shall be excluded from deemed to be modified to the extent of any changes thereto that become final, binding and conclusive on the parties based on mutual agreement or a determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined Independent Accounting Firm in accordance with this Section 2.04 3.2(b).
(c) Within ten (10) Business Days after the date on which the Buyer's written notice of dispute is less than required to be delivered in accordance with Section 3.2(b), (i) the Estimated Purchase PriceBuyer shall pay to the Seller an amount equal to the sum of all undisputed portions of the Adjustment Amount reflected in the Seller's Adjustment Statement if the sum of such undisputed portions is a positive number, or (ii) the Seller shall pay to Purchaser the total Buyer an amount equal to the amount by which the sum of all undisputed portions of the Adjustment Amount reflected in the Seller's Adjustment Statement is less than zero, if the sum of such deficit, and if undisputed portions is less than zero. If there is a dispute with respect to any amount on the Purchase Price as finally determined in accordance with this Section 2.04 exceeds Adjustment Statement or the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar fundsAdjustment Amount, within three five (35) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared all such disputed amounts in accordance with Section 3.2(b), the accounting principles, methodologies and policies set forth in Section 2.04 Buyer shall pay to the Seller an amount equal to the disputed portion of the Seller Disclosure Letter (and, Adjustment Amount as finally determined to be payable with respect to the extent not set forth therein, Adjustment Statement in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable accessSection 3.2(b) if such amount is a positive number; provided, during normal business hours and upon reasonable noticehowever, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement that if such finally determined portion is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided aboveless than zero, then the Accounting Arbitrator Seller shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference pay to the value assigned to Buyer the amount by which such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statementamount is less than zero. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any All payments made pursuant to this Section 2.04 3.2(c) shall be allocated paid together with interest thereon for the period commencing on the Closing Date through the date of payment, calculated at the prime rate of Citibank, N.A. in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of effect on the Business denominated Closing Date, in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as cash by wire transfer of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04available funds.
Appears in 1 contract
Sources: Membership Interest and Stock Purchase Agreement (Transcanada Corp)
Purchase Price Adjustment. (ai) Section 2.04(aExhibit M shows:
(A) the unaudited balance sheet of the Seller Disclosure Letter sets forth certain current assets Business as of January 31, 2004, prepared based on unaudited trial balance information provided by Sellers together with adjustments to reflect the transaction contemplated by this Agreement (which balance sheet, after such adjustments, is referred to as the "Unaudited Transaction Balance Sheet as of 1/31/2004"); and
(B) the unaudited balance sheet of the Business as of May 1, 2004, prepared based on unaudited trial balance information provided by Sellers, together with adjustments to reflect the transaction contemplated by this Agreement (which balance sheet, after such adjustments, is referred to as the "Unaudited Transaction Balance Sheet as of 5/1/2004").
(ii) Prior to the Cut-Off Date, Sellers shall provide audited financial statements for the Business for the fiscal year ended January 31, 2004, accompanied by an unqualified opinion of Ernst & Young LLP, to the effect that the audited financial statements present fairly in all material respects the financial position and current liabilities accounts results of operations of the Business and certain have been prepared in accordance with generally accepted accounting principles, methodologies and policies used principles in the determination of such accounts. Such accounts United States, consistently applied, together with:
(A) adjustments to the audited balance sheet to reflect the transaction contemplated by this Agreement (which adjustments are referred to as "transaction adjustments"); and
(B) a summary of the Businessadjustments, cumulativelyother than transaction adjustments, from the trial balance information referred to in Section 4(b)(i)(A) to the audited financial statements (which adjustments are referred to as the "audit adjustments")
(iii) Within 60 days after the Cut-Off Date, Sellers shall provide an unaudited balance sheet as of immediately before the effective time close of business on the Cut-Off Date reflecting the transaction adjustments, of the Closing (as nature of the transaction adjustments set forth in Section 2.05(a))the Unaudited Transaction Balance Sheet as of 5/1/2004, determined in accordance with Section 2.04(a) which will also reflect all audit adjustments as appropriate (the "Unaudited Transaction Balance Sheet as of the Seller Disclosure LetterCut-Off Date"). Buyer shall reasonably assist Sellers and their representatives in the preparation of the Unaudited Transaction Balance Sheet as of the Cut-Off Date and shall provide Sellers and their representatives access at all reasonable times to the personnel, properties and books and records of the Business for such purpose.
(iv) To the extent that the net assets, calculated in a manner consistent with the principles, methodologies policies and policies set forth therein andprocedures used in preparing Exhibit M ("Net Assets"), to reflected in the extent not set forth thereinUnaudited Transaction Balance Sheet as of the Cut-Off Date exceed the Net Assets reflected in the Unaudited Transaction Balance Sheet as of 5/1/2004 by more than $40 million, in accordance with U.S. GAAP, then the Purchase Price shall constitute be increased by the “Modified Working Capital”excess over $40 million. For the avoidance of doubt, amounts included "Net Assets" shall not include any Excluded Asset or any Excluded Liability. Notwithstanding anything to the contrary in this Section 4(b), the determination book value of Closing Net Indebtedness, Closing all assets on the Unaudited Transaction Expenses and Pension Plan Purchase Price Adjustment Balance Sheet as of the Cut-Off Date shall be excluded from the determination of the Modified Working Capitalcalculated without giving effect to any depreciation or amortization thereof after May 1, 2004.
(bv) To the extent that the Net Assets reflected in the Unaudited Transaction Balance Sheet as of 5/1/2004 exceed the Net Assets reflected in the Unaudited Transaction Balance Sheet as of the Cut-Off Date by more than $40 million, then the Purchase Price shall be decreased by the excess over $40 million.
(vi) If the Purchase Price as finally determined in accordance with this is to be increased pursuant to Section 2.04 is less than 4(b)(iv), then Buyer shall, within five business days after the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficitincrease has been determined, and if pay Sellers an amount equal to such increase, together with interest thereon at an annual rate equal to the three-month LIBOR rate in effect as of the Closing Date, calculated on the actual number of days elapsed from the Closing Date to the date of payment divided by 365. If the Purchase Price as finally determined in accordance with this is to be decreased pursuant to Section 2.04 exceeds 4(b)(v), then Sellers shall, within five business days after the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excessdecrease has been determined, pay Buyer an amount equal to such decrease, together with interest thereon at an annual rate equal to the three-month LIBOR rate in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination effect as of the Purchase PriceClosing Date, calculated on the actual number of days elapsed from the Closing Date to an account designated the date of payment divided by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price365.
(cvii) As promptly Sellers represent that Sellers have not changed accounting policies or procedures, or application thereof, since January 31, 2004, and that the Unaudited Transaction Balance Sheet as practicable of 5/1/2004 is prepared on a basis consistent with the Unaudited Transaction Balance Sheet as of 1/31/2004 (andexcept for adjustments normally reflected only in year-end audited financial statements).
(viii) Sellers covenant that Sellers will not change accounting policies or procedures, or the application thereof, from those reflected in any eventthe Unaudited Transaction Balance Sheet as of 5/1/2004, within ninety (90) days after and that the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation Unaudited Transaction Balance Sheet as of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall Cut-Off Date will be prepared in accordance on a basis consistent with the accounting principlesUnaudited Transaction Balance Sheet as of 5/1/2004 (except for the audit adjustments, methodologies as appropriate, and policies set forth except as otherwise provided in Section 2.04 of the Seller Disclosure Letter Sections 4(b)(iv) and 7(e)).
(andix) If Buyer in good faith objects, by notice in writing to Sellers, to the extent not Net Assets set forth thereinon the Unaudited Transaction Balance Sheet as of the Cut-Off Date ("Final Net Assets") within 30 days after Sellers' delivery thereof, setting forth in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the its written objection its determination of the Closing StatementFinal Net Assets, Seller Sellers and Buyer shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate attempt in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) objections within thirty (30) 30 days after delivery by Seller the Sellers' receipt of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”)Buyer's objections. In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator Buyer may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made object pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f4(b)(ix) With respect to Cash and Cash Equivalents and Indebtedness only if, assuming all of the Business denominated in currencies other than U.S. dollarsBuyer's objections were sustained, the Applicable Exchange Rate for each such currency Purchase Price, as of immediately before the effective time of the Closing as published adjusted by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the any adjustments pursuant to this Section 2.044(b), would be lower than the Purchase Price based on Sellers' determination of Final Net Assets, and Buyer's objections must specify in reasonable detail the nature of any disagreement with Sellers. The only objections that Buyer may make pursuant to this Section 4(b)(ix) are those that relate to:
(A) any claimed inconsistencies between the principles, policies or procedures used in the preparation of the Unaudited Transaction Balance Sheet as of 5/1/2004 and the principles, policies or procedures used in the preparation of the Unaudited Transaction Balance Sheet as of the Cut-Off Date (except for audit adjustments, as appropriate, and except as otherwise provided in Sections 4(b)(iv) and 7(e));
(B) the application of the audit adjustments; or
(C) errors in mathematical computation.
(x) If Sellers and Buyer are unable to resolve the matter within such 30-day period, they shall jointly appoint a mutually acceptable firm of independent accountants of national reputation that is one of the so-called "big four" (or, if they cannot agree on a mutually acceptable firm, they shall cause their respective accounting firms to select such firm) within three business days following the end of such 30-day period. Buyer and Sellers shall provide such accounting firm full cooperation. Such firm shall be instructed to reach its conclusion regarding the disputes as soon as reasonably possible. Such firm's resolution of the disputes shall be rendered in a written decision determining all disputes and shall be conclusive and binding upon Buyer and Sellers.
(xi) The Non-Prevailing Party (as defined below) in any determination by such accounting firm shall pay its own expenses incurred with respect to the submission to such accounting firm and shall pay a percentage of (A) the fees and expenses of such accounting firm plus (B) the reasonable out-of-pocket expenses (including reasonable attorneys' fees) of the other party incurred with respect to the submission, which percentage shall be calculated by dividing (1) an amount equal to the difference between the Non- Prevailing Party's determination of Final Net Assets, as submitted to such accounting firm, and such accounting firm's determination of Final Net Assets by (2) an amount equal to the difference between the parties' respective determinations of Final Net Assets, as submitted to such accounting firm. The other party shall pay the remainder of the fees and expenses of such accounting firm and its own expenses not required to be paid by the Non-Prevailing Party hereunder. A party is the "Non-Prevailing Party" if such accounting firm's determination of Final Net Assets is closer to the other party's determination of Final Net Assets, as submitted to such accounting firm, than it is to that party's determination of Final Net Assets, as submitted to such accounting firm. Notwithstanding anything to the contrary in this Section 4(b)(xi), if such accounting firm's determination of Final Net Assets does not result in a Purchase Price that is lower than the Purchase Price would have been based upon Sellers' determination of Final Net Assets (after giving effect to Section 4(b)(iv) or 4(b)(v)), Buyer shall pay all of the fees and expenses of such accounting firm plus all reasonable out-of-pocket expenses (including reasonable attorneys' fees) of Sellers incurred with respect to the submission.
Appears in 1 contract
Sources: Asset Purchase Agreement (May Department Stores Co)
Purchase Price Adjustment. (a) Section 2.04(a) The Seller has delivered to the Purchaser a written statement, executed by a duly authorized officer of the Seller Disclosure Letter sets Seller, setting forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts (i) an estimated unaudited consolidated balance sheet of the Business, cumulatively, Company Group as of immediately before the effective time of the Closing (as set forth in Section 2.05(a))Date, determined but without giving effect to the transactions occurring at the Closing, prepared in accordance with Section 2.04(aGAAP applied on a basis consistent with the principles used in preparing the Latest Balance Sheet, (ii) an estimated calculation of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, Net Working Capital prepared in accordance with U.S. GAAP, shall constitute the Working Capital Principles as of the Closing Date (the “Modified Estimated Working Capital”. For ), (iii) the avoidance calculation of doubtthe amount, amounts included in if any, by which Estimated Working Capital is less than Target Working Capital (expressed as a positive number) (the determination “Initial Adjustment Amount”); (iv) estimated Closing Indebtedness as of the Closing Net Date (the “Estimated Closing Indebtedness”), Closing (v) estimated Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination as of the Modified Working CapitalClosing Date (the “Estimated Transaction Expenses”), and (vi) the Seller’s resulting calculation of the Closing Purchase Price.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no No later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing)Closing Date, the Purchaser shall prepare and deliver to the Seller a statement certificate executed by the chief financial officer of the Purchaser (the “CFO Certificate”) setting forth Purchaser’s calculation of (i) Modified Working Capitala consolidated unaudited balance sheet of the Company Group as of the Closing Date, but without giving effect to the transactions occurring at Closing, prepared in accordance with GAAP applied on a basis consistent with the principles used in preparing the Latest Balance Sheet, (ii) Closing the proposed final calculation of Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be Working Capital prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 Working Capital Principles as of the Seller Disclosure Letter Closing Date, (andiii) the proposed calculation of the Final WC Adjustment Amount, to (iv) the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance actual amount of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which Closing Indebtedness as of the Closing Statement Date (the “Actual Closing Indebtedness”), (v) the actual amount of Transaction Expenses as of the Closing Date (the “Actual Transaction Expenses”), and (vi) the True-Up Amount. For purposes of this Agreement, (A) “True-Up Amount” shall mean (w) the amount, if any, by which Estimated Closing Indebtedness is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolvedgreater than Actual Closing Indebtedness, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to plus (x) violate any obligation the amount, if any, by which Estimated Transaction Expenses is greater than the amount of confidentiality to Actual Transaction Expenses, minus (y) the amount, if any, by which Purchaser or Seller 31 Actual Closing Indebtedness is greater than the amount of Estimated Closing Indebtedness, minus (z) the amount, if any, by which Actual Transaction Expenses is greater than the amount of Estimated Transaction Expenses and (B) the “Final WC Adjustment Amount” shall mean the difference, which may be subject in discharging their obligations positive or negative, between (x) Net Working Capital (as finally determined pursuant to the immediately preceding sentence, Section 2.3(c) or Section 2.4) and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firmEstimated Working Capital. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to True-Up Amount may be a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions positive or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelynegative number.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Sources: Equity Purchase and Sale Agreement (Smart Sand, Inc.)
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principlesThe Purchase Price, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, 2.1 shall be increased or decreased on a dollar-for-dollar basis to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute that the “Modified Closing Adjusted Working Capital”. For Capital (defined below) is greater or less than $20,828,000 (the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan "Purchase Price Adjustment shall be excluded from the determination of the Modified Working CapitalAdjustment").
(b) If As soon as practicable, but not later than 60 calendar days after the Closing Date, Sellers will provide the Buyer with a Closing Adjusted Working Capital calculation and a calculation of the amount of the Purchase Price as finally determined Adjustment, if any. The components of the Closing Adjusted Working Capital calculation shall be accounted for in accordance with this Section 2.04 is less than U.S. generally accepted accounting principles ("GAAP") applied on a basis consistent with the Estimated Purchase PriceInterim Balance Sheet. Such calculations will be accompanied by a consolidated statement of each of the components of the calculation of Closing Adjusted Working Capital of CMHC, Seller the Companies and the Subsidiaries prepared in accordance with GAAP applied on a basis consistent with the Interim Balance Sheet and reported on by Price Waterhouse LLP. Buyer shall pay allow Sellers and Price Waterhouse LLP full and complete access to Purchaser all books and records of CMHC and the total amount of such deficit, Companies necessary or desirable to allow the Closing Adjusted Working Capital calculation to be properly made and if the audit to be conducted. The Closing Adjusted Working Capital calculation and the Purchase Price as finally determined Adjustment calculation shall be conclusive and binding on the parties hereto unless Buyer shall deliver to Sellers and Terex notice in accordance with this Section 2.04 exceeds writing of an objection to any item contained in the Estimated Purchase Price, Purchaser shall pay to Seller Closing Adjusted Working Capital calculation within 30 days following the total amount Buyer's receipt of those calculations detailing the nature of such excessobjection and quantifying the amount in dispute (the "Buyer's Notice"). If the Buyer timely delivers a Buyer's Notice, in either case by wire transfer the Buyer and Sellers and their respective accountants shall attempt to resolve Buyer's objection. If no resolution is reached within 15 days of immediately available U.S. dollar fundsreceipt of Buyer's Notice, Buyer and Sellers shall, within three (3) Business Days five business days after the final determination end of that period, submit all relevant issues to Coopers & Lybrand LLP ("C & L"). ▇ & L shall review those items in dispute within 20 business days after submission is made to it, and the decision of C & L will be conclusive and binding on the parties. Buyer and Sellers will each pay one-half of any fees and expenses charged by C & L. Payment of the Purchase Price, to an account designated Price Adjustment will be made by the party receiving payment Buyer or Sellers (who shall be jointly and severally liable therefor), as the case may be, on (i) if the Buyer makes no later than two (2) Business Days objection thereto, the 35th day after the final determination Buyer receives the Closing Adjusted Working Capital calculations, or (ii) if any objection has been made, the second business day after the earlier of (A) the parties' resolution of, or (B) the parties' receipt of the Purchase Pricefinal decision of C & L with respect to, all such objections made by the Buyer.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution For purposes of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments calculation made pursuant to this Section 2.04 2.3, (i) "Closing Adjusted Working Capital" shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness mean the difference between the following accounts of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency Terex's material handling business as of immediately before the effective time of the Closing as published by Bloomberg Date: (BGN New YorkA) the sum of trade receivables (less allowances), net inventories and other current assets, minus (B) the sum of the current portion of each of capital lease obligations, trade accounts payable, accrued compensation and benefits, accrued warranty and product liability, customer deposits (if any) and other current liabilities to the extent assumed (directly or indirectly through a Company or Subsidiary), by the Buyer; and (ii) "Interim Balance Sheet" shall mean the unaudited combined balance sheet as of September 30, 1996 referred to in Section 4.8. For purposes of this Section 2.3, the accrued warranty and products liability shall be used to convert computed as of the Closing Date in accordance with reasonable past practice, but in no event shall such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04account be less than $17,773,000.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, Not less than three Business Days prior to the extent not set forth thereinanticipated Closing Date, in accordance with U.S. GAAP, the Sellers’ Representative shall constitute deliver or cause to be delivered to Purchaser: (i) a statement (the “Modified Working CapitalPreliminary Statement”. For ) which shall set forth, together with reasonable supporting calculations for such estimates, (A) the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.Sellers’
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) Within 60 days after the Closing)Closing Date, Purchaser shall prepare and deliver to Seller the Sellers’ Representative a statement (the “Statement”), setting forth Purchaser’s good faith calculation of (i) Modified Working CapitalCash as of the Measurement Time (“Closing Cash”), (ii) the outstanding principal of and accrued interest on all Indebtedness as of the Measurement Time (but without giving effect to the repayment of any Indebtedness pursuant to the payoff documentation contemplated by Section 1.03(e)) (“Closing Net Indebtedness”), (iii) Working Capital as of the Measurement Time (“Closing Transaction Expenses and Working Capital”), (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (andTransaction Expenses, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests paid prior to the extent Closing (“Closing Transaction Expenses”), (v) the Acquisition Amount as of the Measurement Time (“Closing Acquisition Amount”), (vi) the Aggregate Rollover Amount and (vii) based on such amounts, the Net Adjustment Amount.
(c) During the 45-day period following the Sellers’ Representative’s receipt of the Statement (as such period may be extended if and as required under Section 1.06(e), the “Review Period”), the Sellers’ Representative and its accountants and advisors shall be permitted to review the working papers relating to the Business (includingStatement. The Statement shall become final, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final conclusive and binding upon the parties.
parties on the completion of the Review Period, unless the Sellers’ Representative gives written notice of its disagreement with the Statement (da “Notice of Disagreement”) If to Purchaser and Seller are unable on or prior to resolve such date. Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement as contemplated by Section 2.04(c) within thirty so asserted and the Sellers’ Representative’s calculation (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation Accounting Principles) of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the items or amounts. If a Notice of Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined is given by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated Sellers’ Representative in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollarstimely manner, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.then the
Appears in 1 contract
Sources: Securities Purchase Agreement (White Mountains Insurance Group LTD)
Purchase Price Adjustment. (a) Section 2.04(aNo later than five (5) Business Days prior to the Closing Date, Sellers shall cause to be prepared and delivered to Purchaser a certificate of an officer of Sellers setting forth Sellers’ good faith estimates of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, Net Working Capital as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Estimated Net Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance a manner consistent with past practice and using the same accounting methods, principles, policies, practices, procedures, classifications, judgments, estimation methodologies and policies set forth accounting standards as were utilized in Section 2.04 the preparation of the Seller Disclosure Letter Interim Balance Sheet.
(andb) The Initial Purchase Price shall be increased, if the Estimated Net Working Capital exceeds the Reference Net Working Capital, by an amount equal to the extent not set forth thereinamount of such excess, in accordance with U.S. GAAP). The parties agree or decreased, if the Reference Net Working Capital exceeds the Estimated Net Working Capital, by an amount equal to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel such excess (and any other information which either party reasonably requests such net increase or decrease to the extent relating to the Business (including, for the avoidance of doubtInitial Purchase Price, the Business in any Deferred Asset Jurisdictions“Closing Adjustment”).
(c) throughout the periods during which Within sixty (60) days following the Closing Statement is being Date, Purchaser shall deliver to Sellers a calculation by Purchaser of the Net Working Capital as of the Closing Date (the “Preliminary Net Working Capital”), which shall be prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably consistent with past practice and using the operations of such party’s businesses. Notwithstanding same accounting methods, principles, policies, practices, procedures, classifications, judgments, estimation methodologies and accounting standards as were utilized in the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination preparation of the Closing Statement, Seller Interim Balance Sheet.
(d) Sellers shall have forty-five (45) days following receipt the calculation of the Preliminary Net Working Capital to review such calculation and notify Purchaser in writing of such disagreement within sixty any dispute regarding the calculations (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (a “Disagreement Dispute Notice”). If Seller fails to , specifying the reasons therefor in reasonable detail.
(e) In the event that Sellers deliver a Disagreement Dispute Notice by the end of such 60-day periodto Purchaser, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller Sellers shall negotiate cooperate in good faith to resolve such dispute as promptly as practicable and, upon such resolution, if any, any adjustments to the Preliminary Net Working Capital shall be made in accordance with the agreement of Purchaser and Sellers and shall be conclusive and binding on Purchaser and Sellers. If Purchaser and Sellers are unable to resolve any such disagreementdispute within fifteen (15) Business Days of Sellers’ delivery of such Dispute Notice (or any such longer period as Purchaser and Sellers shall mutually agree in writing), such dispute shall be resolved by the Independent Accounting Firm, and any resolution agreed to in writing by Purchaser and Seller such determination shall be final and binding upon on the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties Independent Accounting Firm shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has and Sellers have disagreed pursuant to a Disagreement Notice within the time periods and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with on the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statementspecified above, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided may rely only upon information submitted to it by Purchaser and Seller and not pursuant Sellers. The Independent Accounting Firm shall be instructed to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable best efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, Purchaser and Sellers a written report setting forth the resolution of any such disagreement determined in accordance with the terms each disputed matter within thirty (30) days of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses submission of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other handPreliminary Net Working Capital to it and, in proportion any case, as promptly as practicable after such submission. Any expenses relating to the differences between engagement of the Purchase Price as determined by the Independent Accounting Arbitrator and the asserted Purchase Price set forth Firm in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made respect of its services pursuant to this Section 2.04 2.5(e) shall initially be allocated shared equally by Purchaser and Sellers; provided, however, that all fees and expenses relating to the foregoing work by the Independent Accounting Firm shall ultimately be borne by Purchaser and Sellers in a manner consistent with any inverse proportion as they may prevail on the matters resolved by the Independent Accounting Firm, which proportionate allocation agreed to pursuant to Section 2.03(c)also will be determined by the Independent Accounting Firm and be included in the Independent Accounting Firm’s written report.
(f) With respect The Preliminary Net Working Capital, (A) if no Dispute Notice has been timely delivered by Sellers, as originally submitted by Purchaser, or (B) if a Dispute Notice has been timely delivered by Sellers, as determined pursuant to Cash and Cash Equivalents and Indebtedness the resolution of the Business denominated such dispute in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New Yorkaccordance with Section 2.5(e), shall be used the “Final Net Working Capital.”
(g) If the Final Capital Adjustment exceeds the Closing Adjustment, Purchaser shall pay the amount of such excess to convert Sellers, pro rata in accordance the portion of the Purchase Price payable to each such amounts into U.S. dollars for purposes Person as set forth in Section 2.3. If the Closing Adjustment exceeds the Final Capital Adjustment, Sellers shall pay the amount of determining Closing Net Indebtedness such excess to Purchaser. Purchaser shall, or Sellers shall, as the case may be, within five (5) Business Days after the determination of the Final Capital Adjustment, make such payment to Sellers or Purchaser, as the case may be, by wire transfer in immediately available funds.
(h) In addition to the foregoing, the parties agree that, in the event the consent from the counterparty to the assignment to the Surviving Corporation of THRG’s rights under the Contract identified on Schedule 2.5(h) (the “First Identified Contract”) in connection with the adjustments transactions contemplated hereby is not obtained prior to the Closing without any modifications to the terms of the First Identified Contract that pertain to pricing, discounts, rebates, purchasing commitments, duration, termination, payment terms or delivery terms, or that otherwise adversely affect the value thereof, then the Initial Purchase Price shall be reduced at the Closing in an amount equal to 80% of the Aggregate Cost Differential attributable to the Replacement Contract as determined by the Independent Accounting Firm; provided, however, that in no event shall the reduction to the Initial Purchase Price at the Closing pursuant to this Section 2.042.5(h) exceed $15,000,000. For purposes of this Section 2.5(h): (i) “Replacement Contract” means either (x) the First Identified Contract as amended or otherwise modified in connection with obtaining the consent of the counterparty thereto and consistent with this Section 2.5(h) or (y) if there shall not be a Replacement Contract under clause (x), the Contract entered into by Purchaser or one of its Affiliates in order for the Surviving Corporation to obtain the same or similar product provided pursuant to the First Identified Contract from and after the Closing, which shall have a term of at least twelve (12) months; and (ii) “Aggregate Cost Differential” means the excess of (x) the present value of the aggregate cost under the Replacement Contract to obtain over the period identified on Schedule 2.5(h) the quantities of the product provided pursuant to the First Identified Contract that are identified on Schedule 2.5(h) over (y) the present value of the aggregate cost to obtain over such period such quantities under the First Identified Contract, which present value, in each case, shall be calculated by the Independent Accounting Firm as set forth on and using the assumptions identified on Schedule 2.5(h). The parties agree that the First Identified Contract may not be amended to become the Replacement Contract unless Purchaser shall have consented in writing to the terms of such Replacement Contract in its sole discretion. Notwithstanding any provisions herein to the contrary, in the event that (A) at least ten Business Days prior to the Closing Date, Sellers notify Purchaser in writing of a proposal to amend the pricing, discount and/or rebate terms, but no other terms, and provide a copy of the proposed amendment to the First Identified Contract, which the counterparty thereto is prepared to accept, (B) Purchaser fails or refuses to consent to such amended terms by written notice to Sellers at least five Business Days prior to the Closing Date and (C) Purchaser fails to enter into an alternate Replacement Contract prior to the Closing with a lower Aggregate Cost Differential, the Replacement Contract shall be deemed to be the First Identified Contract as it would have been amended pursuant to the proposal referred to in clause (A). In addition, in the event that on the Closing Date Purchaser or any of its Affiliates shall be a party to any purchasing contracts or arrangements pursuant to which Purchaser or any of its Affiliates is entitled to purchase and the supplier is required or otherwise willing to provide the quantities of the product provided pursuant to the First Identified Contract that are identified in paragraph II of Schedule 2.5(h) in addition to such quantities as Purchaser and its Affiliates reasonably anticipate purchasing thereunder during the same periods that are unrelated to the Business at a lower aggregate cost (net of all applicable discounts and rebates) than the aggregate cost (net of all applicable discounts or rebates) to purchase such products under the First Identified Contract (a “Lower Cost Alternative”), then, for the purposes of determining any adjustment to the Initial Purchase Price pursuant to this Section 2.5(h), the Lower Cost Alternative shall be deemed the Replacement Contract and the applicable price thereunder shall be, in the case where the Lower Cost Alternative is a single contract, the price set forth in such contract (net of all applicable discounts and rebates), or, in the case where the Lower Cost Alternative is more than one contract, a price calculated by determining the weighted average of the price under such contracts (net of all applicable discounts and rebates) based on the quantity applied to each such contract. In the event there is to be an adjustment to the Initial Purchase Price pursuant to this Section 2.5(h), Purchaser shall certify in writing to Sellers on the Closing Date that no Lower Cost Alternative exists or shall provide to the Independent Accounting Firm such information as it may require to determine any adjustment to the Initial Purchase Price pursuant to this Section 2.5(h); it being understood and agreed that the Independent Accounting Firm shall maintain the confidence of such information and use it only for calculating any such adjustment.
Appears in 1 contract
Sources: Purchase Agreement (Covidien Ltd.)
Purchase Price Adjustment. (a) Section 2.04(aPre-Closing Statements. Not later than five (5) Business Days prior to the Closing Date, the Company shall have prepared and delivered to the Purchaser an estimated balance sheet in accordance with GAAP of the Seller Disclosure Letter sets forth certain current assets Company and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, its Subsidiaries as of 11:59 P.M. Eastern Time on the date immediately before the effective time of preceding the Closing Date (as set forth in Section 2.05(a)the “Estimated Closing Balance Sheet”), determined together with a statement (the “Estimated Closing Statement”) setting forth the Company’s good faith estimate of: (i) the Closing Working Capital (the “Estimated Closing Working Capital”), and the resulting estimated Working Capital Adjustment (the “Estimated Working Capital Adjustment”); (ii) the Closing Indebtedness (the “Estimated Closing Indebtedness”); (iii) the Closing Seller Transaction Expenses (the “Estimated Closing Seller Transaction Expenses”); (iv) the Closing Cash (the “Estimated Closing Cash”); and (v) based on the foregoing, the amount, and the calculation of, the Estimated Closing Purchase Price and Sellers’ Closing Consideration (the “Estimated Sellers’ Closing Consideration”), and the Closing Payments in accordance with Section 2.04(a) 1.2 and Section 1.3, respectively. Following delivery by the Company of the Seller Disclosure LetterEstimated Closing Balance Sheet and Estimated Closing Statement and before the Closing, the Sellers shall cause the Company’s senior executive officers and all relevant accounting and financial personnel to be reasonably available for inquiries from and discussions with Representatives of the Purchaser relating to the Estimated Closing Balance Sheet and the Estimated Closing Statement and the Company shall consider in good faith, and consult with Purchaser regarding, any comments made by such Representatives of the principles, methodologies and policies set forth therein Purchaser and, to the extent not set forth thereinthe Company makes any changes to the Estimated Closing Balance Sheet and the Estimated Closing Statement as a result thereof, in accordance with U.S. GAAP, the Company shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination deliver an updated version of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than Estimated Closing Balance Sheet and the Estimated Purchase PriceClosing Statement, Seller as applicable; provided, that in no event shall pay the Company be obligated to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds make any change to the Estimated Purchase Price, Purchaser shall pay to Seller Closing Balance Sheet or the total amount of Estimated Closing Statement based on such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after comments. The Estimated Closing Balance Sheet and the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Estimated Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which Statement shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the partiesAccounting Principles.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) A Purchase Price adjustment to the Purchase Price shall be made as follows: (i) the amount of any indebtedness for borrowed money of Seller or any of its affiliates from third parties that Buyer is assuming pursuant to this Agreement and the amount of any indebtedness for borrowed money of any consolidated members of the Stock Group from third parties shall be subtracted from the Purchase Price; (ii) the amount of cash and cash equivalents in excess of Five Million Dollars ($5,000,000) held in or by the wholly owned members of the Stock Group as of the Closing Date shall be added to the Purchase Price, (iii) the change in Net Working Capital as of the Closing Date (as finally determined below) shall be added to or subtracted from the Purchase Price, and (iv) the amount, if any, of the adjustment derived in Section 2.04(a1.9(i) shall be subtracted from the Purchase Price, provided that such adjustment shall be effectuated solely through reduction of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, Note as of immediately before the effective time of the Closing (as set forth described in Section 2.05(a1.9(i)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Priceleft blank intentionally.
(c) As promptly as practicable Within sixty (and, in any event, within ninety (9060) days after following the Closing), Purchaser Seller shall prepare and deliver to Seller Buyer an audited consolidated statement of assets to be sold and liabilities to be assumed of the Business as of the Closing Date ("CLOSING BALANCE SHEET") as reported on by Ernst & Young LLP, together with a computation of the Net Working Capital as of the Closing Date ("SELLER'S CLOSING WORKING CAPITAL STATEMENT") prepared in a manner consistent with the consolidated statement setting forth Purchaser’s calculation of (i) Modified Working Capitalassets to be sold and liabilities to be assumed of the Business as of May 31, (ii) Closing Net Indebtedness2000, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 attached as EXHIBIT A hereto (the “"MAY 31, 2000 BALANCE SHEET") and the computation of the Net Working Capital as of May 31, 2000, attached as EXHIBIT B hereto ("MAY 31, 2000 WORKING CAPITAL STATEMENT"). The Closing Statement”)Balance Sheet and Seller's Closing Working Capital Statement shall be, which shall be and the May 31, 2000 Balance Sheet and May 31, 2000 Working Capital Statement were, prepared consistent with past practice, in accordance with accounting principles generally accepted in the United States consistently applied, and in accordance with the accounting principles, methodologies and policies principles set forth in Section 2.04 the financial policy manual of Seller, previously delivered to Buyer (the "GUIDE"), except in the case of the Seller Disclosure Letter May 31, 2000 and the Seller's Closing Working Capital Statement, as provided in Schedule 1.9. In the event the Seller's Closing Working Capital Statement cannot be prepared both in accordance with generally accepted accounting principles and in a manner consistent with the Guide, compliance with generally accepted accounting principles shall be given priority, it being understood that the Guide is intended to be an interpretation of generally accepted accounting principles. As used in this Agreement, "NET WORKING CAPITAL" shall be determined in accordance with Schedule 1.9. Subject to (andg) and (h) below, (i) to the extent not set forth thereinthe Net Working Capital as of the Closing Date as finally determined is greater than $197,119,757, the Purchase Price shall be increased by the amount of such difference pursuant to Section 1.9(a)(iii) up to a maximum of Twenty-Five Million Dollars ($25,000,000), and (ii) to the extent the Net Working Capital as of the Closing Date as finally determined is less than $197,119,757, the Purchase Price shall be decreased by the amount of such difference pursuant to Section 1.9(a)(iii).
(d) Buyer and its representatives shall have the right to observe the work performed by Seller and/or its representatives in accordance connection with U.S. GAAPthe preparation of the Closing Balance Sheet and Seller's Closing Working Capital Statement, to examine and make copies of the work papers and other documents generated or reviewed in connection with the preparation of the Closing Balance Sheet and Seller's Closing Working Capital Statement and the May 31, 2000 Balance Sheet and the May 31, 2000 Working Capital Statement, and to access the books and records of Seller related to the Closing Balance Sheet and Seller's Closing Working Capital Statement and the May 31, 2000 Balance Sheet and the May 31, 2000 Working Capital Statement.
(e) Buyer shall have forty-five (45) days after the receipt of Seller's Closing Working Capital Statement to review Seller's Closing Working Capital Statement, the work papers and other documents generated or reviewed by Seller in connection with the preparation of Seller's Closing Working Capital Statement, and the books and records of Seller related to Seller's Closing Working Capital Statement ("BUYER'S REVIEW PERIOD"). If, within Buyer's Review Period, Buyer disputes any item(s) on Seller's Closing Working Capital Statement, Buyer shall give Seller written notice of such disagreement specifically identifying the item(s) and amount(s) in dispute and the basis for such dispute (the "BUYER'S NOTICE"). The parties agree shall use their reasonable efforts to provide each other and their respective Representatives reasonable accessreach agreement with respect to such disputed items within forty-five (45) days following the delivery of Buyer's Notice, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 longer period as may be subject in discharging their obligations pursuant to agreed upon by the immediately preceding sentence, and parties (ythe "RESOLUTION PERIOD"). Any item(s) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the on Seller's Closing Statement, Seller shall notify Purchaser Working Capital Statement not specifically identified in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver as a Disagreement Notice by disputed item before the end of such 60-day period, Seller Buyer's Review Period shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed been accepted by Seller Buyer and shall not be subject to any further dispute dispute, review or review. Purchaser change.
(f) If the parties fail to reach a mutually agreeable determination with respect to Seller's Closing Working Capital Statement within the Resolution Period, the disputed item(s) shall be resolved and, as a result thereof, the amount of the Net Working Capital on the Closing Date shall be definitely and Seller shall negotiate in good faith to resolve any such disagreementfinally resolved by Deloitte & Touche LLP, and any resolution agreed to or if Deloitte & Touche LLP does not agree in writing to serve in such capacity, a nationally-recognized firm of independent public accountants agreed upon by Purchaser both Seller and Seller Buyer (in either case, the "ACCOUNTING FIRM"), who shall act as experts not as arbitrators and whose determination shall be final and binding upon binding. The Accounting Firm shall have agreed in writing to serve in such capacity pursuant to the parties.
terms herein described within fifteen (d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (3015) days after delivery by Seller following the end of a Disagreement Noticethe Resolution Period, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention determination of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected Net Working Capital shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved completed by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with Firm within forty-five (45) days following the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation end of the Closing Statement, and the Accounting Arbitrator shall not make any other determinationResolution Period. The Accounting Arbitrator Firm shall make its determination based solely on written submissionsaddress only those issues in dispute, presentations and supporting material provided by Purchaser and Seller and may not pursuant assign a value to any independent review. In resolving any such disagreement, item greater than the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established greatest value for such disputed item as determined claimed by reference to either party or less than the smallest value assigned to for such item claimed by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest erroreither party. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 Firm shall be borne proportionately by Purchaser, on the one hand, Buyer and Seller, on the other hand, in proportion Seller to the differences between extent that each party's calculation of Net Working Capital differs from the Purchase Price Net Working Capital as finally determined by the Accounting Arbitrator and Firm. The allocation of cost by the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 Accounting Firm shall be allocated final and binding on the parties. The Accounting Firm's determination of Net Working Capital shall be completed in a manner consistent with any allocation agreed to pursuant to the principles set forth in this Section 2.03(c)1.9.
(fg) With respect If, as a result of the post-closing adjustment as described in (a) above, the Purchase Price is to Cash be reduced, the amount of such reduction, with interest thereon calculated as indicated below (the "REDUCTION AMOUNT") shall be paid by wire transfer of immediately available funds to an account designated in writing by Buyer, within ten (10) business days following the date (the "DETERMINATION DATE") of the final determination of the Net Working Capital as of the Closing Date pursuant to the foregoing procedures. The interest shall be calculated at the rate(s) of interest per annum announced from time to time by Citibank N.A. (or its successor) as its U.S. prime rate minus 1% from the Closing Date through the payment date (the "APPLICABLE RATE"). The Reduction Amount shall be treated for income tax purposes as an adjustment to the Purchase Price.
(h) If, as a result of the post-closing adjustment as described in (a) above, the Purchase Price is to be increased, the amount of such increase with interest on such amount (the "INCREASED AMOUNT") shall be paid within ten (10) business days following the Determination Date. The interest shall be calculated at the Applicable Rate from the Closing Date through the payment date. The Increased Amount shall be paid by wire transfer of immediately available funds to an account designated in writing by Seller, and Cash Equivalents and Indebtedness shall be treated for income tax purposes as an adjustment to the Purchase Price.
(i) If the earnings of the Business denominated in currencies other before interest, taxes, depreciation and amortization ("EBITDA") for the fiscal quarter ending December 31, 2000 are less than U.S. dollars, $52,500,000 then the Applicable Exchange Rate for each such currency as of immediately before the effective time principal amount of the Closing Seller Note shall be reduced by an amount equal to 6.5 times the difference between EBITDA for such quarter and $52,500,000 and any associated interest shall be eliminated. EBITDA will be calculated from the results of operations of the Business as published publicly reported by Bloomberg Seller in the ordinary course of business, adjusted on a pro-forma basis for this purpose to (BGN New Yorki) exclude revenue and expenses associated with the EMD Business, (ii) reflect pension expense and retiree health care expenses in a manner identical to the pro-forma period for the first three (3) quarters of 2000, (iii) exclude the effect of research and development expenses associated with the Business' drug delivery systems, (iv) exclude the results of the Textile Dyes business (as well as any gain or loss or transaction costs associated with the sale of this business), shall be used to convert such amounts into U.S. dollars for purposes (v) exclude costs and expenses associated with implementation of determining Closing Net Indebtedness in connection the Textile Consolidation Project, (vi) exclude costs and expenses associated with matters that constitute Excluded Liabilities under the Agreement, and (vii) exclude any costs or expenses associated with the adjustments pursuant to this Section 2.04Business divestiture process.
Appears in 1 contract
Sources: Agreement for Sale and Purchase of Assets (Noveon Inc)
Purchase Price Adjustment. (a) Section 2.04(aWithin 75 days after the Closing Date, the Buyer will prepare and deliver to the Seller a draft balance sheet (the “Draft Closing Date Balance Sheet”) for the Company as of the Seller Disclosure Letter sets Adjustment Time (determined on a pro forma basis as though the Parties had not consummated the transactions contemplated by this Agreement) along with a statement (the “Draft Closing Statement”) setting forth certain current assets the Buyer’s calculation of (i) the Closing Cash, (ii) the Closing Indebtedness, (iii) the Transaction Expenses, (iv) the Net Working Capital, and current liabilities accounts (v) a recalculation of the Estimated Purchase Price using these recalculated numbers in place of the Estimated Closing Cash, the Estimated Closing Indebtedness, the Estimated Transaction Expenses and certain the Estimated Closing Net Working Capital. The Buyer will prepare the Draft Closing Date Balance Sheet using the accounting principlespolicies applied by the Company in preparing the Most Recent Balance Sheet and will calculate the Net Working Capital in accordance with the sample calculation set forth on Schedule 2.4(a), using the same components (i.e., line items), adjustments and methodologies and policies used in the determination of such accounts. Such accounts calculation of the BusinessEstimated Closing Net Working Capital (without introduction of new or different accounting methods, cumulativelypolicies, as of immediately before practices, procedures, classifications, judgments, or estimation methodologies). The Buyer will make available to the effective time Seller and its accountants the work papers and back-up materials used in preparing the Draft Closing Date Balance Sheet and the Draft Closing Statement. The Draft Closing Date Balance Sheet and the Draft Closing Statement will entirely disregard (x) any and all effects on the assets or liabilities of the Closing (Company as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) a result of the Seller Disclosure Lettertransactions contemplated by this Agreement or of any financing or refinancing arrangements entered into at any time by the Buyer or any other transaction entered into by the Buyer in connection with the consummation of the transactions contemplated by this Agreement, and (y) any of the principlesplans, methodologies and policies set forth therein andtransactions, or changes that the Buyer intends to initiate or make or cause to be initiated or made after the Closing with respect to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute Company or the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination business of the Modified Working Capital.Company or its assets, or any facts or circumstances that are unique or particular to the Buyer or any of its assets or liabilities. Table of Contents
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in has any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, objections to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to Draft Closing Date Balance Sheet or the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Draft Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement then it must deliver a statement describing its objections in reasonable detail (“Disagreement Notice”)to the Buyer within 30 days after receiving the Draft Closing Date Balance Sheet and the Draft Closing Statement. If The Buyer and the Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith will use reasonable efforts to resolve any such disagreementobjections themselves through good faith negotiation. If the Parties do not obtain a final resolution within 30 days after the Buyer has received the statement of objections, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon however, Ernst & Young (the parties.
(d“Independent Accountant”) If Purchaser and Seller are unable to will resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for remaining objections. The Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statementone hand, and the Accounting Arbitrator shall not make any Buyer, on the other determinationhand, will each pay its own costs and expenses incurred in this Section 2.4(b). The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs fees and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall Independent Accountant will be borne proportionately apportioned by Purchaserthe Independent Accountant to the Seller, on the one hand, and the Buyer, on the other hand, based on the extent to which the Buyer, on the one hand, or the Seller, on the other hand, is the prevailing party in proportion to the differences between the Purchase Price as determined resolution of each disputed matter. The determination made by the Accounting Arbitrator and the asserted Purchase Price Independent Accountant will be set forth in writing and will be conclusive and binding upon the Parties. The “Closing Statement and Date Balance Sheet” means the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that Draft Closing Date Balance Sheet together with any payments revisions made pursuant to this Section 2.04 shall be allocated in a manner consistent 2.4(b), and the “Closing Date Statement” means the Draft Closing Date Statement together with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments revisions made pursuant to this Section 2.04.2.4(b)
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aAs promptly as reasonably practicable, and in any event not later than forty-five (45) days after Closing, the Buyer shall cause the Companies to permit the Selling Shareholders to prepare and deliver to Buyer (such delivery, the “Post-Closing Delivery”):
(i) a consolidated balance sheet of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principlesCompanies (without giving effect to the consummation of the transactions contemplated hereby) prepared as of the close of business on the Closing Date in accordance with GAAP (it being agreed that if GAAP permits different methods of preparing any item on the Closing Date Balance Sheets, methodologies and policies the methodology used in the determination of Financial Statements with respect to such accounts. Such accounts of item shall be used with respect to such item in the Business, cumulatively, as of immediately before the effective time preparation of the Closing Date Balance Sheets) (as set forth in Section 2.05(acollectively, the “Closing Date :Balance Sheets”)), determined in accordance with Section 2.04(a;
(ii) a calculation of the Seller Disclosure Letter, and working capital of the principles, methodologies and policies set forth therein and, to Companies on a consolidated basis as of the extent not set forth therein, in accordance with U.S. GAAP, shall constitute close of business on the Closing Date (the “Modified Closing Date Working Capital”). For The Closing Date Dorking Capital shall be an amount equal to the avoidance difference between each of doubtthe Companies’ Current Assets and Current Liabilities, amounts included in the determination of Closing Net Indebtednessrespectively. If Current Assets exceed Current Liabilities, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment Date Working Capital shall be excluded from a positive number. If Current Liabilities exceed Current Assets, Closing Date Working Capital shall be a negative number, and
(iii) a calculation of Debt. Buyer shall be entitled to observe and participate in, and provide consultation with respect to, the determination preparation of the Modified Working Capital.Post-Closing Delivery
(b) If Buyer shall have thirty (30) days from the Purchase Price as finally determined in accordance with this Section 2.04 is less than date Selling Shareholders make the Estimated Purchase PricePost-Closing Delivery (such period, Seller shall pay the “Dispute Period”) to Purchaser notify the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excessSelling Shareholders, in either case by wire transfer of immediately available U.S. dollar fundswriting, within three as to whether Buyer agrees or disagrees with the Post-Closing Delivery (3such written notice, the “Dispute Notice”). During the Dispute Period, Buyer and its accountants shall be permitted to review (during regular business hours and upon reasonable prior notice) Business Days after the final determination working papers of the Purchase PriceSelling Shareholders, the Companies and (where applicable) the Selling Shareholders’ accountants relating to an account designated by the party receiving payment no later than two (2) Business Days after matters set forth in the final determination of the Purchase PricePost-Closing Delivery.
(c) As promptly as practicable (and, in any event, within ninety (90) days after If Buyer fad to deliver a Dispute Notice to the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of Selling Shareholders during the Dispute Period: (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being Date Balance Sheets as prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller Selling Shareholders shall be deemed to have accepted been correctly prepared; and (ii) the Selling Shareholders calculation of the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice Date Working Capital shall be deemed accepted by Seller to be final and correct and shall not be subject binding upon each of the Parties.
(d) If Buyer delivers a Dispute Notice to further dispute or reviewthe Selling Shareholders during the Dispute Period, Sellers and Buyer shall, for a period of thirty (30) days from the date the Dispute Notice is delivered to the Selling Shareholders (such period, the “Resolution Period”), use their respective reasonable business efforts to amicably resolve the items in dispute. Purchaser Any items so resolved by the parties shall be deemed to be final and Seller correct as so resolved and shall negotiate in good faith be binding upon each of the parties hereto.
(e) If the Selling Shareholders and Buyer are unable to resolve any such disagreementall of the items in dispute during the Resolution Period, and any resolution agreed then either Buyer or the Selling Shareholders may refer the items remaining in dispute to the Independent Accountants. Such referral shall be made in writing by Purchaser to the Independent Accountants, copies of which shall concurrently be delivered to the non-referring Party hereto. The referring Party shall furnish the Independent Accountants, at the time of such referral, with the Post-Closing Delivery and Seller the Dispute Notice. The Parties shall also furnish the Independent Accountants with such other information and documents as the Independent Accountants may reasonably request in order for them to resolve the items in dispute. The Parties shall also, within fifteen (1;) days of the date the items in dispute are referred to the Independent Accountants, provide the Independent Accountants with a written notice (a “Position Statement”) describing in reasonable detail their respective positions on the items in dispute (copies of which will concurrently be delivered to the other panes hereto). If any Party fails to timely deliver its Position Statement to the Independent Accountants, the Independent Accountants shall resolve the items in dispute solely upon the basis of the information otherwise provided to them. The Independent Accountants shall resolve all disputed items in a written determination to be delivered to each of the Parties within forty (40) days after such matter is referred to them; provided, however, that any delay in delivering such determination shall not invalidate such determination or deprive the Independent Accountants of the power and jurisdiction to resolve the items in dispute. The decision of the Independent Accountants as to the items in dispute shall be final and binding upon the partiesParties and shall not be subject to judicial review. The fees and expenses of the Independent Accountants incurred in the resolution of any items in dispute shall be determined by the Independent Accountants and set forth in their report and shall be allocated and paid one-half (1/2) by Buyer and one-half (1/2) by the Selling Shareholders.
(df) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty Within five (305) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment final determination of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items Closing Date Balance Sheets and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing StatementDate Working Capital (whether through failure of Buyer to timely deliver a Dispute Notice, agreement of the Parties, or determination of the Independent Accountants) if (i) Closing Date Working Capital is negative, Buyer shall have the right to immediately offset such negative amount dollar for dollar against sums due under the Purchase Note and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in (ii) if the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of Date Balance Sheet reflects any such disagreement determined Debt or other items in accordance non-compliance with the terms of this Agreement. Such report , Buyer shall be final and binding upon have the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion right to the differences between immediately offset such amounts against sums due under the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelyNote.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within At least three (3) Business Days after prior to the final determination Closing Date, Seller shall prepare and deliver to Buyer its good faith estimate of (i) the Net Working Capital as of the Purchase PriceClosing Date (the "Estimated Net Working Capital Amount"), to an account designated by (ii) the party receiving payment no later than two (2) Business Days after the final determination Inventories as of the Closing Date (the "Estimated Inventory Amount"), (iii) the Indebtedness of the Business to be assumed by Buyer (the "Assumed Indebtedness") as of the Closing Date (the "Estimated Assumed Indebtedness") and (iv) the Excess Amount and the Schedule of Consigned Inventory and the components of each such item prepared in accordance with GAAP, on a basis consistent with the Financial Statements and the Accounting Methodologies and, in the case of the Estimated Net Working Capital Amount and Estimated Inventory Amount, subject to Section 2.5(e). Seller's calculation of the Estimated Net Working Capital Amount and Estimated Assumed Indebtedness shall be used in determining the Estimated Cash Purchase PricePrice for purposes of Section 2.4.
(b) The Base Cash Purchase Price shall be (i) (x) increased, if the Estimated Net Working Capital Amount exceeds the Benchmark, by an amount equal to such excess, or (y) decreased, if the Benchmark exceeds the Estimated Net Working Capital Amount, by an amount equal to such excess and (ii) decreased by any amount of the Estimated Assumed Indebtedness (to the extent not included in the calculation of the Estimated Net Working Capital Amount).
(c) As promptly as practicable Within sixty (and, in any event, within ninety (9060) days after the Closing)Closing Date, Purchaser Buyer shall prepare and deliver to Seller a statement setting (the "Adjustment Statement") which sets forth Purchaser’s in reasonable detail the calculation of (i) Modified the Net Working CapitalCapital as of the Closing Date (the "Preliminary Net Working Capital Amount"), (ii) the Inventories of the Business as of the Closing Net IndebtednessDate (the "Preliminary Inventory Amount"), (iii) the Assumed Indebtedness as of the Closing Transaction Expenses Date (the "Preliminary Assumed Indebtedness"), and (iv) the Purchase Price pursuant to this Section 2.04 Excess Amount and a Schedule of Consigned Inventory as of the Closing Date (the “Closing Statement”"Preliminary Consignment Items"), which in each case, from the books and records of the Business. The Adjustment Statement shall be prepared in accordance with GAAP, on a basis consistent with the accounting principlesFinancial Statements, methodologies and policies the Accounting Methodologies and, in the case of the Preliminary Net Working Capital Amount and the Preliminary Inventory Amount, subject to Section 2.5(e). Seller agrees to cooperate with Buyer in connection with the preparation of the Adjustment Statement and related information, and shall provide to Buyer such books, records and information as may be reasonably requested by Buyer from time to time in connection with its preparation of the Adjustment Statement.
(d) The amount of Inventory as of the Closing Date set forth in Section 2.04 of the Seller Disclosure Letter (and, Adjustment Statement shall be based on the Inventory set forth in the Closing Inventory Report to the extent not set forth thereinsuch items of Inventory are covered by the Physical Inventory Count, together with changes in accordance with U.S. GAAP). The parties agree Inventory from the date of the Physical Inventory Count referred to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests in Section 2.6 below in relation to the extent relating to Closing Date and net of any required inventory reserves (with such reserves being calculated on the Business same bases as the Adjustment Statement).
(includinge) The amount of Inventories used in the calculation of the Current Assets, Estimated Net Working Capital, Preliminary Net Working Capital, Final Net Working Capital, Estimated Inventory Amount, Preliminary Inventory Amount and the Final Inventory Amount shall not exceed the Inventory Benchmark applicable for the avoidance of doubt, the Business time period in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to Date occurs.
(xf) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing StatementPreliminary Net Working Capital Amount, Preliminary Inventory Amount, the Preliminary Assumed Indebtedness or the Preliminary Consignment Items, Seller shall notify Purchaser Buyer in writing of such disagreement within sixty the thirty (6030) days after Business Day period immediately following the delivery of the Closing Adjustment Statement, which written notice shall set forth describe the specific nature of any such disagreement and provide reasonable supporting documentation for such disagreement. During the thirty (30) Business Day period of its review, Seller shall have reasonable access to any documents, schedules or work papers used in reasonable detail (“Disagreement Notice”)the preparation of the Adjustment Statement. If Seller fails agrees that any failure by it to deliver a Disagreement Notice by the notify Buyer in writing of any such disagreement prior to end of such 60-day period, Seller the thirty (30) Business Day period immediately following the delivery of the Adjustment Statement shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted an acceptance by Seller of the Adjustment Statement and shall not be subject constitute a complete waiver of any right of Seller to further dispute or review. Purchaser such Adjustment Statement and Buyer's calculation of the Preliminary Net Working Capital Amount, Preliminary Inventory Amount, the Preliminary Assumed Indebtedness and the Preliminary Consignment Items for purposes of this Agreement.
(g) Buyer and Seller shall agree to negotiate in good faith to resolve any such disagreementdisagreement regarding the determination of the Preliminary Net Working Capital Amount, Preliminary Inventory Amount, the Preliminary Assumed Indebtedness or the Preliminary Consignment Items, and any resolution of such disagreement agreed to in writing by Purchaser Buyer and Seller shall be final and binding upon the parties.
(d) parties and their successors and assigns. If Purchaser Buyer and Seller are unable to resolve any such disagreement as contemplated identified by Seller pursuant to Section 2.04(c2.5(f) within the thirty (30) days Business Day period after delivery to Buyer of written notice of such disagreement by Seller Seller, then the disputed matters shall be referred for final determination to the Settlement Accountant.
(h) Each of a Disagreement Notice, Purchaser Buyer and Seller shall jointly select provide a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any written submission of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion positions on each item in dispute within fifteen (15) days of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting ArbitratorSettlement Accountant, as provided above, then with a copy to the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firmother party. The parties Settlement Accountant shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser Buyer and Seller have not resolved their disagreement. The scope of disagreed within the disputes to be resolved by time periods and on the Accounting Arbitrator terms specified above and shall be limited to whether such calculation was done resolve the matter in accordance with the terms hereofand provisions of this Agreement, including Section 2.5(e). The Settlement Accountant shall consider only the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions written submissions provided by Buyer and Seller pursuant to this paragraph (f) and shall not conduct any independent investigation or procedures used review. The Settlement Accountant is expressly limited to prepare the Closing Statement, selection of either Seller's or Buyer's position on a disputed item or a position in between the positions of Seller or Buyer based upon written submissions of Buyer and whether there were mathematical errors Seller and it shall thus select as a resolution for each disputed matter the position of either Buyer or Seller or a position in between the calculation positions of the Closing StatementSeller or Buyer, and the Accounting Arbitrator shall Settlement Accountant may not make any other determinationimpose an alternative resolution outside those bounds. The Accounting Arbitrator Settlement Accountant shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all partiesBuyer and Seller, as promptly as practicablepracticable and in any event within forty-five (45) days after its appointment, a written report setting forth the resolution of any such disagreement each disputed matter and its determination of the Preliminary Net Working Capital Amount, Preliminary Inventory Amount, the Preliminary Assumed Indebtedness and/or the Preliminary Consignment Items determined in accordance with the terms of this Agreement. Such report shall be final final, non-appealable and binding upon the parties, absent manifest errorparties to the fullest extent permitted by Applicable Law and may be enforced in any court having competent jurisdiction. The forty-five (45) day period for delivering the written report may be extended by the mutual written consent of the parties or for good cause shown by the Settlement Accountant at its sole discretion. The fees, expenses and costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 Settlement Accountant shall be borne one-half by Purchaser, on the one hand, Buyer and one-half by Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(ei) Purchaser and (i)
(a) If no dispute notice has been timely delivered by Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c2.5(f).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each Preliminary Net Working Capital Amount, as originally submitted by Buyer, or (b) if a dispute notice has been timely delivered by Seller pursuant to Section 2.5(f), the Preliminary Net Working Capital Amount, as determined pursuant to the resolution of such currency as of immediately before the effective time of the Closing as published by Bloomberg dispute in accordance with Section 2.5(g) or (BGN New Yorkh), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing the "Final Net Indebtedness in connection with the adjustments Working Capital Amount", (ii) (a) if no dispute notice has been timely delivered by Seller pursuant to this Section 2.042.5(f), the Preliminary Inventory Amount, as originally submitted by Buyer, or (b) if a dispute notice has been timely delivered by Seller pursuant to Section 2.5(f), the Preliminary Inventory Amount, as determined pursuant to the resolution of such dispute in accordance with Section 2.5(g) or (h), shall be the "Final Inventory Amount", (iii) (a) if no dispute notice has been timely delivered by Seller pursuant to Section 2.5(f), the Preliminary Assumed Indebtedness, as originally submitted by Buyer, or (b) if a dispute notice has been timely delivered by Seller pursuant to Section 2.5(f), the Preliminary Assumed Indebtedness, as determined pursuant to the resolution of such dispute in accordance with Section 2.5(g) or (h), shall be the "Final Assumed Indebtedness", and (iv) (a) if no dispute notice has been timely delivered by Seller pursuant to Section 2.5(f), the Preliminary Consignment Items, as originally submitted by Buyer, or (b) if a dispute notice has been timely delivered by Seller pursuant to Section 2.5(f), the Preliminary Consignment Items, as determined pursuant to resolution of such dispute in accordance with Section 2.5(g) or (h), shall be the "Final Consignment Items".
Appears in 1 contract
Sources: Purchase and Sale Agreement (International Paper Co /New/)
Purchase Price Adjustment. (ai) Section 2.04(aWithin five (5) Business Days following the Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Inventory Statement”) setting forth Seller’s determination of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts value of the Business, cumulatively, Inventory transferred to Buyer as of immediately before the effective time of the Closing (as set forth in Section 2.05(a))of 11:59 P.M., determined in accordance with Section 2.04(alocal time, on the Closing Date) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing StatementInventory”), which shall be prepared in accordance Seller’s determination of Prepaid Inventory transferred to Buyer as of the Closing (as of 11:59 P.M., local time, on the Closing Date) and a calculation of the amount, if any, payable pursuant to clause (g) of this Section 1.3. In connection with the accounting principles, methodologies and policies set forth in Section 2.04 preparation of the Seller Disclosure Letter Inventory Statement, Buyer shall (andA) assist, and shall cause its Affiliates to assist, Seller, its accountants, advisors and other representatives in its preparation of the extent not set forth thereinInventory Statement and (B) afford to Seller, in accordance with U.S. GAAP). The parties agree to provide each its accountants, advisors and other and their respective Representatives representatives, reasonable access, access during normal business hours to the personnel, properties, books and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests records of the Business to the extent relating relevant to the Business preparation of the Inventory Statement (including, for the avoidance including any taking and preparing with Buyer’s participation of doubtphysical counts of Inventory). For purposes of this Section 1.3, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination value of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails Inventory transferred to deliver a Disagreement Notice by the end of such 60-day period, Seller shall Buyer will be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned price for each Product and other type or item of Inventory as set forth on Schedule 1.3 to such item this Agreement shall include only Inventory that (A) has been approved and released by Seller or such applicable Selling Affiliate appointed qualified person in the Disagreement Notice and compliance with applicable Laws, (B) has an unexpired shelf life of not less than twelve (12) months, or such lesser period as may be agreed by Purchaser in the Closing Statement. Purchaser Buyer and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all partieson a Product-by-Product basis, as promptly as practicable(C) has not been damaged, a written report setting forth the resolution recalled and/or incorrectly packaged or labeled and (D) consists of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final active pharmaceutical ingredients, spare parts, raw materials, containers, packaging and binding upon the parties, absent manifest error. The fees, costs packaging supplies and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelywork-in-process.
(eii) Purchaser For the purposes of clarification only, Seller is retaining all Pre-Closing Accounts Payable and Seller agree that any payments made Pre-Closing Accounts Receivable and the only Purchase Price adjustment after the Closing will be the adjustment of the Inventory and Prepaid Inventory pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c)1.3.
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aThe Purchase Price shall be subject to reduction after the Closing Date (i) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of amount, if any, by which Closing Indebtedness exceeds $4,236,000 (the Business"Closing Indebtedness Overage") and (ii) in the amount, cumulativelyif any, as of immediately before by which Closing Current Liabilities less Closing Current Assets exceeds $745,000 (the effective time of the Closing ("Working Capital Deficiency"), determined as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capitalthis Section.
(b) If the The Purchase Price as finally determined in accordance with this Section 2.04 shall be subject to increase after the Closing Date by an amount equal to (i) the amount, if any, by which Closing Indebtedness is less than $4,236,000 (the Estimated Purchase Price"Closing Indebtedness Deficiency") and (ii) the amount, Seller shall pay to Purchaser if any, by which Closing Current Assets less Closing Current Liabilities (the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 "Working Capital Excess") exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price$600,000.
(c) As promptly as practicable (and, in any event, within ninety (90) days after Promptly following the Closing), Purchaser FFPE Holding shall prepare prepare, and deliver cause the New Company's certified public accountants to Seller a statement setting forth Purchaser’s calculation audit, consolidated financial statements of (i) Modified Working Capital, (ii) the New Company as of the Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be Date prepared in accordance with GAAP and with such adjustments and reserves as may be required by Section 4.10 (the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP"Closing Financial Statements"). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to On the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination basis of the Closing StatementFinancial Statements, Seller the New Company's accountants shall notify compute Closing Indebtedness, Closing Current Assets, Closing Current Liabilities and Closing Current Indebtedness. In making their computations, the accountants shall not consider Current Assets to include cash in the amount of any unpaid non-working capital items. The New Company shall deliver the Closing Financial Statements and the computations to the Purchaser in writing of such disagreement within sixty (60) 60 days after the Closing Date. If within thirty days following delivery of the Closing StatementFinancial Statements and the computations, which written the Purchaser has not given FFPE Holding notice shall set forth any of its objection thereto (such disagreement in reasonable detail (“Disagreement Notice”notice to contain a statement of the basis of the Purchaser's objection). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted then the Closing Statement delivered by Purchaser. Matters Indebtedness, Closing Current Assets, Closing Current Liabilities and Closing Current Indebtedness included in the calculations in computation shall be used to determine the Closing Statement to which Seller does not object in Indebtedness Overage, Closing Indebtedness Deficiency, the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreementWorking Capital Deficiency, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the partiesWorking Capital Excess, if any.
(d) If the Purchaser gives such notice of objection, and Seller are unable the parties fail to resolve any disagreement as contemplated by Section 2.04(c) such objection within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided abovedays, then the Accounting Arbitrator shall issues in dispute will be appointedsubmitted to a "Big Five" accounting firm (the "Accountants") for resolution. If issues are submitted to the Accountants for resolution, at (i) each party will furnish to the Accountants such work papers and other documents and information relating to the disputed issues as the Accountants may request of either Purchaser or Sellerand are reasonably available to that party, and will be afforded the opportunity to present to the Accountants any material relating to the determination and to discuss the determination with the Accountants; (ii) the determination by the American Arbitration AssociationAccountants, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts as set forth in a notice delivered to both parties by the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice Accountants, will be binding and conclusive on the parties; and (iii) the Purchaser and Seller have not resolved their disagreement. The scope FFPE Holding will each bear 50% of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation fees of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established Accountants for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelydetermination.
(e) If as finally determined either the Closing Indebtedness Overage is greater than zero or the Working Capital Deficiency is greater than zero, then on the tenth business day following the final determination of such amounts, FFPE Holding shall pay to the Purchaser an amount equal to the Closing Indebtedness Overage and Seller agree that any the Working Capital Deficiency, as the case may be. All payments will be made together with interest at 8% compounded daily beginning on the Closing Date and ending on the date of payment. Payment must be made in immediately available funds. At FFPE Holding's option, payment may be made by either check, wire transfer, or disbursement from the Adjustment Escrow pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed Adjustment Payment Instructions to pursuant to Section 2.03(c)the Adjustment Escrow Holder.
(f) With respect to Cash and Cash Equivalents and If as finally determined either the Closing Indebtedness Deficiency is greater than zero or the Working Capital Excess is greater than zero, then on the tenth business day following the final determination of the Business denominated in currencies other than U.S. dollarssuch amounts, the Applicable Exchange Rate for each such currency as of immediately before the effective time of Purchaser shall pay to FFPE Holding an amount equal to the Closing Indebtedness Deficiency and the Working Capital Excess, as published the case may be. All payments will be made together with interest at 8% compounded daily beginning on the Closing Date and ending on the date of payment. Payment must be made in immediately available funds. At the Purchaser's option, payment may be made by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04either check or wire transfer.
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Sources: LLC Membership Interest Purchase Agreement (Sizzler International Inc)
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within At least three (3) Business Days after prior to the final determination Closing Date, the Company shall deliver to Parent its good faith estimate of the Purchase Pricecalculation of Net Working Capital (the “Estimated Net Working Capital”), to an account designated by Selling Expenses, and, in accordance with Section 6.17, the party receiving payment no later than two Facilities Renovation Balance (2) Business Days after the final determination Company’s good faith estimate of the Purchase PriceFacilities Renovation Balance and Selling Expenses shall be referred to herein as the “Estimated Adjustment Items”).
(cb) As promptly as practicable (andpracticable, in any event, within but no later than ninety (90) days after the Closing)Closing Date, Purchaser Parent shall prepare and deliver deliver, or shall cause to Seller be delivered, to the Securityholder Representative a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 certificate (the “Closing StatementCertificate”), which setting forth a good faith calculation of Net Working Capital, Selling Expenses, the Facilities Renovation Balance, the Net Adjustment Amount and the amount of any cash or cash equivalents of the Company not distributed or used to retire any portion of Company Debt (“Excess Cash”), in each case as of the Closing, along with reasonable supporting or underlying documentation used in the preparation of the Closing Certificate. Parent shall deliver and furnish the Securityholder Representative any additional supporting or underlying documentation pertinent to the Closing Certificate as may be reasonably requested by the Securityholder Representative. The Closing Certificate is to be prepared in accordance with the accounting principlesAccounting Principles with respect to the calculation of Net Working Capital and Excess Cash.
(c) If the Securityholder Representative delivers written notice (the “Disputed Items Notice”) to Parent within thirty (30) days following receipt by the Securityholder Representative of the Closing Certificate, methodologies and policies stating that the Securityholder Representative objects to any of the amounts set forth in Section 2.04 the Closing Certificate and specifying the nature of the Seller Disclosure Letter dispute and the basis therefor, then (i) the Securityholder Representative and Parent shall in good faith attempt to resolve any such dispute and, if they so resolve all disputes, the Closing Certificate (and the amount or computation of Net Working Capital, Selling Expenses, Facilities Renovation Balance, Excess Cash and the Net Adjustment Amount indicated therein), as amended to the extent not set forth thereinnecessary to reflect the resolution of the dispute, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to conclusive and binding on all parties, (xii) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject only those matters that are specified in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Disputed Items Notice by the end of such 60-day period, Seller shall be deemed to have accepted be in dispute, and all other matters shall be conclusive and binding on all parties, (iii) in the event that the Net Adjustment Amount shown on the Closing Statement delivered Certificate prepared by Purchaser. Matters included Parent is positive, within two (2) Business Days following the Securityholder Representative’s receipt of the Closing Certificate, Parent and the Securityholder Representative shall instruct the Escrow Agent to release any funds in the calculations Working Capital Escrow Account, including interest earned thereon, to the Securityholders in accordance with their Pro Rata Percentages, and (iv) in the event that the Net Adjustment Amount shown on the Closing Certificate prepared by Parent is negative, within two (2) Business Days following the Securityholder Representative’s receipt of the Closing Certificate, Parent and the Securityholder Representative shall instruct the Escrow Agent to release any funds in the Working Capital Escrow Account in excess of the absolute value of the Net Adjustment Amount to the Securityholders in accordance with their Pro Rata Percentages. The Securityholder Representative shall not dispute the accounting principles and adjustments used in preparing the Closing Certificate with respect to Net Working Capital if such principles and adjustments are consistent with the Accounting Principles. If the Securityholder Representative does not deliver a Disputed Items Notice to Parent within thirty (30) days following receipt by the Securityholder Representative of the Closing Certificate, the computation of Net Working Capital, Selling Expenses, Facilities Renovation Balance, Excess Cash and the corresponding Net Adjustment Amount specified in the Closing Statement to which Seller does not object in the Disagreement Notice Certificate shall be deemed accepted by Seller conclusively presumed to be true and correct in all respects and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the all parties.
(d) If Purchaser the Securityholder Representative and Seller Parent, notwithstanding such good faith effort, are unable to resolve any disagreement agree upon all of the computations contained in the Closing Certificate as contemplated by Section 2.04(c) identified in the Disputed Items Notice within thirty (30) days after delivery by Seller of a Disagreement the Disputed Items Notice, Purchaser then the Securityholder Representative and Seller Parent jointly shall jointly select a mutually acceptable nationally recognized third party accounting firmengage the Houston, Texas office of Deloitte & Touche LLP (the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser“Accounting Firm”), to resolve any items in the Disputed Items Notice that have not been resolved and to make a determination of such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firmamounts. The parties shall instruct request that the determination of the Accounting Arbitrator Firm shall be made within thirty (30) days after its selection pursuant to consider procedures mutually agreeable to by Parent and the Securityholder Representative. The Accounting Firm shall resolve only those the items and amounts set forth in the Closing Statement Disputed Items Notice that are still in dispute and make a determination of the computation of the relevant amounts, which shall be conclusive and binding on all parties. In resolving any disputed item, the Accounting Firm (i) shall be bound by the provisions of this Section 2.8 and any other relevant provisions of this Agreement and (ii) may not assign a value to any item greater than the greatest value for such items claimed by either Parent or the Securityholder Representative or less than the smallest value of such items claimed by either Parent or the Securityholder Representative.
(e) The fees, costs and expenses (“Accounting Firm Costs”) of the Accounting Firm’s review and determination as set forth in Section 2.8(d) above shall be allocated based on the inverse of the percentage its determination (before such allocation) bears to which Purchaser has disagreed the amount of the Net Adjustment Amount in dispute as originally submitted to the Accounting Firm. For example, should the amount of the Net Adjustment Amount in dispute total in amount to $1,000 and the Accounting Firm awards $600 in favor of the Securityholder Representative’s position, 60% of the costs of its review would be borne by Parent, and 40% of the costs of its review would be paid out of the Working Capital Escrow Account, as provided below. Any Accounting Firm Costs in respect of the Securityholder Representative’s position pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope this Section 2.8(e) shall be paid upon the final determination of the disputes Net Adjustment Amount by release of funds to be resolved by Parent from the Accounting Arbitrator Working Capital Escrow Account to the extent there are sufficient funds in the Working Capital Escrow Account; provided, however, that to the extent there are insufficient funds in the Working Capital Escrow Account, such payment shall be limited by release of all funds to whether such calculation was done Parent from the Working Capital Escrow Account and the remaining funds (or, if Backstop Securities have been issued, by release of Backstop Securities and/or funds from the Indemnity Escrow Account in accordance with the terms hereofOrder of Priority) shall be released to Parent from the Indemnity Escrow Account, in each case, by the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined Escrow Agent in accordance with the terms of this the Escrow Agreement. Such report shall be final and binding upon During the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined review by the Accounting Arbitrator Firm, Parent, the Securityholder Representative and the asserted Purchase Price set forth in Surviving Corporation will each make available to the Closing Statement Accounting Firm interviews with such individuals, and such information, books and records and work papers, as may be reasonably required by the Disagreement NoticeAccounting Firm to fulfill its obligations under Section 2.8(d); provided, respectively.
(e) Purchaser and Seller agree however, that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness the accountants of the Business denominated Securityholder Representative, Parent or the Surviving Corporation shall not be obliged to make any work papers available to the Accounting Firm unless and until such firm has signed a customary agreement relating to such access to work papers in currencies other than U.S. dollars, the Applicable Exchange Rate for each form and substance reasonably acceptable to such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04accountants.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aNot less than five Business Days prior to the anticipated Closing Date, the Company shall provide to Parent a written statement setting forth the Company’s good faith estimate of (i) Estimated Closing Working Capital, (ii) the Aggregate Option Exercise Price, (iii) Estimated Closing Cash, (iv) the Closing Debt, including the ABL Amount, the Debenture Amount and the Holdco Note Amount and (v) the Transaction Expenses (collectively, the “Estimated Closing Statement”). The Estimated Closing Statement shall be accompanied by (A) the most recently available final unaudited trial balance as of a month-end preceding the Closing, (B) a roll-forward of account balances from the final unaudited trial balance required by clause (A) of this Section 2.15(a) to the Seller Disclosure Letter date of the Estimated Closing Statement, (C) such relevant account reconciliations as Parent shall have reasonably requested at least seven Business Days prior to the anticipated Closing Date, and (D) a notice (the “Closing Notice”) that sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the Company’s determination of the Aggregate Purchase Price and the Per Share Merger Consideration as of such accountsdate, and the accounts to which Parent shall transfer funds pursuant to Sections 2.14(a), (b) and (c). Such accounts During such five Business Day period, the Company shall provide to Parent, on reasonable advance notice and during regular business hours, reasonable access to accounting representatives of the Business, cumulatively, as of immediately before the effective time of the Company. The Estimated Closing (as set forth in Section 2.05(a)), determined Statement shall be prepared in accordance with Section 2.04(a) of the Seller Disclosure Letterprinciples set forth on Schedule II to this Agreement, and the principles, methodologies and policies set forth therein and, to the extent not set forth thereinon Schedule II, in accordance with U.S. GAAP, shall constitute applied in a manner consistent with the principles, policies and methodologies used by the Company in the preparation of the Audited Financial Statements for the fiscal year ended December 31, 2012 (collectively, the “Modified Working CapitalBalance Sheet Principles”). For Following delivery to Parent of the avoidance of doubtEstimated Closing Statement and prior to the Closing Date, amounts included the Company shall consider in good faith any significant errors asserted by Parent prior to the Closing Date in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination calculation of the Modified Working Capitalamounts contained in the Estimated Closing Statement and the Closing Notice and, if it is in agreement with any such asserted errors, the Company shall appropriately adjust the amounts in the Estimated Closing Statement and the Closing Notice to correct such errors.
(b) If As promptly as practicable, but in any case no later than 60 days after the Purchase Price as finally determined Closing Date, Parent shall cause to be prepared in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay Balance Sheet Principles and delivered to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller Sellers a closing statement setting forth PurchaserParent’s calculation of Closing Working Capital and Closing Cash, and containing an unaudited consolidated balance sheet of the Company and its Subsidiaries as of the close of business on the day immediately preceding the Closing Date (iwithout giving effect to the transactions contemplated by the Transaction Agreements) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance .
(c) If the Sellers disagree with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations Parent’s calculation of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser Closing Working Capital or Seller 31 may be subject in discharging their obligations Closing Cash delivered pursuant to Section 2.15(b), the immediately preceding sentenceSellers may, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination within 45 days after receipt of the Closing StatementNotice, Seller shall notify Purchaser in writing deliver a notice to Parent providing Table of Contents reasonable detail of the reason for any disagreement and setting forth the Sellers’ calculation of such amount. Any such notice of disagreement within sixty (60) days after delivery shall specify all items or amounts with which the Sellers disagree, and the parties shall be deemed to have agreed with all other items and amounts contained in the Closing Statement and the calculation of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”Working Capital and Closing Cash delivered pursuant to Section 2.15(b). If Seller fails to the Sellers do not deliver a Disagreement Notice any such notice by such date, the end of such 60-day period, Seller Sellers shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in and the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller contained therein shall be final and binding upon on the partiesSellers and Parent. The Sellers and Parent shall cause their respective representatives to cooperate and assist in the preparation of the Closing Statement and the calculation of the Closing Working Capital and Closing Cash, and in the conduct of the review referred to in this Section 2.15, including making available, to the extent necessary, books, records, work papers and appropriate personnel. Without limiting the foregoing, the Sellers and their representatives (including accountants) shall have reasonable access to the books and records of the Company, the personnel of, and work papers prepared by, Parent or Parent’s accountants to the extent that they relate to the Closing Statement and to such historical financial information (to the extent in Parent’s possession) relating to the Closing Statement as the Sellers may reasonably request for the purpose of reviewing the Closing Statement and to prepare a notice of disagreement.
(d) If Purchaser a notice of disagreement is delivered in accordance with Section 2.15(c), the Sellers and Seller Parent shall, during the 30 days following such delivery, use their reasonable best efforts to reach agreement on the disputed items or amounts in order to determine, as may be required, the amount of the Closing Working Capital and Closing Cash. If, during such period, the Sellers and Parent are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller reach such agreement, they shall promptly thereafter cause the Referee to review the relevant portions of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firmthis Agreement, the retention Closing Statement and the disputed items or amounts for the purpose of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller calculating Closing Working Capital and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”)Closing Cash. In making such calculation, the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator Referee shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those remaining items and or amounts set forth in the Closing Statement and Parent’s calculation of Closing Working Capital and Closing Cash as to which Purchaser has disagreed pursuant the Sellers still dispute at the time of such review and shall use the Balance Sheet Principles. Parent and the Sellers shall have the opportunity to a Disagreement Notice and Purchaser and Seller have not resolved provide written submissions regarding their disagreementpositions on the disputed matters, which written submissions shall be provided to the Referee, if at all, no later than 15 Business Days after the date of referral of the disputed matters to the Referee. The scope determination of the disputes to be resolved by the Accounting Arbitrator Referee shall be limited based solely on the written submissions by Parent and the Sellers and their respective representatives. The Referee shall deliver to whether such calculation was done Parent and the Sellers, as promptly as practicable (but in accordance with no event later than 30 Business Days from the terms hereofdate of engagement of the Referee), the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the a report setting forth its calculation of the Closing StatementWorking Capital and Closing Cash, and as applicable; provided, that the Accounting Arbitrator shall Referee may not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant assign a value to any independent review. In resolving any such disagreement, item greater than the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established greatest value for such disputed item as determined claimed by reference to either Parent or the Sellers or less than the smallest value assigned to for such item claimed by Seller in either Parent or the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this AgreementSellers. Such report shall be final and binding upon on, and non-appealable by, Parent and the parties, absent manifest errorSellers. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 Referee shall be borne in the same proportion that the aggregate dollar amount of such remaining disputed items so submitted to the Referee that are unsuccessfully disputed by PurchaserParent, on the one hand, and Sellerthe Sellers, on the other hand, in proportion to the differences between the Purchase Price as finally determined by the Accounting Arbitrator and Referee, bears to the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelytotal dollar amount of such remaining disputed items so submitted.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Sources: Merger Agreement (Convergys Corp)
Purchase Price Adjustment. (a) Section 2.04(aThree (3) Business Days prior to the Closing Date, the Company delivered to Buyer a written statement (the “Estimated Closing Statement”), setting forth in reasonable detail and accompanied by reasonably detailed backup documentation, the Company’s good faith estimate of (i) the Closing Balance Sheet Changes (“Estimated Closing Balance Sheet Changes”), and (ii) the Unpaid Transaction Expenses (the “Estimated Transaction Expenses”). Notwithstanding any input Buyer may have with respect to the amounts reflected in such written statement, no position or agreement made or taken by any of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used parties with respect to the amounts reflected in such statement and/or such accompanying calculations shall preclude the determination of such accounts. Such accounts of Buyer from taking any other position or making any other argument with respect to the Business, cumulativelyAdjustment Statement and/or accompanying calculations, as of immediately before the effective time of the applicable. The Estimated Closing (as set forth in Section 2.05(a)), determined Statement is to be prepared in accordance with Section 2.04(a) GAAP, as consistently applied in the preparation of the Seller Disclosure Letter, Financial Statements (the “Accounting Principles”) and the principles, methodologies and policies applicable definitions set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capitalherein.
(b) If Within ninety (90) days after the Purchase Price as finally determined Closing Date, Buyer shall cause to be prepared and delivered to Sellers’ Representative, a written statement (the “Adjustment Statement”) setting forth in accordance with this Section 2.04 is less than the Estimated Purchase Pricereasonable detail and accompanied by reasonably detailed backup documentation, Seller shall pay to Purchaser the total amount Buyer’s calculation of such deficit(i) Closing Balance Sheet Changes, and if (ii) Unpaid Transaction Expenses (collectively, the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price“Proposed Amounts”).
(c) The Adjustment Statement (and the computations of the Proposed Amounts indicated thereon) delivered by Buyer to Sellers’ Representative shall be deemed to be conclusive and binding upon the parties unless Sellers’ Representative, within thirty (30) days after delivery to Sellers’ Representative of the Adjustment Statement, notifies Buyer in writing that Sellers dispute in good faith the calculation of specific line items set forth therein, specifying the nature of each individual disputed line item calculation and the basis therefor in reasonable detail. Any line items not disputed by the Sellers’ Representative within thirty (30) days after delivery to Sellers’ Representative of the Adjustment Statement shall be final and binding on the parties. The parties shall in good faith attempt to resolve any dispute and, if the parties so resolve all disputes, the Adjustment Statement (and the computations of Proposed Amounts indicated thereon), as amended to the extent necessary to reflect the resolution of the dispute, shall be deemed to be conclusive and binding on the parties. If the parties do not reach agreement in resolving the dispute within thirty (30) days after such notice is given by Sellers’ Representative to Buyer pursuant to this Section 2.4(c), the parties shall submit the dispute to a nationally recognized independent accounting firm which is mutually agreeable to Sellers’ Representative, on behalf of the Sellers, and Buyer and which has not been engaged by, or provided services to, Sellers or the Company within the two-year period preceding the Closing (the “Independent Accountant”) for resolution; provided, that if the parties are unable to agree on the selection of the Independent Accountant, Sellers’ Representative, on the one hand, and Buyer, on the other hand, shall each select a nationally recognized independent accounting firm, which together shall appoint a third nationally recognized independent accounting firm to serve as the Independent Accountant, and such appointment shall be conclusive and binding on the parties. As promptly as practicable thereafter (and, in any event, within ninety fifteen (9015) days after the ClosingIndependent Accountant’s engagement), Purchaser Sellers’ Representative shall prepare and deliver submit any unresolved disputes to Seller the Independent Accountant in writing (with a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant copy to this Section 2.04 (the “Closing Statement”Buyer), supported by any documents and arguments upon which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter it relies. As promptly as practicable thereafter (and, in any event, within fifteen (15) days following the Sellers’ Representative submission of such unresolved disputes), Buyer shall submit its response to the extent not set forth thereinIndependent Accountant (with a copy to the Sellers’ Representative) supported by any documents and arguments upon which it relies. As soon as practicable thereafter, in accordance with U.S. GAAP)the Independent Accountant shall render a decision based solely on the respective written presentations of Buyer and the Sellers’ Representative. The parties agree to provide each other Independent Accountant shall act solely as an expert in resolving any disputed item and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and not as an arbitrator. In resolving any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubtdisputed item, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to Independent Accountant (x) violate any obligation shall be bound by the provisions of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, this Section 2.4 and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver may not assign a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant value to any independent review. In resolving any such disagreement, item greater than the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established greatest value for such disputed item as determined items claimed by reference to either Buyer or Sellers’ Representative or less than the smallest value assigned to for such item items claimed by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest erroreither Buyer or Sellers’ Representative. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 Independent Accountant shall be allocated to and borne by PurchaserBuyer, on the one hand, and Sellerthe Sellers’ Representative, on behalf of the Sellers, on the other hand, in proportion based on the inverse of the percentage that the Independent Accountant’s determination (before such allocation) bears to the differences between total amount of the Purchase Price total items in dispute as determined originally submitted to the Independent Accountant. For example, should the items in dispute total in amount to $1,000 and the Independent Accountant awards $600 in favor of Sellers position, 60% of the costs of its review would be borne by Buyer and 40% of the costs would be borne by the Accounting Arbitrator Sellers’ Representative, on behalf of the Sellers. Subject to Section 7.2(a)(iii), the final, binding and conclusive calculation of Closing Balance Sheet Changes and Unpaid Transaction Expenses, based either upon agreement or deemed agreement by Buyer and Sellers or the asserted Purchase Price set forth written report delivered by the Independent Accountant, in the Closing Statement and the Disagreement Noticeeach case, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to in accordance with this Section 2.04 shall 2.4(c), will be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
the “Final Closing Balance Sheet Changes” or “Final Transaction Expenses” as the case may be (f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollarscollectively, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York“Final Amounts”), shall be used to convert such amounts into U.S. dollars for all purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04Agreement.
Appears in 1 contract
Sources: Stock Purchase Agreement (Staffing 360 Solutions, Inc.)
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within At least three (3) Business Days after prior to the final determination Closing Date, Seller shall cause to be prepared and delivered to Buyer a statement (the “Estimated Closing Statement”) setting forth, with reasonable supporting detail: (i) a balance sheet of the Company Group, on a consolidated basis, estimated in good faith as of the Closing Time (the “Estimated Closing Date Balance Sheet”); (ii) based thereon a good faith estimate of (A) the Closing Date Cash, (B) the Closing Date Indebtedness, (C) the Closing Date Working Capital; and (iii) based thereon, a good faith estimate of the Working Capital Adjustment (the Purchase Price plus such estimate of the Closing Date Cash, minus such estimate of the Closing Date Indebtedness, and plus or minus, as the case may be, such estimate of the Working Capital Adjustment, if any, the “Estimated Purchase Price”). The Closing Date Balance Sheet shall be prepared in a format identical, in all material respects, to an account designated by the party receiving payment no later than two (2) Business Days after Balance Sheet and in a manner using the final determination accounting procedures, methodologies, tests and approaches as those described in Section 2.5 of the Purchase PriceDisclosure Schedule. Buyer shall be entitled to review and comment upon (prior to its delivery) the Estimated Closing Date Balance Sheet if the amount of the estimated Closing Date Working Capital is in excess of $9,250,000.
(cb) As promptly as practicable Within sixty (and, in any event, within ninety (9060) days after the Closing)Closing Date, Purchaser Buyer shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”) setting forth, with reasonable supporting detail: (i) a balance sheet of the Company Group, on a consolidated basis, as of the Closing Time (the “Closing Date Balance Sheet”); (ii) based thereon, which its determination of the Closing Date Cash, the Closing Date Indebtedness, and the Closing Date Working Capital; and (iii) based thereon, its calculation of the Working Capital Adjustment. The Closing Date Balance Sheet shall be prepared in accordance with the accounting principlesa format identical, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (andall material respects, to the extent not set forth thereinBalance Sheet and in a manner using the accounting procedures, methodologies, tests and approaches as those described in accordance Section 2.5 of the Disclosure Schedule.
(c) If Seller has any objections to the Closing Date Balance Sheet or the Closing Statement as prepared by Buyer, Seller must, within thirty (30) days after its receipt thereof, give written notice (the “Notice”) to Buyer specifying in reasonable detail such objections and indicating each disputed item or amount and the basis for Seller’s disagreement therewith. During the period beginning upon Seller’s receipt of the Closing Statement and ending on the date on which the Closing Date Balance Sheet and the Closing Statement are determined to be final pursuant to this Section 2.5, Seller and its accountants and representatives shall be permitted to discuss with U.S. GAAP). The parties agree to provide each other Buyer and their respective Representatives its employees, accountants and representatives the proposed Closing Date Balance Sheet and the Closing Statement, and shall have access upon reasonable access, notice at all reasonable times during normal business hours and upon reasonable notice, to their respective books, records, the work papers and personnel (supporting records of Buyer so as to allow Seller and any other information which either party reasonably requests its accountants and representatives to the extent become informed concerning all matters relating to the Business (including, for preparation of the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which Closing Date Balance Sheet and the Closing Statement is and the accounting procedures, methodologies, tests and approaches being prepared or evaluated and any disputes used in connection therewith; provided, that may arise under this Section 2.04 are being resolved, in each case such access shall be in a manner that does not unreasonably interfere unreasonably with the normal business operations of such party’s businesses. Notwithstanding Buyer or any member of the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable LawsCompany Group. If Seller disagrees with does not deliver the Notice within such thirty (30) day period, Buyer’s determination of the Closing StatementDate Cash, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing StatementDate Indebtedness, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day periodClosing Date Working Capital, Seller shall be deemed to have accepted the Working Capital Adjustment, the Closing Date Balance Sheet and the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by final, binding and conclusive on Seller and shall not be subject Buyer. With respect to further dispute or review. Purchaser any disputed amounts, Buyer and Seller shall negotiate in good faith during the thirty (30) day period (the “Resolution Period”) after the date of Buyer’s receipt of the Notice to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) disputes. If Purchaser Buyer and Seller are unable to resolve all such disputes within the Resolution Period, then within ten (10) Business Days after the expiration of the Resolution Period, all disputes shall be submitted for arbitration to Deloitte or any disagreement as contemplated by Section 2.04(c) other nationally or regionally recognized accounting firm acceptable to Seller and Buyer (the “Accountant”), who shall be engaged to provide a final and conclusive resolution of all unresolved disputes within thirty (30) days Business Days after delivery by such engagement. In selecting the Accountant for purposes of this Agreement, Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present Buyer hereby waive any conflict or potential future auditor independence problems conflict arising from any services performed by such firm for Seller, Purchaser Buyer, the Companies or a Company Group Subsidiary or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firmAffiliates. The parties Accountant shall instruct the Accounting Arbitrator act as an arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereofdetermine, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, the presentations and supporting material provided by Purchaser Buyer and Seller and not pursuant to any by independent review, only those issues that remain in dispute. In resolving any such disagreementThe determination of the Accountant shall be final, binding and conclusive on Seller and Buyer. Each of Buyer and Seller agrees to execute, if requested by the Accounting Arbitrator may only select Accountant, an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice engagement letter containing reasonable and by Purchaser in the Closing Statementcustomary terms. Purchaser Buyer and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, each pay their own costs and expenses of the Accounting Arbitrator arising in connection with incurred under this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively2.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing No later than five (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (35) Business Days after prior to the final determination of the Purchase PriceClosing Date, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser Parent shall prepare and deliver to Seller the Acquiror an estimated unaudited balance sheet on a consolidated basis of the Company Group Entities as of the Closing Date, prior to giving effect to the Pre-Closing Dividend, but after giving effect to the Parent Restructuring Transactions, together with reasonable supporting documentation, and a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”) executed on behalf of Parent by a duly authorized executive officer of Parent, collectively setting forth Parent’s good faith estimate of (i) the Closing Tangible Book Value (the “Estimated Tangible Book Value”), which (ii) the Pre-Closing Dividend Amount (if any) (the “Estimated Pre-Closing Dividend Amount”), and (iii) the Excess Tangible Book Value (if any) (the “Estimated Excess Tangible Book Value”), (iv) the Deferred Payment Amount (if any) (the “Estimated Deferred Payment Amount”), (v) the Loss Reserves (the “Estimated Loss Reserves”) and (vi) the Estimated Closing Consideration and Closing Cash Consideration resulting therefrom, each as calculated as of the Closing Date, and together with reasonable supporting documentation. The Closing Statement shall be prepared subject to the review of and reasonable comment of the Acquiror, which Parent shall consider in accordance with good faith.
(b) Within one hundred twenty (120) days following the accounting principlesClosing Date, methodologies the Acquiror shall prepare and policies deliver to Parent, in the same format as the Closing Statement, each as calculated as of the Closing Date, the following (collectively, the “Preliminary Statement”):
(i) a calculation by the Acquiror of the amount of the Pre-Closing Dividend (if any) (the “Preliminary Pre-Closing Dividend Amount”);
(ii) a calculation by the Acquiror of the Closing Tangible Book Value determined in good faith (the “Preliminary Tangible Book Value”);
(iii) a calculation by the Acquiror of the Excess Tangible Book Value (the “Preliminary Excess Tangible Book Value”), and the resulting Deferred Payment Amount (if any) (the “Preliminary Deferred Payment Amount”); and
(iv) a calculation by the Acquiror of the Loss Reserves (the “Preliminary Loss Reserves”).
(c) Parent shall have forty-five (45) days following receipt of the Preliminary Statement to review the calculations of the Preliminary Pre-Closing Dividend Amount, the Preliminary Deferred Payment Amount, the Preliminary Tangible Book Value, the Preliminary Excess Tangible Book Value and the Preliminary Loss Reserves, and to notify the Acquiror in writing if Parent disputes any aspect of the Preliminary Pre-Closing Dividend Amount, the Preliminary Deferred Payment Amount, the Preliminary Tangible Book Value, the Preliminary Excess Tangible Book Value or the Preliminary Loss Reserves set forth in Section 2.04 the Preliminary Statement (the “Dispute Notice”), specifying the reasons therefor in reasonable detail. Parent shall be conclusively deemed to have accepted all items and amounts contained in the Preliminary Statement other than the items identified in the Dispute Notice. In connection with Parent’s review of the Seller Disclosure Letter (andPreliminary Statement, the Acquiror shall permit, and shall cause its Representatives to the extent not set forth thereinpermit, in accordance with U.S. GAAP). The parties agree Parent and its Representatives to provide each other and their respective Representatives have reasonable access, during normal business hours and upon reasonable notice, to their respective (i) the books, recordsrecords and relevant employees of the Company Group Entities and (ii) all relevant work papers, work papers schedules, memoranda and personnel other documents prepared by the Acquiror in connection with its preparation of its calculation of the Preliminary Pre-Closing Dividend Amount, the Preliminary Deferred Payment Amount, the Preliminary Tangible Book Value, the Preliminary Excess Tangible Book Value and the Preliminary Loss Reserves.
(and any other information which either party reasonably requests d) In the event that Parent shall deliver a Dispute Notice to the extent relating Acquiror, the Acquiror and Parent shall attempt to resolve such dispute as promptly as practicable and, upon such resolution, if any adjustments to the Business (including, for the avoidance of doubtPreliminary Pre-Closing Dividend Amount, the Business Preliminary Deferred Payment Amount, the Preliminary Tangible Book Value, the Preliminary Excess Tangible Book Value and/or the Preliminary Loss Reserves shall be made in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably accordance with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination resolution of the Closing StatementAcquiror and Parent, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of then the Closing Statement, which written notice Acquiror and Parent shall set forth any such disagreement resolution in reasonable detail (“Disagreement Notice”)writing. If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller Acquiror and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith Parent are unable to resolve any such disagreementdispute within fifteen (15) Business Days (or such longer period as the Acquiror and Parent shall mutually agree in writing) of Parent’s delivery of such Dispute Notice, the Acquiror and Parent shall promptly submit any items remaining in dispute to the Independent Accounting Firm, acting solely as an expert and not as an arbitrator, for resolution, and any resolution agreed to in writing by Purchaser and Seller determination of the Independent Accounting Firm shall be final and binding upon on the parties.
. The Acquiror and Parent agree to enter into a customary engagement letter with the Independent Accounting Firm, and any fees, costs or expenses of the Independent Accounting Firm (dand the American Arbitration Association if engaged pursuant to the definition of Independent Accounting Firm) If Purchaser and Seller are unable to resolve any disagreement in respect of its services as contemplated by this Section 2.04(c2.05(d) shall be borne by the parties in reverse proportion to the relative success of the parties on the disputed items submitted to the Independent Accounting Firm, with such determination of relative success made by the Independent Accounting Firm, or if the Independent Accounting Firm is unwilling to make such determination, then such fees, costs and expenses shall be borne fifty percent (50%) by Parent and fifty percent (50%) by the Acquiror. The Independent Accounting Firm shall be instructed to use reasonable best efforts to perform its services and reach a final determination with respect to the matters submitted to it for resolution within thirty (30) days of submission of the dispute thereto and, in any case, as promptly as practicable after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firmsuch submission. In resolving any disputed item, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined Independent Accounting Firm (i) shall be bound by the reasonable discretion provisions of Seller this Section 2.05(d) and Purchaserany other relevant provisions of this Agreement, (ii) may not assign a value to resolve any item greater than the greatest value for such disagreement item claimed by either the Acquiror or Parent or less than the smallest value for such item claimed by either the Acquiror or Parent and (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done iii) must make its calculations in accordance with the terms hereofTransaction Accounting Principles and any other applicable standards and definitions in this Agreement. In connection with the Independent Accounting Firm’s consideration of the dispute submitted to it, each party hereto shall permit, and cause its Affiliates and Representatives to permit, the accounting methodsIndependent Accounting Firm and its Representatives to have reasonable access, standardsduring normal business hours and upon reasonable notice, policiesto all relevant work papers, practicesschedules, classificationsmemoranda and other documents prepared by such party in connection with its preparation of the Preliminary Statement and/or the Dispute Notice, estimation methodologies, assumptions or procedures used to prepare as the Closing Statementcase may be, and whether there were mathematical errors in to finance personnel of such party and its Affiliates and any other information which the calculation of the Closing StatementIndependent Accounting Firm or any Representative thereof reasonably requests, and the parties hereto shall, and shall cause their respective Affiliates to, otherwise cooperate with the Independent Accounting Arbitrator shall not make any other determinationFirm and its Representatives in connection therewith. The determination of the Independent Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report Firm shall be final and binding upon on the parties, absent manifest error. The fees, costs and expenses parties with respect to the calculation of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth items in the Closing Statement and the Disagreement Dispute Notice, respectively.
(e) Purchaser If the Acquiror fails to deliver the Preliminary Statement to Parent within one hundred twenty (120) days following the Closing Date, Parent may, in its sole discretion, elect to either (i) produce the Preliminary Statement, in which case Parent shall have thirty (30) days following the end of such one hundred twenty (120)-day period to produce and Seller agree deliver the Preliminary Statement to the Acquiror and the procedures set forth in Section 2.05(c) and Section 2.05(d) shall apply mutatis mutandis (with references to “Parent” therein deemed to be references to “Acquiror” and vice versa, except with respect to the second sentence of Section 2.05(c)) or (ii) have the Estimated Pre-Closing Dividend Amount, the Estimated Deferred Payment Amount, the Estimated Tangible Book Value, the Estimated Excess Tangible Book Value and the Estimated Loss Reserves be considered final and binding as the “Pre-Closing Dividend Amount,” the “Deferred Payment Amount,” the “Closing Tangible Book Value,” the “Closing Excess Tangible Book Value” and the “Loss Reserves,” respectively. Parent shall have five (5) Business Days after the end of such one hundred twenty (120)-day period to make such election by written notice to the Acquiror; provided that any payments made pursuant if Parent fails to this Section 2.04 deliver such notice to the Acquiror within such period, Parent shall be allocated deemed to have made the election specified in a manner consistent with any allocation agreed to pursuant to Section 2.03(c)clause (ii) of the preceding sentence.
(f) With respect The Preliminary Pre-Closing Dividend Amount, the Preliminary Deferred Payment Amount (if any), the Preliminary Tangible Book Value, the Preliminary Excess Tangible Book Value and the Preliminary Loss Reserves: (i) if no Dispute Notice has been timely delivered, as originally submitted and calculated by the Acquiror or Parent, as applicable, or (ii) if a Dispute Notice has been timely delivered by Parent or Acquiror, as applicable, as adjusted pursuant to Cash and Cash Equivalents and Indebtedness the resolution of such dispute in accordance with Section 2.05(d) (whether by mutual written agreement of the Business denominated in currencies other than U.S. dollarsAcquiror and Parent, or by the Applicable Exchange Rate for each such currency as of immediately before the effective time determination of the Closing as published by Bloomberg (BGN New YorkIndependent Accounting Firm), shall be used the “Pre-Closing Dividend Amount,” the “Deferred Payment Amount,” the “Closing Tangible Book Value,” the “Closing Excess Tangible Book Value” and the “Loss Reserves,” respectively, and shall be used, if a component thereof, in the definition of “Final Closing Consideration” to convert calculate the Final Closing Consideration.
(g) If the Final Closing Consideration (as determined in accordance with Section 2.05(f)) is less than the Estimated Closing Consideration, then Parent shall promptly, but in any event within five (5) Business Days following the determination of the Final Closing Consideration as determined in accordance with Section 2.05(f), pay to the Acquiror an amount equal to the amount by which the Estimated Closing Consideration exceeds the Final Closing Consideration by wire transfer of immediately available funds to the account or accounts designated by the Acquiror.
(h) If the Final Closing Consideration (as determined in accordance with Section 2.05(f)) is greater than the Estimated Closing Consideration, then the Acquiror shall promptly, but in any event within five (5) Business Days following the determination of the Final Closing Consideration as determined in accordance with Section 2.05(f), pay to Parent an amount equal to the amount by which the Final Closing Consideration exceeds the Estimated Closing Consideration by wire transfer of immediately available funds to the account or accounts designated by Parent.
(i) The parties acknowledge that the payments contemplated by Section 2.05(g), Section 2.05(h), Section 2.09, Section 5.12(b) through Section 5.12(e) and Section 6.02(k) are intended by the parties to be treated as part of the Purchase Price and the parties will treat any such amounts into U.S. dollars payment as an adjustment to the Purchase Price for purposes of determining Closing Net Indebtedness in connection Tax and financial reporting purposes. The Acquiror and Parent agree not to take any position that is inconsistent with the adjustments pursuant to intent expressed in this Section 2.042.05(i) unless required by applicable Law.
Appears in 1 contract
Sources: Stock Purchase Agreement (Renaissancere Holdings LTD)
Purchase Price Adjustment. (a) Section 2.04(a) If the Final Purchase Price calculated using the results of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principlesPhysical Inventory is greater than the Estimated Purchase Price, methodologies and policies used in then Buyer shall pay the determination of difference between such accountsamounts to Seller. Such accounts of If the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Final Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, then Seller shall pay the difference between such amounts to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser Buyer. Such payment shall pay to Seller the total amount of such excess, in either case be made by wire transfer of in immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, funds to an account designated by the party receiving recipient. The payment no later than two of the Purchase Price Adjustment shall be made within ten (210) Business Days after days following the final determination of the Purchase Price.
(c) As promptly as practicable (andPhysical Inventory. In order to determine the Physical Inventory, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of following the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day periodDate, Seller shall cause the Physical Inventory to be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice calculated and such calculation shall be deemed accepted by delivered to Buyer. Within ten (10) days of Buyer's receipt of Seller's calculation of Physical Inventory, Buyer shall, in writing, either (i) advise Seller that Buyer agrees with Seller's calculation of the Physical Inventory; or (ii) advise Seller, in reasonable detail, of the nature and shall not be subject to further dispute or reviewextent of any disagreement with Seller's calculation of the Physical Inventory. Purchaser and Seller shall negotiate in If, after good faith to resolve any such disagreementnegotiations, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser Buyer and Seller are unable to resolve any such disagreement as contemplated by Section 2.04(c) within thirty ten (3010) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firmBuyer's notice to Seller, the retention parties shall submit the determination of which will not give rise any disputed items to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, a national certified public accounting firm reasonably acceptable to resolve such disagreement both parties (the firm so selected shall be referred to herein as the “"Accounting Arbitrator”"). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissionsdetermine which of the positions asserted, presentations and supporting material provided either that asserted by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute Buyer or that is within range of values established for such disputed item as determined by reference to the value assigned to such item asserted by Seller in is correct. The Accounting Arbitrator's decision on the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report disputed items shall be final and binding upon on the parties, absent manifest errorparties and shall not be appealable to any court. The fees, costs Each party shall bear the fees and expenses of the Accounting Arbitrator arising its own representatives in connection with this Section 2.04 shall be borne by Purchaser, on the one handdetermination of the Physical Inventory, and Seller, on shall share equally the other hand, in proportion to the differences between the Purchase Price as determined by fees and expense of the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c)Arbitrator.
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), Schedule 4.2.7 shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness deleted in connection its entirety and replace with the adjustments pursuant to this Section 2.04.new Schedule 4.2.7 attached hereto as Exhibit A.
Appears in 1 contract
Sources: Asset Purchase Agreement (Abt Building Products Corp)
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used As soon as practicable but in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no event later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) 60 days after the Closing), Purchaser the Parent shall prepare or cause to be prepared, and shall deliver to Seller a statement setting forth Purchaser’s calculation of the Designated Representatives, (i) Modified Working Capitala balance sheet (the "Closing Date Balance Sheet") that fairly presents in all material respects the consolidated financial position of the Company as of the Closing Date, and (ii) a certificate setting forth the amount of each of the Working Capital and the Net Book Value as of the Closing Net Indebtedness, (iii) Date and the calculation of each in reasonable detail based on the figures set forth in the Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 Date Balance Sheet (the “"Certificate"). Subject to the provisions of the next sentence, the Closing Statement”), which Date Balance Sheet shall be prepared in accordance with GAAP (subject to normal year-end adjustments and lack of footnotes and subject to the accounting principles, methodologies exceptions noted by the Company in Schedule 2.8 attached hereto) applied on a consistent basis in accordance with the Company's past practices. It is expressly understood and policies set forth in Section 2.04 of the Seller Disclosure Letter (andagreed that, to the extent that the Company has followed certain accounting practices in the preparation of the Balance Sheet that are not set forth thereinconsistent with GAAP and that such practices are disclosed in Schedule 2.8 attached hereto, the Closing Date Balance Sheet shall be prepared using such accounting practices even if not consistent with GAAP.
(b) The Closing Date Balance Sheet and the Certificate shall be reviewed by the Designated Representatives and/or their accountants. In connection with such review, the Parent shall, or shall cause its accountants to, provide the Designated Representatives and their accountants with all relevant information and data, including work papers used in the preparation of the Closing Date Balance Sheet and the Certificate as the Designated Representatives shall reasonably request.
(c) The Designated Representatives may dispute any amounts reflected on the Closing Date Balance Sheet or the calculation of the Working Capital or the Net Book Value, but only on the basis of their good-faith belief that the amounts reflected on the Closing Date Balance Sheet were not arrived at in accordance with U.S. GAAP). The parties agree to provide each this Agreement or resulted from a mistake of fact or other and their respective inaccuracy; provided, however, that the Designated Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to shall have notified the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser Company in writing of each disputed item, specifying the amount thereof in dispute and setting forth, in reasonable detail, the basis for such disagreement dispute, within sixty thirty (6030) days of the Parent's delivery of the deliverables specified in Section 1.4(a) above to the Designated Representatives. If the Parent and the Designated Representatives are unable to reach a resolution to the dispute within twenty (20) days after delivery the Designated Representatives' notification to the Parent of the Closing Statementdispute, the Parent and the Designated Representatives shall submit the items then remaining in dispute for resolution to an independent accounting firm of international reputation mutually acceptable to them (the "Independent Accounting Firm"), which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day periodshall, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Noticesuch submission, Purchaser determine and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, report to the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by Parent and the reasonable discretion of Seller and Purchaser, to resolve Designated Representatives upon such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statementremaining disputed items, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon on the parties, parties absent manifest error. The fees, costs fees and expenses disbursements of the Independent Accounting Arbitrator arising in connection with this Section 2.04 Firm shall be borne by Purchaser, on allocated between the one hand, Parent and Seller, on the other hand, Company Stockholders in the same proportion that the aggregate amount of such remaining disputed items so submitted to the differences between the Purchase Price Independent Accounting Firm that is unsuccessfully disputed by each such party (as finally determined by the Independent Accounting Arbitrator Firm) bears to the total amount of such remaining disputed items so submitted. The portion of the fees and disbursements of the Independent Accounting Firm allocated to the Company Stockholders shall be paid out of the Escrow Amount. Each of Parent and the asserted Purchase Price set forth in Designated Representatives hereby agree to instruct the Escrow Agent to pay out of the Escrow Amount the payment required by the immediately preceding sentence.
(d) The Closing Date Balance Sheet and the Certificate shall be deemed to be the "Final Closing Date Balance Sheet" and the "Final Certificate," respectively upon the earlier of (i) the failure of the Designated Representatives to notify the Parent of a dispute within thirty (30) days of the Parent's delivery of the Closing Statement Date Balance Sheet and the Disagreement NoticeCertificate to the Designated Representatives, respectively(ii) the resolution of all disputes pursuant to Section 1.4(c) above by the Parent and the Designated Representatives and (iii) the resolution of all disputes pursuant to Section 1.4(c) above by the Independent Accounting Firm.
(e) Purchaser Within 10 days after the determination of the Final Closing Date Balance Sheet and Seller agree the Final Certificate, (1) in the event that any payments made pursuant the Working Capital as set forth on the Final Certificate (the "Final Working Capital") exceeds $833,000.00, Parent or Paying Agent shall deliver to the Company Stockholders and Company Optionholders their respective Pro Rata Portion (as defined below) of the amount by which the Final Working Capital exceeds $833,000.00, or (2) in the event that the Final Working Capital is less than $833,000.00, Parent shall be entitled to withdraw the amount by which $833,000.00 exceeds the Final Working Capital in immediately available funds out of the Escrow Amount in accordance with the Escrow Agreement. For purposes of this Section 2.04 1.4(e) and Section 1.4(f), "Pro Rata Portion" shall be allocated in mean the quotient obtained by dividing the portion of the Closing Amount that a manner consistent with any allocation agreed Company Stockholder or a Company Optionholder, as the case may be, is entitled to receive pursuant to Section 2.03(c1.2(k) (without giving effect to any amounts deposited in escrow) and Section 1.2(l).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of respectively, by the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04Amount.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aSellers shall, at least five (5) business days prior to the Closing Date, cause to be prepared and delivered to Buyer a statement (the “Preliminary Statement”), setting forth Sellers’ good faith estimate of each of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, Modified Net Working Capital as of immediately before the effective time of the Closing Date (the “Closing Date Modified Net Working Capital”) and the Capital Expenditure Account Balance as set of the Closing Date (the “Closing Date Capital Expenditure Account Balance”). The estimate of Closing Date Modified Net Working Capital is referred to herein as the “Estimated Modified Net Working Capital” and the estimate of the Closing Date Capital Expenditure Account Balance is referred to herein as the “Estimated Closing Date Capital Expenditure Account Balance.”
(b) Within forty-five (45) calendar days after the Closing Date, Buyer shall cause to be prepared and delivered to Sellers a statement (the “Statement”) setting forth in Section 2.05(a))Buyer’s calculations of Closing Date Modified Net Working Capital, determined the Closing Date Capital Expenditure Account Balance and the components and calculation of each, which comments and calculations shall be included and made in accordance with Section 2.04(a) 1.2 of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein Letter and, to the extent not set forth provided for therein, GAAP (in accordance with U.S. GAAPeach case as and to the same extent determined pursuant to Section 1.2(c)(ii)). At the same time, Buyer shall constitute also cause to be prepared and delivered to Sellers a statement (the “Adjustment Statement”) setting forth the calculation (whether a positive or negative number) of (i) the amount of the Closing Date Modified Net Working CapitalCapital as shown on the Statement minus the Estimated Modified Net Working Capital plus (ii) the Closing Date Capital Expenditure Account Balance minus the Estimated Closing Date Capital Expenditure Account Balance (the sum of such amounts, whether a positive or negative number, the “Adjustment Amount”). For Buyer shall provide Sellers and their accountants with access to the avoidance relevant books and records of doubt, amounts included the Company and the Sellers Employees to the extent required in connection with their review of and any dispute with respect to the determination Statement and the Adjustment Statement and shall furnish Sellers with any other information that might be relevant to the calculation of Closing Date Modified Net IndebtednessWorking Capital or the Closing Date Capital Expenditure Account Balance. If, Closing Transaction Expenses and Pension Plan Purchase Price at any time prior to the final resolution of all disputed items on the Statement or the Adjustment Statement, additional information shall be excluded from become known to Buyer or Sellers that would change the determination amount of the Closing Date Modified Net Working Capital.
(b) If Capital or the Purchase Price Closing Date Capital Expenditure Account Balance shown on the Statement or the calculation thereof, then Buyer shall amend the Statement and Adjustment Statement to reflect such additional information. Buyer or Sellers shall promptly notify Sellers or Buyer, as finally determined in accordance with this Section 2.04 is less than applicable, upon becoming aware of any additional information prior to the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination end of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase PriceResolution Period.
(c) As promptly as practicable After receipt of the Statement and the Adjustment Statement, Sellers will have thirty (and, 30) calendar days from receipt to review the Statement and the Adjustment Statement together with the workpapers used in any event, within ninety (90) days after the Closing), Purchaser shall prepare and their preparation. Unless Sellers deliver to Seller Buyer written notice setting forth in reasonable detail the specific items disputed by Sellers and a written statement setting forth Purchaser’s Sellers’ calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses each line item shown on the Statement so disputed and (iv) the Purchase Price pursuant to this Section 2.04 amount in dispute (the “Closing Sellers’ Statement”), which shall be prepared in accordance with ) on or prior to the accounting principles, methodologies and policies set forth in Section 2.04 thirtieth (30th) day after receipt of the Seller Disclosure Letter (and, to Statement and the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Adjustment Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall Sellers will be deemed to have accepted and agreed to the Closing Statement delivered by Purchaserand the Adjustment Statement and such agreement will be final, binding and conclusive. Matters included in Any items on the calculations in the Closing Statement or Adjustment Statement as to which Seller does Sellers have not object in the Disagreement Notice shall given notice of their objection and provided an alternative calculation on Sellers’ Statement will be deemed accepted to have been agreed upon by Seller and shall not be the Parties, subject to further dispute the penultimate sentence of Section 1.3(b). If Sellers so notify Buyer of their objections to any of the Statement or review. Purchaser the Adjustment Statement and Seller shall negotiate provide Buyer with Sellers’ Statement in good faith to resolve any such disagreementa timely manner, Buyer and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) Sellers will, within thirty (30) calendar days following such notice (the “Resolution Period”), attempt to resolve their differences. Any resolution by Buyer and Sellers during the Resolution Period as to any disputed amounts will be final, binding and conclusive. If the amount claimed by Buyer on the Adjustment Statement to be owed by Sellers is less than the Escrow Amount, then, promptly after delivery of the Adjustment Statement, any amount on deposit in the Escrow Account that is in excess of the amount claimed by Buyer to be owed by Sellers under this Section shall be distributed from the Escrow Account to Sellers in accordance with the Escrow Agreement, and Buyer agrees to reasonably cooperate with Sellers in any necessary joint instruction to the Escrow Agent. Money released from the Escrow Account to Sellers shall be distributed to Sellers in accordance with the Sharing Percentages set forth on Annex A. If Buyer and Sellers do not resolve all disputed items by the end of the Resolution Period, then all items remaining in dispute will be submitted within ten (10) days after delivery by Seller the expiration of the Resolution Period to a Disagreement Notice, Purchaser and Seller shall jointly select a national independent accounting firm mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller Buyer and Purchaser, to resolve such disagreement Sellers (the firm so selected shall be referred to herein as the “Neutral Accounting Arbitrator”). In the event ; it being understood that Purchaser and Seller are unable to agree on the appointment no member of the Neutral Accounting Arbitrator, as provided above, then the ’s engagement team shall have an existing professional relationship with Buyer or any of its Affiliates. The Neutral Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator act as an arbitrator to consider determine only those items in dispute. All fees and amounts set forth in expenses relating to the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes work, if any, to be resolved performed by the Neutral Accounting Arbitrator shall will be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaserallocated between Buyer, on the one hand, and SellerSellers, on the other hand, in inverse proportion to as they shall prevail on the differences between the Purchase Price amounts of such disputed items so submitted (as finally determined by the Neutral Accounting Arbitrator). The Neutral Accounting Arbitrator will deliver to Buyer and Sellers a written determination (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided to the Neutral Accounting Arbitrator by Sellers and Buyer) of the disputed items within thirty (30) days of receipt of the disputed items (or as soon as practicable thereafter), which determination will be final, binding and conclusive. The final, binding and conclusive Statement and Adjustment Statement, which either are agreed upon by Buyer and Sellers or are delivered by the Neutral Accounting Arbitrator in accordance with this Section 1.3, will be the “Conclusive Statement” and the asserted Purchase Price set forth “Conclusive Adjustment Statement,” respectively. In the event that either Buyer or Sellers fails to submit its statement regarding any items remaining in dispute within the Closing Statement and time determined by the Disagreement NoticeNeutral Accounting Arbitrator, respectivelythen the Neutral Accounting Arbitrator shall render a decision based solely on the evidence timely submitted to the Neutral Accounting Arbitrator by Buyer and/or Sellers.
(ed) Purchaser If the Adjustment Amount as shown on the Conclusive Adjustment Statement (the “Conclusive Adjustment Amount”) is a negative number, then the Cash Consideration will be reduced by the amount of the Conclusive Adjustment Amount, but not in excess of the Escrow Amount, and Seller Buyer shall be entitled to payment of such amount from the Escrow Account by wire transfer of immediately available funds to an account or accounts designated by the Party entitled to receive such funds (and Sellers agree that any to cooperate reasonably in facilitating such payment, including by executing and delivering an appropriate joint instruction to the Escrow Agent). If the Conclusive Adjustment Amount is a positive number, then the Cash Consideration will be increased by the amount of the Conclusive Adjustment Amount, but not in excess of the Escrow Amount, and Buyer shall pay to Sellers cash equal to such amount, to be paid to an account or accounts designated in writing by Sellers prior to the date when such payment is due. All payments to be made pursuant to this Section 2.04 1.3(d) will be made on the fifth business day following the date on which Buyer and Sellers agree to, or the Neutral Accounting Arbitrator delivers, the Conclusive Statement and the Conclusive Adjustment Statement and, in the case of payment to Buyer, instruct the Escrow Agent by joint written instruction accordingly. If the Conclusive Adjustment Amount is a positive number, or is a negative amount that is less than the amount remaining on deposit in the Escrow Account, then, promptly after determination of the Conclusive Adjustment Amount, any amount remaining on deposit in the Escrow Account that is in excess of the lesser of the Conclusive Adjustment Amount and the Escrow Amount shall be allocated distributed from the Escrow Account to Sellers in a manner consistent accordance with the Escrow Agreement, and Buyer agrees to reasonably cooperate with Sellers in any allocation agreed necessary joint instruction to pursuant the Escrow Agent. Money released from the Escrow Account to Section 2.03(c).Sellers shall be distributed to Sellers in accordance with the Sharing Percentages set forth on Annex A.
(fe) With respect Buyer acknowledges and agrees that its sole and exclusive remedy for any amount due to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments it pursuant to this Section 2.041.3 shall be its right to payment from the Escrow Account in an amount not to exceed the Escrow Amount. Sellers acknowledge and agree that their sole and exclusive remedy for any amount due to them pursuant to this Section 1.3 shall be the right to payment from Buyer in an amount not to exceed the Escrow Amount.
Appears in 1 contract
Sources: Purchase and Sale Agreement (International Power PLC)
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than At least two (2) Business Days after prior to the final determination Closing Date, Seller shall deliver to Purchaser a statement (the “Pre-Closing Statement”) setting forth a good faith calculation of the Purchase PriceEstimated Closing Working Capital and the resulting Estimated Working Capital Shortfall (if any) or Estimated Working Capital Surplus (if any).
(cb) As promptly as practicable (and, in any event, within Within ninety (90) days after the Closing)Closing Date, Purchaser shall prepare and deliver to Seller a reasonably detailed statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”) setting forth Purchaser's good faith calculation of the Closing Working Capital prepared and determined in accordance with the Accounting Principles (as finally determined pursuant to the terms hereof, the “Final Working Capital”). Purchaser shall deliver the Closing Statement together with copies of other information and documentation used in the calculations thereof, which and any other information as may be reasonably requested by Seller to allow Seller to review such calculations. The Closing Statement and the determinations and calculations contained therein shall be prepared in accordance with the accounting principlesAccounting Principles, methodologies the Working Capital Example and policies the other terms and conditions set forth in Section 2.04 of this Agreement.
(c) The Closing Statement shall become final and binding upon the Seller Disclosure Letter Parties on the forty-fifth (and, to 45th) day following the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during date on which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolveddelivered to Seller, in each case in a manner that does not interfere unreasonably unless Seller delivers written notice of its disagreement with the operations Closing Statement (a “Notice of Disagreement”) to Purchaser prior to such party’s businessesdate. Notwithstanding the foregoing, neither Purchaser nor Seller Any Notice of Disagreement shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement specify in reasonable detail (“Disagreement Notice”)the nature of any disagreement so asserted. If Seller fails to deliver a Notice of Disagreement Notice is received by the end of such 60-day periodPurchaser in a timely manner, Seller shall be deemed to have accepted then the Closing Statement delivered by Purchaser. Matters included (as revised in accordance with this sentence) shall become final and binding upon Seller and Purchaser on the earlier of (i) the date Seller and Purchaser resolve in writing any differences they have with respect to the matters specified in the calculations Notice of Disagreement or (ii) the date any disputed matters are finally resolved in writing by the Closing Statement to which Seller does not object in Independent Accountant. During the Disagreement fourteen (14)-day period following the delivery of a Notice shall be deemed accepted by of Disagreement, Seller and Purchaser shall not be subject to further dispute or review. Purchaser and Seller shall negotiate seek in good faith to resolve any such disagreement, and any resolution agreed to in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement. If at the end of such fourteen (14)-day period Seller and Purchaser have not resolved in writing the matters specified in the Notice of Disagreement, Seller and Purchaser shall submit to a qualified certified public accountant employed by a dispute resolution firm, business consulting firm, independent accounting firm or similar business (the “Independent Accountant”) for arbitration, in accordance with the standards set forth in this Section 2.7, only matters that remain in dispute. The Independent Accountant shall be an independent accounting firm with experience in accounting for for- profit postsecondary institutions that is not a “Big 4” accounting firm and shall be reasonably mutually agreed upon by Seller and Purchaser in writing. The terms of engagement of the Independent Accountant shall be as reasonably mutually agreed upon between Seller and Purchaser. Seller and Purchaser shall enter into an engagement letter with the Independent Accountant promptly after its retention, which shall include customary indemnification and other provisions. Seller and Purchaser shall cooperate with the Independent Accountant in all reasonable respects, but no Party will have ex parte meetings, teleconferences or other correspondence with the Independent Accountant. As promptly as practicable thereafter, Purchaser and Seller shall be final each prepare and binding upon submit a presentation to the parties.
(d) If Independent Accountant. Seller and Purchaser and Seller are unable shall use commercially reasonable efforts to resolve any disagreement as contemplated by Section 2.04(c) cause the Independent Accountant to render a written decision resolving the matters submitted to the Independent Accountant within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request receipt of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreementsuch submission. The scope of the disputes to be resolved by the Accounting Arbitrator Independent Accountant shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were fixing mathematical errors in and determining whether the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item items in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement were determined in accordance with the terms of Accounting Principles and the accounting principles and procedures set forth in this Agreement, and the Independent Accountant is not to make any other determination, including (A) whether GAAP was followed for the Financial Statements, or (B) whether any of the Working Capital Target or the Estimated Working Capital is correct. Such report The Independent Accountant's decision shall be (x) based solely on written submissions and testimony by ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ and their respective Representatives (and it shall not permit or authorize discovery) and not by independent review, (y) made strictly in accordance with the Accounting Principles and the accounting principles and procedures set forth in this Agreement and (z) final and binding upon on all of the parties, Parties absent manifest error. The fees, costs Independent Accountant may not assign a value greater than the greatest value for such item claimed by either Party or smaller than the smallest value for such item claimed by either Party. The fees and expenses of the Accounting Arbitrator arising in connection with Independent Accountant incurred pursuant to this Section 2.04 2.7 shall be borne by Purchaserpro rata as between Seller, on the one hand, and SellerPurchaser, on the other hand, in proportion to the differences final allocation made by such Independent Accountant of the disputed items weighted in relation to the claims made by Seller and Purchaser, such that the prevailing Party pays the lesser proportion of such fees, costs and expenses. Any determinations by the Independent Accountant, and any work or analyses performed by the Independent Accountant, in connection with its resolution of any dispute under this Section 2.7 shall not be admissible in evidence in any Action between the Parties other than to the extent necessary to enforce payment obligations under this Section 2.7.
(d) Upon the determination of the Final Working Capital, the Estimated Purchase Price as determined shall be increased (any such increase, the “Seller Adjustment Amount”) by the Accounting Arbitrator amount, if any, that the Final Working Capital exceeds the Estimated Working Capital, and the asserted Estimated Purchase Price set forth shall be decreased (any such decrease, the “Purchaser Adjustment Amount”) by the amount, if any, that the Estimated Working Capital exceeds the Final Working Capital.
(i) If there is a Seller Adjustment Amount and if the Estimated Purchase Price was a positive number, then Purchaser shall, within five (5) Business Days after Seller Adjustment Amount is determined, make payment by wire transfer of immediately available funds to Seller or forfeit rent abatement credited pursuant to Section 2.8 below, or combination thereof, in the Closing Statement amount of any Seller Adjustment Amount plus the amount of the Estimated Purchase Price.
(ii) If there is a Purchaser Adjustment Amount and the Disagreement NoticeEstimated Purchase Price was a negative number, respectivelythen Seller shall, within five (5) Business Days after Purchaser Adjustment Amount is determined, make payment by wire transfer of immediately available funds to Purchaser in the amount of any Purchaser Adjustment Amount.
(iii) If there is a Purchaser Adjustment Amount and the Estimated Purchase Price was a positive number, then (i) if the difference of the Estimated Purchase Price minus the Purchaser Adjustment Amount is a positive number, then Purchaser shall, within five (5) Business Days after Purchaser Adjustment Amount is determined, make payment by wire transfer of immediately available funds to Seller or forfeit rent abatement credited pursuant to Section 2.8 below, or combination thereof, in the amount of such difference, (ii) if the difference of the Estimated Purchase Price minus the Purchaser Adjustment Amount is a negative number, then Seller shall, within five (5) Business Days after Purchaser Adjustment Amount is determined, make payment by wire transfer of immediately available funds to Purchaser in the amount of the absolute value of such difference, or (iii) if the Estimated Purchase Price equaled the Purchaser Adjustment, no payment shall be made under this Section 2.7(d).
(iv) Upon payment of the amounts provided in this Section 2.7(d), none of the Parties may make or assert any claim under this Section 2.7.
(e) Purchaser The Accounting Principles (together with the Working Capital Example) were prepared in good faith by Seller, in cooperation with Purchaser, setting forth the various line items used (or to be used) in, and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness illustrating as of the Business denominated in currencies other than U.S. dollarsJune 30, 2019, the Applicable Exchange Rate for each such currency as of immediately before the effective time calculation of the Closing Working Capital prepared and calculated for the SBBC System in accordance with this Agreement. For all purposes hereunder, the Closing Working Capital, the Estimated Working Capital, and the Final Working Capital and all determinations and calculations by any Person (including the Independent Accountant, as published applicable) of such amounts shall in all circumstances be prepared and calculated strictly in accordance with the Accounting Principles without deviation or exception in any manner, or for any reason, whatsoever; provided that such calculations and determinations (i) shall not include any purchase accounting or other adjustment arising out of the consummation of the transactions contemplated by Bloomberg this Agreement, (BGN New York), ii) shall be used based on facts and circumstances as they exist at the Closing, and shall exclude the effect of any act, decision or event occurring on or after the Closing, (iii) shall follow the defined terms contained in this Agreement whether or not such terms are consistent with GAAP and (iv) shall calculate any reserves, accruals or other non-cash expense items on a pro rata (as opposed to convert such amounts into U.S. dollars monthly accrual) basis to account for purposes a Closing that occurs on any date other than the last day of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04a calendar month.
Appears in 1 contract
Sources: Asset Purchase Agreement
Purchase Price Adjustment. (a) Section 2.04(aAt least three (3) of Business Days prior to the Closing Date, the Seller Disclosure Letter sets Representative shall deliver to the Buyer: (i) a reasonably detailed statement (the “Pre-Closing Statement”) setting forth certain current assets and current liabilities accounts and certain accounting principlesthe Sellers’ good faith calculation of (A) the Estimated Closing Cash, methodologies and policies used in (B) the determination of such accounts. Such accounts of Estimated Closing Indebtedness, (C) the BusinessEstimated Transaction Expenses, cumulatively(D) the Estimated Working Capital, as of immediately before well as the effective time of resulting Working Capital Excess (if any) or Working Capital Shortfall (if any), as the case may be, and (E) the Estimated Aggregate Consideration, and (ii) the Distribution Schedule.
(b) Within seventy-five (75) days after the Closing Date, the Buyer shall deliver to the Seller Representative a reasonably detailed statement (as set the “Post-Closing Statement”) setting forth in Section 2.05(a)the Buyer’s good faith calculation of (i) the Closing Cash, (ii) the Closing Indebtedness, (iii) the Closing Transaction Expenses, (iv) the Closing Working Capital and the resulting Working Capital Excess (if any) or Working Capital Shortfall (if any), determined in accordance with Section 2.04(a) of as the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”case may be. For the avoidance of doubt, amounts included in for purposes of the determination calculation of the Post-Closing Net IndebtednessStatement, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment the parties hereto agree that the Earn-Out Amount shall be excluded from zero dollars ($0). Any actions taken by the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days Buyer at or after the final determination Closing shall not be taken into account for the purpose of preparing the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase PricePost-Closing Statement.
(c) As promptly as practicable After receipt of the Post-Closing Statement, the Seller Representative shall have thirty (and, in any event, within ninety (9030) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Review Period”) to review the Post-Closing Statement”). During the Review Period, which the Seller Representative and its accountants shall be prepared in accordance with have full access to the accounting principles, methodologies books and policies set forth in Section 2.04 records of the Seller Disclosure Letter (andCompany, the personnel of, and work papers prepared by, Buyer and/or Buyer’s accountants to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree that they relate to provide each other the Post-Closing Statement and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel such historical financial information (and any other information which either party reasonably requests to the extent in Buyer’s possession) relating to the Business (includingPost-Closing Statement, as the Seller Representative may reasonably request for the avoidance purpose of doubt, reviewing the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Post-Closing Statement is being prepared or evaluated and any disputes to prepare a Notice of Disagreement (defined below); provided, that may arise under this Section 2.04 are being resolved, in each case such access shall be in a manner that does not interfere unreasonably with the normal business operations of such party’s the Buyer or the Company or their respective businesses. Notwithstanding .
(d) The Post-Closing Statement shall become final and binding upon the foregoing, neither Purchaser nor parties hereto following the expiration of the Review Period unless the Seller shall be required to Representative delivers written notice of its disagreement with the Post-Closing Statement (xa “Notice of Disagreement”) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access Buyer prior to or disclose information where, upon such date. Any Notice of Disagreement shall specify in reasonable detail the advice of counsel, such access or disclosure would jeopardize Seller Representative’s objections to the attorneyPost-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, indicating each disputed item or amount and the basis for the Seller shall notify Purchaser in writing Representative’s disagreement therewith. If a Notice of such disagreement within sixty Disagreement is received by the Buyer prior to the expiration of the Review Period, then during the thirty (6030) days after day period (the “Resolution Period”) following the delivery of a Notice of Disagreement, the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by Representative and the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller Buyer shall negotiate in good faith to resolve in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement. If such disagreementdifferences are so resolved within the Resolution Period, and any resolution the revised Post-Closing Statement with such changes as may have been previously agreed to in writing by Purchaser the Buyer and the Seller Representative shall be final and binding upon the partiesbinding.
(de) If Purchaser at the end of the Resolution Period the Seller Representative and the Buyer have not resolved in writing the matters specified in the Notice of Disagreement, the Seller are unable Representative and the Buyer shall submit any amounts remaining in dispute to the Accounting Firm, who, acting as experts and not arbitrators, shall resolve such disputed amounts only and make any disagreement adjustments to the Post-Closing Statement. The Buyer and the Sellers agree that all adjustments shall be made without regard to the materiality of the amount at issue. The Accounting Firm shall render a written decision resolving the matters submitted to the Accounting Firm as contemplated by Section 2.04(c) soon as practicable, and in any event within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention receipt of which will not give rise to present such submission (or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein other time as the “Accounting Arbitrator”parties hereto shall agree in writing). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator Firm shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were fixing mathematical errors in and determining whether the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item items in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement were determined in accordance with GAAP and the terms of this Agreement, and no other matters. Such report The Accounting Firm’s decision shall be (w) limited to the specific items under dispute by the parties (x) based solely on written submissions by the Seller Representative and the Buyer and their respective Representatives (and it shall not permit or authorize discovery or hear testimony) and not by independent review, (y) made strictly in accordance with GAAP and the terms of this Agreement and (z) final and binding upon on all of the parties, parties hereto absent fraud or manifest error. The fees, costs Accounting Firm may not assign a value greater than the greatest value for such item claimed by either party or smaller than the smallest value for such item claimed by either party. The fees and expenses of the Accounting Arbitrator arising in connection with Firm incurred pursuant to this Section 2.04 2.3 shall be borne by Purchaserpro rata as between the Sellers according to each Seller’s Pro Rata Percentage, on the one hand, and Sellerthe Buyer, on the other hand, in proportion to the differences between final allocation made by such Accounting Firm of the Purchase Price as determined disputed items weighted in relation to the claims made by the Accounting Arbitrator Sellers and the asserted Purchase Price set forth in Buyer, such that the Closing Statement prevailing party pays the lesser proportion of such fees, costs and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c)expenses.
(f) With respect to Cash and Cash Equivalents and Indebtedness Within five (5) Business Days after the final determination of the Business denominated in currencies other than U.S. dollarsFinal Closing Cash, the Applicable Exchange Rate for each Final Closing Indebtedness, the Final Transaction Expenses and the Final Working Capital, and the resulting Final Aggregate Consideration, the following payments shall be made, as applicable:
(i) If the Final Aggregate Consideration is greater than the Estimated Aggregate Consideration calculated at Closing (such currency excess amount expressed as shares of immediately before Parent Stock, calculated using the effective time dollar amount of such excess amount, divided by the Closing as published by Bloomberg (BGN New YorkParent Stock Share Price, the “Adjustment Surplus Amount”), then the Buyer shall deliver (or caused to be used delivered), a number of shares of Parent Stock equal to convert the Adjustment Surplus Amount to (A) the Sellers (subject to Section 2.5), in each case, in accordance with their respective Pro Rata Percentage.
(ii) If the Final Aggregate Consideration is less than the Estimated Aggregate Consideration calculated at Closing (such amounts into U.S. dollars for purposes excess amount expressed as shares of determining Closing Net Indebtedness in connection with Parent Stock, calculated using the adjustments positive dollar amount of such excess amount, divided by the Parent Stock Share Price, the “Adjustment Deficit Amount”), then the Buyer and the Seller Representative shall execute and deliver a joint written instruction to the Escrow Agent within two (2) Business Days following the date on which the Final Aggregate Consideration is finally determined pursuant to this Section 2.042.3 directing the Escrow Agent to release from the Escrow Account and pay to Buyer a number of shares of Parent Stock equal to such Adjustment Deficit Amount, and in the event that such Adjustment Deficit Amount is greater than the Escrow Amount, then the Sellers shall pay, or cause to be paid, to Buyer, within ten (10) Business Days by wire transfer of immediately available funds, an amount equal to the remaining portion of such Adjustment Deficit Amount to Buyer, payable by each Seller according to such Seller’s Pro Rata Percentage.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, possible and in any event, event within ninety seventy five (9075) days after following the Closing)Closing Date, Purchaser shall prepare and deliver to Seller (i) an unaudited consolidated balance sheet for the Companies as of the Reference Time (the “Final Closing Balance Sheet”) and (ii) a statement setting (the “Final Closing Statement”) which sets forth Purchaser’s good faith calculation of the (iA) Modified Working CapitalCash, (iiB) Closing Net Date Indebtedness, (iiiC) Closing Transaction Date Working Capital (which shall reflect the correction of any adjustment erroneously made or failed to be made at Closing pursuant to Section 1.3 attributable to a miscalculation of the Working Capital Deficiency or Working Capital Excess, as applicable), (D) Specified Expenses which were not paid by Seller, either Company or any of their respective Affiliates at or prior to the Reference Time, and (ivE) after taking into account the adjustments set forth in the preceding portions of clause (a)(ii) hereof and the escrow payments made pursuant to Section 1.4(b), (c), and (d) the calculation of the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”)based thereon, which shall be in each case, prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP1.5(d). The parties agree shall provide reasonable access to provide each the appropriate personnel of the other parties and their respective Representatives reasonable accessall supporting financial statements, during normal business hours worksheets and upon reasonable noticeother documentation used to determine the Final Closing Balance Sheet and the Final Closing Statement, to their respective books, records, work papers and personnel will reasonably cooperate (and any use commercially reasonable efforts to cause such third parties to reasonably cooperate) with the other information which either party reasonably requests to parties in their review of the extent relating to Final Closing Balance Sheet and the Business Final Closing Statement.
(including, for b) Within seventy five (75) days (the avoidance of doubt, “75-Day Period”) after the Business in any Deferred Asset Jurisdictions)) throughout Final Closing Balance Sheet and the periods during which the Final Closing Statement is being prepared are delivered to Seller pursuant to Section 1.5(a), Seller shall deliver to Purchaser either (i) a written acknowledgement accepting the Final Closing Balance Sheet and the Final Closing Statement in their entirety (the “Acknowledgement”); or evaluated (ii) a written notice (the “Adjustment Report”) of those items in the Final Closing Balance Sheet and any disputes that may arise under this Section 2.04 are being resolvedthe Final Closing Statement which Seller disputes, in each which case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor items identified by Seller shall be required deemed to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Lawsdispute. If Seller disagrees with (i) delivers an Acknowledgement within the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty 75-Day Period or (60ii) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by an Acknowledgement or an Adjustment Report to Purchaser within the end of such 6075-day periodDay Period, Seller shall be deemed to have accepted and agreed to the Final Closing Balance Sheet and the Final Closing Statement as delivered by Purchaser. Matters included in the calculations in the pursuant to Section 1.5(a), and such Final Closing Balance Sheet and Final Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon Seller and Purchaser and the parties.
(d) If Closing Date Working Capital shall be as set forth therein. In the event that Seller timely delivers an Adjustment Report to Purchaser, then Purchaser and Seller are unable will use all commercially reasonable efforts to resolve any disagreement as contemplated by Section 2.04(cthe disputed matter(s) within the thirty (30) day period following the delivery of the Adjustment Report. If Seller and Purchaser fail to agree on Seller’s proposed adjustments contained in the Adjustment Report within thirty (30) days after delivery by Seller of a Disagreement NoticePurchaser receives the Adjustment Report, then Purchaser and Seller shall jointly submit the disputed matter(s) to RSM US LLP (provided that if such Person is unable or unwilling to serve in such capacity, or if such Person has been engaged by any of the parties prior to, or from or after the date hereof and is thus not “independent” or no longer “independent”, as applicable, Seller and Purchaser shall work in good faith to jointly select an alternative firm that is a mutually acceptable nationally recognized third party independent accounting firm) (the “Independent Auditor”). Purchaser and Seller will furnish, or cause to be furnished, to the retention Independent Auditor such work papers, documentation and other reports and information relating to the disputed matter(s) as the Independent Auditor may request or as either Seller or Purchaser believe relevant and each party shall be afforded the opportunity to discuss the disputed matter with the Independent Auditor. The Independent Auditor shall make the final determination (the “Auditor’s Determination”) (A) in reliance upon supporting documentation provided to the Independent Auditor by Seller and Purchaser within twenty (20) Business Days of which will not give rise submission of the disputed matter(s) to present or potential future auditor independence problems for the Independent Auditor, (B) in writing, (C) furnished to Seller and Purchaser as soon as practicable after the disputed items(s) have been referred to the Independent Auditor, (D) in accordance with Section 1.5(c), and (E) absent manifest error and subject to the following sentence, nonappealable and incontestable by Seller, Purchaser or any and each of their respective Affiliates and successors and not subject to collateral attack for any reason. With respect to each disputed amount, the Auditor’s Determination must be an amount between or Subsidiaries, equal to Seller’s position as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Adjustment Report and Purchaser’s position as set forth in the Final Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of Balance Sheet or the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Final Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determinationas applicable. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs Any fees and expenses of the Accounting Arbitrator arising Independent Auditor and the American Arbitration Association incurred in connection with resolving the disputed matter(s) pursuant to this Section 2.04 1.5(b) shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in inverse proportion to the differences between respective percentages of the Purchase Price as dollar value of disputed items determined by in favor of Purchaser, on the Accounting Arbitrator one hand, and Seller, on the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelyother hand.
(ec) Purchaser The term “Final Closing Balance Sheet” and Seller agree that any payments made “Final Closing Statement” as used herein shall mean the Final Closing Balance Sheet and Final Closing Statement, as applicable, as ultimately determined pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash 1.5. The date on which the Final Closing Balance Sheet and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Final Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments Statement are finally determined pursuant to this Section 2.041.5 shall hereinafter be referred to as the “Settlement Date.”
Appears in 1 contract
Sources: Equity Purchase Agreement (Whole Earth Brands, Inc.)
Purchase Price Adjustment. (a) Section 2.04(a) On the business day immediately prior to the Closing Date, the Company shall deliver to Buyer a certificate of the Seller Disclosure Letter sets forth certain current assets Company's Chief Executive Officer and current its Chief Financial Officer (the "Estimated Closing Certificate") setting forth: (i) the aggregate amount of all of the Company's indebtedness for borrowed money (including any accrued and unpaid interest thereon), capitalized lease obligations and all other liabilities accounts and certain accounting principlesobligations evidenced by notes, methodologies bonds, debentures or similar instruments, together with a calculation of the prepayment premiums and policies used penalties that would be required to be paid in order to effect the determination payment in full of such accounts. Such accounts of indebtedness, liabilities and obligations on or about the Business, cumulativelyClosing Date, as of immediately before such business day (collectively, the effective time "Debt"), (ii) the cash and cash equivalents of the Company as of the Closing Date, (as set forth in Section 2.05(a)the "Cash Balance"), which amount shall be determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, GAAP (as defined herein); and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and any Gross Margin Amount (ivdefined below) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, that is owed to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination Company as of the Closing StatementDate, Seller including all details as to how such amount was determined. The Estimated Closing Certificate shall notify Purchaser in writing be accompanied by a balance sheet of the Company as of the close of business on such disagreement within sixty business day (60the "Estimated Closing Balance Sheet"). For purposes hereof, "Gross Margin Amount" shall mean the excess of (A) days after delivery all outstanding accounts receivable of the Company as of the Closing Statement, which written notice shall set forth Date for any such disagreement in reasonable detail Systems (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice as defined below) sold by the end of such 60-day period, Seller shall be deemed Company prior to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement Date (excluding any outstanding accounts receivable for Systems sold to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreementGreenShift Corporation, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser Buyer or any of their respective Affiliates affiliates or Subsidiariessubsidiaries), as determined by over (B) the reasonable discretion total costs and expenses to build the applicable System with respect to each outstanding accounts receivable, irrespective of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, costs and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determinationexpenses have yet been paid. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms For purposes of this Agreement. Such report , "Systems" shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelymean biodiesel process systems.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aWithin ninety (90) calendar days following the Closing Date, Parent shall cause its independent public accountants to prepare and deliver to the Shareholders' Representative a statement containing the balance sheet of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, PIC as of immediately before the effective time of the Closing Date (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(athe "Closing Date Balance Sheet") and a calculation of the Seller Disclosure LetterNet Working Capital as of the Closing Date (such amount, the "Closing Net Working Capital"); provided, that the Excess Bonus shall not be deducted in calculating the Closing Net Working Capital. The Closing Date Balance Sheet shall be prepared, and the principles, methodologies and policies set forth therein and, to the extent not set forth thereinClosing Net Working Capital shall be calculated, in accordance with U.S. United States generally accepted accounting principles ("GAAP, shall constitute ") (as in effect on the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working CapitalDate).
(b) If the Purchase Price Shareholders' Representative in good faith disagrees with Parent's calculation of the Closing Net Working Capital as finally determined in accordance with this Section 2.04 is less than set forth on the Estimated Purchase PriceClosing Date Balance Sheet, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, he may within three twenty (320) Business Days after the final determination receipt thereof deliver a written notice to Parent disagreeing with such calculation of the Purchase PriceClosing Net Working Capital. Any such notice of disagreement shall specify in reasonable detail those items or amounts comprising the Closing Net Working Capital as to which the Shareholders' Representative disagrees and the basis of such disagreement. If no such notice of disagreement is timely delivered pursuant to this Section 2.3(b), to an account designated by the party receiving payment no later than two (2) Business Days after Closing Net Working Capital set forth on the Closing Date Balance Sheet shall be final determination of and binding on the Purchase Priceparties hereto.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the ClosingIf a notice of disagreement shall be timely delivered pursuant to Section 2.3(b), Purchaser shall prepare and deliver the parties shall, during the twenty (20) Business Days following such delivery, use their reasonable efforts to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capitalreach an agreement on the disputed items. If such an agreement is reached, (ii) the Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution Working Capital as so agreed to in writing by Purchaser and Seller shall be final and binding upon on the parties.
(d) parties hereto. If Purchaser and Seller the parties are unable to resolve any disagreement as contemplated reach such an agreement, a nationally-recognized accounting firm jointly selected by Section 2.04(cParent and the Shareholders' Representative not then performing, or that has not performed in the past two (2) within thirty (30) days after delivery by Seller of a Disagreement Noticeyears, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems material services for Seller, Purchaser or any of their respective Affiliates the Shareholders or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement Parent (the firm so selected "Accounting Referee") shall be referred retained to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, review promptly this Agreement and the Accounting Arbitrator shall not make any other determinationdisputed items or amounts. The Accounting Arbitrator Referee shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference deliver to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, and within forty-five (45) calendar days of being referred the matter, a written report setting forth its adjustments, if any, to the resolution of any Closing Date Balance Sheet and the calculations supporting such disagreement determined in accordance with adjustments. The Accounting Referee shall act as an arbitrator to determine, based solely on the terms provisions of this AgreementSection 2.3 and the presentations by Parent and the Shareholders' Representative, and not by independent review, only those issues still in dispute. Such report shall be final and binding upon the parties, absent manifest errorparties hereto and the Closing Net Working Capital as adjusted pursuant to such report shall be final and binding on the parties hereto. The fees, costs and expenses cost of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.Accounting
Appears in 1 contract
Sources: Stock Purchase Agreement (United National Group LTD)
Purchase Price Adjustment. (a1) The Purchase Price will be adjusted, on a preliminary basis, on the Closing Date by adding to the amount specified in Section 2.04(a2.2(a) hereof, the positive Adjusted Working Capital, if any, or subtracting from the amount specified in Section 2.2(a) hereof, the negative Adjusted Working Capital, if any, in each case as shown on the Estimated MI Closing Balance Sheet prepared by Sellers, and reviewed and agreed upon by Buyer, in good faith and based upon the most recent financial information of the Seller Disclosure Letter sets forth certain current assets Business then available thereto prior to the Closing and current liabilities accounts assuming for such purposes only that the Estimated MI Closing Balance Sheet were the Final MI Closing Balance Sheet; provided, however, if Sellers and certain accounting principlesBuyer do not agree upon the Estimated MI Closing Balance Sheet prior to the Closing Date, methodologies the Closing shall not be delayed and policies used in the determination of such accounts. Such accounts Adjusted Working Capital shall be deemed to equal $324,657 for purposes of the BusinessClosing, cumulativelyunless Sellers and Buyer shall otherwise agree.
(2) As soon as practicable after the 90th day following the Closing Date, but in any event no later than the 100th day following the Closing Date (the "Settlement Date"), the Buyer shall deliver to Sellers a balance sheet of the Business as of immediately before the effective time of the Closing (Date prepared in accordance with GAAP, except as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letterherein, and in the principlessame manner and consistent with the accounting principles reflected in the June 30, methodologies and policies set forth therein and, 1999 Balance Sheet (as hereinafter defined) to the extent not the manner of preparation thereof and accounting principles reflected therein are consistent with this Agreement, GAAP and the agreed upon exceptions thereto which are set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
herein (b) If the Purchase Price as finally such definitive balance sheet determined in accordance with pursuant to this Section 2.04 is less than 2.2(c) being herein called the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three "Final MI Closing Balance Sheet"). Within twenty (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (9020) days after the Closing)receipt of the Final MI Closing Balance Sheet, Purchaser Sellers shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation Buyer written notice of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance its agreement or disagreement with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (contents thereof and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably if Sellers disagree with the operations of such party’s businesses. Notwithstanding the foregoingFinal MI Closing Balance Sheet, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Lawsan explanation for its disagreement. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller the Buyer's receipt of a Disagreement Noticeany notice of disagreement, Purchaser Sellers and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firmBuyer have not finally agreed on the Final MI Closing Balance Sheet, the retention disagreement shall be submitted to an independent certified public accountant selected by mutual agreement of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller Sellers and Purchaser, to resolve such disagreement Buyer (the firm so selected shall be referred to herein as the “Accounting "Arbitrator”"). In the event that Purchaser and Seller are unable to agree on the appointment The fees of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator relating to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne shared equally by PurchaserSellers, on the one hand, and SellerBuyer, on the other hand, in proportion and the decision of the Arbitrator shall be conclusive and final and binding upon Sellers and Buyer.
(3) On the Settlement Date or the date on which the parties ultimately reach resolution with respect to the differences between Final MI Closing Balance Sheet, the parties shall recalculate the Purchase Price as determined by paid at Closing after giving effect to the Accounting Arbitrator and the asserted Purchase Price set forth in adjustment made at the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed subclause (c)(1) above, to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of determine whether the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of Purchase Price paid at the Closing is equal to the Purchase Price which would have been due if the Final MI Closing Balance Sheet had been substituted for the Estimated MI Closing Balance Sheet. If the Purchase Price paid at Closing was less than the Purchase Price which would have been paid had the Final Closing Balance Sheet been substituted for the Estimated MI Closing Balance Sheet, Buyer shall pay to IMG the difference in cash, and if the Purchase Price paid at Closing was greater than the Purchase Price which would have been paid had the Final Closing Balance Sheet been substituted for the Estimated MI Closing Balance Sheet, IMG shall pay to Buyer the difference in cash, in each case such payment being made as published by Bloomberg promptly as practicable but in any event, within two Business Days after the ultimate resolution of such disagreement, together with interest which shall have accrued upon such payment amount at a rate of six percent (BGN New York), shall be used to convert 6%) per annum from the Closing Date until the date of any such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04payment.
Appears in 1 contract
Sources: Asset Purchase Agreement (Liberty Group Operating Inc)
Purchase Price Adjustment. (ai) Section 2.04(aAt least five (5) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately business days before the effective time of the Closing (as set Closing, Target shall, and Principals shall cause Target to, prepare in good faith and deliver to Buyer a written statement setting forth in Section 2.05(a))reasonable detail the Estimated Closing Date Cash, determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Estimated Closing Net Date Indebtedness, the Estimated Closing Date Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Closing Date Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 Capital (the “Estimated Closing Statement”), which together with supporting documentation for such estimates and any additional information reasonably requested by Buyer. The Estimated Closing Statement shall be reasonably acceptable to Buyer and shall be prepared in accordance consultation with the accounting principles, methodologies Buyer and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing StatementExhibit B, which written notice shall set sets forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the partiesGAAP, absent manifest error. The fees, costs and expenses that were used in preparation of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelyAnnual Financial Statements.
(eii) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 The Base Purchase Price payable at Closing shall be allocated in (A) increased on a manner consistent with dollar for dollar basis by the amount of Estimated Closing Date Cash, (B) decreased by the amount of any allocation agreed to pursuant to Section 2.03(cEstimated Closing Date Indebtedness, (C) decreased on a dollar for dollar basis by the amount of any Estimated Closing Date Transaction Expenses, and either (D) increased if the Estimated Closing Date Working Capital is more than the Working Capital Target, by the amount of such difference or (E) decreased if the Estimated Closing Date Working Capital is less than the Working Capital Target, by the amount of such difference (collectively, the “Closing Date Adjustment”).
(fiii) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately At least two (2) business days before the effective time Closing, Target shall, and Principals shall cause Target to, prepare and deliver to Buyer a flow of funds statement (the “Flow of Funds Statement”) setting forth: (A) the Base Purchase Price; (B) the Closing as published by Bloomberg Date Adjustment; and (BGN New York)C) the applicable payees, shall be used to convert such amounts into U.S. dollars payable and wire instructions for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this all amounts payable under Section 2.042(b) hereof.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (MSA Safety Inc)
Purchase Price Adjustment. (a) Section 2.04(aNot later than five (5) Business Days prior to the Closing Date, Parent shall cause to be prepared and delivered to Purchaser a statement (the “Estimated Statement”) showing the amount reasonably estimated by Parent, in good faith, to be the Working Capital as of 11:59 pm on the day immediately preceding the Closing Date (the “Estimated Working Capital”), together with supporting documentation used by Parent in calculating and preparing the Estimated Statement and such other documentation as Purchaser shall reasonably request. In the event Purchaser objects to Parent’s calculation of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts amount of the Business, cumulatively, as of immediately before the effective time of the Closing (Estimated Working Capital as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase PriceStatement, Purchaser shall pay deliver to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than Parent at least two (2) Business Days after prior to the final determination Closing Date a written statement in reasonable detail describing Purchaser’s objections to the Estimated Statement (“Purchaser’s Objection Notice”). Purchaser and Parent shall use their commercially reasonable efforts to resolve any of Purchaser’s objections to the Purchase Price.
(c) As promptly Estimated Statement as practicable (described in Purchaser’s Objection Notice, and Parent shall make such revisions to the Estimated Statement as mutually agreed between Parent and Purchaser, and, in if any eventchanges are made, within ninety shall deliver a copy of such revised Estimated Statement to Purchaser one (901) days after Business Day prior to the Closing), Purchaser shall prepare and deliver Closing Date. With respect to Seller a statement setting forth any of Purchaser’s calculation of objections that are not resolved before the Closing Date, the parties shall proceed as follows: (i) Modified Working Capitalif the aggregate amount of Purchaser’s unresolved objections is less than $200,000, the Closing shall proceed with Parent’s estimate of such disputed amounts, and (ii) Closing Net Indebtednessif the aggregate of Purchaser’s unresolved objections is greater than $200,000, (iii) Closing Transaction Expenses then the mid-point between Purchaser’s unresolved objections and (iv) Parent’s estimate of such disputed amounts shall be used for purposes of proceeding to Closing. The final amount used as the Purchase Price Estimated Working Capital pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)3.3(a) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting ArbitratorFinal Estimated Working Capital”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Sources: Asset Purchase Agreement (International Wire Group Inc)
Purchase Price Adjustment. (a) Section 2.04(aWithin sixty (60) days after the Closing Date, Buyer shall prepare and deliver to the Shareholders’ Representative a statement (the “Statement”) setting forth the actual Working Capital as of the Seller Disclosure Letter sets close of business on the Closing Date (the “Closing Working Capital”), calculated in the manner set forth certain current assets on Schedule 2.4(a). The Statement shall be prepared in accordance with GAAP and current liabilities accounts and certain consistent with the accounting principles, practices, methodologies and policies used in the determination of such accounts. Such accounts preparation of the BusinessTarget Working Capital, cumulativelyexcept that Buyer is permitted to conduct a physical inventory, as at Buyer’s cost and expense, for purposes of immediately before preparing the effective time Statement. Schedule 2.4(a)(ii) sets forth the calculation for determining the value of shot rock inventory. Buyer hereby agrees that the Shareholders and their respective representatives shall be permitted to attend and participate in the physical inventory conducted by Buyer under this Section 2.4, and Buyer hereby further agrees to provide written notice to the Shareholders’ Representative of the Closing date(s) on which the physical inventory shall be conducted, which notice shall be delivered no later than ten (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a10) Business Days prior to the start of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capitalphysical inventory.
(b) If Within thirty (30) days following receipt by the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination Shareholders’ Representative of the Purchase PriceStatement, the Shareholders’ Representative shall deliver written notice to an account designated by Buyer of any dispute the party receiving payment no later than two (2) Business Days after Shareholders have regarding the final determination Statement and the accurate calculation of the Purchase Price.
Closing Working Capital on a basis consistent with the requirements of Section 2.4(a) (csuch written notice shall set forth a detailed description of any such dispute); provided, however, that the Shareholders’ Representative (on behalf of the Shareholders) As promptly as practicable (andmay not dispute the accounting principles, practices, methodologies and policies used in any event, within ninety (90) days after preparing the Closing), Purchaser shall prepare Statement if they are consistent with GAAP and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance consistent with the accounting principles, practices, methodologies and policies set forth used in Section 2.04 the preparation of the Seller Disclosure Letter (and, Target Working Capital. If the Shareholders’ Representative does not so notify Buyer of a dispute with respect to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of within such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 6030-day period, Seller shall such Statement will be deemed to have accepted final, conclusive and binding on the Closing Statement delivered by Purchaserparties. Matters included in In the calculations in event of such notification of a dispute, the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller parties shall negotiate in good faith to resolve any such disagreementdispute. If Buyer and the Shareholders’ Representative, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable notwithstanding such good faith efforts, fail to resolve all or any disagreement portion of such dispute within fifteen (15) days after the Shareholders’ Representative advises Buyer of the dispute, then Buyer and the Shareholders’ Representative jointly shall engage the Accounting Firm, acting as contemplated by accountants and not as arbitrators, to resolve the dispute, or any remaining portion thereof, on a basis consistent with the requirements of Section 2.04(c) 2.4(a). The parties agree that they will request that the Accounting Firm render its reasoned written decision within thirty (30) days after delivery by Seller referral of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firmthe dispute to the Accounting Firm for decision pursuant hereto. In resolving the dispute, the retention of which will not give rise Accounting Firm shall limit its review to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined the items that were properly identified by the reasonable discretion Shareholders’ Representative in the written notification of Seller and Purchaserthe dispute (which decision, to resolve such disagreement (in the firm so selected case of each disputed item, shall be referred within the range of the respective amounts asserted by the Shareholders’ Representative and Buyer to herein as be the “Accounting Arbitrator”correct amount of such disputed item). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved All determinations so made by the Accounting Arbitrator Firm shall be limited to whether such calculation was done in accordance with the terms hereoffinal, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final conclusive and binding upon on the parties, absent manifest error. The fees, Judgment may be entered to enforce such determination in any court of competent jurisdiction. Buyer and the Shareholders’ Representative (on behalf of the Sellers) shall each bear its own costs and expenses, including reasonable expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall their respective representatives and experts, that may be borne incurred by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness Person in connection with the adjustments pursuant preparation, review, dispute (if any) and final determination of the Statement and Closing Working Capital; provided, that Buyer and the Shareholders’ Representative (on behalf of the Sellers) shall share equally all reasonable expenses and fees of the Accounting Firm in connection with the review, dispute and final determination of the Statement and Closing Working Capital.
(c) Upon final determination of Closing Working Capital as provided in Section 2.4(b) above, (i) if Closing Working Capital is greater than Target Working Capital, then the Purchase Price shall be increased by the amount of the excess of Closing Working Capital over Target Working Capital (together with Interest), and Buyer shall pay or cause to this Section 2.04.be paid an amount in cash equal to
Appears in 1 contract
Sources: Share and Membership Interest Purchase Agreement (Nacco Industries Inc)
Purchase Price Adjustment. (a) Section 2.04(aNo later than five (5) Business Days prior to the Closing Date, Seller shall prepare and deliver to Buyer a certificate of an officer of Seller, or one of its Subsidiaries, on behalf of Seller, setting forth its good faith estimate as of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination open of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of business on the Closing Date of (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(ai) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute Net Working Capital (the “Modified Estimated Net Working Capital”. For ), (ii) the avoidance of doubt, amounts included in Closing Indebtedness other than the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment Travelport Facility which shall be excluded from repaid by Seller on the determination of Closing Date pursuant to Section 4.24 (the Modified Working Capital“Estimated Closing Indebtedness”), (iii) the Company Portion Retention Payments (the “Estimated Company Portion Retention Payments”), (iv) the GTA Bonus (the “Estimated GTA Bonus”), (v) the Project Austin Costs (the “Estimated PA Costs”), (vi) the Restructuring Costs (the “Estimated Restructuring Costs”), (vii) the M&A Costs (the “Estimated M&A Costs”) and (viii) the Project Nova Costs (the “Estimated Project Nova Costs”).
(b) If the The Initial Purchase Price as finally determined in accordance with this Section 2.04 is less than shall be (i) (A) increased, if the Estimated Purchase PriceNet Working Capital exceeds the Reference Net Working Capital, Seller shall pay by an amount equal to Purchaser the total amount of such deficitexcess or (B) decreased, and if the Purchase Price as finally determined in accordance with this Section 2.04 Reference Net Working Capital exceeds the Estimated Purchase PriceNet Working Capital, Purchaser shall pay by an amount equal to Seller such excess (such increase or decrease, as the total case may be, being the “Estimated Closing Adjustment”) and (ii) decreased by (w) the Estimated Closing Indebtedness, (x) an amount equal to the product of (A) 0.80 and (B) the Estimated Project Nova Costs (such excessproduct, in either case by wire transfer the “Estimated Project Nova Cost Payment”), (y) an amount equal to the product of immediately available U.S. dollar funds(A) 0.65 and (B) the Estimated Company Portion Retention Payments (such product, within three the “Estimated Company Portion Retention Payments Payment”) and (z) an amount equal to the sum of (1) the product of (A) 0.80 and (B) the Estimated GTA Bonus (such product, the “Estimated GTA Bonus Payment”), (2) the product of (A) 0.80 and (B) the Estimated PA Costs (such product, the “Estimated PA Cost Payment”), (3) Business Days after the final determination product of (A) 0.80 and (B) the Purchase PriceEstimated Restructuring Costs (such product, to an account designated by the party receiving payment no later than two “Estimated Restructuring Cost Payment”) and (24) Business Days after the final determination product of (A) 0.65 and (B) the Purchase PriceEstimated M&A Costs (such product, the “Estimated M&A Cost Payment”).
(c) As promptly as practicable Within forty-five (and, in any event, within ninety (9045) days after following the ClosingClosing Date, Buyer and the Company shall deliver or cause to be delivered to Seller the following (collectively, the “Preliminary Closing Statement”):
(i) an unaudited combined balance sheet of the Acquired Companies immediately prior to the Closing (the “Preliminary Closing Balance Sheet”), Purchaser shall prepare prepared by Buyer in accordance with GAAP applied on a consistent basis;
(ii) a certificate of an officer of Buyer, or one of its Subsidiaries, certifying that the Preliminary Closing Balance Sheet has been prepared in accordance with GAAP, applied on a consistent basis; and
(iii) (x) a reasonably detailed calculation by Buyer of the Net Working Capital as of the open of business on the Closing Date based on the Preliminary Closing Balance Sheet (the “Preliminary Net Working Capital”), and deliver to Seller (y) a statement setting forth Purchaser’s in reasonable detail (1) the Company Portion Retention Payments as of the open of business on the Closing Date (the “Preliminary Company Portion Retention Payments”), (2) the GTA Bonus as of the open of business on the Closing Date (the “Preliminary GTA Bonus”), (3) the Project Austin Costs as of the open of business on the Closing Date (the “Preliminary PA Costs”), (4) the Restructuring Costs as of the open of business on the Closing Date (the “Preliminary Restructuring Costs”) and (5) the Closing Indebtedness as of the open of business on the Closing Date other than the Travelport Facility (which shall be repaid by Seller on the Closing Date pursuant to Section 4.24) (the “Preliminary Closing Indebtedness”), (6) the M&A Costs as of the open of business on the Closing Date (the “Preliminary M&A Costs”) and (7) the Project Nova Costs as of the open of business on the Closing Date (the “Preliminary Project Nova Costs”).
(iv) Seller shall have fifteen (15) Business Days following receipt of the Preliminary Closing Statement to review the Preliminary Closing Balance Sheet and the calculation of (i) Modified Preliminary Net Working Capital and to notify Buyer in writing if it disputes the amount of the Preliminary Net Working Capital, (ii) the Preliminary Company Portion Retention Payments, the Preliminary GTA Bonus, the Preliminary PA Costs, the Preliminary Closing Net Indebtedness, (iii) the Preliminary M&A Costs, the Preliminary Project Nova Costs and/or the Preliminary Restructuring Costs set forth on the Preliminary Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 Statement (the “Closing StatementDispute Notice”), which specifying the reasons therefor in reasonable detail.
(d) In connection with Seller’s review, Seller and its Representatives shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives have reasonable access, during normal business hours and upon reasonable notice, to their respective booksall relevant work papers, recordsschedules, work papers memoranda and other documents prepared by Buyer or its Representatives in connection with its preparation of the Preliminary Closing Balance Sheet and/or its calculation of Preliminary Net Working Capital, the Preliminary Company Portion Retention Payments, the Preliminary GTA Bonus, the Preliminary PA Costs, the Preliminary Closing Indebtedness, the Preliminary M&A Costs, the Preliminary Project Nova Costs and the Preliminary Restructuring Costs and to finance personnel (of Buyer and its Subsidiaries and any other information which either party Seller reasonably requests to requests, and Buyer shall, and shall cause its Subsidiaries to, cooperate reasonably with Seller and its Representatives in connection therewith.
(e) In the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes event that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Dispute Notice by the end of such 60-day periodto Buyer, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser Buyer and Seller shall negotiate cooperate in good faith to resolve such dispute as promptly as practicable and, upon such resolution, if any, any such disagreementadjustments to the Preliminary Closing Balance Sheet, the Preliminary Net Working Capital, the Preliminary Company Portion Retention Payments, the Preliminary GTA Bonus, the Preliminary PA Costs, the Preliminary Closing Indebtedness, the Preliminary M&A Costs, the Preliminary Project Nova Costs and any resolution agreed to in writing by Purchaser and Seller the Preliminary Restructuring Costs shall be final made in accordance with the agreement of Buyer and binding upon the parties.
(d) Seller. If Purchaser Buyer and Seller are unable to resolve any disagreement such dispute within ten (10) Business Days (or such longer period as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser Buyer and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firmagree in writing) of Seller’s delivery of such Dispute Notice, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined such dispute shall be resolved by the reasonable discretion of Seller Independent Accounting Firm, and Purchaser, to resolve such disagreement (the firm so selected determination shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser final and Seller are unable to agree binding on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firmparties. The parties Independent Accounting Firm shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser Buyer and Seller have not resolved their disagreementdisagreed within the time periods and on the terms specified above. In making such determination, the Independent Accounting Firm may rely only upon information submitted to it by Buyer or Seller. The scope of the disputes to be resolved by the Independent Accounting Arbitrator Firm shall be limited instructed to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable best efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, Buyer and Seller a written report setting forth the resolution of each disputed matter within thirty (30) days of submission of the Preliminary Closing Balance Sheet, the Preliminary Net Working Capital, the Preliminary Company Portion Retention Payments, the Preliminary GTA Bonus, the Preliminary PA Costs, the Preliminary Closing Indebtedness, the Preliminary M&A Costs, the Preliminary Project Nova Costs and the Preliminary Restructuring Costs to it and, in any case, as promptly as practicable after such disagreement determined submission. Any expenses relating to the engagement of the Independent Accounting Firm in accordance with the terms respect of its services pursuant to this Agreement. Such report Section 2.3(e) shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne shared equally by PurchaserSeller, on the one hand, and SellerBuyer and the Company, jointly and severally, on the other hand. The Preliminary Closing Balance Sheet, in proportion the Preliminary Net Working Capital, the Preliminary Company Portion Retention Payments, the Preliminary GTA Bonus, the Preliminary PA Costs, the Preliminary Restructuring Costs, the Preliminary Closing Indebtedness, the Preliminary M&A Costs and the Preliminary Project Nova Costs, (i) if no Dispute Notice has been timely delivered by Seller, as originally submitted by Buyer or (ii) if a Dispute Notice has been timely delivered by Seller, as determined pursuant to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth resolution of such dispute in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to accordance with this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York2.3(e), shall be used to convert such amounts into U.S. dollars for purposes of determining be, respectively, the “Final Closing Balance Sheet,” the “Final Net Indebtedness in connection with Working Capital,” “Final Company Portion Retention Payments,” the adjustments pursuant to this Section 2.04“Final GTA Bonus,” the “Final PA Costs,” the “Final Restructuring Costs,” the “Final Closing Indebtedness,” the “Final M&A Costs” and the “Final Project Nova Costs”(collectively, the “Final Amounts”).
Appears in 1 contract
Sources: Purchase Agreement (Cendant Corp)
Purchase Price Adjustment. (a) Section 2.04(aSellers shall, at least five (5) business days prior to the Closing Date, cause to be prepared and delivered to Buyer a statement (the “Preliminary Statement”), setting forth Sellers’ good faith estimate of each of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, Modified Net Working Capital as of immediately before the effective time of the Closing Date (the “Closing Date Modified Net Working Capital”) and the Capital Expenditure Account Balance as set of the Closing Date (the “Closing Date Capital Expenditure Account Balance”). The estimate of Closing Date Modified Net Working Capital is referred to herein as the “Estimated Modified Net Working Capital” and the estimate of the Closing Date Capital Expenditure Account Balance is referred to herein as the “Estimated Closing Date Capital Expenditure Account Balance.” (b) Within forty-five (45) calendar days after the Closing Date, Buyer shall cause to be prepared and delivered to Sellers a statement (the “Statement”) setting forth in Section 2.05(a))Buyer’s calculations of Closing Date Modified Net Working Capital, determined the Closing Date Capital Expenditure Account Balance and the components and calculation of each, which comments and calculations shall be included and made in accordance with Section 2.04(a) 1.2 of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein Letter and, to the extent not set forth provided for therein, GAAP (in accordance with U.S. GAAPeach case as and to the same extent determined pursuant to Section 1.2(c)(ii)). At the same time, Buyer shall constitute also cause to be prepared and delivered to Sellers a statement (the “Adjustment Statement”) setting forth the calculation (whether a positive or negative number) of (i) the amount of the Closing Date Modified Net Working CapitalCapital as shown on the Statement minus the Estimated Modified Net Working Capital plus (ii) the Closing Date Capital Expenditure Account Balance minus the Estimated Closing Date Capital Expenditure Account Balance (the sum of such amounts, whether a positive or negative number, the “Adjustment Amount”). For Buyer shall provide Sellers and their accountants with access to the avoidance relevant books and records of doubt, amounts included the Company and the Sellers Employees to the extent required in connection with their review of and any dispute with respect to the determination Statement and the Adjustment Statement and shall furnish Sellers with any other information that might be relevant to the calculation of Closing Date Modified Net IndebtednessWorking Capital or the Closing Date Capital Expenditure Account Balance. If, Closing Transaction Expenses and Pension Plan Purchase Price at any time prior to the final resolution of all disputed items on the Statement or the Adjustment Statement, additional information shall be excluded from become known to Buyer or Sellers that would change the determination amount of the Closing Date Modified Net Working Capital.
(b) If Capital or the Purchase Price Closing Date Capital Expenditure Account Balance shown on the Statement or the calculation thereof, then Buyer shall amend the Statement and Adjustment Statement to reflect such additional information. Buyer or Sellers shall promptly notify Sellers or Buyer, as finally determined in accordance with this Section 2.04 is less than applicable, upon becoming aware of any additional information prior to the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination end of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase PriceResolution Period.
(c) As promptly as practicable After receipt of the Statement and the Adjustment Statement, Sellers will have thirty (and, 30) calendar days from receipt to review the Statement and the Adjustment Statement together with the workpapers used in any event, within ninety (90) days after the Closing), Purchaser shall prepare and their preparation. Unless Sellers deliver to Seller Buyer written notice setting forth in reasonable detail the specific items disputed by Sellers and a written statement setting forth Purchaser’s Sellers’ calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses each line item shown on the Statement so disputed and (iv) the Purchase Price pursuant to this Section 2.04 amount in dispute (the “Closing Sellers’ Statement”), which shall be prepared in accordance with ) on or prior to the accounting principles, methodologies and policies set forth in Section 2.04 thirtieth (30th) day after receipt of the Seller Disclosure Letter (and, to Statement and the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Adjustment Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall Sellers will be deemed to have accepted and agreed to the Closing Statement delivered by Purchaserand the Adjustment Statement and such agreement will be final, binding and conclusive. Matters included in Any items on the calculations in the Closing Statement or Adjustment Statement as to which Seller does Sellers have not object in the Disagreement Notice shall given notice of their objection and provided an alternative calculation on Sellers’ Statement will be deemed accepted to have been agreed upon by Seller and shall not be the Parties, subject to further dispute the penultimate sentence of Section 1.3(b). If Sellers so notify Buyer of their objections to any of the Statement or review. Purchaser the Adjustment Statement and Seller shall negotiate provide Buyer with Sellers’ Statement in good faith to resolve any such disagreementa timely manner, Buyer and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) Sellers will, within thirty (30) calendar days following such notice (the “Resolution Period”), attempt to resolve their differences. Any resolution by Buyer and Sellers during the Resolution Period as to any disputed amounts will be final, binding and conclusive. If the amount claimed by Buyer on the Adjustment Statement to be owed by Sellers is less than the Escrow Amount, then, promptly after delivery of the Adjustment Statement, any amount on deposit in the Escrow Account that is in excess of the amount claimed by Buyer to be owed by Sellers under this Section shall be distributed from the Escrow Account to Sellers in accordance with the Escrow Agreement, and Buyer agrees to reasonably cooperate with Sellers in any necessary joint instruction to the Escrow Agent. Money released from the Escrow Account to Sellers shall be distributed to Sellers in accordance with the Sharing Percentages set forth on Annex A. If Buyer and Sellers do not resolve all disputed items by the end of the Resolution Period, then all items remaining in dispute will be submitted within ten (10) days after delivery by Seller the expiration of the Resolution Period to a Disagreement Notice, Purchaser and Seller shall jointly select a national independent accounting firm mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller Buyer and Purchaser, to resolve such disagreement Sellers (the firm so selected shall be referred to herein as the “Neutral Accounting Arbitrator”). In the event ; it being understood that Purchaser and Seller are unable to agree on the appointment no member of the Neutral Accounting Arbitrator, as provided above, then the ’s engagement team shall have an existing professional relationship with Buyer or any of its Affiliates. The Neutral Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator act as an arbitrator to consider determine only those items in dispute. All fees and amounts set forth in expenses relating to the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes work, if any, to be resolved performed by the Neutral Accounting Arbitrator shall will be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaserallocated between Buyer, on the one hand, and SellerSellers, on the other hand, in inverse proportion to as they shall prevail on the differences between the Purchase Price amounts of such disputed items so submitted (as finally determined by the Neutral Accounting Arbitrator). The Neutral Accounting Arbitrator will deliver to Buyer and Sellers a written determination (such determination to include a work sheet setting forth all material calculations used in arriving at such determination and to be based solely on information provided to the Neutral Accounting Arbitrator by Sellers and Buyer) of the disputed items within thirty (30) days of receipt of the disputed items (or as soon as practicable thereafter), which determination will be final, binding and conclusive. The final, binding and conclusive Statement and Adjustment Statement, which either are agreed upon by Buyer and Sellers or are delivered by the Neutral Accounting Arbitrator in accordance with this Section 1.3, will be the “Conclusive Statement” and the asserted Purchase Price set forth “Conclusive Adjustment Statement,” respectively. In the event that either Buyer or Sellers fails to submit its statement regarding any items remaining in dispute within the Closing Statement and time determined by the Disagreement NoticeNeutral Accounting Arbitrator, respectively.then the Neutral Accounting Arbitrator shall
(ed) Purchaser If the Adjustment Amount as shown on the Conclusive Adjustment Statement (the “Conclusive Adjustment Amount”) is a negative number, then the Cash Consideration will be reduced by the amount of the Conclusive Adjustment Amount, but not in excess of the Escrow Amount, and Seller Buyer shall be entitled to payment of such amount from the Escrow Account by wire transfer of immediately available funds to an account or accounts designated by the Party entitled to receive such funds (and Sellers agree that any to cooperate reasonably in facilitating such payment, including by executing and delivering an appropriate joint instruction to the Escrow Agent). If the Conclusive Adjustment Amount is a positive number, then the Cash Consideration will be increased by the amount of the Conclusive Adjustment Amount, but not in excess of the Escrow Amount, and Buyer shall pay to Sellers cash equal to such amount, to be paid to an account or accounts designated in writing by Sellers prior to the date when such payment is due. All payments to be made pursuant to this Section 2.04 1.3(d) will be made on the fifth business day following the date on which Buyer and Sellers agree to, or the Neutral Accounting Arbitrator delivers, the Conclusive Statement and the Conclusive Adjustment Statement and, in the case of payment to Buyer, instruct the Escrow Agent by joint written instruction accordingly. If the Conclusive Adjustment Amount is a positive number, or is a negative amount that is less than the amount remaining on deposit in the Escrow Account, then, promptly after determination of the Conclusive Adjustment Amount, any amount remaining on deposit in the Escrow Account that is in excess of the lesser of the Conclusive Adjustment Amount and the Escrow Amount shall be allocated distributed from the Escrow Account to Sellers in a manner consistent accordance with the Escrow Agreement, and Buyer agrees to reasonably cooperate with Sellers in any allocation agreed necessary joint instruction to pursuant the Escrow Agent. Money released from the Escrow Account to Section 2.03(c).Sellers shall be distributed to Sellers in accordance with the Sharing Percentages set forth on Annex A.
(fe) With respect Buyer acknowledges and agrees that its sole and exclusive remedy for any amount due to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments it pursuant to this Section 2.041.3 shall be its right to payment from the Escrow Account in an amount not to exceed the Escrow Amount. Sellers acknowledge and agree that their sole and exclusive remedy for any amount due to them pursuant to this Section 1.3 shall be the right to payment from Buyer in an amount not to exceed the Escrow Amount.
Appears in 1 contract
Sources: Purchase and Sale Agreement
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, and in any event, event within ninety (90) days after following the Closing)Closing Date, Purchaser Buyer shall prepare and deliver to Seller the Equityholder Representative (i) an unaudited consolidated balance sheet of the Company and its Subsidiaries as of the Reference Time (the "Closing Balance Sheet") and (ii) a statement setting (the "Post-Closing Statement") which sets forth Purchaser’s Buyer's calculation of (iA) Modified Cash, (B) the Closing Date Indebtedness, (C) the Closing Date Working Capital, (iiD) Closing Net Indebtednessthe Transaction Expenses, (iii) Closing Transaction Expenses and (ivE) the calculation of the Purchase Price pursuant to this Section 2.04 (based on the “Closing Statement”)foregoing elements, which shall be in each case, prepared in accordance with the accounting principles, methodologies and policies definitions set forth in Section 2.04 this Agreement and, in the case of the Seller Disclosure Letter (andClosing Balance Sheet and the Closing Date Working Capital, to as calculated using the extent not same methodologies, principles, conventions, policies and procedures as were used in the preparation of the example calculation of Closing Date Working Capital set forth therein, in accordance with U.S. GAAP). on Exhibit B. The parties agree to provide each other Closing Balance Sheet and the Post-Closing Statement shall disregard any and all effects on the Company and its Subsidiaries (including their respective Representatives reasonable access, during normal business hours assets and upon reasonable notice, to their respective books, records, work papers and personnel liabilities) as a result of the transactions contemplated by this Agreement (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, other than with respect to the Business calculation of the Transaction Expenses) or of any financing or refinancing arrangement entered into at any time by Buyer or any other transaction entered into by Buyer in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably connection with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination consummation of the transactions contemplated by this Agreement.
(b) After delivery of the Post-Closing Statement, Seller Buyer and the Company shall notify Purchaser cooperate with and shall provide the Equityholder Representative and its authorized officers, employees and professional advisors with reasonable access during normal business hours, upon reasonable prior notice, to the books and records (including work papers, schedules, memoranda and other documents) and supporting data of Buyer and the Company used in writing of such disagreement within sixty (60) days after delivery connection with the preparation of the Post-Closing Statement, which provided that such actions do not unreasonably interfere with the business and operations of Buyer and its Affiliates, including the Company and its Subsidiaries and the Equityholder Representative and its authorized officers, employees and professional advisors keep any such information confidential in accordance with Section 6.13(a).
(c) On or prior to the date that is forty-five (45) days following the Equityholder Representative's receipt of the Post-Closing Statement (such period, the "Review Period"), the Equityholder Representative may object to any calculation contained in the Post-Closing Statement by delivering to Buyer a written notice shall set statement setting forth any such disagreement objection in reasonable detail detail, indicating each disputed item, the basis for its disagreement therewith and the dollar amount of each such disagreement (“Disagreement Notice”the "Statement of Objections"). If Seller the Equityholder Representative fails to deliver a Disagreement Notice by the end Statement of such 60Objections before the expiration of the Review Period, the Post-day periodClosing Statement shall constitute the Final Closing Statement for purposes of this Agreement, Seller and the calculation of the Purchase Price based thereon shall be deemed to have been accepted by the Equityholder Representative and shall be deemed final and binding upon the parties hereto. Any calculation set forth in the Post-Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement as to which Seller the Equityholder Representative does not object in the Disagreement Notice shall Statement of Objections will be deemed accepted by Seller the Equityholder Representative and shall not will be subject to further dispute or review. Purchaser final and Seller binding upon all parties hereto upon delivery of the Statement of Objections.
(d) If the Equityholder Representative delivers the Statement of Objections before the expiration of the Review Period, Buyer and the Equityholder Representative shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to each objection set forth in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) Statement of Objections within thirty (30) days after the delivery of the Statement of Objections (such period, as may be extended by Seller written agreement of a Disagreement Notice, Purchaser Buyer and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firmthe Equityholder Representative in their respective sole discretions, the retention "Resolution Period"), and in connection with such good-faith negotiations, each of which will not give rise to present or potential future auditor independence problems for SellerBuyer and the Equityholder Representative shall provide the other party and its authorized officers, Purchaser or any of their respective Affiliates or Subsidiariesemployees and professional advisors with reasonable access during normal business hours, as determined by the upon reasonable discretion of Seller and Purchaserprior notice, to resolve the books, records (including work papers, schedules, memoranda and other documents) and supporting data of such disagreement (party prepared or reviewed in connection with the firm so selected shall be referred preparation the Post-Closing Statement and the Statement of Objections, and, if each item in the Statement of Objections is resolved by written agreement of Buyer and the Equityholder Representative within the Resolution Period, the Post-Closing Statement, modified to herein reflect such changes as have been agreed in writing by Buyer and the “Accounting Arbitrator”). In Equityholder Representative with respect to the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of Objections, shall constitute the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Final Closing Statement, and the Accounting Arbitrator calculation of the Purchase Price based thereon (as so modified), shall not make be final and binding on all parties hereto. All discussions related to such negotiations within the Resolution Period shall (unless otherwise agreed by Buyer and the Equityholder Representative in their respective sole discretions) be governed by Rule 408 of the Federal Rules of Evidence (in effect as of the date of this Agreement) and similar state rules. If the Equityholder Representative and Buyer fail to reach an agreement with respect to all of the matters properly set forth in the Statement of Objections before expiration of the Resolution Period, then Buyer and the Equityholder Representative shall, as promptly as practicable, and in any other determinationevent within ten (10) days following the end of the Resolution Period refer any calculation remaining in dispute (the "Disputed Amounts") for resolution to Deloitte & Touche LLP (provided that if such person is unable or unwilling to serve in such capacity, the Equityholder Representative and Buyer shall work in good faith to jointly select an alternative firm that is a nationally or regionally recognized independent accounting firm) (the "Independent Accountant"). Buyer and the Equityholder Representative will execute a customary engagement letter with the Independent Accountant, will cooperate with the Independent Accountant during the term of its engagement, and will provide the Independent Accountant, at the time of such engagement, with the Post-Closing Statement and the Statement of Objections. The Accounting Arbitrator Equityholder Representative and Buyer shall also furnish the Independent Accountant with such other information and documents as the Independent Accountant may reasonably request in order for it to resolve the Disputed Amounts. Buyer and the Equityholder Representative will request that the Independent Accountant, within thirty (30) days of its referral, make a final, written determination as to the Disputed Amounts. Neither Buyer nor the Equityholder Representative nor any of their respective Representatives shall have or conduct any communication, whether written or oral, with the Independent Accountant without the other party either being present or concurrently receiving a written copy of any such communication. Neither Buyer nor the Equityholder Representative will disclose to the Independent Accountant, and the Independent Accountant will not consider for any purpose, any settlement discussion or settlement offer made by or on behalf of Buyer or the Equityholder Representative, unless otherwise agreed in writing by Buyer and the Equityholder Representative. The Equityholder Representative and Buyer will instruct the Independent Accountant to only resolve the Disputed Amounts and the decision of the Independent Accountant for each Disputed Amount must be within the range of values assigned to such Disputed Amount in the Post-Closing Statement and the Statement of Objections, respectively. The Independent Accountant shall act as expert, and not as arbitrator, Buyer and the Equityholder Representative shall instruct the Independent Accountant to make its determination based solely on written submissions, presentations submissions by Buyer and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference Equityholder Representative to the value assigned to extent such item by Seller submissions are in the Disagreement Notice accordance with this Agreement and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined only in accordance with the terms of this Agreement (i.e., not on the basis of an independent review). The Post-Closing Statement, as modified based on any applicable agreement of the Equityholder Representative and Buyer and the determination of the Independent Accountant in accordance with this Section 2.07(d) with respect to the Disputed Amounts, shall constitute the Final Closing Statement for purposes of this Agreement. Such report shall , and the calculation of the Purchase Price based thereon will be final and binding upon the all parties, absent manifest erroron the date the Independent Accountant delivers its final determination in writing to Buyer and to the Equityholder Representative. The final determination of the Independent Accountant shall be enforceable to the same extent as an arbitral award pursuant to the Federal Arbitration Act in any court of competent jurisdiction.
(e) The fees, costs and expenses of the Accounting Arbitrator arising Independent Accountant incurred in connection with this Section 2.04 the resolution of the Disputed Amounts shall be borne allocated and paid by PurchaserBuyer, on the one hand, and Sellerthe Equityholder Representative (on behalf of the Equityholders, severally among the Equityholders based on their Pro Rata Percentages), on the other hand, in the same proportion that the aggregate amount of the Disputed Amounts so submitted to the differences between the Purchase Price Independent Accountant that is unsuccessfully disputed by such party (as finally determined by the Accounting Arbitrator and Independent Accountant) bears to the asserted Purchase Price set forth in total amount of the Closing Statement and Disputed Amounts submitted to the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c)Independent Accountant.
(f) With respect to Cash and Cash Equivalents and Indebtedness of No later than five (5) Business Days after the Business denominated in currencies other than U.S. dollars, Purchase Price has been finally determined based on the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Final Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments Statement pursuant to this Section 2.042.07 (such final determination, the "Final Purchase Price"), (x) the Equityholder Representative shall deliver or cause to be delivered to Buyer the Payment Allocation Schedule (reflecting any updated Pro Rata Percentages as may be necessary after taking into account the payment of the Closing Payment Amount and the deemed payment of the exercise price in respect of each Option) and (y) the following actions shall be taken and payments shall be made, by wire transfer of immediately available funds to the account (or accounts) specified in writing by the Equityholder Representative or Buyer, as applicable:
(i) If the Final Purchase Price is greater than the Estimated Purchase Price (the amount by which the Final Purchase Price exceeds the Estimated Purchase Price, the "Positive Adjustment Amount": (A) Buyer shall pay, or cause to be paid, to the Equityholders based on their respective Pro Rata Percentages an amount equal to the lesser of the Positive Adjustment Amount and the Adjustment Escrow Amount, and (B) within the five (5) Business Day period following the determination of the Final Purchase Price, Buyer and the Equityholder Representative shall deliver or cause to be delivered a joint written instruction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release the entire Adjustment Escrow Amount to the Company (for further payment to the Optionholders pursuant to Section 2.07(h)) and the Sellers in respective amounts based on their respective Pro Rata Percentages.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable practicable, but in no event later than sixty (and, in any event, within ninety (9060) days after the Closing)Closing Date, Purchaser Buyer shall prepare and deliver to Seller the Sellers’ Representative a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”) setting forth Buyer’s good faith calculation of (i) Net Working Capital (the “Revised Net Working Capital”), which shall be prepared in accordance with (ii) Closing Cash (the accounting principles“Revised Closing Cash”), methodologies (iii) Closing Indebtedness (the “Revised Closing Indebtedness”), (iv) Closing Transaction Expenses (the “Revised Closing Transaction Expenses”), and policies set forth in Section 2.04 (v) Revised Cash Consideration. During the (30) thirty day period immediately following the delivery of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated by Buyer to the Sellers’ Representative (the “Objection Period”), Buyer shall provide the Sellers’ Representative and any disputes that may arise under this Section 2.04 are being resolvedits respective Representatives with a reasonable opportunity, in each case in a manner that does not unreasonably interfere unreasonably with the businesses and operations of such party’s businesses. Notwithstanding Buyer and its Affiliates (including the foregoingCompany), neither Purchaser nor Seller shall be required to review any work papers, books and records used in preparing the Closing Statement and have an opportunity to discuss the Closing Statement with the employees of the Buyer who prepared the statements.
(xb) violate If, prior to 5:00 p.m. (Central Time) on the last day of the Objection Period (the “Objection Deadline”), the Sellers’ Representative has not given Buyer written notice of any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant good faith objection to the immediately preceding sentence, and (y) provide access to Closing Statement or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement component thereof specifying in reasonable detail the nature and basis of such objection, as well as the specific matters in dispute (the “Disagreement Disputed Matters”) and the amount of any proposed adjustments (an “Objection Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted then the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement and all components thereof are to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller final and shall are to be binding and conclusive on the Parties for all purposes under this Agreement and not be subject to further dispute or review. Purchaser challenge.
(c) If, prior to the Objection Deadline, the Sellers’ Representative has given Buyer an Objection Notice, then Buyer and Seller the Sellers’ Representative shall negotiate in good faith attempt to resolve any such disagreementthe Disputed Matters (and, for avoidance of doubt, all other matters with respect to, and any resolution agreed all other components of, the Closing Statement are to in writing by Purchaser be binding and Seller shall be final conclusive on the Parties for all purposes under this Agreement and binding upon not subject to further dispute or challenge). If Buyer and the parties.
(d) If Purchaser and Seller are unable Sellers’ Representative fail to resolve any disagreement as contemplated by Section 2.04(c) all of the Disputed Matters within thirty (30) days after delivery by Seller following Buyer’s receipt of a Disagreement such Objection Notice, Purchaser then Buyer and Seller the Sellers’ Representative shall jointly select a mutually acceptable nationally recognized third party accounting firm, submit the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or SubsidiariesDisputed Matters remaining in dispute (and only such Disputed Matters, as determined by the reasonable discretion of Seller all other matters with respect to, and Purchaserall other components of, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be (including those Disputed Matters resolved by Buyer and the Accounting Arbitrator shall be limited to whether such calculation was done Sellers’ Representative in accordance with the terms hereofimmediately preceding sentence) are to be binding and conclusive on the Parties for all purposes under this Agreement and not subject to further dispute or challenge) to the Independent Accounting Firm for resolution in accordance with the guidelines and procedures set forth in this Agreement. If Disputed Matters are submitted to the Independent Accounting Firm for resolution in accordance with the immediately preceding sentence, (i) Buyer and the accounting methodsSellers’ Representative shall furnish, standardsor cause to be furnished, policiesto the Independent Accounting Firm such work papers and other documents and information relating to such Disputed Matters as the Independent Accounting Firm requests and as are available to such Party or such Party’s Representatives and Buyer and the Sellers’ Representative are to be afforded the opportunity to present to the Independent Accounting Firm any material relating to such Disputed Matters, practices, classifications, estimation methodologies, assumptions or procedures used (ii) Buyer and the Sellers’ Representative shall instruct the Independent Accounting Firm to prepare deliver the Closing StatementIndependent Accounting Firm’s determination in a written notice to Buyer and the Sellers’ Representative within thirty (30) days of the submission to the Independent Accounting Firm of such Disputed Matters, and whether there were mathematical errors such determination is to be final, binding and conclusive on the Parties for all purposes under this Agreement and not subject to further dispute or challenge and is to be used in the calculation of the Final Net Working Capital and the determination of the Final Closing StatementCash, Final Closing Indebtedness and Final Closing Transaction Expenses, as applicable, and (iii) the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs fees and expenses of the Independent Accounting Arbitrator arising in connection with this Section 2.04 shall Firm are to be borne allocated and payable by PurchaserBuyer, on the one hand, and Sellerthe Sellers’ Representative, on the other hand, in proportion to the differences between amounts by which the Purchase Price as determined by the Accounting Arbitrator proposals of Buyer and the asserted Purchase Price Sellers’ Representative, respectively, differed from the Independent Accounting Firm’s final determination of such Disputed Matters, and Buyer and the Sellers’ Representative shall instruct the Independent Accounting Firm to determine such proportions in the Independent Accounting Firm’s final determination.
(d) Within three (3) Business Days following the determination of the Final Cash Consideration, the Sellers’ Representative shall prepare (or cause to be prepared) and deliver to Buyer, an updated Allocation Certificate that reflects any changes to the information set forth in therein resulting from any adjustment to the Closing Statement and the Disagreement Notice, respectivelyTransaction Consideration pursuant to this Section 2.6.
(e) Purchaser If the Estimated Cash Consideration exceeds the Final Cash Consideration (the amount of such excess, the “Downward Adjustment Amount”), then within five (5) Business Days of the final determination of the Final Cash Consideration, (i) the Parties shall jointly instruct the Escrow Agent to distribute the Downward Adjustment Amount from the NWC Escrow Fund to Buyer, and Seller agree that (ii) the Parties shall jointly instruct the Escrow Agent to distribute any payments made pursuant funds remaining in the NWC Escrow Fund after such payment of the Downward Adjustment Amount to this Section 2.04 shall (A) to the Transaction Consideration Bank Account, on behalf of Sellers and the Warrantholder and (B) the Company, to be allocated distributed by the Company through a special Company payroll, to each Optionholder (such distributions to be in a manner consistent accordance with any allocation agreed to pursuant to Section 2.03(ceach Sellers’, Optionholders’ and the Warrantholder’s Allocation Percentage (as reflected in the updated Allocation Certificate)).
(f) With If the Final Cash Consideration equals or exceeds the Estimated Cash Consideration (the amount of such excess, the “Upward Adjustment Amount”), then within five (5) Business Days of the final determination of the Final Cash Consideration, (i) the Parties shall jointly instruct the Escrow Agent to distribute the NWC Escrow Fund to (A) to the Transaction Consideration Bank Account, on behalf of Sellers and the Warrantholder, and (B) the Company, to be distributed by the Company through a special Company payroll (subject to and reduced by applicable withholding Taxes), to each Optionholder (such distributions to be in accordance with the Allocation Percentages (as reflected in the updated Allocation Certificate), and (ii) the Purchaser shall pay, or cause the Company to pay, as applicable, by wire transfer of immediately available funds, (A) to an account designated by the Sellers’ Representative, on behalf of Sellers and the Warrantholder, an amount equal to each Seller’s and the Warrantholder’s Allocation Percentage (as reflected in the updated Allocation Certificate) of the Upward Adjustment Amount, and (B) through a special Company payroll, to each Optionholder, their respective Allocation Percentages (as reflected in the updated Allocation Certificate) of the Upward Adjustment Amount (subject to and reduced by applicable withholding Taxes).
(g) The Estimated Closing Statement and the Closing Statement, as well as all estimates, calculations and determinations therein, are to be prepared and calculated on a consolidated basis for the Company using the accounting principles, practices, classifications, procedures, policies and methods set forth on Annex D (the “Accounting Principles”). An example calculation of Net Working Capital using the Accounting Principles is also set forth on Annex D.
(h) The Parties shall treat each payment made under this Section 2.6 as an adjustment to the Transaction Consideration for Tax purposes, unless (i) a final determination (which includes the execution of a Form 870-AD or successor form) with respect to Cash and Cash Equivalents and Indebtedness of any such payment causes such payment not to be treated as an adjustment to the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate Transaction Consideration for each such currency Tax purposes or (ii) as of immediately before the effective time of the Closing as published otherwise required by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04applicable Legal Requirements.
Appears in 1 contract
Sources: Stock Purchase Agreement (Computer Programs & Systems Inc)
Purchase Price Adjustment. (a) Section 2.04(a) In consideration for the sale by Seller of the Seller Disclosure Letter sets forth certain current assets Purchased Assets to Buyer and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts Buyer’s assumption of the BusinessAssumed Liabilities, cumulativelyat the Closing, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser Buyer shall pay to Seller cash in the total amount of such excessONE HUNDRED AND TWO MILLION DOLLARS AND NO CENTS ($102,000,000) (as it may be adjusted pursuant to the last sentence of this Section 1.5(a), in either case Section 1.5(d), and Section 1.5(i), the “Purchase Price”). The Purchase Price shall be paid by wire transfer of immediately available U.S. dollar funds, within three (3) funds to the account or accounts designated in writing by Seller at least two Business Days after prior to the final determination Closing Date. At the Closing, the Purchase Price shall be adjusted to give credit to Buyer for the amount of liabilities assumed pursuant to Section 1.3(c).
(b) On a mutually convenient date or dates as near as reasonably practicable to the Closing Date, but in no event more than five (5) days prior to the then anticipated Closing Date, Buyer and Seller shall cause to be taken a physical count of the Purchase Priceinventory included in the Purchased Assets (“Inventory”) on a stock keeping unit (“SKU”) basis (the “Inventory Count”). The Inventory Count shall be taken by RGIS Inventory Services or such other inventory service designated jointly by Buyer and Seller (the “Inventory Service”) with Buyer and Seller sharing equally the fees and expenses of the Inventory Service and Buyer and Seller otherwise each bearing its own costs and expenses in connection therewith. The Parties shall roll back or roll forward the Inventory Count, as the case may be, to an account designated the close of business on the day prior to the Closing Date based on Gross Shipments (as defined below). From the period from the date of the Inventory Count through the close of business on the day prior to the Closing Date, Seller shall keep a count of units sold or received by SKU multiplied by the party receiving payment no later than two applicable cost, as truly and accurately recorded in Seller’s cost file and records (2“Cost File”) Business Days after maintained in the final determination ordinary course of business, of such SKUs (“Gross Shipments”). All such reports shall be made available by Seller to Buyer on a daily basis from the date of the Purchase PriceInventory Count through the day prior to the Closing Date.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser The Inventory Service shall be additionally instructed by Buyer and Seller to prepare and deliver to Buyer and Seller a final certified report of Inventory Count as promptly as practicable following the Inventory Count and in no event later than two day(s) prior to the Closing Date. Following its receipt of the final certified report of Inventory Count and no later than the day prior to the Closing Date, Seller shall prepare or cause to be prepared, and shall deliver to Buyer, an unaudited statement (the “Closing Statement of Inventory”) setting forth Purchaser’s the value of the Inventory as determined by multiplying the Inventory Count for each SKU by the related cost as set forth in the Cost File as of the close of business on the day prior to the Closing Date (the “Closing Inventory Value”). Seller shall deliver to Buyer, together with the Closing Statement of Inventory, the Cost File utilized in the preparation of the Closing Statement of Inventory. Buyer and Seller shall cooperate with and reasonably assist the Inventory Service, and shall make available to the Inventory Service the books, records, personnel and properties of Buyer and Seller, as the case may be, that the Inventory Service reasonably requires in order to prepare and deliver the final certified report of Inventory Count.
(d) The Purchase Price at Closing shall be subject to adjustment based upon the calculation of the Closing Inventory Value as presented by Seller to Buyer pursuant to Section 1.5(c) on the Closing Date. If, as of the Closing Date, the difference between the Closing Inventory Value and the Target Inventory is:
(i) Modified Working Capital$500,000 or less, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) there shall be no adjustment to the Purchase Price pursuant to this Section 2.04 1.5(d);
(ii) greater than $500,000, and the Closing Inventory Value is greater than the Target Inventory, the Purchase Price shall be increased by an amount equal to such excess, less $500,000; or
(iii) greater than $500,000, and the Closing Inventory Value is less than the Target Inventory, the Purchase Price shall be reduced by an amount equal to $500,000 less than such deficiency.
(e) Buyer shall have fifteen (15) days following the delivery of the Closing Statement of Inventory (the “Objection Period”) to provide written notice to Seller (the “Objection Notice”) of any good faith objection to any portion of the Closing StatementStatement of Inventory relating to the final certified Inventory Count or calculation of the Closing Inventory Value, or adjustment pursuant to Section 1.5(d) (“Adjustment”), which objection shall be prepared in accordance with the accounting principles, methodologies and policies set forth with reasonable detail in Section 2.04 such Objection Notice; provided, however, that if the disputed portions of the Closing Statement of Inventory or Adjustment are less than $50,000 in the aggregate, then (A) no such Objection Notice shall be delivered to Seller Disclosure Letter and (andB) the Closing Statement of Inventory as prepared by Seller shall be deemed final and undisputed. During the Objection Period, Buyer and its accountants will be permitted to examine the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (all back-up materials and any memoranda used or generated by the Inventory Service and/or Seller in connection with the preparation of the Closing Statement of Inventory and such other information which either party documents as Buyer may reasonably requests request in connection with its review of the Closing Statement of Inventory, and shall be provided access at all reasonable times to the extent relating to personnel of the Business (includingInventory Service or Seller, as the case may be, for the avoidance purpose of doubt, reviewing and ascertaining the Business in any Deferred Asset Jurisdictions)) throughout the periods during which accuracy of the Closing Statement is being prepared of Inventory or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with Adjustment. Unless Buyer timely delivers an Objection Notice before the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination expiration of the Closing StatementObjection Period, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail Statement of Inventory (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by and the end of such 60-day period, Seller Closing Inventory Value reflected thereon or calculated therefrom) and Adjustment shall be deemed to have been accepted and approved by Buyer and shall thereafter be final and binding upon Buyer and Seller for purposes of any closing and post-closing adjustment set forth in this Section 1.5. In addition, to the extent any portion of the Closing Statement delivered by Purchaser. Matters included of Inventory or of the calculation of the Closing Inventory Value or Adjustment shall not be expressly objected to in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice Objection Notice, such matters shall be deemed to have been accepted and approved by Seller Buyer and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon Buyer and Seller for purposes hereof. If Buyer timely delivers an Objection Notice before the partiesexpiration of the Objection Period, then those aspects of the Closing Statement of Inventory or Adjustment objected to in the Objection Notice shall not thereafter be final and binding until resolved in accordance with this Section 1.5.
(df) Following receipt of any Objection Notice, Buyer and Seller shall discuss in good faith the applicable objections set forth therein for a period of ten (10) days thereafter and shall, during such period, attempt to resolve the matter or matters in dispute by mutual written agreement. If Buyer and Seller reach such an agreement, the agreement shall be confirmed in writing and Buyer and Seller shall revise the Closing Statement of Inventory to reflect such agreement, which agreement (and Closing Statement of Inventory, as so revised, including the Closing Inventory Value reflected thereon or calculated therefrom and Adjustment) shall thereafter be final and binding upon Seller and Buyer for purposes of any closing and post-closing adjustment set forth in this Section 1.5.
(g) If Purchaser Buyer and Seller are unable to resolve any disagreement as contemplated by reach a mutual agreement in whole or in part in accordance with Section 2.04(c1.5(f) within thirty during the ten (30) days after delivery 10)-day period referred to therein, then Seller and Buyer shall appoint such accounting firm of national standing designated jointly by Seller of a Disagreement Noticeand Buyer (other than KPMG LLP, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party BDO ▇▇▇▇▇▇▇, LLP, ▇▇▇▇▇ & ▇▇▇▇▇ or any other accounting firm, the retention of which will not give rise to present or potential future auditor independence problems firm that has performed significant work for Seller, Purchaser any Party or any of their respective its Affiliates or Subsidiariessince January 1, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement 2007) (the firm so selected shall be referred to herein as the “Accounting ArbitratorFirm”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator resolve those matters still in dispute with respect to consider only those items and amounts set forth in the Closing Statement as to of Inventory and the Closing Inventory Value reflected thereon or calculated therefrom or Adjustment. Not later than 5:00 p.m. Eastern Standard Time on the tenth (10th) full Business Day after the day on which Purchaser has disagreed pursuant to a Disagreement Notice the Accounting Firm is appointed, Seller and Purchaser and Seller have not resolved their disagreement. The scope of the disputes Buyer each shall deliver or cause to be resolved by delivered to the Accounting Arbitrator Firm: (i) a written statement of its position on each remaining dispute or disagreement (that Party’s “Position”); (ii) the aggregate Closing Inventory Value and Adjustment, determined as though the Accounting Firm concurred with each such position (that Party’s “Final Number”); and (iii) a wire transfer or certified check in the amount of $10,000, which amount the Accounting Firm shall be limited authorized to whether such calculation was done apply towards its fees and expenses in accordance the manner set forth below. If one Party fully complies with the terms hereofimmediately preceding sentence and the other Party does not, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report compliant Party’s Position shall be final and binding upon on all Parties and no further action by the partiesAccounting Firm is required. If both Parties comply with the second sentence of this Section 1.5(g), absent manifest errorthe Accounting Firm shall make a final and binding resolution of the remaining disputes or disagreements between Buyer and Seller, and at such time the Party (if any) liable for any further payment of the Adjustment shall comply with the provisions of Section 1.5(i) hereof. The Accounting Firm shall be instructed that, in making its final and binding resolution, it must, as to each disputed item, select either the Position of Buyer or the Position of Seller. No appeal from such determination shall be permitted. The costs and expenses for the services of the Accounting Firm shall be borne entirely by the Party whose Final Number is furthest (in dollars) from the appropriate Adjustment as determined by the Accounting Firm. Subject to the foregoing sentence and Section 1.5(b), all fees and expenses of Seller relating to matters described in this Section 1.5 shall be borne by Seller, and all fees and expenses of Buyer relating to matters described in this Section 1.5 shall be borne by Buyer. Seller and Buyer agree to fully cooperate with each other and with the Accounting Firm to resolve any dispute.
(h) Notwithstanding any other provision of this Agreement, including, without limitation, any provision stating that remedies shall be cumulative and not exclusive, this Section 1.5 provides the sole and exclusive method for resolving any and all disputes that may arise between or among the Parties with respect to the determination of Closing Inventory Value and Adjustment. As among the Parties, each Party hereby irrevocably waives, relinquishes and surrenders on its own behalf and on behalf of its Affiliates and its officers, directors, principals, attorneys, agents, employees and other authorized representatives (each a “Representative”) all rights to, and agrees that it will not attempt, and shall cause its Affiliates and Representatives not to attempt, to resolve any such dispute or disputes related to the determination of the Closing Statement of Inventory or Adjustment in any manner other than as set forth in this Section 1.5, including, without limitation, through litigation. Each Party further agrees on its own behalf and on behalf of its Affiliates and Representatives that if one or more of them should initiate any attempt to resolve any such dispute or disputes related to the determination of the Closing Statement of Inventory or Adjustment in any manner other than the sole and exclusive manner set forth in this Section 1.5, such initiators shall pay and reimburse all fees, costs and expenses of the Accounting Arbitrator arising incurred by any other Party as a result of, in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion or related to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelysuch attempt or attempts.
(ei) Purchaser and Seller agree that any All payments required to be made to a Party as a result of the final determination of the Adjustment pursuant to this Section 2.04 1.5 shall be allocated made, in a manner consistent with any allocation agreed immediately available funds via wire transfer to pursuant the account or accounts designated in writing by the Party entitled to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of receive such payment, no later than two Business Days following the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time final calculation of the Closing as published by Bloomberg (BGN New York), shall be used Inventory Value and Adjustment. Any adjustments made to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments Purchase Price pursuant to this Section 2.041.5 shall be treated by all parties hereto for Tax purposes as adjustments to the Purchase Price.
Appears in 1 contract
Purchase Price Adjustment. (ai) Section 2.04(a) As soon as practicable, but in no event later than 60 days following the Closing Date, Seller shall prepare a pro forma balance sheet of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, Target as of immediately before the effective time of the Closing (the "Closing Balance Sheet") and a calculation of Closing Date Total Surplus as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure LetterClosing based on the Closing Balance Sheet (collectively, the "Closing Financial Data"). The Closing Balance Sheet and the calculation of Closing Date Total Surplus shall be prepared on a basis consistent with the methods, principles, practices and policies employed in the preparation and presentation of the Latest Balance Sheet.
(ii) During the preparation of the Closing Balance Sheet and the calculation of Closing Date Total Surplus as of the Closing, and the principles, methodologies and policies set forth therein and, to period of any review or dispute within the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance contemplation of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price4, Purchaser shall pay (A) provide Seller and Seller's authorized representatives with full access to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective all relevant books, records, work papers workpapers and personnel (employees of Target and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentenceBusiness, and (yB) provide access to cooperate fully with Seller and Seller's authorized representatives, including the provision on a timely basis of all information necessary or disclose information where, upon useful in the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination preparation of the Closing Statement, Balance Sheet.
(iii) Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery deliver a copy of the Closing StatementFinancial Data to Purchaser promptly after it has been prepared. After receipt of the Closing Financial Data, which Purchaser shall have forty-five (45) days to review the Closing Financial Data, together with the workpapers used in the preparation thereof. Unless Purchaser delivers written notice shall set forth any such disagreement to Seller on or prior to the 45th day after Purchaser's receipt of the Closing Financial Data stating that Purchaser has objections to the Closing Financial Data, or methods, principles, practices or policies employed in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day periodpreparation thereof, Seller Purchaser shall be deemed to have accepted and agreed to the Closing Statement delivered Financial Data. If Purchaser so notifies Seller of its objections to the Closing Financial Data, the Parties shall, within twenty (20) days (or such longer period as the Parties may agree) following such notice (the "Resolution Period"), attempt to resolve their differences arising from such objections and any resolution by Purchaser. Matters included them as to any disputed amounts or methods, principles, practices or policies employed in the calculations preparation thereof shall be final, binding and conclusive. Purchaser acknowledges and agrees that it shall not, under any circumstances, have the ability to raise objections relating to the adequacy of the amounts recorded for Loss Reserves, ALAE Reserves or ULAE (the "Reserve Accounts") on the Latest Balance Sheet, Closing Date Balance Sheet, the methods, principles, practices or policies employed in the preparation thereof, or the impact thereof on Closing Statement Date Total Surplus; provided, however, that with respect to any development in the Reserve Accounts between the date of the Latest Balance Sheet and the Closing Date, Purchaser may raise objections to the method used in preparing the amounts recorded in the Reserve Accounts solely on the basis that such method was inconsistent with the past practice of the Seller.
(iv) Any amounts or methods, principles, practices or policies employed in the preparation thereof, remaining in dispute at the conclusion of the Resolution Period ("Unresolved Changes") shall be submitted to such firm of United States independent certified public accountants as Seller and Purchaser may agree, such firm to be a "Big 6 Firm". If they cannot so agree within five (5) days after the end of the Resolution Period, they shall each select one such firm within ten (10) days after the end of the Resolution Period and the two (2) firms so chosen shall select a third firm of United States independent certified public accountants, such firm to be a "Big 6 Firm" to which Seller does not object in the Disagreement Notice such dispute shall be deemed accepted submitted (the firm ultimately selected pursuant to this Section being the "Neutral Auditors"). All Unresolved Changes shall be submitted to the Neutral Auditors no later than ten (10) days after the same is designated. Each Party agrees to execute, if requested by the Neutral Auditors, a reasonable engagement letter. All fees and expenses relating to the work, if any, to be performed by the Neutral Auditors shall be borne pro rata by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences allocation of the dollar amount of the Unresolved Changes between the Purchase Price as determined Seller and Purchaser made by the Accounting Arbitrator Neutral Auditors such that the prevailing party pays a lesser proportion of the fees and expenses. The Neutral Auditors shall act as an arbitrator to determine, based on the asserted Purchase Price provisions of this Section 4, only the Unresolved Changes. The Neutral Auditors' determination of the Unresolved Changes shall be made within forty-five (45) days of the submission of the Unresolved Changes thereto, shall be set forth in the Closing Statement a written statement delivered to Seller and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c)final, binding and conclusive.
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) On the fifth Business Day prior to the Closing Date, Seller will prepare in good faith and deliver to Buyer an unaudited pro forma balance sheet of the Commodities Business as of the last day of the calendar month preceding the date of such preparation (the “Estimated Closing Balance Sheet”). The Estimated Closing Balance Sheet will (i) be prepared from the Documents of the Commodities Business, in accordance with U.S. GAAP (except as otherwise set forth in the Agreed Adjustments) and the Agreed Adjustments, applied consistently with the methodology employed in the preparation of the pro forma balance sheet of the Commodities Business as of December 31, 2010 set forth on Section 2.04(a2.6(a) of the Seller Disclosure Letter sets (the “Reference Balance Sheet”), and (ii) set forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts an estimate of the BusinessNet Book Value of the Commodities Business derived from the Estimated Closing Balance Sheet (the “Estimated Net Book Value.”)
(b) As soon as reasonably practicable, cumulativelybut in no event more than 90 days following the Closing, Buyer will prepare in good faith and deliver to Seller an unaudited pro forma balance sheet of the Commodities Business as of immediately before the effective time of the Closing Date (as set forth in Section 2.05(athe “Closing Balance Sheet”)), determined in accordance with Section 2.04(a. The Closing Balance Sheet will (i) be prepared from the Documents of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth thereinCommodities Business, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included GAAP (except as otherwise set forth in the determination of Closing Net IndebtednessAgreed Adjustments) and the Agreed Adjustments, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from applied consistently with the determination methodology employed in the preparation of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficitReference Balance Sheet, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) set forth the Net Book Value of the Commodities Business derived from the Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 Balance Sheet (the “Closing StatementNet Book Value”), which shall be prepared in accordance with . In the accounting principles, methodologies and policies set forth in Section 2.04 of the event Seller Disclosure Letter (and, has any objection either to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which Closing Balance Sheet or the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing StatementNet Book Value, Seller shall notify Purchaser in writing of such disagreement deliver to Buyer within sixty (60) 30 days after delivery of the Closing Statement, which Balance Sheet by Buyer to Seller a written notice shall set forth any such disagreement in reasonable detail objection (“Disagreement NoticeSeller’s Objection”)) setting forth a specific description of the basis of Seller’s objection and the adjustments to the Closing Balance Sheet and Closing Net Book Value Seller believes should be made. If Seller fails to deliver a Disagreement Notice by the end no Seller’s Objection is received within 30 days after delivery of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in Balance Sheet, the Closing Statement to which Seller does not object in Balance Sheet and the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller Closing Net Book Value shall be final and binding upon on the parties. Buyer shall have 15 days from its receipt of Seller’s Objection to respond in writing. If Buyer does not respond within 15 days after delivery of Seller’s Objection, the adjustments set forth in Seller’s Objection shall be final and binding.
(dc) If Purchaser Seller and Seller Buyer are unable to resolve all of their disagreements with respect to the proposed adjustments set forth in the Seller’s Objection within 15 days of Buyer’s receipt of the Seller’s Objection, they shall refer any disagreement remaining disagreements to the Balance Sheet Auditor, who, acting as contemplated by an expert and not as an arbitrator, shall determine, on the basis set forth in Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice2.6(b), Purchaser and only with respect to the remaining differences so submitted, whether the Closing Balance Sheet and the Closing Net Book Value require adjustment. Buyer and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, instruct the retention of which will not give rise Balance Sheet Auditor to present or potential future auditor independence problems for deliver its written determination to Buyer and Seller no later than 30 days after the remaining differences underlying the Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by ’s Objection are referred to the reasonable discretion of Balance Sheet Auditor. The Balance Sheet Auditor’s determination shall be conclusive and binding upon Buyer and Seller and Purchaser, their Affiliates. The pro forma balance sheet of the Commodities Business as of the Closing Date as finally determined pursuant to resolve such disagreement (the firm so selected Section 2.6(b) or this Section 2.6(c) shall be referred to herein as the “Accounting ArbitratorFinal Closing Balance Sheet”). In ; and the event that Purchaser and Seller are unable to agree on the appointment Net Book Value of the Accounting Arbitrator, Commodities Business as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not Date as finally determined pursuant to any independent reviewSection 2.6(b) or this Section 2.6(c) shall be referred to as the “Final Net Book Value.” The fees and disbursements of the Balance Sheet Auditor shall be borne equally by Buyer and Seller. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser Buyer and Seller shall use commercially reasonable efforts make readily available to cause the Accounting Arbitrator to deliver to Balance Sheet Auditor all parties, as promptly as practicable, a written report setting forth the resolution relevant Documents and any work papers (including those of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties’ respective accountants, absent manifest error. The feesto the extent permitted by such accountants) relating to the Estimated Closing Balance Sheet, costs the Estimated Net Book Value, the Closing Balance Sheet, the Closing Net Book Value, Seller’s Objection and expenses of all other items reasonably requested by the Accounting Arbitrator arising Balance Sheet Auditor in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelytherewith.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Sources: Stock and Asset Purchase Agreement (Jefferies Group Inc /De/)
Purchase Price Adjustment. (a) Section 2.04(aOn the Closing Date, the Company shall: (i) of determine the Seller Disclosure Letter sets Estimated Closing Working Capital; and (ii) deliver to Buyer a written statement (the “Preliminary Statement”) setting forth certain current assets in reasonable detail the calculation by the Company thereof and current liabilities accounts and certain accounting principles, methodologies and policies the computations used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capitalconnection therewith.
(b) If The Base Cash Consideration shall be (i) increased by the Purchase Price as finally determined in accordance with this Section 2.04 is less than amount, if any, by which the Estimated Purchase PriceClosing Working Capital exceeds the Target Working Capital and (ii) decreased by the amount, Seller shall pay to Purchaser if any, by which the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 Target Working Capital exceeds the Estimated Purchase PriceClosing Working Capital. Notwithstanding the foregoing, Purchaser the Base Cash Consideration shall pay to Seller be neither increased nor decreased, as the total case may be, unless the amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated excess is greater than $250,000 and then only by the party receiving payment no later than two (2) Business Days after the final determination amount in excess of the Purchase Price$250,000.
(c) As promptly as practicable (and, in any event, within ninety (90) Within 75 days after the Closing)Closing Date, Purchaser Buyer shall prepare and deliver to Seller the Shareholders’ Representative a written statement (the “Statement”) setting forth Purchaser’s in reasonable detail its calculation of (i) Modified Closing Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared as determined in accordance with GAAP and consistent with the accounting principles, methodologies and policies set forth used in Section 2.04 the preparation of the Seller Disclosure Letter Preliminary Statement.
(andd) During the 30-day period following the receipt by the Shareholders’ Representative of the Statement, the Shareholders’ Representative shall be permitted to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, review during normal business hours and upon reasonable noticemake copies reasonably required of (i) the working papers of Buyer, to their respective booksthe Company and, recordsif relevant, work papers and personnel (and any other information which either party reasonably requests to the extent its independent auditors relating to the Business preparation of the Statement and (includingii) any supporting schedules, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated supporting analyses and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant other supporting documentation relating to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination preparation of the Closing Statement, Seller . The Statement shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be become final and binding upon the parties.
parties on the thirtieth day following delivery thereof, except to the extent that the Shareholders’ Representative gives written notice of disagreement with the Statement (dthe “Notice of Disagreement”) If Purchaser and Seller are unable to resolve Buyer prior to such date. Any Notice of Disagreement shall (A) specify in reasonable detail the nature of any disagreement as contemplated by Section 2.04(c) within thirty so asserted (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done of Closing Working Capital is mathematically correct and/or has been prepared in accordance with the terms hereofdefinition of Closing Working Capital and (B) if independent auditors are engaged by the Shareholders’ Representative in connection with the preparation of the Notice of Disagreement, be accompanied by a certificate of such independent auditors that they concur with each of the positions taken by the Shareholders’ Representative in the Notice of Disagreement. If a Notice of Disagreement complying with the preceding sentence is received by Buyer in a timely manner, then the Statement (as revised in accordance with clause (I) or (II) below) shall become final and binding upon the parties on the earlier of (I) the date Buyer and the Shareholders’ Representative resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement or (II) the date any disputed matters are finally resolved in writing by the Accounting Firm.
(e) During the 30-day period following the delivery of a Notice of Disagreement that complies with the preceding paragraph, Buyer and the Shareholders’ Representative shall seek in good faith to resolve in writing any differences which they may have with respect to the matters specified in the Notice of Disagreement. During such period, Buyer and its independent auditors shall be permitted to review and make copies reasonably required of (i) the working papers of any independent auditors engaged by the Shareholders’ Representative relating to the preparation of the Notice of Disagreement and (ii) any supporting schedules, supporting analyses and other supporting documentation relating to the preparation of the Notice of Disagreement. If, at the end of such 30-day period, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors differences as specified in the calculation Notice of Disagreement are not resolved, the Closing StatementShareholders’ Representative and Buyer shall promptly submit such differences that remain in dispute to BDO ▇▇▇▇▇▇▇, LLP (the “Accounting Firm”) for review and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent reviewresolution. In resolving any such disagreementdisputed item, the Accounting Arbitrator may Firm shall: (i) be bound by the provisions of this Section 1.8 and the definitions of Closing Working Capital; (ii) limit its review to matters still in dispute as specifically set forth in the Notice of Disagreement (and only select an amount to the extent such matters are still in dispute following such 30-day period); and (iii) further limit its review solely to whether the Statement has been prepared in accordance with this Section 1.8. The determination of any item that is a component of Closing Working Capital is the subject of a dispute cannot, however, be in excess of, or less than, the greatest or lowest value, respectively, claimed for each any particular item in dispute that is within range the Statement or the Notice of values established for such disputed item as determined by reference to Disagreement (or, if different, the value assigned to claimed by the relevant party at the end of such item by Seller in the Disagreement Notice 30-day period). The Shareholders’ Representative and by Purchaser in the Closing Statement. Purchaser and Seller Buyer shall use commercially reasonable efforts to cause the Accounting Arbitrator Firm to deliver render a decision resolving the matters in dispute within 30 days following the submission of such matters to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this AgreementAccounting Firm. Such report shall The Shareholders’ Representative and Buyer agree that judgment may be final and binding entered upon the partiesdetermination of the Accounting Firm in any court having jurisdiction over the party against which such determination is to be enforced. Except as specified in the following sentence, absent manifest error. The fees, costs the fees and expenses of the Accounting Arbitrator arising Firm in connection with the Accounting Firm’s determination of Closing Working Capital pursuant to this Section 2.04 1.8 shall be borne by Purchaser, on the one hand, and Seller, on the other handborne, in proportion its entirety, by the party whose calculation of Closing Working Capital as initially submitted to the differences between the Purchase Price Accounting Firm is furthest away from Closing Working Capital as determined by the Accounting Arbitrator Firm. The fees and expenses of the Buyer’s independent auditors (if any) incurred in connection with the issuance of the Statement shall be borne by the Buyer, and the asserted Purchase Price set forth fees and expenses of the independent auditors of the Shareholders’ Representative incurred in connection with their review of the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c)borne by the Shareholders.
(f) With respect If the Final Purchase Price is greater than the Base Purchase Price, Buyer shall, within five Business Days after the final determination of Closing Working Capital, make payment to Cash and Cash Equivalents and Indebtedness the Shareholders’ Representative, by wire transfer of immediately available funds, of the Business denominated in currencies other amount of such excess, together with interest thereon at the rate of 6% per annum (the “Rate”), calculated on the basis of the actual number of days elapsed and a 360-day year, from the Closing Date to the date of actual payment, compounded annually. If the Final Purchase Price is less than U.S. dollarsthe Base Purchase Price, the Applicable Exchange Rate for each such currency as Shareholders’ Representative shall, within five Business Days after the final determination of Closing Working Capital, make payment to Buyer by wire transfer of immediately before available funds, of such excess, together with interest thereon at the effective time Rate, calculated on the basis of the actual number of days elapsed and a 360-day year, from the Closing as published Date to the date of actual payment, compounded annually. Buyer and the Shareholders’ Representative agree that if any amounts are owed by Bloomberg (BGN New Yorkthe Shareholders to Buyer under this Section 1.8(f), Buyer shall first proceed against the Escrow Amount being held by the Escrow Agent pursuant to the Escrow Agreement in order to recover such amounts and, thereafter, Buyer may proceed directly against the Shareholders.
(g) Any payment required to be made under this Section 1.8 shall be used deemed an adjustment to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04Final Purchase Price.
Appears in 1 contract
Sources: Stock Purchase Agreement (National Technical Systems Inc /Ca/)
Purchase Price Adjustment. (a) Section 2.04(aAs soon as practicable, but in no event later than thirty (30) days following the Closing Date, Seller shall prepare, at Seller's expense, a Statement of Adjusted Working Capital of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts Company as of the Business, cumulativelyclose of business on the Closing Date (including the notes
(i) the "net working capital" of the Company, as defined according to generally accepted accounting principles ("GAAP"), but excluding (A) intercompany receivables and payables, (B) cash and cash equivalents, and (C) borrowings, including the current portion of immediately before long-term borrowings (including capitalized leases) (the effective time "Net Working Capital Amount");
(ii) the "net debt" of the Closing Company, as defined as the sum of all borrowings of the Company (as set forth in Section 2.05(a)whether long-term or short-term and including capitalized leases), determined in accordance with Section 2.04(aless cash and cash equivalents (the "Net Debt Amount"); and
(iii) the "gross fixed asset additions" of the Seller Disclosure LetterCompany, and the principles, methodologies and policies set forth therein and, as defined as any additions to or investments in fixed assets necessary to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination operation of the Modified Working Capitalbusiness of the Company ("Gross Fixed Asset Additions").
(b) If During the Purchase Price as finally determined in accordance with preparation of the Closing Date Statement and the period of any dispute within the contemplation of this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price1.4, Purchaser shall pay cause the Company to (i) provide Seller and its authorized representatives with access to the total amount books, records, facilities and employees of such excessthe Company, in either case by wire transfer of immediately available U.S. dollar funds, within three (3ii) Business Days provide Seller as promptly as practicable after the final determination Closing Date (but in no event later than fifteen (15) days after the Closing Date) with normal periodic financial information with respect to the Company for the period ending on the Closing Date, and (iii) cooperate with Seller and its authorized representatives with respect to the preparation of the Purchase PriceClosing Date Statement, to an account designated by including the party receiving payment no later than two (2) Business Days after provision on a timely basis of all information necessary for or useful in the final determination preparation of the Purchase PriceClosing Date Statement.
(c) As Seller shall deliver a copy of the Closing Date Statement, together with the work papers used in the preparation thereof, to Purchaser promptly as practicable after it has been prepared and in no event later than thirty (and, in any event, within ninety (9030) days after the Closing)Closing Date. After receipt of the Closing Date Statement, Purchaser shall prepare and deliver have thirty (30) days to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capitalreview the Closing Date Statement, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance together with the accounting principleswork papers used in the preparation thereof. Purchaser and its authorized representatives shall have full access to all books and records, methodologies employees and policies set forth in Section 2.04 accounts of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging complete their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination review of the Closing Date Statement, . Unless Purchaser delivers written notice to Seller shall notify Purchaser in writing of such disagreement within sixty (60) days on or prior to the 60th day after delivery Purchaser's receipt of the Closing Statement, which written notice shall set forth any such disagreement Date Statement specifying in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by all disputed items and amounts with respect thereto and the end of such 60-day periodbasis therefor, Seller Purchaser shall be deemed to have accepted and agreed to the Closing Statement delivered by PurchaserDate Statement. Matters included in the calculations in If Purchaser so notifies Seller of its objection to the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Date Statement, Purchaser and Seller shall negotiate in good faith to resolve any such disagreementshall, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery following such notice (the "Resolution Period"), attempt to resolve their differences in good faith with respect to any such disputed items and/or amounts, and any resolution by such parties as to any such disputed items and/or amounts shall be final, binding and conclusive with respect to each of such parties. If following resolution of any disputed items and/or amounts there do not remain in dispute items and/or amounts the net effect of which exceeds $50,000 in the aggregate, then all such items and/or amounts
(d) If at the conclusion of the Resolution Period the net effect of all remaining items and/or amounts shall exceed $50,000 in the aggregate, then upon the request of Purchaser or Seller all items and amounts relating to the Closing Date Statement which remain in dispute shall be submitted to a firm of nationally recognized independent public accountants (the "Neutral Auditors") selected by Seller and Purchaser within ten (10) days after the expiration of the Resolution Period. If Seller and Purchaser are unable to agree on the Neutral Auditors, Seller and Purchaser shall each have the right to request the American Arbitration Association to appoint the Neutral Auditors who shall not have had a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for material relationship with Seller, Purchaser or any of their respective Affiliates or Subsidiariesaffiliates within the past four (4) years. Each party agrees to execute, as determined if requested by the Neutral Auditors, a reasonable discretion of engagement letter. All fees and expenses relating to the work, if any, to be performed by the Neutral Auditors shall be borne equally by Seller and Purchaser. The Neutral Auditors shall act as an arbitrator to determine, based solely on presentations by Seller and Purchaser, and not by independent review, only those items and/or amounts with respect to resolve such disagreement (the firm so selected Closing Date Statement which remain in dispute. The Neutral Auditors' determination shall be referred made within thirty (30) days of their selection, whether or not such presentations by Seller and Purchaser have been made within such period, shall be set forth in a written statement containing a basis for such determination delivered to herein Seller and Purchaser, and shall be final, binding and conclusive. The term "Adjusted Closing Date Statement," as hereinafter used, shall mean the “Accounting Arbitrator”). In the event that definitive Closing Date Statement agreed to by Purchaser and Seller are unable to agree on in accordance with Section 1.4(c) or the appointment of definitive Closing Date Statement resulting from the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, determinations made by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator Neutral Auditors in accordance with this Section 1.4(d) (in addition to consider only those items theretofore agreed to by Seller and amounts Purchaser), in each case prepared in the manner set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope last sentence of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms Section 1.4(a) hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree The Cash Consideration shall be increased or decreased, as the case may be, dollar for dollar, to the extent that either the Net Working Capital Amount or the Net Debt Amount reflected in the Adjusted Closing Date Statement is greater than or less than, respectively, the Net Working Capital Amount or the Net Debt Amount, as the case may be, reflected in the Audited Special-Purpose Balance Sheet. In addition, the Cash Consideration shall be increased, dollar for dollar, to the extent of any payments made Gross Fixed Asset Additions, if any, since the date of the Audited Special-Purpose Balance Sheet; provided, however, that in no event shall the Cash Consideration be increased by an amount in excess of $100,000 as a result of any Gross Fixed Asset Additions. The amount of any increase to or reduction of the Cash Consideration pursuant to this Section 2.04 1.4(e) shall be allocated bear interest from the Closing Date through the date of payment at the publicly announced base interest rate of Bank of America NT&SA in a manner consistent with effect from time to time from the Closing Date to the date of such payment. The amount of any allocation agreed increase to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness or reduction of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments Cash Consideration pursuant to this Section 2.041.4(e), together with interest thereon, shall be paid by wire transfer in immediately available funds to the account designated by Seller or Purchaser, as the case may be, within five (5) business days after the Adjusted Closing Date Statement is agreed to by Seller and Purchaser pursuant to Section 1.4(c) hereof, or any remaining disputed items and/or amounts with respect thereto are ultimately determined 10 by the Neutral Auditors pursuant to Section 1.4(d) hereof; provided, however, that in the event that the interest payable with respect to the increase or decrease in the Cash Consideration pursuant to this Section 1.4(e), if any, shall not exceed $5,000, then such interest shall not be due and payable.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aExhibit 2.3(a) sets forth an adjusted balance sheet of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, Company as of immediately before the effective time of the Closing (as set forth in Section 2.05(a))November 30, determined 1996 prepared in accordance with Section 2.04(a) and adjusted pursuant to the Accounting Principles and Procedures for purposes of determining the "Net Asset Amount" of the Seller Disclosure LetterCompany at November 30, and 1996 (the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital"Adjusted November Balance Sheet").
(b) Purchaser and Seller agree to accept the Accounting Principles and Procedures for all purposes of this Section 2.3, including, without limitation, for purposes of preparation of the Adjusted November Balance Sheet, the Estimated Closing Date Balance Sheet and the Closing Date Balance Sheet.
(c) Not fewer than three Business Days before the Closing Date, Seller shall deliver to Purchaser (i) a balance sheet (the "Estimated Closing Date Balance Sheet") based upon the books and records of the Company and prepared in accordance with and adjusted pursuant to the Accounting Principles and Procedures and reflecting Seller's best estimate of each of the items, and the amounts thereof, to be included on the Closing Date Balance Sheet and (ii) a certificate of Seller, duly executed by an executive officer of Seller, stating that the Estimated Closing Date Balance Sheet has been prepared in good faith, has been prepared in accordance with and adjusted pursuant to the Accounting Principles and Procedures, and reflects Seller's best estimate of, and to the best Knowledge of Seller, fairly presents each of the items, and the amounts thereof, to be included on the Closing Date Balance Sheet.
(d) If the Net Asset Amount of the Company as shown on the Estimated Closing Date Balance Sheet is greater than the Net Asset Amount shown on the Adjusted November Balance Sheet, the payment of the Fixed Amount to Seller on the Closing Date shall be increased, as a preliminary adjustment to the Fixed Amount as provided in Section 2.2(b), by the amount of such excess (the "Estimated Price Increase"). If the Net Asset Amount of the Company as shown on the Estimated Closing Date Balance Sheet is less than the Net Asset Amount as shown on the Adjusted November Balance Sheet, the payment of the Fixed Amount to Seller on the Closing Date shall be decreased, as a preliminary adjustment to the Fixed Amount as provided in Section 2.2(b), by the amount of such deficiency (the "Estimated Price Decrease").
(e) As of the close of business on the last day of the fiscal month of the Company in which the Closing occurs, or at such other time on such other date as near as practicable thereto as may be mutually agreed to by the parties to avoid business disruptions, Purchaser shall cause physical counts to be made of the inventory of the Company located at the Company's Leicester, Massachusetts and Harrison, Arkansas facilities (the "Inventory Count"), which shall be observed by representatives of the accounting firm of Deloitte & Touche LLP (the costs of such physical inventory to be shared equally by Purchaser and Seller). Seller's representatives shall also be entitled to attend and observe the taking of the Inventory Count. Upon completion of the Inventory Count (and any adjustment pursuant to the immediately following sentence), Seller shall be provided with copies of the relevant data relating to those counts for its review. The results of the Inventory Count shall be adjusted to reflect the Company's inventory at the close of business on the day immediately preceding the Closing Date using actual receipts and shipments, and the valuation of inventory for purposes of the Closing Date Balance Sheet shall be computed in accordance with the Accounting Principles and Procedures and shall be based on the results of the Inventory Count as so adjusted, plus (i) the amount shown in the Company's books and records in accordance with the Company's perpetual inventory system at all locations (other than the Company's Leicester, Massachusetts and Harrison, Arkansas facilities) and (ii) "in-transit" inventory.
(f) Within forty-five (45) days following the Closing Date, Seller shall deliver to Purchaser a special purpose balance sheet of the Company as of 12:01 a.m. on the Closing Date prepared by Seller with the cooperation of Purchaser (the "Closing Date Balance Sheet"). The Closing Date Balance Sheet shall be prepared in accordance with and adjusted by the Accounting Principles and Procedures and shall set forth the calculation of the Net Asset Amount. In connection with the preparation of the Closing Date Balance Sheet, each party shall provide the other and the other's accountants and representatives full access to the Company's books, records, facilities and employees within such party's control. If the Net Asset Amount of the Company as reflected in the Closing Date Balance Sheet, is greater than the Net Asset Amount as reflected in the Estimated Closing Date Balance Sheet, the Estimated Purchase Price shall be increased, by a final adjustment to the Estimated Purchase Price as finally determined provided in Section 2.2(c), by the amount of such excess (the "Final Purchase Price Increase"). If the Net Asset Amount of the Company as reflected in the Closing Date Balance Sheet is less than the Net Asset Amount as reflected in the Estimated Closing Date Balance Sheet, the Estimated Purchase Price shall be decreased, by a final adjustment to the Estimated Purchase Price as provided in Section 2.2(c), by the amount of such deficiency (the "Final Purchase Price Decrease").
(g) Purchaser shall have fifteen (15) Business Days after receipt by it of the Closing Date Balance Sheet (the "Dispute Period") to dispute any item, calculation or amount, or the method of calculation of any item or amount, reflected therein (a "Dispute"). If Purchaser does not give written notice of a Dispute (a "Dispute Notice") to Seller within the Dispute Period, the Closing Date Balance Sheet shall be deemed to have been accepted by Purchaser in the form in which it was delivered by Seller. In the event that Purchaser does not agree with any item, calculation or amount, or the method of calculation of any item or amount, reflected on the Closing Date Balance Sheet, Purchaser shall give Seller a Dispute Notice within the Dispute Period, setting forth the basis of its disagreement, and Seller and Purchaser shall, within fifteen (15) days after receipt by Seller of such Dispute Notice, attempt to resolve such Dispute and agree in writing upon the final Closing Date Balance Sheet. In the event that Seller and Purchaser are unable to resolve any such Dispute within the fifteen (15) day resolution period, then the national office of the certified public accounting firm of Deloitte & Touche LLP or such other national office of a certified public accounting firm or office as may be mutually agreed upon by Seller and Purchaser (the "Arbitrator") shall be employed as arbitrator hereunder to settle such Dispute as soon as reasonably practicable. The parties agree that the Arbitrator shall decide only the matters involved in the Dispute, and not any other matters, and that such matters shall be decided in accordance with this Section 2.04 is less than 2.3. Any Arbitration pursuant to this Section 2.3(g) shall be conducted in the Estimated Purchase Price, Seller shall pay to Purchaser the total amount national office of Deloitte & Touche LLP or of such deficitcertified public accounting firm, in accordance with the Commercial Arbitration Rules of the American Arbitration Association then existing and the Arbitrator's determination with respect to any Dispute shall be final and binding on all parties and not subject to appeal on any ground, and if judgment on the arbitration award may be enforced in any court having jurisdiction over the subject matter of the controversy. Seller and Purchaser shall each pay one-half of the fees and expenses of the Arbitrator for the services of the Arbitrator in the arbitration.
(h) In the event of a Purchase Price Adjustment, an amount equal to the Purchase Price Adjustment together with interest on such amount at a rate equal to the rate of interest announced from time to time by Chase Manhattan Bank to be its prime or reference rate, from the Closing Date to the payment date, shall be paid by either Purchaser to Seller, or Seller to Purchaser, as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excesscase may be, in either case immediately available funds by wire transfer of immediately available U.S. dollar fundsto such bank account as may be designated by Seller or Purchaser, as the case may be. Such payment shall be made within three ten (310) Business Days days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase PriceClosing Date Balance Sheet.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination Preparation of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working CapitalDay Financial Statements.
(bi) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) Within 7 days after the ClosingClosing Date, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, CPA (“Saternus”), Purchaser shall the Target’s accountant prior to Closing, will at the direction of Sellers prepare and deliver to Buyer a draft balance sheet (the "Draft Closing Date Balance Sheet") for Target as of the close of business on the Closing Date (determined on a pro forma basis as though the Parties had not consummated the transactions contemplated by this Agreement). Saternus will prepare the Draft Closing Date Balance Sheet in accordance with GAAP applied on a basis consistent with the preparation of the Financial Statements; provided, however, that assets, liabilities, gains, losses, revenues, and expenses in interim periods or as of dates other than year-end (which normally are determined through the application of so-called interim accounting conventions or procedures) shall be determined, for purposes of the Draft Closing Date Balance Sheet, through full application of the procedures used in preparing the most recent audited balance sheet included within the Financial Statements; provided further, that in preparing the Draft Closing Date Balance Sheet, work in progress at the time of Closing for which Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capitalhas not yet billed its customers shall be accounted for at the rate Seller has historically billed its customers for such work, to account for uncollectible revenues. Any unpaid amounts associated with such work in progress shall cause an adjustment in amounts due Sellers.
(ii) If Buyer has any objections to the Draft Closing Net IndebtednessDate Balance Sheet, it shall deliver a detailed statement describing its objections to Sellers within 7 days after receiving the Draft Closing Date Balance Sheet. Buyer and Sellers shall use reasonable efforts to resolve any such objections themselves. If the Parties do not obtain a final resolution within 14 days after Sellers have received the statement of objections, however, Buyer and Sellers shall engage Boulay, Heutmaker, ▇▇▇▇▇▇ & Co. P.L.L.P. (iii“▇▇▇▇▇▇”) to resolve any remaining objections. The determination of ▇▇▇▇▇▇ shall be set forth in writing and shall be conclusive and binding upon the Parties. At Sellers direction, Saternus shall revise the Draft Closing Transaction Expenses and (iv) Date Balance Sheet as appropriate to reflect the Purchase Price resolution of any objections thereto pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP2.5(a)(ii). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and "Closing Date Balance Sheet" shall mean the Draft Closing Date Balance Sheet together with any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made revisions thereto pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c2.5(a)(ii).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (ai) Section 2.04(aWithin sixty (60) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time days of the Closing and determined as of the Closing, Seller shall at its expense cause an audit for the purpose of preparing a statement of Subject Assets acquired and Assumed Liabilities (the "Closing Statement of Assets and Liabilities") in the form attached hereto as Exhibit 1.3. Within five (5) days following completion of such audit, Seller shall prepare and deliver the Closing Statement of Assets and Liabilities to Buyer. The Closing Statement of Assets and Liabilities shall be accompanied by a check or wire transfer of an amount equal to the "Net Worth Difference" (as set forth defined below), if any, together with interest as described in Section 2.05(a1.3(a)(iv)). It is understood by the parties hereto that any such payment may not represent payment in full of the final Purchase Price, which such final Purchase Price shall be determined as provided in this Section 1.3. Said Statement shall (x) be complete and correct in all material respects, (y) represent a fair statement of the Subject Assets and Assumed Liabilities in all material respects and (z) be prepared on the same basis, and in accordance with Section 2.04(agenerally accepted accounting principles using the same methods and procedures applied on a basis consistent with the methods and procedures used to prepare the Base Balance Sheet. In addition, in preparing the Closing Statement of Assets and Liabilities, reserve levels, including reserves and allowances for accounts receivables, inventories, warranty claims, and other items, 5 11 shall be determined on a basis consistent with that used to determine such reserves in the Base Balance Sheet, adjusted only for changes in circumstances, such as known bad debts, increases in dollar amount or quantities, or identified potential liabilities. Notwithstanding the foregoing, the parties hereto agree as follows: (i) the "Accrued warranty reserve" on the Closing Statement of Assets and Liabilities shall remain at $219,630 and not be reduced; (ii) the "Obsolescense reserve" on the Closing Statement of Assets and Liabilities shall be the sum of $591,992 from the Base Balance Sheet plus $439,000 that was recorded during the quarter ended June 30, 1997; (iii) the inventory accounts on the Closing Statement of Assets and Liabilities shall not be adjusted upward by $165,000 which Seller and Stockholder have indicated they believe is an amount by which such accounts in the aggregate were understated on the Base Balance Sheet on account of overhead; and (iv) the fixed asset depreciation accounts on the Closing Statement of Assets and Liabilities shall not be adjusted downward by $35,000 which amount Seller and Stockholder have indicated they believe is an amount by which such accounts in the aggregate were overstated on the Base Balance Sheet. Buyer's accountants will be provided reasonable and timely access to the audit working papers of Seller's accountants documenting the procedures they performed in forming their opinion on the Closing Statement of Assets and Liabilities.
(ii) If the amount of total Subject Assets less Assumed Liabilities ("Net Worth") as shown on the Closing Statement of Assets and Liabilities is less than $8,110,000 (such difference, the "Net Worth Difference") then the Purchase Price shall be equal to the Estimated Purchase Price decreased by the Net Worth Difference.
(iii) If Buyer disagrees with the Closing Statement of Assets and Liabilities, Buyer shall, within forty-five (45) days after receipt thereof, furnish to Seller a written statement of such disagreement, together with an explanation of the Seller Disclosure Letterreasons therefor. The parties hereto shall first use commercially reasonable efforts to resolve such disagreement among themselves. If the parties are unable to resolve the dispute within ten (10) business days after delivery of such notification, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment dispute shall be excluded from submitted to accountants other than Ernst & Young LLP or Deloitte & Touche LLP jointly selected by Buyer and Seller (the "Accountants"). The Accountants shall be instructed to apply the same methods, policies and procedures as were applied in preparing the Base Balance Sheet. The determination of the Modified Working CapitalAccountants as to the resolution of any dispute shall be binding and conclusive upon all parties hereto. All determinations pursuant to this Section 1.3(b)(iii) shall be in writing and shall be delivered to Buyer and Seller. Any adjustment to the Estimated Purchase Price made pursuant to this Section 1.3(b) may be entered in and enforced by any court having jurisdiction thereover. The fees and expenses of the Accountants in connection with the resolution of disputes pursuant to this Section 1.3(b)(iii) shall be borne equally by the Buyer and Seller.
(biv) If If, pursuant to Section 1.3(b)(ii), the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total difference (less any adjustment amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.previously
Appears in 1 contract
Sources: Asset Purchase Agreement (Brooktrout Technology Inc)
Purchase Price Adjustment. a. Target shall prepare and deliver to Acquiror at least two (a2) Section 2.04(a) calendar days prior to the Closing an unaudited balance sheet of Target as of the Seller Disclosure Letter sets forth certain current close of business on the Closing Date (the “Closing Balance Sheet”), which Closing Balance Sheet shall (i) be true, correct and complete, (ii) be derived from and be in accordance with the books and records of Target, (iii) fairly and accurately present in all material respects the assets (including the Closing Cash Amount), liabilities (including all reserves and current liabilities accounts the unpaid Total Debt Amount, unpaid Change of Control Payments and certain accounting principles, methodologies unpaid Transaction Fees) and policies used in the determination financial position of such accounts. Such accounts Target as of the Businessdate thereof and (iv) fairly and accurately present the Working Capital Amount. Target shall provide to Acquiror any information and back-up materials (including bank account information) reasonably requested by Acquiror with respect thereto. The Closing Balance Sheet shall set forth (A) the Closing Working Capital Amount, cumulatively(B) the unpaid Total Debt Amount, as (C) all unpaid Transaction Fees, (D) all unpaid Change of immediately before Control Payments, and (E) the effective time Closing Cash Amount, and shall include a reasonably detailed summary of the calculations made to arrive at such amounts, shall be based upon the amounts reflected on the Closing (as set forth in Balance Sheet, and shall be reasonably acceptable to Acquiror. The Closing Balance Sheet shall be used to make any preliminary adjustment to the Net Aggregate Consideration on the Closing Date pursuant to Section 2.05(a)2.13(b), determined subject to further adjustment in accordance with Section 2.04(a) of 2.13(e).
b. In the Seller Disclosure Letterevent that the Working Capital Adjustment is negative the Total Consideration shall be adjusted downward by such negative Working Capital Adjustment (each, and the principles, methodologies and policies set forth therein and, “Estimated Working Capital Adjustment”). There will be no preliminary adjustment to the extent not set forth thereinNet Aggregate Consideration on the Closing Date for any Cash Adjustment.
c. Within ninety (90) days after the Closing Date, Acquiror may prepare and deliver to Stockholders’ Agent a certificate setting forth, in accordance with U.S. GAAPreasonable detail, shall constitute (i) any proposed Cash Adjustment and (ii) any proposed adjustment to the Working Capital Amount compared to the Closing Working Capital Amount and any resulting Working Capital Adjustment (the “Modified Working CapitalClosing Certificate”). For Acquiror shall provide to Stockholders’ Agent any information and back-up materials used by Acquiror in preparing the avoidance of doubt, amounts included in Closing Certificate reasonably requested by Stockholders’ Agent with respect thereto. If Acquiror does not deliver the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, Certificate within ninety (90) days after the Closing)Closing Date, Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller Acquiror shall be deemed to have accepted waived its right to any subsequent Working Capital Adjustment or Cash Adjustment, and the Estimated Working Capital Adjustment shall be the final Working Capital Adjustment and the final Cash Adjustment shall be $0.
d. Stockholders’ Agent shall have forty-five (45) days from the date on which the Closing Statement Certificate have been delivered by Purchaser. Matters included in the calculations in to it to raise any objection(s) to the Closing Statement Certificate, by delivery of written notice to which Seller does Acquiror setting forth such objection(s) in reasonable detail (the “Disputed Items”). In the event that Stockholders’ Agent shall not object in deliver any such objection(s) with respect to the Disagreement Notice Closing Certificate within such thirty-day period, then the Closing Certificate shall be deemed accepted by Seller and final for purposes of this Section 2.13. In the event that any such objection(s) is so delivered, the Closing Certificate shall not be subject to further dispute or review. Purchaser deemed final and Seller Acquiror and Stockholders’ Agent shall negotiate attempt, in good faith faith, to resolve any such disagreementthe Disputed Items and, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller if they are unable to resolve all of the Disputed Items within thirty (30) days of delivery of such notice, shall, within five (5) Business Days thereafter (or such earlier date as mutually agreed), submit the Disputed Items to the Independent Accounting Firm. Acquiror and Stockholders’ Agent shall provide to the Independent Accounting Firm all work papers and back-up materials relating to the Disputed Items requested by the Independent Accounting Firm to the extent available to Acquiror or its Representatives or Stockholders’ Agent or its Representatives, respectively. Acquiror and Stockholders’ Agent shall be afforded the opportunity to present to the Independent Accounting Firm any disagreement material related to the Disputed Items and to discuss the issues with the Independent Accounting Firm. The determination by the Independent Accounting Firm, as contemplated by Section 2.04(c) set forth in a notice to be delivered to Acquiror and Stockholders’ Agent within thirty (30) days after delivery the submission of the Disputed Items to the Independent Accounting Firm, shall be final, binding and conclusive on Acquiror, Stockholders’ Agent and all holders of Target Capital Stock and Target Options. The fees and expenses of the Independent Accounting Firm shall be allocated to and borne proportionately by Seller Acquiror and Stockholders’ Agent (on behalf of a Disagreement Noticethe holders of Target Capital Stock and Target Options) to the extent Acquiror’s and Stockholders’ Agent’s respective determinations of the Disputed Items differ from the Independent Accounting Firm’s final determination of the Disputed Items (such proportional responsibility to be determined conclusively by the Independent Accounting Firm and included in its written determination). The Working Capital Amount and Cash Adjustment reflected in the Closing Certificate, Purchaser as revised to reflect the resolution of any and Seller all disputes by Acquiror and Stockholders’ Agent and/or the Independent Accounting Firm, shall jointly select a mutually acceptable nationally recognized third party accounting firmbe deemed to be the “Final Working Capital Amount” and “Final Cash Adjustment,” respectively.
e. At such time as the Closing Certificate shall become final in accordance with Section 2.13(c) or 2.13(d), the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected Estimated Working Capital Amount shall be referred compared to herein as the “Accounting Arbitrator”)Final Working Capital Amount to calculate the final Working Capital Adjustment. In the event the final Working Capital Adjustment exceeds the Estimated Working Capital Adjustment or the Final Cash Adjustment is greater than $0, the holders of Target Capital Stock and Target Options shall pay to Acquiror an amount equal to the aggregate of such excess amounts within five (5) Business Days from the date that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that Certificate is within range of values established for such disputed item as finally determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f2.13(c) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New Yorkor 2.13(d), shall be used to convert by Acquiror’s deduction of such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with from the adjustments pursuant to this Section 2.04Escrow Fund.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing Within sixty (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (9060) days after the Closing)Closing Date, Purchaser Seller shall prepare and deliver to Seller Buyer a statement setting of assets and liabilities of the Business (including only the Assets transferred to Buyer pursuant hereto and the Assumed Liabilities) as of the close of business on the Business Day immediately preceding the Closing Date (the "Closing Statement of Assets and Liabilities"). The Closing Statement of Assets and Liabilities will be in a format comparable to the Balance Sheet. Buyer shall cooperate with Seller in connection with, and shall furnish to Seller all such information as Seller may reasonably require, in the preparation of the Closing Statement of Assets and Liabilities. Except as set forth Purchaser’s calculation in Schedule 2.5(a), the Closing Statement of Assets and Liabilities:
(i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principlesbooks and records of Seller;
(ii) shall fairly present the financial position of the Business;
(iii) shall utilize the same methodologies for determining foreign currency exchange rates as were used in the preparation of the Balance Sheet;
(iv) shall utilize the same estimation methodologies used for determining EACs as were used in the preparation of the Balance Sheet, methodologies with EACs updated to reflect changes in facts and policies circumstances (including the matters set forth in Section 2.04 Schedule 4.7) occurring subsequent to the EACs referred to in Schedule 2.5(a) and prior to the date of the Seller Disclosure Letter Closing Statement of Assets and Liabilities;
(v) shall not include any assets held in trust for the benefit of any participants in any of Seller's pension plans; and
(vi) except as may be otherwise specified in Schedule 2.5(a), to the extent not set forth therein, shall be prepared in accordance with U.S. GAAP)GAAP consistently applied using the same accounting methods, policies, practices and procedures, with consistent classifications and estimation methodologies as were used in the preparation of the Financial Statements, and will not include any changes in assets or liabilities as a result of purchase accounting adjustments arising from or resulting as a consequence of the transactions contemplated hereby. The In the event that the Closing Date does not occur at a financial week or month end for accounting purposes, the parties shall agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to on mutually acceptable roll forward or roll back procedures. Buyer shall cause the extent relating to employees of the Business (including, for to assist Seller in the avoidance preparation of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated of Assets and Liabilities.
(b) Each party shall provide the other party and its representatives with reasonable access to books and records and relevant personnel during the preparation of the Estimated Closing Net Assets and the Closing Statement of Assets and Liabilities and the resolution of any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to 2.5.
(xc) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within Within sixty (60) days after delivery of the Closing StatementStatement of Assets and Liabilities, which Buyer may dispute all or any portion Seller's calculation of the Closing Net Assets or as described on the Closing Statement of Assets and Liabilities by giving written notice shall set (a "Notice of Disagreement") to the Seller setting forth any such disagreement in reasonable detail the basis for any such dispute (“Disagreement Notice”any such dispute being hereinafter called a "Disagreement"), identify the specific items involved and the dollar amount of each such disagreement and provide reasonable supporting documentation for each such Disagreement. The parties shall promptly commence good faith negotiations with a view to resolving all such Disagreements. If Buyer does not provide a Notice of Disagreement to Seller fails to deliver a Disagreement Notice by within the end of such sixty (60-) day periodperiod as set forth in this subsection (d), Seller Buyer shall be deemed to have accepted the as final such Closing Statement delivered by Purchaser. Matters included of Assets and Liabilities in the calculations form delivered to it by Seller. Additionally, after the sixty (60) day period referred to above, Buyer may not introduce any new Disagreement with respect to an item in the Closing Statement to which Seller of Assets and Liabilities or increase the amount of a Disagreement. Similarly, a Disagreement by Buyer does not object provide Seller any right to introduce any changes to the calculation of Closing Net Assets; provided that nothing herein shall prevent Seller from asserting or Buyer from opposing any offset that may result from an item in Buyer's Notice of Disagreement. During the sixty (60) day period of its review, Buyer shall have reasonable 14 access to any documents, schedules or workpapers used in the Disagreement Notice shall be deemed accepted by Seller preparation of the Closing Statement of Assets and shall not be subject to further dispute or review. Purchaser Liabilities.
(d) Buyer and Seller shall agree to negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) Disagreement. If Purchaser Buyer and Seller are unable to resolve any disagreement as contemplated all Disagreements properly identified by Buyer pursuant to Section 2.04(c2.5(c) within sixty (60) days after delivery to Seller of written notice of such Disagreement, then, within thirty (30) days after delivery by Seller of a Disagreement Noticethereafter, Purchaser Buyer and Seller shall jointly select a mutually acceptable nationally recognized third party an arbiter from one of the "Big 5" accounting firmfirms that is not the independent auditor of either Buyer or Seller; if Buyer and Seller are unable to select such an arbiter within such time period, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve American Arbitration Association shall make such disagreement selection (the firm person so selected shall be referred to herein as the “"Accounting Arbitrator”"). In the event that Purchaser The Disagreement shall be submitted for final and Seller are unable binding arbitration to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at so selected for a resolution of such Disagreement in accordance with the request terms of either Purchaser or Seller, by the American Arbitration Association, which this Agreement. The Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to will only consider only those items and amounts set forth in the Closing Statement of Assets and Liabilities as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser Buyer and Seller have not resolved their disagreement. The scope of disagreed within the disputes to be resolved by time periods and on the Accounting Arbitrator shall be limited to whether such calculation was done terms specified above and must resolve the matter in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation provisions of the Closing Statement, and the Accounting Arbitrator shall not make any other determinationAgreement. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all partiesBuyer and Seller, as promptly as practicablepracticable and in any event within one hundred and twenty (120) days after its appointment, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this the Agreement. Such report The Accounting Arbitrator shall select as a resolution the position of either Buyer or Seller for each item of disagreement and may not impose an alternative resolution. The Accounting Arbitrator shall make its determination based solely on presentations and supporting material provided by the parties and not pursuant to any independent review. The determination of the Accounting Arbitrator shall be final and binding upon the parties, absent manifest errorBuyer and Seller. The fees, expenses and costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne one-half by Purchaser, on the one hand, Buyer and one-half by Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to If the Closing Net Assets as finally determined in accordance with this Section 2.04 2.5 are less than the Estimated Closing Net Assets, the Purchase Price shall be allocated decreased on a dollar-for-dollar basis by the amount of such shortfall, and if the Closing Net Assets are greater than the Estimated Closing Net Assets, the Purchase Price shall be increased on a dollar-for-dollar basis by the amount of such excess. If any adjustment under this Section 2.5 results in a manner consistent with reduction in the Purchase Price, Seller shall pay to Buyer the amount of such reduction, and if any allocation agreed adjustment results in an increase in the Purchase Price, Buyer shall pay to pursuant Seller the amount of such increase, in each case, by wire transfer of immediately available funds to Section 2.03(c).
an account designated by the party receiving payment within five (f5) With respect to Cash and Cash Equivalents and Indebtedness Business Days after the final determination of the Business denominated amount of such reduction or increase in currencies other than U.S. dollarsPurchase Price, plus interest on the Applicable Exchange Rate for each amount of such currency as of immediately before the effective time of reduction or increase from the Closing Date to the date of such payment thereof at the per annum rate equal to the rate announced by Citibank, N.A. in the City of New York as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining its base rate in effect on the Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04Date.
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Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (andpracticable, but in any event, event within ninety (90) days after the Closing)Closing Date, Purchaser Parent shall prepare and deliver to Seller the Equityholder Representative a written statement (the “Purchase Price Adjustment Statement”) setting forth Purchaserin reasonable detail Parent’s good faith calculation of (i1) Modified the Closing Cash, the Closing Net Working Capital, (ii) the Closing Net IndebtednessIndebtedness and the Transaction Expenses, (iii) Closing Transaction Expenses and (iv2) Parent’s determination of the Aggregate Closing Merger Consideration based on the foregoing clause (1), together with reasonably detailed supporting calculations, in each case, determined in accordance with this Agreement.
(b) Following the delivery of the Purchase Price Adjustment Statement, for purposes of this Section 2.8, Parent shall provide the Equityholder Representative and its Representatives with reasonable access at reasonable times to the Business Records, work papers and other documents that were used in, or are relevant to, the preparation of the Purchase Price Adjustment Statement, internal and external accountants, and relevant personnel of the Company Group to verify the accuracy of such amounts, all to the extent reasonably requested by the Equityholder Representative; provided that the Equityholder Representative and its representatives shall maintain the confidentiality of any such information furnished pursuant to this Section 2.04 2.8(b) and, solely with respect to the Equityholder Representative’s receipt of workpapers of Parent’s and the Company Group’s external accountants, shall have entered into any customary access letters as may be reasonably required by such of Parent’s or the Company Group’s external accounting advisors.
(c) If the “Closing Statement”), which shall be prepared in accordance Equityholder Representative disagrees with the accounting principles, methodologies and policies calculation of any of the items set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubtPurchase Price Adjustment Statement, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller Equityholder Representative shall notify Purchaser Parent in writing of such disagreement (an “Objection Dispute”) within sixty forty-five (6045) days after delivery receipt of the Closing StatementPurchase Price Adjustment Statement by the Equityholder Representative (such period, which written notice the “Review Period”). The Objection Dispute shall set forth any such disagreement the basis for the Equityholder Representative’s dispute or objections and the specific adjustments (including dollar amounts) to the Purchase Price Adjustment Statement that the Equityholder Representative believes in reasonable detail (“Disagreement Notice”)good faith should be made. Any amount, determination or calculation contained in the Purchase Price Adjustment Statement and not specifically disputed in a timely delivered Objection Dispute shall be final, conclusive and binding on the Parties. If Seller the Equityholder Representative fails to deliver a Disagreement Notice by written notice of an Objection Dispute to Parent on or prior to the end last day of such 60-day periodthe Review Period, Seller the Purchase Price Adjustment Statement shall be deemed final and binding on the Parties for purposes of this Agreement.
(d) If the Equityholder Representative delivers a notice of an Objection Dispute pursuant to have accepted Section 2.8(c), Parent and the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller Equityholder Representative shall negotiate in good faith to resolve any such disagreement, Objection Dispute and any resolution agreed to in writing by Purchaser Parent and Seller the Equityholder Representative shall be final and binding upon the parties.
(d) Parties for purposes of this Agreement. If Purchaser Parent and Seller the Equityholder Representative are unable to resolve any disagreement as contemplated by Section 2.04(c) all Objection Disputes within thirty twenty (3020) days after of delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention written notice of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined such Objection Disputes by the reasonable discretion Equityholder Representative to Parent, then the disputed matters shall, at the request of Seller and Purchasereither the Equityholder Representative or Parent, to resolve such disagreement (the firm so selected shall be referred for final determination to herein as Deloitte (the “Accounting Arbitrator”)) as promptly as practicable following the end of such twenty (20) day period; provided, that any communications between the Equityholder Representative and Parent (or their respective Representatives) during the aforementioned twenty (20) day period shall be considered settlement discussions pursuant to the Federal Rule of Evidence 408 and similar state rules and the Accounting Arbitrator will be instructed to disregard any evidence of such communications in its consideration of the Objection Disputes. In If such firm is unable to serve, Parent and the event that Purchaser Equityholder Representative shall jointly select an Accounting Arbitrator from an accounting firm of national standing. If Parent and Seller the Equityholder Representative are unable to agree on the appointment of the upon an Accounting Arbitrator, as provided aboveArbitrator within such time period, then the Accounting Arbitrator shall be appointed, at the request an accounting firm of either Purchaser or Seller, national standing designated by the American Arbitration AssociationAssociation in New York, which New York; provided, that the Accounting Arbitrator shall not have served as auditor for, or provided any other services to, Parent or the Company or their respective Subsidiaries. Parent and the Equityholder Representative each agree to promptly sign an engagement letter, in commercially reasonable form, as may reasonably be another nationally recognized third party accounting firmrequired by the Accounting Arbitrator. The parties shall instruct the Accounting Arbitrator shall act as an expert, not as an arbitrator, and its decision shall be limited to consider only the positions taken on those items and amounts set forth in on the Closing Purchase Price Adjustment Statement and the Objection Dispute as to which Purchaser has Parent and the Equityholder Representative have disagreed pursuant to a Disagreement Notice within the applicable time periods and Purchaser on the terms specified in Section 2.8(c) and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done this Section 2.8(d) and must resolve all unresolved Objection Disputes in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation provisions of the Closing Statement, and the Accounting Arbitrator shall not make any other determinationthis Agreement. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all partiesParent and the Equityholder Representative, as promptly as practicablepracticable (and in any event within sixty (60) days) after submission by Parent and the Equityholder Representative of the written presentations and written responses specified in the engagement letter with the Accounting Arbitrator, a written report setting forth the resolution of any such disagreement unresolved Objection Disputes determined in accordance with the terms herein. The Accounting Arbitrator’s determination shall be based solely on the definitions and other applicable provisions of this Agreement, and any such submissions specified in the engagement letter, and not on independent review of the Accounting Arbitrator. Neither Parent nor the Equityholder Representative shall have any ex parte communications with the Accounting Arbitrator relating to this Section 2.8 or this Agreement. In resolving any disputed item, the Accounting Arbitrator shall be bound by the principles set forth in this Section 2.8 and shall not assign a value to any item greater than the greatest value for such item claimed by either Parent or the Equityholder Representative or less than the smallest value for such item claimed by either Parent or the Equityholder Representative. Such report shall be final and binding upon all of the partiesParties for purposes of this Agreement, absent manifest errorerror by the Accounting Arbitrator or fraud. The fees, expenses and costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by PurchaserParent and the Equityholder Representative, on the one hand, and Seller, on the other handrespectively, in the proportion that the aggregate dollar amount of the disputed items submitted to the differences between the Purchase Price Accounting Arbitrator by such Party that are unsuccessfully disputed by such Party (as finally determined by the Accounting Arbitrator Arbitrator) bears to the aggregate dollar amount of disputed items submitted by Parent and the asserted Purchase Price set forth Equityholder Representative. The Parties agree that the Accounting Arbitrator’s decision may be enforced as an arbitration award in the Closing Statement and the Disagreement Notice, respectivelyany court of competent jurisdiction.
(e) Purchaser Upon the written agreement of Parent and Seller agree that any payments made the Equityholder Representative or the decision of the Accounting Arbitrator, or if the Equityholder Representative fails to deliver written notice of an Objection Dispute on or prior to the last day of the Review Period as provided in Section 2.8(c), the Purchase Price Adjustment Statement, as modified pursuant to the written agreement of Parent and the Equityholder Representative or the decision of the Accounting Arbitrator, as applicable, shall be deemed to be the final Purchase Price Adjustment Statement for purposes of this Section 2.8 (the “Final Purchase Price Adjustment Statement”) and shall be deemed to be final and binding on the Parties for purposes of this Agreement. The Closing Cash, the Closing Net Working Capital, the Closing Indebtedness, the Transaction Expenses, each as shown on the Final Purchase Price Adjustment Statement, shall be referred to as the “Final Closing Cash”, the “Final Closing Net Working Capital”, the “Final Closing Indebtedness”, and the “Final Transaction Expenses”, respectively. For purposes of this Agreement, (i) the “Final Closing Net Working Capital Adjustment Amount” means the amount equal to the Final Closing Net Working Capital, minus the Target Net Working Capital (which may be a positive or negative number) and (ii) the “Final Aggregate Closing Merger Consideration” means (1) the Base Amount, plus (2) the Final Closing Cash, plus (3) the Final Closing Net Working Capital Adjustment Amount (whether such amount is a positive number or a negative number (and for the avoidance of doubt, in the case of a negative number, with the addition of such negative number pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
clause (f3) With respect to Cash and Cash Equivalents and Indebtedness having the same arithmetic result as the subtraction of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each absolute value of such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New Yorknegative number)), shall be used to convert such amounts into U.S. dollars for purposes of determining minus (4) the Final Closing Net Indebtedness in connection with Indebtedness, minus (5) the adjustments pursuant to this Section 2.04Final Transaction Expenses, minus (6) the Adjustment Escrow Amount, minus (7) the Equityholder Representative Expense Amount, minus (8) the Aggregate Preferred Stock Closing Accrued Value, minus (9) the Aggregate Preferred Option Closing Accrued Value, plus (10) the Aggregate Option Exercise Price.
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Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, On or as of immediately before the effective time of soon as practicable after the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase PriceDate, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller Buyer a statement setting forth Purchaser’s calculation balance sheet (the “Preliminary Closing Balance Sheet”) as of the Closing Date on the same basis and applying the same accounting principles, policies and practices that were used in preparing the Financial Statements taking into account the Purchased Assets and none of the Excluded Assets.
(i) Modified Working CapitalThe Preliminary Closing Balance Sheet shall be binding and conclusive upon, and deemed accepted by, Buyer unless the Buyer shall have notified Seller in writing of any objections with respect to the balances for accounts receivable, inventory, fixed assets and/or prepaid items set forth therein within five (5) days after receipt thereof. During the five (5)-day period after Buyer’s receipt of the Preliminary Closing Balance Sheet and, as applicable, thereafter, Seller shall make the work papers and back-up materials used in preparing the Preliminary Closing Balance Sheet insofar as they pertain to accounts receivable, inventory, fixed assets and prepaid items, as well as the personnel of Seller with knowledge regarding any underlying matters, available to Buyer at reasonable times and upon reasonable notice. Any written notice of the Buyer shall (1) specify in reasonable detail each item on the Preliminary Closing Balance Sheet that the Buyer disputes and (2) include a summary of the Buyer’s reasons for such dispute.
(ii) Disputes between Buyer and Seller relating to the Preliminary Closing Net Indebtedness, Balance Sheet that cannot be resolved by them within ten (iii10) Closing Transaction Expenses days after receipt by Seller of the notice referred to in Section 2.7(a)(i) above may be referred no later than twenty (20) days after such receipt for decision (at the request of either Buyer or Seller) to an independent nationally recognized accounting firm mutually agreeable to Buyer and (iv) Seller to decide the Purchase Price pursuant to this Section 2.04 matter (the “Closing StatementAuditor”). Prior to referring the matter to the Auditor, Buyer and Seller shall agree on the procedures to be followed by the Auditor (including procedures with regard to presentation of evidence). Such procedures shall not alter the accounting practices, principles and policies to be applied to the Preliminary Closing Balance Sheet, which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under those required by this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable LawsAgreement. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser Buyer and Seller are unable to agree on upon procedures before the appointment end of fifteen (15) days after referral of the Accounting Arbitrator, as provided abovedispute to the Auditor, then the Accounting Arbitrator Auditor shall establish such procedures giving due regard to the intention of the Parties to resolve disputes as quickly, efficiently and inexpensively as possible, which procedures may, but need not, be appointed, at the request those proposed by either of either Purchaser Buyer or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser Buyer and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done then submit evidence in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statementestablished, and the Accounting Arbitrator Auditor shall not make any other determinationdecide the dispute in accordance therewith. The Accounting Arbitrator shall make its determination based solely Auditor’s decision on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant any matter referred to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report it shall be final and binding upon the parties, absent manifest erroron Seller and Buyer. The fees, costs and expenses fee of the Accounting Arbitrator arising in connection with this Section 2.04 Auditor shall be borne by PurchaserSeller, on the one hand, and SellerBuyer, on the other hand, in proportion equal portions, unless the Auditor decides, based on its determination with respect to the differences reasonableness of the respective positions of Buyer and Seller, that the fee shall be bome in unequal proportions. Asset Purchase Agreement - HME Wireless Inc.DOC 8
(iii) The Preliminary Closing Balance Sheet shall become final and binding upon Buyer and Seller upon the earlier of: (1) the failure by the Buyer to object thereto within the period permitted under Section 2.7(a)(i) above; (2) the agreement between Buyer and Seller with respect thereto; or (3) the decision by the Auditor with respect to any disputes under Section 2.7(a)(ii) above. As adjusted, if applicable, pursuant to such agreement or such decision, the Preliminary Closing Balance Sheet, when final and binding, is referred to herein as the “Final Closing Balance Sheet.”
(b) The Purchase Price will be adjusted downward on a dollar-for-dollar basis (i) for every dollar by which the accounts receivable as reflected on the Final Closing Balance Sheet are less than $450,000 and (ii) for every dollar by which the amount of inventory as reflected on the Final Closing Balance Sheet (including advanced payments on such inventory) is less than $350,000, in each case as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this accordance with Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c2.7a).
(fc) With respect No later than the 5th day after the Final Closing Balance Sheet becomes final, as described in Section 2.7(a)(iii), Buyer shall pay to Cash and Cash Equivalents and Indebtedness of Seller the Business denominated Holdback less the amount, if any, by which the Purchase Price is adjusted downward in currencies other than U.S. dollarsaccordance with Section 2.7(b) (the “Purchase Price Adjustment”).
(d) In the event that the Purchase Price Adjustment exceeds the Holdback, the Applicable Exchange Rate for each such currency amount by which the Purchase Price Adjustment exceeds the Holdback will be paid by Seller to Buyer not later than the 5th day after Final Closing Balance Sheet becomes final, as of immediately before the effective time of the Closing as published by Bloomberg (BGN New Yorkdescribed in Section 2.7(a)(iii), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
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Purchase Price Adjustment. (a) Section 2.04(aWithin ten (10) Business Days prior to the Closing Date, and in no event less than five (5) Business Days before the Closing Date, Sellers shall prepare (in consultation and cooperation with Buyer) and deliver to Buyer a certificate signed by the chief executive officer and chief financial officer of GHI (the “Closing Date Calculation Certificate”) setting forth Sellers’ best estimate, based on the standards of preparation of the Seller Disclosure Letter sets Adjustment Balance Sheet set forth certain current assets in Section 2.3(b), of the Adjusted Net Working Capital (the “Estimated Adjusted Net Working Capital”), together with a worksheet showing in reasonable detail the components of such estimate. The Benchmark Adjusted Net Working Capital shall have the meaning set forth in Schedule 2.3(a). The “Estimated Aggregate Cash Consideration” shall mean (i) $55,000,000.00 minus (ii) the lesser of (A) the Maximum Estimated Reduction Amount and current liabilities accounts (B) the excess, if any, of the Benchmark Adjusted Net Working Capital over the Estimated Adjusted Net Working Capital minus (iii) the COBRA Reduction, if any. Sellers shall, concurrently with their delivery of the Closing Date Calculation Certificate, provide Buyer with copies of all materials used by Sellers and certain accounting principles, methodologies and policies used their representatives in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Adjusted Net Working Capital, and shall promptly provide Buyer with such other financial information requested by Buyer. In the event that Buyer notifies Sellers, prior to the Closing, that it disputes the amount of the Estimated Adjusted Net Working Capital (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant such notice being referred to this Section 2.04 (the as an “Closing StatementObjection Notice”), which Buyer and Sellers shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate cooperate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable. If, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion prior to the differences between Closing, Buyer and Sellers agree in writing to any changes to the Purchase Price Estimated Adjusted Net Working Capital, then the Estimated Adjusted Net Working Capital, as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York)case may be, shall be used modified as so agreed. If as of 12:00 noon Minneapolis time on the Business Day prior to convert such amounts into U.S. dollars for purposes the Closing Date, Buyer and Sellers have not agreed in writing to the amount of determining Closing the Estimated Adjusted Net Indebtedness in connection with Working Capital, then, prior to the adjustments pursuant Closing, Buyer may deliver to this Section 2.04Sellers its good faith estimate of the Estimated Adjusted Net Working Capital (the “Buyer Estimated Adjusted Net Working Capital”).
Appears in 1 contract
Sources: Asset Purchase Agreement
Purchase Price Adjustment. The Adjustment (as defined below) ------------------------- will be determined as follows:
(a) Section 2.04(aCambridge and Seller agree that the Final Cash Purchase Price shall be determined as follows:
(i) of Twenty-Seven Million Five Hundred Sixty Thousand Dollars ($27,560,000);
(iii) plus any amount that (A) Actual Total Accounts Receivable Amount less Actual Trade Accounts Payable amount exceeds (B) $10,600,000 or -- minus any that (A) $10,600,000 exceeds (B) the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in Actual Total Accounts Receivables Amount less the determination of such accounts. Such accounts of the Business, cumulativelyActual Trade Accounts Payable Amount, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capitalcase may be.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (andpossible following the Closing Time, but in any event, event within ninety thirty (9030) days after following the Closing)Closing Time, Purchaser Seller shall prepare and deliver to Seller Cambridge a closing statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “"Closing Statement”)") setting for the Actual Non-Tooling Accounts Receivable Amount, which the Actual Total Accounts Receivable Amount and the Actual Trade Accounts Payable Amount (collectively, the "Actual Receivable and Payable Items") as of the Closing Time. The Closing Statement shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (GenCorp Accounting Principles and, to the extent not set forth thereindescribed in the GenCorp Accounting Principles, in accordance with U.S. GAAPGAAP consistently applied (for purposes of this Section 2.07 collectively referred to as the "Accounting Principles"). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests Cambridge shall give Seller access to the extent relating data necessary to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which prepare the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably provide Seller with the operations reasonable assistance of such party’s businessesCambridge's employees in connection therewith. Notwithstanding Representatives of Cambridge shall have the foregoingright to participate with the representatives of Seller in the process of preparing the Closing Statement and shall have access to all data, neither Purchaser nor schedules and work papers used by Seller in preparing the Closing Statement. Cambridge shall have the right to have the Closing Statement audited and Seller shall be required reasonably cooperate with Cambridge and Cambridge's accountants in conducting such audit.
(c) The Closing Statement shall become final and binding upon Cambridge unless on or before the (30th) day after Cambridge's receipt of the Closing Statement Cambridge shall deliver to (x) violate any obligation Seller a written notice of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant its objection to the immediately preceding sentence, amount of any Actual Receivable and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of Payable Item on the Closing Statement, Seller shall notify Purchaser in writing of together with proposed changes thereto and the reasons for such disagreement within sixty (60) days after delivery of changes; provided, however, that the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails only objection to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in which Cambridge may make is whether the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreementaccurately reflects, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures Accounting Principles used to prepare the Closing Statement, the book value or book amount of the Actual Receivable and whether there were mathematical errors Payable Items included thereon. Cambridge may not object to any other matter pertaining to the Closing Statement. All matters on which no notice of objection is given shall be deemed final and binding. In no event may Cambridge submit a notice of objection which suggests a change in the calculation Closing Statement of less than $100,000 in the aggregate.
(d) If Cambridge issues a notice of objection, Seller and Cambridge shall meet and attempt to resolve the dispute within fifteen (15) days following Cambridge's notice of objection. If the parties resolve all or some of the matters in dispute within such fifteen (15) day period then the parties shall prepare and sign an Adjusted Closing Statement reflecting such agreement which shall be deemed final and binding. As to matters which remain in dispute after such fifteen (15) day period ("Unresolved Matters"), the Closing Statement shall be deemed final unless Cambridge shall within ten (10) days after the end of such fifteen (15) day period request that the Closing Statement be reviewed by the Accounting Firm.
(e) Cambridge shall give notice of its request for review by the Accounting Firm to Seller in writing and shall within ten (10) days after such notice submit a written statement of its position to the Accounting Firm and to Seller. Seller may within ten (10) days of Cambridge submitting its written statement to the Accounting Firm respond to such written statement with its own written statement. The Accounting Firm shall consider both written statements as it performs its duties. The authority of the Accounting Firm in reviewing the Closing Statement shall be limited to determining whether, as to the Actual Receivable and Payable Items included within the Unresolved Matters, the Closing Statement accurately reflects, in accordance with the Accounting Principles used to prepare the Closing Statement, the book value or book amount of such Actual Receivable and the Accounting Arbitrator shall not make any other determinationPayable Items. The Accounting Arbitrator Firm shall not have the authority to review or make a determination with respect to any matter except the Actual Receivable and Payable Items included within Unresolved Matters, it being understood that the Accounting Firm shall not be retained to conduct its determination based solely on written submissionsown independent audit or review, presentations but rather shall be retained only to resolve specific differences between Seller and supporting material provided by Purchaser Cambridge within the range of such difference and consistent with the Accounting Principles. The Accounting Firm may request that each of the parties provide it additional information in connection with its review of the Unresolved Matters. The parties shall require the Accounting Firm to complete its review not later than the thirtieth (30th) day following the submission of the matter to the Accounting Firm. Cambridge and Seller shall bear the fees and not pursuant to any independent review. In resolving any such disagreement, expenses of review by the Accounting Arbitrator may only select an amount for Firm in the same proportion as the ratio of each item in dispute that parties' position is within range of values established for such disputed item to the final determination by the Accounting Firm, as determined by reference to the value assigned Accounting Firm, whose determination shall be final and binding on the parties.
(f) The Accounting Firm shall prepare a report of any adjustments to such item by Seller in the Disagreement Notice Actual Receivable and by Purchaser in Payable Items it deems necessary so that such Actual Receivable and Payable Items are reflected on the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined Statement in accordance with the terms of this AgreementAccounting Principles. Such report shall contain an explanation of any such adjustment and a description of why the Accounting Principles required such adjustment. Promptly after its completion, the Accounting Firm shall provide such report to Seller and Cambridge. Seller shall incorporate all such adjustments into the Closing Statement within fifteen (15) days after receipt of such adjustments, which shall thereupon become the Adjusted Closing Statement and which shall be final and binding upon Cambridge and Seller.
(g) Within ten (10) days after the parties, absent manifest error. The fees, costs and expenses of date the Accounting Arbitrator arising Closing Statement or the Adjusted Closing Statement becomes final in connection accordance with this Section 2.04 2.07 (such tenth day being referred to herein as the "Settlement Date"), Seller shall be borne pay to Cambridge the amount, if any, by Purchaserwhich the Final Cash Purchase Price Capital Amount is less than the Estimated Cash Purchase Price or Cambridge shall pay to Seller the amount, if any, by which the Final Cash Purchase Price is more than the Estimated Cash Purchase Price, together with, in either case, interest from the Closing Time on the one hand, and Seller, on the other hand, in proportion amount paid under this Section 2.07(g) calculated at an annual rate equal to the differences between the Purchase Price prime rate as determined publicly announced by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement NoticeCitibank, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollarsN.A., the Applicable Exchange Rate for each such currency New York, New York as of immediately before the effective time of the Closing as published by Bloomberg Time (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to any amount so paid under this Section 2.042.07(h) the "Adjustment").
Appears in 1 contract
Sources: Asset Purchase Agreement (Cambridge Industries Inc /De)
Purchase Price Adjustment. The Purchase Price described in Section 2.3 above shall be increased or reduced (the "Purchase Price Adjustment") if the difference between the Recent Statement of Selected Assets and Liabilities and the Closing Date Statement of Selected Assets and Liabilities is greater than $200,000, which increase or reduction, if any, shall be determined based on the following procedure:
(a) Section 2.04(aWithin twenty (20) days after Closing, Seller shall prepare and deliver to Buyer a list of the Seller Disclosure Letter sets forth certain current assets Inventory and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, Accrued Expenses as of immediately before the effective time of the Closing (as set forth in Section 2.05(a))Date, determined in accordance valued on the same basis and using the same methods and procedures applied on a basis consistent with Section 2.04(a) the methods and procedures used to prepare the Recent Statement of the Seller Disclosure LetterSelected Assets and Liabilities, and promptly thereafter Buyer and Seller shall jointly conduct a review of Inventory and Accrued Expenses, including, at the principlesrequest of either party, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capitala physical inventory count.
(b) If Buyer must, as soon as reasonably practicable after the Purchase Price Closing Date but not later than twenty (20) days after receiving the Seller's list of Inventory and Accrued Expense, prepare its proposed Closing Date Statement of Selected Assets and Liabilities (setting forth, in reasonable detail, Buyer's calculation as finally determined in accordance with this Section 2.04 is less than of the Estimated Purchase Price, Seller shall pay to Purchaser Closing Date of the total value of the Inventory and amount of such deficit, and if the Purchase Price Accrued Expense as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase PriceClosing Date, which items shall be valued on the same basis and using the same methods and procedures applied on a basis consistent with the methods and procedures used to an account designated by prepare the party receiving payment no later than two Recent Statement of Selected Assets and Liabilities) (2) Business Days after the final determination of the Purchase Price"Closing Statement").
(c) As promptly as practicable Within twenty (and, in any event, within ninety (9020) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination receipt of the Closing Statement, Seller shall notify Purchaser in writing must give Buyer written notice of such disagreement within sixty (60) days after delivery any exceptions to Buyer's calculation of the Closing Statement, which Date Statement of Selected Assets and Liabilities.
(i) If Seller has not given Buyer such written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60within that twenty-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts values set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice will be conclusive and Purchaser binding on the parties.
(ii) If Seller gives Buyer such written notice within that twenty-day period, then Buyer and Seller have not resolved their disagreementshall promptly endeavor to resolve any disputes. The scope If Seller and Buyer fail to reach an agreement with respect to such matters on or before twenty (20) days after Seller has delivered written notice to Buyer of the disputes exceptions to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, then, as to such matters remaining in dispute, the Seller and whether there the Buyer shall promptly retain an accounting firm ("Firm") acceptable to Buyer and Seller, which has not rendered accounts or other services to either Buyer or Seller for at least three years. The Firm shall be instructed to apply the same methods, policies and procedures as were mathematical errors applied in preparing the calculation Recent Statement of Selected Assets and Liabilities. Subject to the foregoing, the Firm shall make an independent determination of any matters in dispute and deliver an opinion to Buyer and Seller within 45 days of the Closing StatementFirm's retention, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its which determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall will be final conclusive and binding upon on the parties, absent manifest error. The fees, costs All fees and expenses of the Accounting Arbitrator arising in connection with Firm must be paid by the party to this Section 2.04 shall be borne by Purchaser, Agreement not generally prevailing on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price issues as determined by the Accounting Arbitrator Firm, except that if the Firm determines that neither party could fairly found to be the prevailing party, then such fees and expenses of the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 Firm shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c)paid equally by Buyer and Seller.
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Sources: Asset Purchase Agreement (Ault Inc)
Purchase Price Adjustment. (a) Section 2.04(a) Within three Business Days of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts end of the Business, cumulatively, as of immediately before the effective time of calendar month in which the Closing (as set forth in Section 2.05(a))takes place, determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, Parent shall deliver to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller Surviving Company a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Net Income Statement”), which shall be prepared together with appropriate supporting evidence, showing the net income, if any, computed in accordance with the accounting principlesGAAP and consistent with past practice, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (andCompany from the period beginning January 1, to 2011 through the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement Effective Time (the firm so selected shall be referred to herein as the “Accounting ArbitratorReconciliation Period”). In the event that Purchaser and Seller are unable to agree on there is positive net income during the appointment of the Accounting ArbitratorReconciliation Period, as provided above, then the Accounting Arbitrator shall be appointedParent shall, at the request time of either Purchaser delivery of the Net Income Statement, also remit to the Surviving Company by wire transfer in immediately available funds, an amount equal to any such positive net income.
(b) The Surviving Company shall have five Business Days from the date of delivery of the Net Income Statement to accept or Sellerreject the amount of net income set forth therein. If no objection is raised within such five Business Day Period, the amount shall have been deemed accepted by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firmSurviving Company. The parties shall instruct If the Accounting Arbitrator to consider only those items and amounts Surviving Company notifies the Parent in writing within such five Business Day Period that it disputes the amount of net income set forth in the Closing Statement as Net Income Statement, then the parties shall work in good faith to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. promptly resolve such dispute.
(c) The scope parties hereto agree that the net working capital of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done Company, computed in accordance with GAAP (the terms hereof, “Net Working Capital”) at and as of the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare Effective Time will be an amount not less than $0 (the “Net Working Capital Benchmark”). Within three Business Days following the end of the calendar month in which the Closing Statementtakes place, and whether there were mathematical errors in Purchaser will, or will cause the Surviving Company to, calculate the Net Working Capital of the Company as of the Effective Time (the “Closing Net Working Capital”). Purchaser shall deliver to Parent a written calculation of Net Working Capital (the Closing Statement“Working Capital Calculation”), and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissionstogether with appropriate supporting evidence, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined computed in accordance with the terms of this Agreement. Such report shall be final GAAP and binding upon the parties, absent manifest error. The fees, costs and expenses consistent with past practice of the Accounting Arbitrator arising in connection with this Section 2.04 Company. If the Closing Net Working Capital is less than the Net Working Capital Benchmark, then the Parent shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion promptly remit to Purchaser an amount equal to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelyamount of such deficit.
(ed) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 The Parent shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness have five Business Days from the date of delivery of the Working Capital Calculation to accept or reject the amount of Net Working Capital calculated therein. If no objection is raised within such five Business denominated in currencies other than U.S. dollarsDay period, the Applicable Exchange Rate for each amount shall have been deemed accepted by the Parent. If the Parent notifies the Purchaser in writing within such currency as five Business Day period that it disputes the amount of immediately before Net Working Capital in the effective time of Working Capital Calculation, then the Closing as published by Bloomberg (BGN New York), parties shall be used work in good faith to convert promptly resolve such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04dispute.
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Sources: Merger Agreement (Corporate Resource Services, Inc.)
Purchase Price Adjustment. (a) The Purchase Price shall be adjusted following the Execution based on the Final Statement of Net Assets (as defined below) prepared pursuant to this Section 2.04(a) 1.5. If the amount of the Seller Disclosure Letter sets forth certain Net Assets of the Company reflected on the Final Statement of Net Assets is less than Four Hundred Thousand Euros (€ 400,000), then the amount of the Purchase Price shall be decreased by the amount of the shortfall. Conversely, if the amount of the Net Assets of the Company reflected on the Final Statement of Net Assets is greater than Four Hundred Thousand Euros (€ 400,000), then the amount of the Purchase Price shall be increased by the amount of the excess.
(b) For purposes of this Section 1.5, the term “Net Assets” means the excess, if any, of (i) the net book value of the current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, Company as of immediately before the effective time Effective Date, over (ii) the net book value of the Closing total liabilities of the Company as of the Effective Date.
(c) Within forty (40) calendar days following the Effective Date, Sellers shall cause to be prepared and shall deliver to Buyer: (i) an unaudited balance sheet of the Company as set forth in Section 2.05(aof the Effective Date (the “Effective Date Balance Sheet”); and (ii) a Statement of Net Assets as of the Effective Date (the “Statement of Net Assets”), determined each of which shall be denominated in Euros. The Company shall bear the entire cost of the preparation of the Effective Date Balance Sheet and the Statement of Net Assets; the cost shall be provided for as a liability on the Effective Date Balance Sheet.
(d) The Effective Date Balance Sheet and Statement of Net Assets shall be prepared in accordance with Section 2.04(aUnited States generally accepted accounting principles (“US GAAP”) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth thereininconsistent therewith, the past practices of the Company.
(e) If, within forty (40) days following such delivery, Buyer fails to deliver to the Sellers a notice (pursuant to Section 9.5) stating in reasonable detail any objections Buyer may have with respect to the Effective Date Balance Sheet or the Statement of Net Assets (the “Dispute Notice”), Buyer shall be deemed to have accepted the Effective Date Balance Sheet and the Statement of Net Assets as delivered by Sellers.
(f) If there is a dispute regarding the Effective Date Balance Sheet or the Statement of Net Assets, Buyer and Sellers shall negotiate in good faith to resolve such dispute. If, after a period of thirty (30) days following the Sellers’ receipt (pursuant to Section 9.5) of the Dispute Notice, such dispute remains unresolved, Buyer and Sellers will jointly engage an international accounting firm mutually satisfactory to Buyer and Sellers, or if they cannot agree, an independent accounting firm of 200 or more accountants chosen by lot, with Buyer, on the one hand, and Sellers jointly, on the other hand, having the right to select two of such firms, which cannot be the auditor for either Buyer or the Company and to strike one such firm chosen by the other party (the “Independent Accountant”), to resolve such dispute in accordance with U.S. GAAPthis Agreement, shall constitute and the “Modified Working Capital”. For the avoidance decision of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment such firm shall be excluded from final and binding on the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined parties hereto. The Independent Accountant shall make its calculations in accordance with this Section 2.04 is less than 1.5. All fees and expenses of the Estimated Purchase PriceIndependent Accountant incurred in connection with such resolution shall be shared equally between Buyer, Seller shall pay to Purchaser on the total amount of such deficitone hand, and if Sellers, on the other. The final Effective Date Balance Sheet and Statement of Net Assets (whether finalized through the agreement of the parties or through the determination of the Independent Accountant) shall be referred to as the “Final Balance Sheet” and the “Final Statement of Net Assets”, respectively.
(g) All post-Execution adjustments to the Purchase Price as finally determined in accordance with this Section 2.04 exceeds resulting from the Estimated Purchase Price, Purchaser Final Statement of Net Assets shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, be made within three (3) Business Days after the final determination earlier of the Purchase Price, to an account designated agreement of the parties on the amount of such adjustment or the date on which a written notice of any resolution of such amount has been given by the party receiving payment no later than two (2) Business Days after Independent Accountant, as the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (andcase may be, to the extent not set forth thereinparties hereunder, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business but in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller adjustment shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement occurred as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firmEffective Date. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms For purposes of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that “Business Day” means any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies day other than U.S. dollarsa Saturday, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York)Sunday or other day in which banks are obligated to close in Salzburg, shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04Austria.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) Within 90 calendar days following the Closing Date, Seller shall prepare, or cause to be prepared (including in connection therewith conducting a physical inventory in accordance with Seller's past practices), and deliver to Purchaser a balance sheet of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts Business (including all Delayed Transfer Assets) as of the Business, cumulatively, as close of immediately before the effective time of business on the Closing Date (assuming there will be no Subsequent Closings) (as set forth in Section 2.05(a)), determined such may be adjusted following resolution of disputes in accordance with Section 2.04(a) of 2.3(c), the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, "CLOSING DATE BALANCE SHEET"). The Closing Date Balance Sheet will be prepared in accordance with U.S. GAAPGAAP using the same accounting principles, procedures, policies and methods that were employed in preparing the Benchmark Balance Sheet (true and correct copies of such specific principles, procedures, policies and methods, as they have been applied to the Business, have been Made Available to Purchaser). Based on the Closing Date Balance Sheet and this Section 2.3, Seller shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination prepare a certificate setting forth a calculation of Closing Net Indebtedness, Closing Transaction Expenses Cash and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working CapitalNet Asset Value of the Business as of the Closing Date (the "CLOSING NET ASSET VALUE"). Seller shall also cause to be prepared and shall deliver to Purchaser at the same time as the foregoing an audit report of Deloitte & Touche LLP, Seller's independent public accountants, stating that the Closing Date Balance Sheet was prepared in accordance with GAAP consistently applied and presents fairly, in all material respects, the financial position of the Business as of the Closing Date.
(b) If During the Purchase Price as finally determined preparation of the Closing Date Balance Sheet and the calculation of Closing Cash and Closing Net Asset Value, and the period of any dispute within the contemplation of this Section 2.3, Purchaser shall, and shall cause the Acquired Companies to: (i) provide Seller and Seller's authorized representatives with reasonable access to the books, records, facilities and employees of the Acquired Companies and the Purchased Assets; and (ii) cooperate fully with Seller and Seller's authorized representatives, including by providing on a timely basis all information necessary or useful in the calculation of Closing Cash and Closing Net Asset Value. Such access and cooperation shall be provided in accordance with this the terms of Section 2.04 is less than the Estimated Purchase Price7.4, and Seller and Purchaser shall pay to Purchaser the total amount bear in equal proportion any direct costs associated with Purchaser's provision of such deficit, access and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Pricecooperation.
(c) As promptly as practicable (and, After receipt of the calculation of Closing Cash and Closing Net Asset Value and the workpapers used in any event, within ninety (90) days after the Closing)preparation thereof, Purchaser shall prepare and deliver have 20 Business Days to Seller a statement setting forth Purchaser’s review the calculation of (i) Modified Working Capital, (ii) Closing Cash and Closing Net Indebtedness, (iii) Closing Transaction Expenses Asset Value and (iv) the Purchase Price pursuant such workpapers. Purchaser and its authorized representatives shall have reasonable access to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies all relevant books and policies set forth in Section 2.04 records and employees of the Seller Disclosure Letter (and, and its Subsidiaries to the extent reasonably required to complete their review of the calculation of Closing Cash and Closing Net Asset Value. Purchaser may dispute items reflected in the calculation of Closing Cash and Closing Net Asset Value only on the basis that such amounts were not set forth therein, determined in accordance conformity with U.S. GAAP)GAAP applied by Seller on a consistent basis or contain arithmetic error. The parties agree Unless Purchaser delivers written notice to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests Seller on or prior to the extent relating to the 20th Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination Day after Purchaser's receipt of the calculation of Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Cash and Closing Statement, which written notice shall set forth any such disagreement Net Asset Value specifying in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end amount, nature and basis of such 60-day periodall disputed items, Seller Purchaser shall be deemed to have accepted and agreed to the calculation of Closing Statement delivered Cash and Closing Net Asset Value. If Purchaser so notifies Seller of its objection to the calculation of Closing Cash or Closing Net Asset Value, Purchaser and Seller shall, within 30 calendar days following such notice (the "RESOLUTION PERIOD"), attempt to resolve their differences and any resolution by Purchaserthem as to any disputed amounts shall be final, binding and conclusive. Matters included If following resolution of any disputed amounts there do not remain in dispute amounts the calculations aggregate net effect of which would result in the Closing Statement an adjustment to which Seller does not object Cash Consideration under Section 2.3(e) in the Disagreement Notice excess of U.S.$1 million, then all amounts remaining in dispute shall be deemed accepted to have been resolved in favor of the calculation of Closing Cash and Closing Net Asset Value delivered by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the partiesPurchaser.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointedIf, at the request conclusion of either Purchaser or Sellerthe Resolution Period, the net effect of all amounts remaining in dispute would result in an adjustment to Cash Consideration under Section 2.3 in excess of U.S.$1 million, then all amounts remaining in dispute shall be submitted to KPMG LLP (the "NEUTRAL AUDITORS") within ten calendar days after the expiration of the Resolution Period. Each party agrees to execute, if requested by the American Arbitration AssociationNeutral Auditors, which Accounting Arbitrator shall be another nationally recognized third party accounting firma reasonable engagement letter, including customary indemnities. The parties shall instruct All fees and expenses relating to the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes work, if any, to be resolved performed by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 Neutral Auditors shall be borne by Purchaser, pro rata as between Seller on the one hand, hand and Seller, Purchaser on the other handother, in proportion to the differences allocation of the dollar amount of the amounts remaining in dispute between the Purchase Price as determined Seller and Purchaser made by the Accounting Arbitrator Neutral Auditors such that the prevailing party pays the lesser proportion of the fees and expenses. The Neutral Auditors shall act as an arbitrator to determine, based solely on the provisions of this Section 2.3 and the asserted Purchase Price set forth presentations by Seller and Purchaser, and not by independent review, only those issues still in the Closing Statement dispute and the Disagreement Notice, respectively.
(e) Purchaser only as to whether such amounts were arrived at in conformity with GAAP and Seller agree that any payments made pursuant to this Section 2.04 2.3(a). The Neutral Auditors' determination shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.made within 30 calendar days
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aPrior to the Closing, the Vendor has delivered to the Purchaser a statement setting forth (x) the Vendor’s good faith estimate of the Seller Disclosure Letter Working Capital as of 11:59 p.m. on the Closing Date (the “Estimated Working Capital Statement”), which Estimated Working Capital Statement sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in reasonable detail the determination of such accounts. Such accounts Vendor’s good faith estimate of the Business, cumulatively, Working Capital as of immediately before the effective time of 11:59 p.m. on the Closing Date (the “Estimated Working Capital Amount”) (which has been determined and computed in accordance with GAAP, except as otherwise set forth in Section 2.05(a)the definition of Working Capital, and (y) the Vendor’s good faith estimate of the Net Cash as of 11:59 p.m. on the Closing Date (the “Estimated Net Cash Statement”), which Estimated Net Cash Statement sets forth in reasonable detail the Vendor’s good faith estimate of the Net Cash as of 11:59 p.m. on the Closing Date (the “Estimated Net Cash Amount”) (which has been determined and computed in accordance with Section 2.04(a) of the Seller Disclosure LetterGAAP, and the principles, methodologies and policies except as otherwise set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination definition of Closing Net Indebtedness, Closing Transaction Expenses Indebtedness and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working CapitalCash at Closing).
(b) If Within ninety (90) days following the Purchase Price Closing Date, the Purchaser’s Auditors shall prepare, and the Purchaser shall deliver to the Vendor, (x) a statement of Working Capital (the “Working Capital Statement”), which Working Capital Statement shall set forth the amount of Working Capital as finally of 11:59 p.m. on the Closing Date (the “Working Capital Amount”), and (y) a statement of Net Cash (the “Net Cash Statement”, and together with the Working Capital Statement, the “Closing Statements”), which Net Cash Statement shall set forth the amount of Net Cash as of 11:59 p.m. on the Closing Date (the “Net Cash Amount”). The Closing Statements shall be prepared, and the Working Capital Amount and the Net Cash Amount shall be determined and computed, in accordance with this Section 2.04 is less than GAAP, except as otherwise set forth in the Estimated Purchase Pricedefinitions of Working Capital, Seller Indebtedness and Cash at Closing, as applicable. The Closing Statements, the Final Net Working Capital Amount and the Final Net Cash Amount shall pay to Purchaser the total amount of such deficit, be calculated and if the Purchase Price as finally determined paid in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase PriceCanadian dollars.
(c) As promptly as practicable Upon completion of the Closing Statements, the Purchaser shall deliver the Closing Statements to the Vendor and the Vendor’s Auditors (andthe date of such delivery being the “Delivery Date”). If the Vendor’s Auditors elect to dispute the calculation of the Working Capital Amount and/or the Net Cash Amount, in any event, the Vendor shall give written notice (an “Objection Notice”) to the Purchaser within ninety thirty (9030) days after (the Closing)“Objection Period”) following the Delivery Date, Purchaser which Objection Notice shall prepare and deliver set forth in reasonable detail the Vendor’s Auditors objections to Seller a statement setting forth the Purchaser’s calculation of (i) Modified the Working CapitalCapital Amount and/or the Net Cash Amount, (ii) Closing Net Indebtednessas applicable, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant Vendor’s Auditors proposal with respect to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 calculation of the Seller Disclosure Letter (andWorking Capital Amount and/or the Net Cash Amount, to the extent not set forth thereinas applicable, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, Vendor’s Auditors basis for the avoidance of doubtcalculation thereof. If the Vendor does not deliver an Objection Notice within the Objection Period, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller Statements shall be deemed final and to have accepted be irrevocably and unconditionally approved by the Closing Statement delivered by Vendor. If the Vendor delivers an Objection Notice within the Objection Period, the Vendor’s Auditors and the Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller ’s Auditors shall negotiate in good faith for a period not to exceed ten (10) Business Days after termination of the Objection Period (such ten (10) Business Day Period, the “Post-Closing Negotiation Period”) to resolve any such disagreementdispute regarding the Working Capital Amount and/or the Net Cash Amount, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the partiesas applicable.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller at the end of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firmthe Post-Closing Negotiation Period, the retention of which will Vendor’s Auditors and the Purchaser’s Auditors do not give rise reach an agreement with respect to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiariesthe Working Capital Amount and/or the Net Cash Amount, as determined applicable, such dispute shall be submitted to Deloitte & Touche or, if Deloitte & Touche is unavailable, an international accounting firm to be chosen jointly by the reasonable discretion of Seller Vendor’s Auditors and the Purchaser, ’s Auditors. The chosen independent accounting firm shall act as experts and not arbiters and resolve the dispute with respect to resolve such disagreement (the firm so selected shall be referred to herein as Working Capital Amount and/or the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting ArbitratorNet Cash Amount, as provided aboveapplicable, then the Accounting Arbitrator and shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to thereby consider only those items over which the Vendor’s Auditors and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to Purchaser’s Auditors have a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of independent accounting firm shall deliver to the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, Vendor and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all partiestheir respective auditors, as promptly as practicablepracticable (but in no event later than fifteen (15) Business Days after its appointment), a written report setting forth its determination of the resolution of any Working Capital Amount and/or the Net Cash Amount, as applicable, and such disagreement determined in accordance with determination by the terms of this Agreement. Such report independent accounting firm shall be final final, binding and binding upon conclusive on the partiesVendor and the Purchaser. The Vendor shall bear the fees, absent manifest errorcosts and expenses of the Vendor’s Auditors. The Purchaser shall bear the fees, costs and expenses of the Purchaser’s Auditors. The fees, costs and expenses of the Accounting Arbitrator arising in connection independent accounting firm, including the costs relating to any negotiations with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion independent accounting firm with respect to the differences between the Purchase Price as determined terms and conditions of such firm’s engagement, will be paid one-half by the Accounting Arbitrator Purchaser and one-half by the Vendor.
(e) The Working Capital Amount and the asserted Purchase Price Net Cash Amount as set forth in the Closing Statement Statements if there is no Objection Notice and as agreed by the Vendor’s Auditors and the Disagreement Purchaser’s Auditors or as determined by the independent accounting firm, as applicable, if there is an Objection Notice, respectively.
shall be deemed to be the final Working Capital Amount (ethe “Final Net Working Capital Amount”) and the final Net Cash Amount (the “Final Net Cash Amount”) to be used for purposes of calculating any adjustment to the Estimated Purchase Price, if applicable. The Estimated Purchase Price shall be increased, dollar for dollar, by the amount by which the Final Net Working Capital Amount exceeds the Estimated Working Capital Amount by more than Two Hundred and Fifty Thousand Dollars ($250,000). The Estimated Purchase Price shall be decreased, dollar for dollar, by the amount by which the Final Net Working Capital Amount falls below the Estimated Working Capital Amount by more than Two Hundred and Fifty Thousand Dollars ($250,000). The Estimated Purchase Price shall be decreased, dollar for dollar, by the amount by which the Final Net Cash Amount exceeds the Estimated Net Cash Amount. The Estimated Purchase Price shall be increased, dollar for dollar, by the amount by which the Final Net Cash Amount falls below the Estimated Net Cash Amount. The Purchaser (if there is a net increase in the Estimated Purchase Price), shall within two (2) Business Days after determination of the Final Net Working Capital Amount and Seller agree that any payments made the Final Net Cash Amount make payment to the Vendor, by wire transfer in immediately available funds of the aggregate amount of the net increase in the Estimated Purchase Price as determined pursuant to this Section 2.04 3.2. The Vendor (if there is a net decrease in the Estimated Purchase Price), shall within two (2) Business Days after determination of the Final Net Working Capital Amount and the Final Net Cash Amount make payment to the Purchaser by wire transfer in immediately available funds of the aggregate amount of the net decrease in the Estimated Purchase Price as determined pursuant to this Section 3.2. In the event the full amount, if any, determined to be owed to the Purchaser pursuant to this Section 3.2(e) is not received by the Purchaser within the two (2) Business Day period provided herein, the Purchaser shall be allocated in a manner consistent entitled to instruct the Escrow Agent to distribute such deficit amount to the Purchaser from the Escrow Account and the Vendor shall thereafter promptly replenish the Escrow Account by depositing an amount equal to such deficit amount with any allocation agreed to pursuant to Section 2.03(c)the Escrow Agent.
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), Any amounts paid under this Section 3.2 shall be used treated as an adjustment to convert such amounts into U.S. dollars the Purchase Price for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04Purchased Shares for Tax purposes.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) Preparation of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accountsEstimated Closing Balance Sheet. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within At least three (3) Business Days after before the final determination of Closing Date, the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser Seller shall prepare and deliver to Seller the Buyer, the following, together with reasonable supporting documents and information, a statement balance sheet of the Company as of the close of business on the Closing Date (without giving effect to the transactions contemplated herein) (the “Estimated Closing Balance Sheet”) setting forth Purchaser’s calculation of (i) Modified its good faith estimate of (A) the Net Working Capital (the “Estimated Net Working Capital”), (B) Company Cash (the “Estimated Company Cash”), and (C) the Company Debt (the “Estimated Company Debt”) and (ii) on the basis of the foregoing, a calculation of the Estimated Closing Adjustment Amount. For purposes of this Agreement, “Estimated Closing Adjustment Amount” shall mean an amount, which may be positive or negative, equal to (1) the Estimated Net IndebtednessWorking Capital minus the Target Working Capital plus (2) the Estimated Company Cash minus (3) the Estimated Company Debt. If the Estimated Closing Adjustment Amount is a positive number, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (payable at the “Closing Statement”)shall be increased by the amount of the Estimated Closing Adjustment Amount. If the Estimated Closing Adjustment Amount is a negative number, which the Purchase Price payable at the Closing shall be reduced by the amount of the Estimated Closing Adjustment Amount. The Estimated Closing Balance Sheet shall be prepared in accordance with the accounting principles, methodologies and policies Accounting Principles on a basis consistent with the past practices of the Company. An example of the Estimated Closing Balance Sheet as of the date hereof is set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAPon Schedule 1.3(a). The parties agree to provide each other Parties acknowledge and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars solely for purposes of determining calculating the Estimated Net Working Capital, Closing Net Indebtedness Working Capital and the Final Closing Adjustment Amount, the accrued liability in connection with respect of all Government Audit Matter Losses shall be $322,000.00, irrespective of any Party’s assessment of the adjustments pursuant to this Section 2.04appropriate reserve in respect of such losses.
Appears in 1 contract
Sources: Stock Purchase Agreement
Purchase Price Adjustment. (a) Not later than seventy-five (75) days after the Closing Date, the Purchaser shall deliver to the Vendor a statement of the Closing Working Capital, which statement shall be substantially in the form of Section 2.04(a2.06(a) of the Seller Disclosure Letter sets forth certain current assets Schedules (the “Closing Working Capital Statement”), and current liabilities accounts and certain accounting principles, methodologies and policies used in shall set out the determination of such accounts. Such accounts Working Capital as at the end of the Business, cumulativelyday on the day prior to the Closing Date (such Working Capital, as finally determined pursuant to the provisions of immediately before this Section 2.06, referred to as the effective time of “Closing Working Capital”). The Vendor shall reasonably cooperate with the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, Purchaser and the principles, methodologies and policies set forth therein and, its Representatives to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute required to prepare the “Modified Closing Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working CapitalCapital Statement.
(b) If During the Purchase Price as period from the date the Closing Working Capital Statement is delivered by the Purchaser to the Vendor through the date such statement is finally determined in accordance with the terms of this Section 2.04 is less than 2.06, the Estimated Purchase Price, Seller Purchaser shall pay cooperate with the Vendor to provide the Vendor with reasonable access to the work papers of the Purchaser relating to the total amount preparation of such deficitthe Closing Working Capital Statement, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay make reasonably available to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after Vendor individuals responsible for the final determination preparation of the Purchase Price, Closing Working Capital Statement in order to an account designated by the party receiving payment no later than two (2) Business Days after the final determination respond to inquiries of the Purchase PriceVendor related thereto.
(c) As promptly as practicable If the Vendor notifies the Purchaser that the Vendor agrees with the Closing Working Capital Statement within thirty (and, in any event, within ninety (9030) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared receipt thereof or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by notice to the end Purchaser of its disagreement therewith within such 60-thirty (30) day period, Seller such Closing Working Capital Statement shall be conclusive and binding on the Vendor and the Purchaser and the parties shall be deemed to have accepted agreed thereto, in the first case, on the date the Purchaser receives the notice and, in the second case, on such 30th day. If the Vendor disagrees with the Closing Working Capital Statement delivered by Purchaser. Matters included in or the calculations in calculation of the Closing Statement to which Seller does not object Working Capital as set forth therein, then the Vendor shall notify the Purchaser of its disagreement (the “Dispute Notice”) within such thirty (30) day period together with reasonable particulars of the basis of such dispute, including the Vendor’s position on the amounts in dispute (and the Disagreement Notice resulting Vendor position on the amount of the Closing Working Capital). In such event, the Vendor and the Purchaser shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate attempt, in good faith faith, to resolve their differences with respect thereto within thirty (30) days after the receipt by the Purchaser of the Dispute Notice and make any such disagreement, and any resolution amendments to the Closing Working Capital Statement as mutually agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Any dispute over the Closing Working Capital Statement or the calculation of Closing Working Capital as set forth in the Dispute Notice not resolved by the Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) the Vendor within such thirty (30) days day period after delivery by Seller receipt of a Disagreement Noticethe Dispute Notice (or such other period as the parties may agree) shall be submitted to the Independent Auditor to determine such dispute, and such determination shall be final and binding on the parties. The Independent Auditor shall allow the Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise Vendor to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates positions regarding the dispute (provided that, for greater certainty, such presentations are limited to matters described in the Dispute Notice) and each of the Purchaser and the Vendor shall have the right to present additional documents, materials and other information, and make an oral presentation to the Independent Auditor, regarding such dispute and the Independent Auditor shall consider such additional documents, materials and other information and such oral presentation. Any such other documents, materials or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected other information shall be referred copied to herein as each of the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment Vendor and each of the Accounting Arbitrator, as provided above, then Vendor and the Accounting Arbitrator Purchaser shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firmentitled to attend any such oral presentation. The parties Independent Auditor shall instruct determine, based solely on such presentations from the Accounting Arbitrator to consider Vendor and the Purchaser and not by independent review, only those items and amounts issues in dispute specifically set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Dispute Notice and shall render a written report (the “Adjustment Report”) to the Vendor and the Purchaser in which the Independent Auditor shall, after considering all matters set forth in the Dispute Notice, determine what adjustments, if any, should be made to the Closing Working Capital Statement and Seller have not resolved their disagreementthe Closing Working Capital. The scope Adjustment Report shall set forth, in reasonable detail, the Independent Auditor’s determination with respect to each of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions disputed items or procedures used to prepare the Closing Statement, and whether there were mathematical errors amounts specified in the calculation of the Closing StatementDispute Notice, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator revisions, if any, to be made to the Closing Working Capital Statement and/or the Closing Working Capital, together with supporting calculations, and the parties shall make its determination based solely on written submissionssuch revisions to the Closing Working Capital Statement, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent reviewas applicable. In resolving any such disagreementdisputed item, the Accounting Arbitrator may only select an amount for each Independent Auditor: (i) shall be bound to the principles of this Section 2.06 (including Section 2.06(a) of the Disclosure Schedules), (ii) shall limit its review to matters specifically set forth in the Dispute Notice, and (iii) shall not assign a value to any item in dispute that is within range of values established higher than the highest value for such disputed item as determined claimed by reference to either party or lower than the lowest value assigned to for such item claimed by Seller in the Disagreement Notice and by Purchaser in the Closing Statementeither party. Purchaser and Seller The parties shall use commercially reasonable efforts to cause the Accounting Arbitrator Independent Auditor to deliver to all parties, as promptly as practicable, a written report setting forth the resolution complete its work and render its determination within thirty (30) days of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest errorits engagement. The feescosts, costs fees and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 Independent Auditor shall be allocated to and borne by the Purchaser, on the one hand, and Sellerthe Vendor, on the other hand, in proportion based on the inverse of the percentage that the Independent Auditor’s determination (before such allocation) bears to the differences between total amount of the Purchase Price total items in dispute as determined originally submitted to the Independent Auditor. For example, should the items in dispute total in amount to $1,000 and the Independent Auditor awards $600 in favour of the Purchaser’s position, 60% of the costs of the Independent Auditor’s review would be borne by the Accounting Arbitrator Vendor, and 40% of the asserted Purchase Price set forth in costs would be borne by the Closing Statement and the Disagreement Notice, respectivelyPurchaser.
(e) Purchaser For greater certainty, each of the Closing Working Capital, Closing Working Capital Statement and Seller agree that any payments made pursuant Target Working Capital are to this Section 2.04 shall be allocated calculated and prepared in a manner consistent with any allocation agreed to pursuant to consistent, and in accordance with, the indicative Working Capital calculation set forth in Section 2.03(c).
(f2.06(a) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04Disclosure Schedules.
Appears in 1 contract
Sources: Asset Purchase Agreement (Apogee Enterprises, Inc.)
Purchase Price Adjustment. The Adjustment (as defined below) will be determined as follows:
(a) Section 2.04(aCambridge and Seller agree that the Final Cash Purchase Price shall be determined as follows:
(i) of Twenty-Seven Million Five Hundred Sixty Thousand Dollars ($27,560,000);
(ii) MINUS the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in Actual Non-Tooling Accounts Receivable Amount; and
(iii) plus any amount that (A) Actual Total Accounts Receivable Amount less Actual Trade Accounts Payable amount exceeds (B) $10,600,000 or minus any that (A) $10,600,000 exceeds (B) the determination of such accounts. Such accounts of Actual Total Accounts Receivables Amount less the Business, cumulativelyActual Trade Accounts Payable Amount, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capitalcase may be.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (andpossible following the Closing Time, but in any event, event within ninety thirty (9030) days after following the Closing)Closing Time, Purchaser Seller shall prepare and deliver to Seller Cambridge a closing statement (the "Closing Statement") setting forth Purchaser’s calculation the Actual Non-Tooling Accounts Receivable Amount, the Actual Total Accounts Receivable Amount and the Actual Trade Accounts Payable Amount (collectively, the "Actual Receivable and Payable Items") as of (i) Modified Working Capital, (ii) the Closing Net Indebtedness, (iii) Time. The Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which Statement shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (GenCorp Accounting Principles and, to the extent not set forth thereindescribed in the GenCorp Accounting Principles, in accordance with U.S. GAAPGAAP consistently applied (for purposes of this Section 2.07 collectively referred to as the "Accounting Principles"). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests Cambridge shall give Seller access to the extent relating data necessary to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which prepare the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably provide Seller with the operations reasonable assistance of such party’s businessesCambridge's employees in connection therewith. Notwithstanding Representatives of Cambridge shall have the foregoing, neither Purchaser nor right to participate with representatives of Seller in the process of preparing the Closing Statement and shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide have access to or disclose information whereall data, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If schedules and work papers used by Seller disagrees with the determination of in preparing the Closing Statement, Seller . Cambridge shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of have the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed right to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser audited and Seller shall negotiate reasonably cooperate with Cambridge and Cambridge's accountants in good faith to resolve any conducting such disagreement, and any resolution agreed to in writing by Purchaser and Seller audit.
(c) The Closing Statement shall be become final and binding upon Cambridge unless on or before the parties.
(d30th) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days day after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment Cambridge's receipt of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.Closing
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aNot more than five (5) Business Days, but in no event less than three (3) Business Days, before the Closing Date, Seller shall deliver to Purchaser:
(i) an estimated unaudited balance sheet of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts Company as of the BusinessMeasurement Time (the “Estimated Adjusted Closing Balance Sheet”);
(ii) a statement (the “Estimated Adjustment Statement” and, cumulativelytogether with the Estimated Adjusted Closing Balance Sheet, the “Estimated Financial Statements”) setting forth Seller’s good faith estimate of:
(A) the Adjusted Net Working Capital (such estimated amount, the “Estimated Adjusted Net Working Capital”); and
(B) the Seller Outstanding Checks (such estimated amount, the “Estimated Seller Outstanding Checks”). in each case as of immediately before the effective time Measurement Time, with such amounts being derived from the Estimated Adjusted Closing Balance Sheet, accompanied by a statement showing in reasonable detail how such good faith estimate was determined. The Estimated Adjustment Statement shall be prepared in accordance with Seller Accounting Principles and, with respect to the Adjusted Net Working Capital, the Adjusted Net Working Capital Example. If there is an inconsistency between Seller Accounting Principles and the definitions of Adjusted Aggregate Net Indebtedness, Adjusted Net Working Capital, Seller Outstanding Checks, and Adjustment Liabilities the Closing (as terms set forth in Section 2.05(a))such definitions shall control. If there is an inconsistency between Seller Accounting Principles and the Adjusted Net Working Capital Example, determined in accordance the Adjusted Net Working Capital Example shall control. Contemporaneously with Section 2.04(a) the delivery of the Estimated Adjustment Statement, Seller Disclosure Lettershall also deliver to Purchaser copies of supporting calculations that Seller used in preparing the Estimated Adjustment Statement.
(b) The Base Purchase Price shall be subject to adjustment, and without duplication, on the principlesClosing Date as follows:
(i) If the Estimated Adjusted Net Working Capital is less than the Target Adjusted Net Working Capital, methodologies and policies set forth therein and, the Base Purchase Price shall be decreased by an amount equal to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute amount by which the “Modified Target Adjusted Net Working Capital exceeds the Estimated Adjusted Net Working Capital”. For If the avoidance of doubtEstimated Adjusted Net Working Capital is greater than the Target Adjusted Net Working Capital, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Base Purchase Price Adjustment shall be excluded from increased by an amount equal to the determination of amount by which the Modified Estimated Adjusted Net Working Capital exceeds the Target Adjusted Net Working Capital.
(bii) If the The Base Purchase Price as finally determined in accordance with this Section 2.04 is less than shall be increased by the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase PriceOutstanding Checks.
(c) As promptly as practicable (and, in any event, within Within ninety (90) days after the Closing)Closing Date, Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of Seller:
(i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) an unaudited balance sheet of the Purchase Price pursuant to this Section 2.04 Company as of Measurement Time (the “Closing StatementBalance Sheet”); and
(ii) a statement (the “Closing Adjustment Statement” and, which together with the Closing Balance Sheet, the “Closing Date Financial Statements”) setting forth:
(A) the Adjusted Aggregate Net Indebtedness;
(B) the Adjusted Net Working Capital;
(C) the Seller Outstanding Checks; and
(D) the Adjustment Liabilities; in each case as of the Measurement Time, with such amounts being derived from the Closing Balance Sheet and accompanied by a statement showing in reasonable detail how such amount was determined. The Closing Date Financial Statements shall be prepared in accordance with Seller Accounting Principles and, with respect to the accounting principlesAdjusted Net Working Capital, methodologies the Adjusted Net Working Capital Example. If there is an inconsistency between Seller Accounting Principles and policies the definitions of Adjusted Aggregate Net Indebtedness, Adjusted Net Working Capital, Seller Outstanding Checks, and Adjustment Liabilities the terms set forth in Section 2.04 of such definitions shall control. If there is an inconsistency between Seller Accounting Principles and the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubtAdjusted Net Working Capital Example, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably Adjusted Net Working Capital Example shall control. Contemporaneously with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing StatementDate Financial Statements, which written notice Purchaser shall set forth any such disagreement also deliver to Seller (subject to the confidentiality obligations of Section 7.9 (Confidentiality)) copies of the supporting calculations that Purchaser used in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted preparing the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the partiesDate Financial Statements.
(d) In the event that Seller either (i) has no objections to the Closing Date Financial Statements as prepared by Purchaser and does not deliver a Dispute Notice to Purchaser prior to the expiration of the Objection Deadline, or (ii) Seller otherwise fails to deliver a Dispute Notice to Purchaser prior to the expiration of the Objection Deadline then, upon expiration of the Objection Deadline, the Closing Date Financial Statements prepared by Purchaser, including the Adjusted Aggregate Net Indebtedness, the Adjusted Net Working Capital, Seller Outstanding Checks and the Adjustment Liabilities (all such items, the “Closing Adjustment Items”) set forth therein, shall be deemed to be and shall become final, binding and conclusive on all of the Parties. In the event that Seller disputes the amount of any of the Closing Adjustment Items as set forth in the Closing Date Financial Statements, Seller shall, on or prior to the date that is thirty (30) days following the date on which Purchaser delivers the Closing Date Financial Statements to Seller (the “Objection Deadline”), prepare and deliver to Purchaser a written notice of dispute (the “Dispute Notice”), which Dispute Notice shall (i) identify with reasonable specificity, and provide a reasonably detailed explanation of, the basis upon which Seller has delivered such Dispute Notice, including the applicable provisions of this Agreement on which the dispute set forth in such Dispute Notice is based, and (ii) set forth the amount of each of the Closing Adjustment Items that Seller believes existed as of the Measurement Time, together with supporting documents and information that Seller has utilized in connection with making such determinations and calculations.
(e) In the event Seller timely delivers a Dispute Notice to Purchaser in accordance with the terms hereof, Purchaser and Seller shall in good faith attempt to reconcile their differences and specify any resolution in writing. Any definitive written resolution by Purchaser and Seller as to any such disputes shall be final, binding and conclusive on all of the Parties. If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) such dispute within thirty (30) days after delivery by Purchaser’s receipt of the Dispute Notice from Seller, either Purchaser or Seller may submit the items remaining in dispute for resolution to Ernst & Young Global Limited or another independent accounting firm mutually acceptable to Purchaser and Seller (the “Independent Accounting Firm”). Upon the selection of a Disagreement Noticethe Independent Accounting Firm, and in any event within fifteen (15) Business Days following such selection, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, submit to such Independent Accounting Firm (and the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller other Party) documentary materials and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event analyses that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by as the American Arbitration Associationcase may be, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct believes support its respective position relating to the Accounting Arbitrator to consider only those items and amounts disputed matters set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Dispute Notice, but excluding any work papers of independent certified public accountants. The Independent Accounting Firm shall, within forty-five (45) calendar days after receipt of all such submissions by Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done Seller, make a determination in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used standards provided herein and deliver to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller a written report (the “Final Report”) containing such Independent Accounting Firm’s determination of the disputed matters that were so submitted to it (and not pursuant to any independent reviewonly such matters). In resolving any such disagreementmatter specified in a Dispute Notice, the Independent Accounting Arbitrator may only select an amount for each Firm shall not assign a value to any item in dispute that is within range of values established greater than the greatest value for such disputed item as determined claimed by reference to either Party or less than the smallest value assigned to for such item claimed by either Party. The determinations of the Independent Accounting Firm that are contained in the Final Report shall be final, binding and conclusive on all of the Parties. The fees and disbursements of the Independent Accounting Firm shall be paid by Seller in the Disagreement Notice and by Purchaser in same proportion that the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses aggregate amount of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion remaining disputed items so submitted to the differences between the Purchase Price Independent Accounting Firm that are unsuccessfully disputed by Seller (as finally determined by the Independent Accounting Arbitrator Firm) bears to the total amount of such remaining disputed items so submitted, and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 balance shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c)paid by Purchaser.
(f) With respect No later than five (5) Business Days following the Determination Date, Seller or Purchaser (or Purchaser Designee, who shall be caused by Purchaser to Cash and Cash Equivalents and make the relevant payment), as the case may be, shall make the following payments, after netting, without duplication, against each other all payments required to be made by Seller and/or Purchaser (or Purchaser Designee), as the case may be, pursuant to clauses (i) through (vi) immediately below, with all such payments being made to the applicable Person(s) via wire transfer of immediately available funds to the account or accounts designated in writing by the Person(s) entitled to receive such payment:
(i) if the Final Adjusted Aggregate Net Indebtedness is a positive number (i.e., the aggregate amount of Indebtedness of the Business denominated in currencies Company as of the Measurement Time is greater than the sum of all Outstanding Deposits, cash, cash equivalents and other than U.S. dollarsshort term securities of the Company as of the Measurement Time), Seller shall pay to Purchaser an amount equal to the absolute value of the Final Adjusted Aggregate Net Indebtedness;
(ii) if the Final Adjusted Aggregate Net Indebtedness is a negative number (i.e, the Applicable Exchange Rate for each such currency aggregate amount of Indebtedness of the Company as of immediately before the effective time Measurement Time is less than the sum of all Outstanding Deposits, cash, cash equivalents and other short term securities of the Company as of the Measurement Time), Purchaser shall pay to Seller an amount equal to the absolute value of the Final Adjusted Aggregate Net Indebtedness;
(iii) if the Estimated Adjusted Net Working Capital is less than the Final Adjusted Net Working Capital, Purchaser shall pay to Seller an amount equal to the amount by which the Final Adjusted Net Working Capital exceeds the Estimated Adjusted Net Working Capital;
(iv) if the Estimated Adjusted Net Working Capital is greater than the Final Adjusted Net Working Capital, Seller shall pay to Purchaser an amount equal to the amount by which the Estimated Adjusted Net Working Capital exceeds the Final Adjusted Net Working Capital;
(v) if the Estimated Seller Outstanding Checks is less than the Final Seller Outstanding Checks, Purchaser shall pay to Seller an amount equal to the amount by which the Final Seller Outstanding Checks exceeds the Estimated Seller Outstanding Checks;
(vi) if the Estimated Seller Outstanding Checks is greater than the Final Seller Outstanding Checks, Seller shall pay to Purchaser an amount equal to the amount by which the Estimated Seller Outstanding Checks exceeds the Final Seller Outstanding Checks.
(vii) if the Final Adjustment Liabilities are less than U.S.$3,350,000, Purchaser shall pay to Seller an amount equal to the amount by which the Final Adjustment Liabilities are less than U.S.$3,350,000.
(viii) if the Final Adjustment Liabilities are greater than U.S.$3,350,000, Seller shall pay to Purchaser an amount equal to the amount by which the Final Adjustment Liabilities exceed $ U.S.$3,350,000.
(g) Any amount payable pursuant to Section 2.6(f) shall bear simple interest at the Applicable Rate determined as of the Closing as published by Bloomberg Date, to accrue daily on the basis of a 365-day year, calculated for the actual number of days elapsed from (BGN New York), and including) the Closing Date through (but excluding) the date of payment. Such interest payment shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection payable together with the adjustments amount payable pursuant to this Section 2.042.6(f).
Appears in 1 contract
Sources: Securities Purchase Agreement (Ralcorp Holdings Inc /Mo)
Purchase Price Adjustment. (a) Section 2.04(a) On or before the Closing Date, Seller and Purchaser shall conduct an audit of Seller’s Inventory to the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in extent that it can be observed without unreasonably disrupting the determination of such accounts. Such accounts operation of the Business. Within thirty (30) days following the Closing Date, cumulatively, Seller shall prepare a written schedule of all items of Inventory as of immediately before the effective time of the Closing Date that Purchaser was unable to observe as part of the foregoing audit (the “Inventory Schedule”). The Inventory Schedule shall indicate the condition of each item of Inventory included thereon.
(b) Within forty five (45) calendar days following the Closing Date, Seller shall cause to be prepared and shall deliver to Purchaser, along with the Inventory Schedule, a statement of Assets and Assumed Liabilities (the “Closing Date Statement”) based on the balance sheet of Seller as of the Effective Time. The Closing Date Statement shall include only the Assets and the Assumed Liabilities.
(c) Except as set forth in Section 2.05(a))the following sentence, determined the Closing Date Statement shall be prepared in accordance with Section 2.04(aUnited States generally accepted accounting principles (“GAAP”) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth thereininconsistent therewith, in accordance with U.S. GAAPthe past practices of Seller applied on a consistent basis. For purposes of the Closing Statement: (i) used Inventory that has been fully refurbished shall be valued based upon the amount that it would sell for between a willing buyer and a willing seller made at wholesale, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts; (ii) used Inventory that has been partially refurbished but requires additional refurbishing by Purchaser shall be valued at fifty percent (50%) of the amount that it would sell for between a willing buyer and a willing seller made at wholesale, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts; (iii) used Inventory that has not been restored to merchantable condition, and is not capable of being so restored without undue effort, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses be valued at zero; and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(biv) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within Accounts Receivable aged over ninety (90) days after and not collected on the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) date that the Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price Date Statement is actually finalized pursuant to this Section 2.04 subsection (the “Closing Statement”), which f) below shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the partiesvalued at zero.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms For purposes of this Agreement. Such report shall be final and binding upon , the parties, absent manifest error. The fees, costs and expenses “Net Assets” means an amount equal to the difference between the following: (i) the amount of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, current Assets as set forth on the one handClosing Date Statement; minus (ii) the Adjusted Assumed Liabilities Amount. For purposes of this Agreement, the “Adjusted Assumed Liabilities Amount” means an amount equal to the Assumed Liabilities, reduced by fifty percent (50%) of the amount of liabilities related to deferred revenue, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined increased by the Accounting Arbitrator and amount of the asserted Purchase Price set forth upfront license fee in the Closing Statement and the Disagreement Noticeamount of $7,633 required to be paid by Purchaser to obtain a 12-month license agreement for 17 seats of Sugar Enterprise On-Site from Sugar CRM, respectivelyInc. after Closing.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) Seller agrees that it shall refund to Purchaser, pursuant to the terms of this Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles2.05, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time a portion of the Closing Date Payment Amount equal to the Asset Adjustment Amount (as set forth in Section 2.05(adefined below). As of the Closing Date, the books of Seller shall be deemed "closed," a physical inventory shall be taken of the Assets, and within 60 days (or such longer period as is required for an audit to be completed) of such date the independent auditors selected by Purchaser shall have performed a balance sheet audit of the Assets (at Purchaser's expense), determined . Such auditors shall prepare a balance sheet based on such physical inventory in accordance with Section 2.04(a) Applicable Accounting Principles (the "Closing Date Balance Sheet"). If requested, Seller and ▇▇▇▇▇ shall make reasonable efforts to assist Purchaser and its representatives in the preparation of the Seller Disclosure Letter, Closing Date Balance Sheet. The Closing Date Balance Sheet shall be binding on the parties hereto and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination conclusive evidence of the Modified Working Capitalnet book value of the Assets.
(b) If Promptly upon the Purchase Price as finally determined Closing Date Balance Sheet being delivered to Seller, but in accordance with this Section 2.04 is less no event more than 10 days following such date, the Estimated Purchase Price, Seller shall pay to Purchaser in immediately available funds the total amount on a dollar-for-dollar basis by which the value of the Working Capital as reflected in the Closing Date Balance sheet is less than $[287,546]. For this purpose, Working Capital shall equal current assets (exclusive of cash, accounts receivable which have aged more than 100 days, and any amounts due from ▇▇▇▇▇) less current liabilities (the amount of such deficitshortfall, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York)any, shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04"Asset Adjustment Amount").
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principlesThe Purchase Price shall be subject to adjustment, methodologies and policies used in the determination of such accounts. Such accounts of the Businessif any, cumulatively, as of immediately before the effective time of after the Closing (Date as set forth specified in this Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital2.04.
(b) As soon as practicable (but in no event later than 90 calendar days following the Closing Date), the Sellers shall jointly prepare and deliver to the Purchaser a combined balance sheet for the Companies (the "Closing Balance Sheet") as of the Closing Date. The Closing Balance Sheet shall be accompanied by the report thereon of KPMG Peat Marwick LLP, independent accountants of the Sellers (the "Sellers' Accountants"), stating that the Closing Balance Sheet fairly presents in all material respects the combined financial position of the Companies in accordance with GAAP applied on a basis consistent with the preparation of the 1997 Combined Balance Sheet. During the preparation of the Closing Balance Sheet by the Sellers and the period of any dispute provided for in Section 2.04(d), the Purchaser shall provide each Seller and the Sellers' Accountants reasonable access to the books, records, facilities and employees of each Company, and the Purchaser shall cooperate reasonably with the Sellers' Accountants, in each case to the extent required by any such Seller and the Sellers' Accountants in order to prepare the Closing Balance Sheet and to investigate the basis for any such dispute.
(c) Subject to the limitations set forth in Section 2.04(d), within 30 Business Days after the date of receipt by the Purchaser of the Closing Balance Sheet:
(i) If the amount of the Total Working Capital on the Closing Balance Sheet is less than zero, each Seller shall immediately pay to the Purchaser, as an adjustment to the Purchase Price Price, an amount equal to its Pro Rata Share of such difference; and
(ii) If the amount of the Total Working Capital on the Closing Balance Sheet is greater than zero, the Purchaser shall immediately pay, as finally determined an adjustment to the Purchase Price, to each Seller, an amount equal to such Seller's Pro Rata Share of such excess.
(d) If not disputed by the Purchaser in accordance with this Section 2.04 is less than 2.04(d), the Estimated Purchase PriceClosing Balance Sheet delivered by the Sellers to the Purchaser shall be final, Seller shall pay binding and conclusive on the parties hereto. The Purchaser may dispute any amount reflected on the Closing Balance Sheet to Purchaser the total amount extent that the net effect of such deficitdisputed amount in the aggregate would be to change the Total Working Capital by more than $50,000 (the "Designated Amount"), and if but only on the Purchase Price as finally determined basis that the amounts reflected on the Closing Balance Sheet were not arrived at in accordance with this Section 2.04 exceeds GAAP applied on a basis consistent with the Estimated Purchase Pricepreparation of the Interim Combined Balance Sheet; provided, however, that the Purchaser shall pay to notify each Seller and the total Sellers' Accountants in writing of each disputed item, specifying the amount of such excessthereof in dispute and setting forth, in either case by wire transfer of immediately available U.S. dollar fundsdetail, the basis for such dispute, within three (3) 30 Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination 's receipt of the Closing Statement, Seller shall notify Purchaser in writing Balance Sheet. In the event of such disagreement within sixty (60) days after delivery of the Closing Statementa dispute, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by each Seller and shall not be subject to further dispute or review. the Purchaser and Seller shall negotiate in good faith to resolve any reconcile their differences. If such disagreementdispute has not been resolved within 10 Business Days after the notice referred to in the preceding sentence has been given, Price Waterhouse Coopers LLP (the "Purchaser's Accountants") and the Sellers' Accountants shall attempt to reconcile their differences, and any resolution agreed by them as to in writing by Purchaser and Seller any disputed amounts shall be final final, binding and conclusive on the parties hereto. If any such resolution by the Purchaser's Accountants and the Sellers' Accountants leaves in dispute amounts the net effect of which in the aggregate would be to change the Total Working Capital by less than the Designated Amount, all the amounts remaining in dispute shall then be deemed to have been resolved as such amounts are set forth on the Closing Balance Sheet, and such resolution shall be final, binding upon and conclusive on the parties.
(d) parties hereto. If Purchaser the Purchaser's Accountants and Seller the Sellers' Accountants are unable to resolve any disagreement as contemplated reach a resolution, leaving in dispute amounts the net effect of which in the aggregate would change the Total Working Capital by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firmat least the Designated Amount, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, 's Accountants and the Accounting Arbitrator Sellers' Accountants shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, submit the Accounting Arbitrator may only select an amount for each item items remaining in dispute that is within range of values established for such disputed item as determined the Purchaser shall be entitled to dispute by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such Section 2.04(d) for resolution to Deloitte & Touche LLP or such independent accounting firm as may be mutually acceptable to each Seller and the Purchaser (the "Independent Accounting Firm"), which shall, within 30 Business Days of such submission, determine and report to each Seller and the Purchaser upon such remaining disputed items, and such report shall have the legal effect of an arbitral award and shall be final final, binding and binding upon conclusive on each Seller and the parties, absent manifest errorPurchaser. The fees, costs fees and expenses disbursements of the Independent Accounting Arbitrator arising in connection with this Section 2.04 Firm shall be borne by Purchaser, on allocated between the one hand, Sellers and Seller, on the other hand, Purchaser in the same proportion that the aggregate amount of such remaining disputed items so submitted to the differences between Independent Accounting Firm which is unsuccessfully disputed by the Purchase Price Sellers or the Purchaser (as finally determined by the Independent Accounting Arbitrator Firm) bears to the total amount of such remaining disputed items so submitted. The amount of such fees and disbursements allocated to the asserted Purchase Price set forth Sellers pursuant to the immediately preceding sentence shall be allocated to each Seller in accordance with its Pro Rata Share of such amount. Any amount that is payable under Section 2.04(c), including, without limitation, any portion thereof that is subject to dispute under this Section 2.04(d) shall be paid by the Closing Statement Sellers (each in accordance with its Pro Rata Share of such amount) or the Purchaser, as the case may be, by wire transfer in immediately available funds to an account or accounts designated by the Sellers or the Purchaser, as applicable, within five Business Days following the resolution of such dispute and the Disagreement Notice, respectivelyin an amount in accordance with such resolution.
(e) Purchaser In acting under this Agreement, the Sellers' Accountants, the Purchaser's Accountants and Seller agree that any payments made pursuant to this Section 2.04 the Independent Accounting Firm shall be allocated in a manner consistent with any allocation agreed entitled to pursuant to Section 2.03(c)the privileges and immunities of arbitrators.
(f) With respect Any payment required to Cash and Cash Equivalents and Indebtedness be made by the Sellers or the Purchaser pursuant to Section 2.04(c) shall bear interest from the Closing Date through the date of payment on the basis of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time average of the Closing as published daily rate of interest publicly announced by Bloomberg (BGN Citibank, N.A., in New York), shall be used New York, from time to convert time, as its base rate plus 2%, from the Closing Date to the date of such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04payment.
Appears in 1 contract
Sources: Purchase Agreement (Carematrix Corp)
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within At least three (3) Business Days after prior to the final determination of the Purchase PriceClosing Date, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, Company shall in any event, within ninety (90) days after the Closing), Purchaser shall good faith prepare and deliver to Seller Buyer a statement setting forth Purchaser’s calculation written estimate of the amount of (i) Modified the Closing Net Working Capital (the “Estimated Closing Net Working Capital”), including any Estimated Net Working Capital Deficit or Estimated Net Working Capital Surplus, (ii) the Closing Net IndebtednessCash Amount (the “Estimated Closing Cash Amount”), (iii) the Closing Transaction Expenses and Loan Indebtedness (the “Estimated Closing Loan Indebtedness”), (iv) the Purchase Price pursuant to this Section 2.04 Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), and (v) the Estimated Purchase Price, each calculated as of the Effective Time, together with an estimated balance sheet of the Acquired Companies, on a consolidated basis, as of the Effective Time (the “Estimated Closing Balance Sheet”, and together with the items set forth in clauses (i) through (v), the “Estimated Closing Statement”), which . The Estimated Closing Statement shall be prepared in accordance with the accounting principlesCompany’s Accounting Principles and consistent with Exhibit C, methodologies provided that in the event of any conflict between the Company’s Accounting Principles and policies Exhibit C, the Company’s Accounting Principles shall govern. At such time, the Company shall also deliver a draft of the Funds Flow Statement. As promptly as practicable but not later than one (1) Business Day prior to the Closing, Buyer shall identify any adjustments that it believes are required to the Estimated Closing Statement. If Shareholder Representative disputes any such adjustments, then Buyer and Shareholder Representative shall use reasonable best efforts to resolve such dispute, after which the Company shall re-deliver to Buyer the Estimated Closing Statement and Funds Flow Statement with such adjustments as the parties have agreed are appropriate. Buyer shall be entitled to rely in full on the information provided by the Company in the Estimated Closing Statement and Funds Flow Statement. The Initial Purchase Price minus the Estimated Net Working Capital Deficit (if any), plus the Estimated Net Working Capital Surplus (if any), plus the Estimated Closing Cash Amount, minus the Estimated Closing Loan Indebtedness, minus the Estimated Closing Transaction Expenses shall be the “Estimated Purchase Price.” Notwithstanding anything else in this Agreement, the Estimated Closing Statement, the Estimated Closing Balance Sheet and in turn the calculation of the amounts set forth therein shall not reflect any liabilities or assets related to actions taken on the Closing Date by Buyer or its Affiliates, including in Section 2.04 connection with any financing or transfer of cash into the Acquired Companies.
(b) As soon as practicable, but in no event later than ninety (90) days following the Closing Date, Buyer shall in good faith prepare and deliver to Shareholder Representative a written statement with a calculation, as of the Seller Disclosure Letter Effective Time, of (andi) the Net Working Capital (the “Closing Net Working Capital”), to including the extent not set forth thereinamount of Net Working Capital Surplus or Net Working Capital Deficit, if any, (ii) the Cash (the “Closing Cash Amount”), (iii) the Loan Indebtedness (the “Closing Loan Indebtedness”), (iv) the Transaction Expenses (the “Closing Transaction Expenses”), and (v) the Final Purchase Price, together with the balance sheet of the Acquired Companies, on a consolidated basis, as of the Effective Time, and reasonable supporting documentation for the forgoing calculations and material differences between the Estimated Closing Statement and the Closing Statement (such statement including items in clauses (i) through (v) and such balance sheet, the “Closing Statement”). The Closing Statement shall be prepared in accordance with U.S. GAAP). The parties agree Company’s Accounting Principles and consistent with Exhibit C, provided that in the event of any conflict between the Company’s Accounting Principles and Exhibit C, the Company’s Accounting Principles shall govern.
(c) During the review periods provided pursuant to Section 2.6(d) and Section 2.6(e) and the Resolution Period, Buyer shall (i) provide each other Shareholder Representative and their respective Representatives Shareholder Representative’s authorized representatives with reasonable access, access during normal business hours to the books and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests records of the Acquired Companies to the extent relating reasonably requested by Shareholder Representative or his authorized representatives to review the amounts and calculations in the Closing Statement, and (ii) reasonably and timely cooperate with Shareholder Representative’s and his authorized representatives’ reasonable requests with respect to the Business amounts and calculations included in the Closing Statement.
(including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)d) throughout the periods during which After Buyer delivers the Closing Statement is being prepared or evaluated required by Section 2.6(b) to Shareholder Representative, Shareholder Representative shall have sixty (60) days to review such statement and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably supporting materials. Buyer shall cooperate with Shareholder Representative and its authorized representatives to the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be extent reasonably required to (x) violate any obligation complete Shareholder Representative’s and its authorized representatives’ review of confidentiality the Closing Statement. Unless Shareholder Representative delivers written notice to which Purchaser Buyer on or Seller 31 may be subject in discharging their obligations pursuant prior to the immediately preceding sentence, and sixtieth (y60th) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination day after Shareholder Representative’s receipt of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement specifying in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end amount, nature and basis of such 60-day periodall disputed items, Seller Shareholder Representative shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in and agreed to the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Noticeproposed Final Purchase Price. If Shareholder Representative timely notifies Buyer of its objection to any calculation included in the Closing Statement, respectivelyShareholder Representative and Buyer shall, within sixty (60) days (or such longer period as the parties may agree in writing) following such notice (“Resolution Period”), attempt to resolve their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive.
(e) Purchaser If, at the conclusion of the Resolution Period, there are any amounts remaining in dispute with respect to the calculations set forth in the Closing Statement, then such amounts remaining in dispute shall be submitted to KPMG, or, if such firm is unable to serve in such capacity, to a firm of nationally recognized independent public accountants selected by Shareholder Representative and Seller agree that any payments made Buyer within ten (10) days after the expiration of the Resolution Period (the firm selected pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c2.6(e).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York“Neutral Auditors”), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.. If KPMG
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aWithin sixty (60) days after the Closing Date, Pfizer shall deliver to Purchaser a statement of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts Inventories of the Business, cumulatively, Asset Selling Corporations as of immediately before the effective time of the Closing Date, without giving effect to any possible delayed transfers of Conveyed Assets held by Asset Selling Corporations operating in Belgium, Japan and/or China (the "Inventories Statement"). The Inventories Statement shall be unaudited and shall state the Inventories of the Asset Selling Corporations as of the Closing Date by following and applying the procedures and valuation and other principles set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein on Schedule 2.7A hereto and, to the extent not set forth thereinaddressed in Schedule 2.7A, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which Inventories Statement shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, GAAP. Purchaser shall provide Pfizer with access to the extent not set forth thereinInventories, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel of Purchaser necessary for Pfizer to prepare the Inventories Statement.
(and any other information which either party reasonably requests to b) Purchaser may dispute the extent relating to amounts reflected on the Business Inventories Statement (includinga "Disputed Item"), for but only on the avoidance of doubtbasis a Disputed Item does not reflect, or is not consistent or in compliance with, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes provisions of this Agreement; provided, however, that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser Pfizer in writing of such disagreement each Disputed Item, and specify the amount thereof in dispute and the basis therefor, within sixty (60) days after delivery receipt of the Closing Inventories Statement. The failure by Purchaser to provide a notice of Disputed Items to Pfizer within such sixty (60) day period will constitute Purchaser's acceptance of the Inventories Statement.
(c) If a notice of Disputed Items shall be timely delivered pursuant to subclause (b) above, which written notice shall set forth any such disagreement in reasonable detail Pfizer and Purchaser shall, during the ten (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by 10) Business Days following the end date of such 60-day perioddelivery (the "Resolution Period"), Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any the Disputed Items. If, during such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon Resolution Period the parties.
(d) If Purchaser and Seller parties are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller reach agreement, Pfizer and Purchaser shall refer all unresolved Disputed Items to an accounting firm or expert of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firmstanding as Pfizer and Purchaser shall mutually agree upon or, if the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller parties are unable to agree on the appointment of the Accounting Arbitratorso agree, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, appointed by the American Arbitration AssociationAssociation (the "Accounting Expert"). The Accounting Expert shall make a determination with respect to each unresolved Disputed Item within fifteen (15) days after its engagement by Pfizer and Purchaser to resolve such Disputed Items, which Accounting Arbitrator determination shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done made in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors rules set forth in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determinationthis Section 2.7. The Accounting Arbitrator Expert shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all partiesPfizer and Purchaser, as promptly as practicablewithin such fifteen (15) day period, a written report setting forth its adjustments, if any, to the resolution of any Inventories Statement and the calculations supporting such disagreement determined in accordance with the terms of this Agreementadjustments. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, parties and Seller, on conclusive. Pfizer and Purchaser shall each pay one-half of all the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness costs incurred in connection with the adjustments engagement of the Accounting Expert. As used herein, "Final Inventories" shall mean (i) if no notice of Disputed Items is delivered by Purchaser within the period provided in subclause (b) above, Inventories as shown in the Inventories Statement as prepared by Pfizer, or (ii) if such a notice of Disputed Items is delivered by Purchaser, either (x) as agreed to in writing by Pfizer and Purchaser, or (y) * OMITTED PURSUANT TO OUR REQUEST FOR CONFIDENTIAL TREATMENT Inventories as shown in the Accounting Expert's calculation delivered pursuant to this Section 2.04subclause (c).
Appears in 1 contract
Sources: Asset Purchase Agreement (Philipp Brothers Chemicals Inc)
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly soon as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared but in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within no event later than sixty (60) days after delivery the Closing, Seller shall cause to be prepared and delivered to Buyer: (x) an unaudited statutory balance sheet of CalFarm as of the end of the calendar month immediately preceding the Closing Date (the "Closing Balance Sheet"), which balance sheet shall reflect (i) the transfer of assets and liabilities to and from CalFarm as a result of the Depooling Agreement (including the net change in the tax liabilities of CalFarm related to the consummation of the transactions contemplated by the Depooling Agreement), (ii) the transfer to CalFarm by Seller of all the outstanding shares of common stock of CalFarm Agency prior to the Closing Date, and (iii) the transfer by Seller to CalFarm pursuant to an assignment or sublease of all of Seller's rights and obligations under the office building lease between ▇▇▇▇▇▇ Hills Business Center II, a California limited partnership, and Seller dated as of February 16, 1996, as amended as of September 11, 1998 ((i), (ii) and (iii) above being collectively referred to herein as the "Related Transfers"); PROVIDED, HOWEVER, that no effect shall be given to any Tax Liability paid or to be paid by CalFarm, Cal-Ag or CalFarm Agency as a result of the Elections provided for in Section 12.8; and (y) a report indicating the market value as of the Closing StatementDate of the Investment Assets of CalFarm which market value shall be determined by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Pricing Services, except as otherwise provided on Annex B hereto. The Closing Balance Sheet shall (i) be prepared in accordance with SAP (other than the requirement thereof for footnote disclosure), (ii) be consistent with the preparation of the SAP Statements (as defined in Section 3.8 hereof) and (iii) be based on, and give effect to, the methods, procedures, assumptions and transfers used in the preparation of the 1998 Pro Forma Balance Sheet. Buyer shall cooperate with Seller in the preparation of the Closing Balance Sheet and shall provide Seller with access to CalFarm's premises and shall make available to Seller such employees, information systems, books and records of CalFarm as Seller may reasonably request to prepare the Closing Balance Sheet. At the option and expense of Buyer, upon notice to Seller prior to Closing, the Closing Balance Sheet shall be audited by PricewaterhouseCoopers LLP (such Closing Balance Sheet as so audited being referred to herein as the "Audited Closing Balance Sheet") and which written notice Audited Closing Balance Sheet shall set forth any such disagreement in reasonable detail (“Disagreement Notice”)be delivered to Buyer upon completion of the audit. If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in Balance Sheet is so audited, the calculations in the Audited Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller Balance Sheet shall be final and binding upon on the parties.
parties and shall be deemed to be the Closing Balance Sheet for purposes of subsection (db) If Purchaser below, except that (x) the amount of unpaid losses and Seller are unable loss adjustment expenses reflected on the unaudited Closing Balance Sheet shall be the amount of unpaid losses and loss adjustment expenses and (y) the amount of accrued liabilities representing the difference between the estimated Purchase of Goodwill liability under the agreements with traditional agents (formerly known as "exclusive agents") and the estimated amount recoverable from the future sale of books of business to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement purchasing agents (the firm so selected "Agent Business Accrual Liability") reflected on the unaudited Closing Balance Sheet shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment amount of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures Agent Business Accrual Liability used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining the Surplus on the Closing Net Indebtedness in connection with the adjustments Balance Sheet pursuant to subsection (b) below; PROVIDED THAT, to the extent that Buyer disagrees with any such amount solely as its relates to events and developments since January 1, 1999 reflected in the SAP results of operations of CalFarm from January 1, 1999 to and including the date of the Closing Balance Sheet, such disagreement shall be resolved pursuant to subsection (c) below.
(b) Subject to the remainder of this Section 2.04.subsection (b) and subsection (c) below, within twenty
Appears in 1 contract
Sources: Stock Purchase Agreement (Zenith National Insurance Corp)
Purchase Price Adjustment. (a) Section 2.04(a) For purposes of this Agreement, the term "Adjusted Stockholders' Equity" of the Seller Disclosure Letter sets forth certain current assets Business or the Purchased Assets and current liabilities accounts and certain accounting principlesAssumed Liabilities shall mean as of a particular date, methodologies and policies used in the determination stockholders' equity of such accounts. Such accounts of Purchased Assets and Assumed Liabilities computed in accordance with the Businessmethods, cumulativelyformulae, as of immediately before prorations and reserves, and the effective time of the Closing (as adjustments thereto, set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure LetterSchedule 3.5 hereto, and which adjustments shall include the principleselimination of assets which are not Purchased Assets and liabilities which are not Assumed Liabilities. In particular, methodologies the calculation of Adjusted Stockholders' Equity shall exclude all cash and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capitalall Intercompany Accounts.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within Within ninety (90) days after the Closing)Closing Date, Purchaser Seller shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation Purchaser (the date of such delivery being the "Adjustment Date") (i) Modified Working Capital, a balance sheet for the Purchased Assets and Assumed Liabilities transferred at the Closing (the "Closing Date Balance Sheet") and (ii) a statement of the Adjusted Stockholders' Equity as of Closing Net IndebtednessDate (the "Statement of the Closing Date Adjusted Stockholders' Equity" or "Statement"). The Closing Date Balance Sheet and Statement shall (i) have been prepared by Seller and certified by Seller's auditors, KPMG LLP (iii"KPMG") Closing Transaction Expenses (or such other firm of independent certified public accountants appointed by Seller for this purpose) in accordance with Schedule 3.5 and otherwise in accordance with GAAP applied in a manner consistent with the Financial Statements, and (ivii) set forth the Purchase Price pursuant to this Section 2.04 Adjusted Stockholders' Equity of the Purchased Assets and Assumed Liabilities as of the Closing Date (the “"Closing Date Adjusted Stockholders' Equity"). In rendering the Closing Date Balance Sheet and the Statement”), which Seller and its auditors shall be consult with Purchaser and its auditors, and permit Purchaser and such auditors at the earliest practicable date access to and copies of the work papers and calculations related to the Statement.
(c) Purchaser may dispute the calculation of the Closing Date Adjusted Stockholders' Equity only to the extent that Purchaser asserts in good faith that the Closing Date Balance Sheet or Statement was not prepared in accordance with the accounting principles, methodologies Schedule 3.5 and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, otherwise in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case GAAP applied in a manner that does not interfere unreasonably consistent with the operations Financial Statements or, if an item on a Closing Date Balance Sheet or a Statement is not governed by Schedule 3.5 or GAAP applied in a manner consistent with the financial statements, that the treatment of such party’s businesses. Notwithstanding item on such Closing Date Balance Sheet or Statement was not the foregoingmost appropriate treatment of such item under GAAP, neither Purchaser nor Seller in any of which cases Purchaser's notification as set forth below shall be required accompanied by a report of a nationally recognized independent public accounting firm selected by Purchaser other than the firm used by Seller to prepare the Closing Date Balance Sheet or Statement, stating that such firm concurs with Purchaser's assertion as set forth above. All such disputes shall be resolved in the following manner:
(xi) violate any obligation of confidentiality to which If Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination disputes a calculation of the Closing StatementDate Adjusted Stockholders' Equity, or any portion thereof, Purchaser shall notify Seller in writing within thirty (30) days after the Adjustment Date, and shall specify therein in detail the basis and reason for such dispute and the amount which is in dispute (the "Disputed Amount"), and such notice of dispute shall be accompanied by a certificate of Purchaser's outside accountants certifying that the positions taken by Purchaser in such notice are in accordance with this Agreement and Schedule 3.5;
(ii) During the thirty (30) day period following the date of such notice, Purchaser and Seller shall notify Purchaser attempt to resolve such dispute; and
(iii) If at the end of the thirty (30) day period specified in writing clause (ii) above, the parties shall have failed to reach agreement with respect to such dispute, the matter shall be referred to such other firm of independent certified public accountants as the parties mutually agree (the "Accounting Firm"), for resolution. The Accounting Firm shall be instructed to use every reasonable effort to perform such disagreement services within sixty (60) days after delivery of the submission to it of any Closing StatementDate Balance Sheet and the related Statement and notice of dispute and, which written notice shall set forth in any case, as soon as practicable after such submission. In connection with the resolution of any such disagreement in reasonable detail (“Disagreement Notice”)dispute, the Accounting Firm shall have access to all documents, records, work papers, facilities and personnel necessary to perform its function as arbitrator. If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller The Accounting Firm shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. allow Purchaser and Seller to present their respective positions regarding the dispute and shall negotiate in good faith to resolve any thereafter as promptly as possible provide the parties hereto a written determination of the dispute, such disagreement, and any resolution agreed to in writing by Purchaser and Seller written determination shall be final and binding upon the parties hereto, and judgment may be entered on the award. The Accounting Firm may, at its discretion, conduct a conference concerning the disagreement with the Purchaser and the Seller, at which conference each party shall have the right to present additional documents, materials and other information and to have present its advisors, counsel and accountants. In connection with such process, there shall be no hearings, oral examinations, testimony, depositions, discovery or other similar proceedings. The Accounting Firm shall determine the proportion of its fees and expenses to be paid by each of the Seller and the Purchaser, based primarily on the degree to which the Accounting Firm has accepted the positions of the respective parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(cWithin five (5) within thirty (30) business days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of any dispute relating to the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation calculations of the Closing StatementDate Adjusted Stockholders' Equity:
(i) Purchaser shall pay to Seller, in immediately available funds, an amount equal to the difference (if any, and if a positive result) between (A) the Accounting Arbitrator Closing Date Adjusted Stockholders' Equity relating to the Purchased Assets and Assumed Liabilities at the Closing, minus (B) $29,901,573; or, alternatively,
(ii) Seller shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissionspay to Purchaser, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreementin immediately available funds, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference equal to the value assigned difference (if any, and if a positive result) between (1) $29,501,573, minus (2) the Closing Date Adjusted Stockholders' Equity relating to the Purchased Assets and Assumed Liabilities at the Closing, in either case together with interest for the period from the Closing Date to the date of such item by Seller payment at a rate per annum in effect from time to time equal to the prime interest rate as published in the Disagreement Notice Wall Street Journal, which rate shall change automatically without notice and by Purchaser simultaneously with each change in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelyprime interest rate.
(e) Purchaser and Seller agree that Notwithstanding the foregoing: (A) notwithstanding the existence of any payments made dispute pursuant to paragraph (c) above, the parties shall make any adjusting payment required under this Section 2.04 3.5, to the extent that such adjusting payment is not disputed, at the time and in the manner set forth above and (B) the balance (being any amount in dispute or such different amount compromised and settled by the parties or determined by the Accounting Firm in accordance with the provisions of Section 3.5(c) above) shall be allocated paid in a manner consistent with any allocation agreed to pursuant to Section 2.03(c)immediately available funds within ten (10) days after such settlement or determination, as the case may be.
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Sources: Asset Purchase Agreement (Danka Business Systems PLC)
Purchase Price Adjustment. (ai) Section 2.04(aExhibit M shows:
(A) the unaudited balance sheet of the Seller Disclosure Letter sets forth certain current assets Business as of January 31, 2004, prepared based on unaudited trial balance information provided by Sellers together with adjustments to reflect the transaction contemplated by this Agreement (which balance sheet, after such adjustments, is referred to as the “Unaudited Transaction Balance Sheet as of 1/31/2004”); and
(B) the unaudited balance sheet of the Business as of May 1, 2004, prepared based on unaudited trial balance information provided by Sellers, together with adjustments to reflect the transaction contemplated by this Agreement (which balance sheet, after such adjustments, is referred to as the “Unaudited Transaction Balance Sheet as of 5/1/2004”).
(ii) Prior to the Cut-Off Date, Sellers shall provide audited financial statements for the Business for the fiscal year ended January 31, 2004, accompanied by an unqualified opinion of Ernst & Young LLP, to the effect that the audited financial statements present fairly in all material respects the financial position and current liabilities accounts results of operations of the Business and certain have been prepared in accordance with generally accepted accounting principles, methodologies and policies used principles in the determination of such accounts. Such accounts United States, consistently applied, together with:
(A) adjustments to the audited balance sheet to reflect the transaction contemplated by this Agreement (which adjustments are referred to as “transaction adjustments”); and
(B) a summary of the Businessadjustments, cumulativelyother than transaction adjustments, from the trial balance information referred to in Section 4(b)(i)(A) to the audited financial statements (which adjustments are referred to as the “audit adjustments”).
(iii) Within 60 days after the Cut-Off Date, Sellers shall provide an unaudited balance sheet as of immediately before the effective time close of business on the Cut-Off Date reflecting the transaction adjustments, of the Closing (as nature of the transaction adjustments set forth in Section 2.05(a))the Unaudited Transaction Balance Sheet as of 5/1/2004, determined in accordance with Section 2.04(a) which will also reflect all audit adjustments as appropriate (the “Unaudited Transaction Balance Sheet as of the Seller Disclosure LetterCut-Off Date”). Buyer shall reasonably assist Sellers and their representatives in the preparation of the Unaudited Transaction Balance Sheet as of the Cut-Off Date and shall provide Sellers and their representatives access at all reasonable times to the personnel, properties and books and records of the Business for such purpose.
(iv) To the extent that the net assets, calculated in a manner consistent with the principles, methodologies policies and policies set forth therein andprocedures used in preparing Exhibit M (“Net Assets”), to reflected in the extent not set forth thereinUnaudited Transaction Balance Sheet as of the Cut-Off Date exceed the Net Assets reflected in the Unaudited Transaction Balance Sheet as of 5/1/2004 by more than $40 million, in accordance with U.S. GAAP, then the Purchase Price shall constitute be increased by the “Modified Working Capital”excess over $40 million. For the avoidance of doubt, amounts included “Net Assets” shall not include any Excluded Asset or any Excluded Liability. Notwithstanding anything to the contrary in this Section 4(b), the determination book value of Closing Net Indebtedness, Closing all assets on the Unaudited Transaction Expenses and Pension Plan Purchase Price Adjustment Balance Sheet as of the Cut-Off Date shall be excluded from the determination of the Modified Working Capitalcalculated without giving effect to any depreciation or amortization thereof after May 1, 2004.
(bv) To the extent that the Net Assets reflected in the Unaudited Transaction Balance Sheet as of 5/1/2004 exceed the Net Assets reflected in the Unaudited Transaction Balance Sheet as of the Cut-Off Date by more than $40 million, then the Purchase Price shall be decreased by the excess over $40 million.
(vi) If the Purchase Price as finally determined in accordance with this is to be increased pursuant to Section 2.04 is less than 4(b)(iv), then Buyer shall, within five business days after the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficitincrease has been determined, and if pay Sellers an amount equal to such increase, together with interest thereon at an annual rate equal to the three-month LIBOR rate in effect as of the Closing Date, calculated on the actual number of days elapsed from the Closing Date to the date of payment divided by 365. If the Purchase Price as finally determined in accordance with this is to be decreased pursuant to Section 2.04 exceeds 4(b)(v), then Sellers shall, within five business days after the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excessdecrease has been determined, pay Buyer an amount equal to such decrease, together with interest thereon at an annual rate equal to the three-month LIBOR rate in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination effect as of the Purchase PriceClosing Date, calculated on the actual number of days elapsed from the Closing Date to an account designated the date of payment divided by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price365.
(cvii) As promptly Sellers represent that Sellers have not changed accounting policies or procedures, or application thereof, since January 31, 2004, and that the Unaudited Transaction Balance Sheet as practicable of 5/1/2004 is prepared on a basis consistent with the Unaudited Transaction Balance Sheet as of 1/31/2004 (andexcept for adjustments normally reflected only in year-end audited financial statements).
(viii) Sellers covenant that Sellers will not change accounting policies or procedures, or the application thereof, from those reflected in any eventthe Unaudited Transaction Balance Sheet as of 5/1/2004, within ninety (90) days after and that the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation Unaudited Transaction Balance Sheet as of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall Cut-Off Date will be prepared in accordance on a basis consistent with the accounting principlesUnaudited Transaction Balance Sheet as of 5/1/2004 (except for the audit adjustments, methodologies as appropriate, and policies set forth except as otherwise provided in Section 2.04 of the Seller Disclosure Letter Sections 4(b)(iv) and 7(e)).
(andix) If Buyer in good faith objects, by notice in writing to Sellers, to the extent not Net Assets set forth thereinon the Unaudited Transaction Balance Sheet as of the Cut-Off Date (“Final Net Assets”) within 30 days after Sellers’ delivery thereof, setting forth in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the its written objection its determination of the Closing StatementFinal Net Assets, Seller Sellers and Buyer shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate attempt in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) objections within thirty (30) 30 days after delivery by Seller the Sellers’ receipt of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”)Buyer’s objections. In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator Buyer may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made object pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f4(b)(ix) With respect to Cash and Cash Equivalents and Indebtedness only if, assuming all of the Business denominated in currencies other than U.S. dollarsBuyer’s objections were sustained, the Applicable Exchange Rate for each such currency Purchase Price, as of immediately before the effective time of the Closing as published adjusted by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the any adjustments pursuant to this Section 2.044(b), would be lower than the Purchase Price based on Sellers’ determination of Final Net Assets, and Buyer’s objections must specify in reasonable detail the nature of any disagreement with Sellers. The only objections that Buyer may make pursuant to this Section 4(b)(ix) are those that relate to:
(A) any claimed inconsistencies between the principles, policies or procedures used in the preparation of the Unaudited Transaction Balance Sheet as of 5/1/2004 and the principles, policies or procedures used in the preparation of the Unaudited Transaction Balance Sheet as of the Cut-Off Date (except for audit adjustments, as appropriate, and except as otherwise provided in Sections 4(b)(iv) and 7(e));
(B) the application of the audit adjustments; or
(C) errors in mathematical computation.
(x) If Sellers and Buyer are unable to resolve the matter within such 30-day period, they shall jointly appoint a mutually acceptable firm of independent accountants of national reputation that is one of the so-called “big four” (or, if they cannot agree on a mutually acceptable firm, they shall cause their respective accounting firms to select such firm) within three business days following the end of such 30-day period. Buyer and Sellers shall provide such accounting firm full cooperation. Such firm shall be instructed to reach its conclusion regarding the disputes as soon as reasonably possible. Such firm’s resolution of the disputes shall be rendered in a written decision determining all disputes and shall be conclusive and binding upon Buyer and Sellers.
(xi) The Non-Prevailing Party (as defined below) in any determination by such accounting firm shall pay its own expenses incurred with respect to the submission to such accounting firm and shall pay a percentage of (A) the fees and expenses of such accounting firm plus (B) the reasonable out-of-pocket expenses (including reasonable attorneys’ fees) of the other party incurred with respect to the submission, which percentage shall be calculated by dividing (1) an amount equal to the difference between the Non-Prevailing Party’s determination of Final Net Assets, as submitted to such accounting firm, and such accounting firm’s determination of Final Net Assets by (2) an amount equal to the difference between the parties’ respective determinations of Final Net Assets, as submitted to such accounting firm. The other party shall pay the remainder of the fees and expenses of such accounting firm and its own expenses not required to be paid by the Non-Prevailing Party hereunder. A party is the “Non-Prevailing Party” if such accounting firm’s determination of Final Net Assets is closer to the other party’s determination of Final Net Assets, as submitted to such accounting firm, than it is to that party’s determination of Final Net Assets, as submitted to such accounting firm. Notwithstanding anything to the contrary in this Section 4(b)(xi), if such accounting firm’s determination of Final Net Assets does not result in a Purchase Price that is lower than the Purchase Price would have been based upon Sellers’ determination of Final Net Assets (after giving effect to Section 4(b)(iv) or 4(b)(v)), Buyer shall pay all of the fees and expenses of such accounting firm plus all reasonable out-of-pocket expenses (including reasonable attorneys’ fees) of Sellers incurred with respect to the submission.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of In order to determine the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principlesPurchase Price, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Estimated Purchase Price Adjustment shall will be excluded from (i) increased by the determination of amount, if any, by which the Modified Working Capital.
(b) If the Purchase Price NWC Over/Under Amount as finally determined in accordance with this Section 2.04 is less than 1.3 exceeds the corresponding amount thereof used in determining the Estimated Purchase PricePrice Adjustment Amounts, Seller shall pay to Purchaser (ii) increased by the total amount, if any, by which the Indebtedness used in determining the Estimated Purchase Price Adjustment Amounts exceeds the amount of such deficit, and if the Purchase Price Indebtedness as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness1.3, (iii) Closing Transaction Expenses decreased by the amount, if any, by which the NWC Over/Under Amount as finally determined in accordance with this Section 1.3 is less than the corresponding amount thereof used in so determining the Estimated Purchase Price Adjustment Amounts, and (iv) decreased by the amount, if any, by which the amount of Indebtedness as finally determined in accordance with this Section 1.3 exceeds the corresponding amount thereof used in determining the Estimated Purchase Price pursuant Adjustment Amounts. For purposes of this Agreement, (x) the adjustment referred to this Section 2.04 in the immediately preceding sentence will be finally calculated on a net basis and (y) all determinations of the actual amounts thereof (the “Closing Statement”), which shall "Actual Purchase Price Adjustment Amounts") will be determined by the amounts thereof required to be shown on a consolidated balance sheet of the Company prepared in accordance with this Section 1.3 as of the opening of business on the Closing Date (the "Closing Date Balance Sheet") on a basis consistent with, and using the same accounting principles, methodologies policies, practices and policies procedures used in preparing, the Balance Sheet and otherwise in accordance with the principles set forth in Schedule 1.3(a) and Section 2.04 1.2(a).
(b) Within 60 calendar days after the Closing Date, Seller will in good faith prepare and deliver, or cause to be prepared and delivered, to Purchaser an unaudited Closing Date Balance Sheet setting forth the Actual Purchase Price Adjustment Amounts. Seller and its authorized representatives will be entitled to review, during normal business hours, the books, records and work papers of the Company to prepare the Closing Date Balance Sheet and to determine the Actual Purchase Price Adjustment Amounts. Without limiting the generality or effect of any other provision hereof, Purchaser will (i) provide Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable its representatives access, during normal business hours and upon reasonable noticehours, to their respective booksthe facilities, records, work papers personnel and personnel (accounting and any other information which either party reasonably requests records of the Company to the extent relating reasonably determined by Seller to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which be necessary to permit Seller to prepare or have prepared the Closing Statement is being prepared or evaluated Date Balance Sheet and to compute the Actual Purchase Price Adjustment Amounts as herein provided; provided, however, that Seller will conduct any disputes that may arise under this Section 2.04 are being resolved, in each case such review in a manner that does not unreasonably interfere unreasonably with the operations conduct of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to Business by the immediately preceding sentenceCompany after the Closing, and (yii) provide access take such actions as may be reasonably requested by Seller to close, or disclose information whereto assist Seller in closing, upon as of the advice opening of counselbusiness on the Closing Date, such access or disclosure would jeopardize the attorney-client privilege books and accounting records of such party or contravene any applicable Laws. If the Company and otherwise reasonably to cooperate with Seller disagrees with and its representatives in the determination preparation of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after Date Balance Sheet. Concurrently with the delivery of the Closing StatementDate Balance Sheet, which Seller will use its reasonable efforts to cause ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ L.L.P. to provide Purchaser access to any of such firm's workpapers, trial balances and similar materials prepared in connection with such firm's audits or reviews of any of the Financial Statements (the "Workpapers").
(c) If, within 30 calendar days after the date of Seller's delivery of its computation of the Actual Purchase Price Adjustment Amounts, Purchaser determines in good faith that such computations are inaccurate, Purchaser will give written notice shall set to Seller within such 30 calendar day period (i) setting forth any such disagreement Purchaser's computation of Actual Purchase Price Adjustment Amounts and (ii) specifying in reasonable detail (“Disagreement Notice”)Purchaser's basis for its disagreement with Seller's computations. If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing The failure by Purchaser and Seller shall be final and binding upon so to express its disagreement or provide such specification within such 30 calendar day period will constitute Purchaser's acceptance of Seller's computation of the parties.
(d) Actual Purchase Price Adjustment Amounts. If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) between them within thirty (30) ten calendar days after delivery by Seller the giving of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firmnotice of such disagreement, the retention items in dispute will be referred for determination to the Charlotte, North Carolina office of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement KPMG Peat Marwick LLP (the firm so selected shall "Accountants") as promptly as practicable. The Accountants will make a determination as to each of the items in dispute, which determination will be (A) in writing, (B) furnished to each of the parties hereto as promptly as practicable after the items in dispute have been referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting ArbitratorAccountants, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done (C) made in accordance with this Agreement, and (D) conclusive and binding upon each of the terms hereofparties hereto. In connection with their determination of the disputed items, the accounting methodsAccountants will be entitled to rely on the Workpapers and the Company's or C&A's, standardsas the case may be, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, books and whether there were mathematical errors in the calculation of the Closing Statementrecords, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations fees and supporting material provided expenses of the Accountants will be shared equally by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item (except as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statementprovided below). Purchaser and Seller shall will use commercially reasonable efforts to cause the Accounting Arbitrator Accountants to deliver to all parties, render their decision as promptly soon as practicable, including without limitation by promptly complying with all reasonable requests by the Accountants for information, books, records and similar items. If the determination of the Accountants represents an outcome more favorable to either Purchaser or Seller than the midpoint of such parties' last written settlement offers related to all items in dispute, in the aggregate, submitted to the other party at least two calendar days before the referral of the matter to the Accountants (each a written report setting forth "Last Offer"), then the resolution party obtaining such favorable result will be deemed the "Prevailing Party" and the other party will be deemed the "Non-Prevailing Party". For purposes hereof, all of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs fees and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall Accountants, will be borne by Purchaser, on the one handNon-Prevailing Party. No party will disclose to the Accountants, and Sellerthe Accountants will not consider for any purpose, on any settlement offer (other than the other hand, in proportion to the differences between the Purchase Price as determined Last Offer) made by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelyany party.
(ed) Purchaser and To the extent that the Actual Purchase Price Adjustment Amounts, calculated on a net basis, determined as provided in this Section 1.3 is more or less than the Estimated Net Purchase Price Adjustment Amounts, Seller agree that any payments made or Purchaser, as applicable, will, within ten calendar days after the final determination of the Actual Purchase Price Adjustment Amounts, calculated on a net basis, pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness 1.3, make payment by wire transfer of immediately available funds of the Business denominated amount of such difference, together with interest thereon from the Closing Date to the date of payment (at a rate equal to Chase Manhattan Bank's prime rate, as publicly announced and in currencies other than U.S. dollarseffect from time to time during such period, plus 2.0%, calculated on the Applicable Exchange Rate for each such currency as of immediately before the effective time basis of the Closing as published by Bloomberg (BGN New Yorkactual number of days elapsed over 365), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04account as has been designated by Purchaser or Seller, as applicable.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) Within 60 days after the Closing Date, Seller shall cause to be prepared and shall deliver to Purchaser a balance sheet of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in Division (the determination of such accounts. Such accounts of the Business, cumulatively"CLOSING BALANCE SHEET"), as of immediately before the effective time close of business on June 30, 1997, which Closing Balance Sheet shall (i) not include Excluded Assets or Excluded Liabilities, (ii) not include an accrual for vacation benefits, (iii) be prepared in a manner consistent with the preparation of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein March Balance Sheet and, to the extent not set forth thereinexcept as described on SCHEDULE 4.05 hereto, in accordance with U.S. GAAP, (iv) be audited by Coopers (under the supervision of the Coopers audit partner who supervised the most recent audit of Seller's financial statements), and (v) be accompanied by a statement prepared by Seller (the "NET ASSET VALUE STATEMENT") of the Net Asset Value of the Division at such date. In connection with the preparation of the Closing Balance Sheet, after the Closing Purchaser shall constitute provide Seller with access to the “Modified Working Capital”. For Continued Employees (including without limitation temporary (contract) Continued Employees Jay ▇▇▇▇▇▇▇, ▇▇ke ▇▇▇▇▇▇ ▇▇▇ Dolo▇▇▇ ▇▇▇▇▇▇▇) ▇▇o, prior to the avoidance Closing, worked on the preparation of doubtthe Closing Balance Sheet, amounts included and such Continued Employees shall continue to work on the preparation of the Closing Balance Sheet and shall assist Seller in the determination review and finalization by Seller of such Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working CapitalBalance Sheet.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount A physical count of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three inventory (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth thereinnecessary for audited financial statements) has been conducted by Seller prior to and as close as practicable to June 30, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, 1997 for the avoidance purpose of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which preparing the Closing Statement is being Balance Sheet. A copy of all documents prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.inventory
Appears in 1 contract
Sources: Asset Purchase Agreement (Connectivity Technologies Inc)
Purchase Price Adjustment. (a) Section 2.04(a) Seller shall cause to be prepared and delivered to Buyer, no later than three days prior to the Closing Date, a Closing Date Balance Sheet prepared in good faith including an estimate of Closing Working Capital (the “Estimated Closing Working Capital”), together with worksheets and data that support the calculation of the Estimated Closing Working Capital. The Estimated Closing Working Capital shall (i) accurately reflect the Closing Working Capital of the Business as of close of business on the day before the Closing Date, (ii) be based upon balance sheet line items and accounts of Seller Disclosure Letter sets forth certain current assets calculated in accordance with GAAP applied consistently in accordance with the accounting policies, practices and current liabilities accounts and certain accounting principles, methodologies and policies procedures used in the determination of such accounts. Such accounts preparation of the Business, cumulatively, as of immediately before the effective time of the Closing Business Balance Sheets and (as set forth in Section 2.05(a)), determined iii) otherwise be prepared in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capitalthis Agreement.
(b) If Within forty-five (45) days after the Purchase Price Closing, Buyer shall prepare a good faith calculation of the Closing Working Capital (the “Buyer’s Calculation”) setting forth, in reasonable detail and to the extent practicable, each item or amount differing from the Estimated Closing Working Capital. Buyer’s Calculation shall (i) accurately reflect the Closing Working Capital of the Business as finally determined of close of business on the day before the Closing Date, (ii) be based upon balance sheet line items and accounts set forth on Schedule II hereto calculated in accordance with GAAP applied consistently in accordance with the accounting policies, practices and procedures used in the preparation of the Business Balance Sheets and (iii) otherwise be prepared in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase PriceAgreement.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreementwith Buyer’s Calculation, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser Buyer and Seller shall use commercially reasonable efforts to reach agreement on the disputed items or amounts in order to determine the Closing Working Capital. If Buyer and Seller are unable to reach such agreement within thirty (30) days after the date on which Seller notifies Buyer of such disagreement (such event, a “Dispute”), then the amount of the Closing Working Capital shall be determined in accordance with Section 2.10(d) below.
(d) In the event of a Dispute, Buyer and Seller shall promptly thereafter cause the Accounting Arbitrator Referee promptly to review this Agreement and the disputed items or amounts for the purpose of calculating Closing Working Capital. In making such calculation, the Accounting Referee shall consider only those items or amounts in the Buyer’s Calculation as to which there is disagreement. The Accounting Referee shall deliver to all partiesBuyer and Seller, as promptly as practicable, a written report setting forth the resolution calculation of any such disagreement determined the Closing Working Capital (as calculated in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.and
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aSeller has delivered to Purchaser its good faith estimate of (i) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing Cash (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working CapitalEstimated Cash”. For ) and (ii) Indebtedness (the avoidance of doubt, amounts included in the determination of Closing Net “Estimated Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital”).
(b) If Within 90 days after the Purchase Price date hereof, Purchaser will deliver to Seller a consolidated balance sheet, in substantially the same form as finally the Sample Statement, of the Companies as of the open of business on the date hereof (the “Closing Balance Sheet”) and a statement showing the calculation of Cash, Indebtedness and Net Working Capital derived from the Closing Balance Sheet and the Target Net Working Capital Amount (together with the Closing Balance Sheet, the “Preliminary Statement”). The Closing Balance Sheet shall be prepared, and Cash, Indebtedness and Net Working Capital shall be determined (including for purposes of Section 1.05(a)), (i) on a basis consistent with the principles, assumptions, policies, practices and methodologies applied in preparing the Sample Statement and in substantially the same manner as the calculations of Cash, Indebtedness and Net Working Capital set forth therein, and (ii) to the extent consistent with the basis set forth in clause (i), in accordance with Seller’s Accounting Policies and Practices. The Target Net Working Capital Amount shall be determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth definition thereof in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP8.04(b). The parties Closing Balance Sheet shall not include any changes in assets or liabilities as a result of purchase accounting adjustments or other changes arising from or resulting as a consequence of the transactions contemplated hereby. The Parties agree that the purpose of preparing the Closing Balance Sheet and determining Cash, Indebtedness, the Target Net Working Capital Amount and Net Working Capital is not to provide each permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of preparing the Closing Balance Sheet or determining Cash, Indebtedness, the Target Net Working Capital Amount or Net Working Capital. During the 60-day period following Seller’s receipt of the Preliminary Statement and until final resolution hereunder, Seller and its accountants and other representatives shall be permitted reasonable access to review the books and records of Purchaser and the Companies and any work papers related to the preparation of the Preliminary Statement. Seller and its accountants and other representatives may make inquiries of Purchaser, the Companies and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared accountants regarding questions concerning or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably disagreements with the operations Preliminary Statement arising in the course of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentencereview thereof, and (y) provide access Purchaser shall use its, and shall cause the Companies to or disclose information whereuse their, upon the advice of counsel, commercially reasonable efforts to cause any such access or disclosure would jeopardize the attorney-client privilege of accountants to cooperate with and respond to such party or contravene any applicable Lawsinquiries. If Seller disagrees with has any objections to the determination of the Closing Preliminary Statement, Seller shall notify deliver to Purchaser a statement (an “Objections Statement”) that shall specify in writing reasonable detail the nature of such any disagreement so asserted. If an Objections Statement is not delivered to Purchaser within sixty (60) 60 days after delivery of the Closing StatementPreliminary Statement to Seller, which written notice the Preliminary Statement shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice be final, binding and nonappealable by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by PurchaserParties hereto. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreementobjections, and any but if they do not reach a final resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) 30 days after the delivery by Seller of a Disagreement Noticethe Objections Statement, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and PurchaserPurchaser shall submit to Ernst & Young or, if Ernst & Young is not available, another independent accounting or valuation firm reasonably acceptable to resolve such disagreement Seller and Purchaser (the firm so selected shall be referred to herein as the “Accounting ArbitratorValuation Firm”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any and all matters that remain in dispute and which were properly included in the Objections Statement. Any further submissions to the Valuation Firm must be written and delivered to each Party to the dispute. The Valuation Firm shall make a final determination of Cash, Indebtedness, the Target Net Working Capital Amount and Net Working Capital to the extent such disagreement determined amounts are in dispute, in each case, in accordance with the terms of this Agreement, including the Sample Statement and the definitions of Cash, Indebtedness, Target Net Working Capital Amount and Net Working Capital set forth herein, and the resulting Final Consideration will be calculated with reference to such amounts. Such report The Parties will cooperate with the Valuation Firm during the term of its engagement. The determination of Cash, Indebtedness and Net Working Capital as of the open of business on the date hereof, the determination of the Target Net Working Capital Amount and the resulting Final Consideration calculated with reference thereto, shall be become final and binding upon on the parties, absent manifest errorParties on the earlier of (A) the date Seller and Purchaser resolve in writing any differences they have with respect to the matters specified in the Objections Statement and (B) the date the Valuation Firm delivers its final resolution in writing to the Parties. The fees, costs Valuation Firm shall be instructed to render its determination of all matters submitted to it within 30 days following submission. The fees and expenses of the Accounting Arbitrator arising Valuation Firm incurred pursuant to this Section 1.05(b) shall be borne 50% by Seller and 50% by Purchaser. The fees and disbursements of Seller’s accountants and other representatives incurred in connection with this Section 2.04 their review of the Preliminary Statement and preparation of any Objections Statement shall be borne by Seller, and the fees and disbursements of Purchaser’s accountants and other representatives incurred in connection with their preparation of the Preliminary Statement and review of any Objections Statement shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(ec) If the Final Consideration is greater than the Closing Date Consideration, Purchaser and Seller agree that shall promptly (but in any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to event within five Business Days after the date on which the Final Consideration is finally determined pursuant to Section 2.03(c1.05(b).
(f) With respect pay to Cash and Cash Equivalents and Indebtedness Seller the amount of the Business denominated in currencies other than U.S. dollarssuch excess, the Applicable Exchange Rate for each such currency as by wire transfer of immediately before available funds to an account or accounts designated in writing by Seller to Purchaser. If the effective time of Final Consideration is less than the Closing as published by Bloomberg Date Consideration, Seller shall promptly (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness but in connection with any event within five Business Days after the adjustments date on which the Final Consideration is finally determined pursuant to this Section 2.041.05(b)) pay to Purchaser the amount of such excess, by wire transfer of immediately available funds to an account or accounts designated in writing by Purchaser to Seller.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principlesAs soon as practicable, methodologies and policies used but in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of no event later than 60 days following the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase PriceDate, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination prepare a combined balance sheet of the Purchase Price, to an account designated by Company and the party receiving payment no later than two (2) Business Days after Subsidiaries including the final determination notes thereto as of the Purchase Price.
close of business on the Closing Balance Sheet Date (c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing"Closing Balance Sheet"), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of Working Capital based on the Closing Balance Sheet (i) Modified "Closing Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”"), which a calculation of Closing Cash based on the Closing Balance Sheet and a calculation of 1998 Average Working Capital. The Closing Balance Sheet shall be prepared in accordance with GAAP, using the same accounting principles, methodologies procedures, policies and policies set forth methods that were employed in Section 2.04 preparing the
(b) During the preparation of the Closing Balance Sheet and the calculation of Closing Working Capital, Closing Cash and 1998 Average Working Capital (the "Closing Financial Data"), and the period of any dispute within the contemplation of this Section 2.5, Buyer shall cause the Company and each Subsidiary to (i) provide Seller Disclosure Letter (and, and Seller's authorized representatives with full access to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers facilities and personnel employees of the Company and each Subsidiary, (ii) provide Seller, within 10 business days after the Closing Date, with normal month-end closing financial information for the period ending on the Closing Balance Sheet Date, and any other (iii) cooperate fully with Seller and Seller's authorized representatives, including by providing on a timely basis all information which either party reasonably requests necessary or useful in preparing the Closing Financial Data.
(c) Seller shall deliver a copy of the Closing Financial Data to Buyer promptly after it has been prepared. After receipt of the Closing Financial Data, Buyer shall have 20 days to review the Closing Financial Data, together with the workpapers used in the preparation thereof. Buyer and its authorized representatives shall have full access to all relevant books and records and employees of Seller to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging complete their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination review of the Closing StatementFinancial Data. Buyer may dispute items reflected in the calculation of Closing Working Capital, Closing Cash and 1998 Average Working Capital only on the basis that such amounts were not arrived at in conformity with GAAP. Unless Buyer delivers written notice to Seller shall notify Purchaser in writing of such disagreement within sixty (60) days on or prior to the 20th day after delivery Buyer's receipt of the Closing Statement, which written notice shall set forth any such disagreement Date Financial Data specifying in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end amount, nature and basis of such 60-day periodall disputed items, Seller Buyer shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing StatementWorking Capital, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.and
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) Within 90 calendar days after the Closing)Closing Date, Purchaser shall prepare and deliver to Seller a statement (the "Statement") in the form set forth in Schedule 1.04 setting forth Working Capital as of the Effective Time ("Closing Working Capital") and the Statement will contain a certification from Purchaser that it has prepared the Statement in compliance with the requirements of this Section 1.04 and Schedule 1.04.
(b) During the 90 calendar day period following Purchaser’s calculation 's delivery of the Statement, Seller and its independent auditors shall be permitted to review the working papers of Purchaser and the Company relating to the Statement. The Statement shall become final and binding upon the parties on the 90th calendar day following delivery thereof, unless Seller gives written notice of its disagreement with the Statement (a "Notice of Disagreement") to Purchaser prior to such date. Any Notice of Disagreement shall (i) Modified Working Capital, specify in reasonable detail the nature of any disagreement so asserted and (ii) only include disagreements based on mathematical errors or based on Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared Working Capital not being calculated in accordance with this Section 1.04. If a Notice of Disagreement is received by Purchaser within the accounting principles90 calendar day period referred to above, methodologies then the Statement (as revised in accordance with this sentence) shall become final and policies binding upon the parties on the earlier of (A) the date Purchaser and Seller resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement and (B) the date all such disputed matters are finally resolved in writing by the Independent Expert pursuant to the procedures set forth in this Section 2.04 1.04. During the 90 calendar day period following the delivery of the a Notice of Disagreement, Purchaser and Seller Disclosure Letter (and, shall seek in good faith to resolve in writing any differences that they may have with respect to the extent not set forth therein, matters specified in accordance with U.S. GAAP)the Notice of Disagreement. The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by At the end of such 60-90 calendar day period, Purchaser and Seller shall be deemed submit to have accepted an independent accounting firm (the Closing Statement delivered by Purchaser. Matters "Independent Expert") for arbitration any and all matters that remain in dispute and (i) were included in the calculations Notice of Disagreement and (ii) if applicable, any matters which Seller or Purchaser believe should be reflected in Closing Working Capital as a consequence of the adjustments proposed in the Closing Statement Notice of Disagreement (any such matters to which be notified by Seller does not object in or Purchaser (as applicable) to the Disagreement Notice other party no later than 7 calendar days before being submitted to the Independent Expert). The Independent Expert shall be deemed accepted an internationally recognized independent public accounting firm as agreed upon by ▇▇▇▇▇▇▇▇▇ and Seller and shall not be subject to further dispute or reviewin writing. Purchaser and Seller shall negotiate in good faith each instruct the Independent Expert and use their respective commercially reasonable efforts (at their own expense) to resolve any such disagreementcause the Independent Expert to render a decision resolving the matters submitted to it pursuant to this Section 1.04(b) as soon as practicable, and in any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the partiesevent within 90 calendar days following submission.
(dc) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator Independent Expert shall be limited to (i) whether such calculation the Statement was done prepared in accordance with the terms hereofBalance Sheet Principles with respect to the matters that were submitted for resolution to the Independent Expert, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and (ii) whether there were mathematical errors in the Statement and (iii) the interest calculation of the Closing Statementin accordance with Section 1.04(g). The Independent Expert is not authorized to, and the Accounting Arbitrator shall not not, make any other determination. The Accounting Arbitrator shall make its , including (A) any determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant with respect to any independent review. In resolving any such disagreement, matter included in the Accounting Arbitrator may only select an amount Statement or the Notice of Disagreement that was not submitted for each item in dispute that is within range of values established for such disputed item as determined by reference resolution to the value assigned Independent Expert, (B) any determination as to such item whether United States Generally Accepted Accounting Principles ("U.S. GAAP") followed for the Financial Statements or the Statement, (C) any determination as to the accuracy of Section 3.05 or any other representation or warranty in this Agreement, (D) any determination as to compliance by the Company, Purchaser or Seller with any of their respective covenants in this Agreement or (E) any determination that an issue was not properly included by Seller in the Disagreement Notice of Disagreement. Any disputes not within the scope of disputes to be resolved by the Independent Expert pursuant to this Section 1.04(c) shall be resolved as otherwise provided in this Agreement. Any determination by the Independent Expert, and any work or analyses performed by Purchaser the Independent Expert, may not be offered as evidence in the Closing Statement. Purchaser any suit, action or proceeding as evidence of a breach of Section 3.05, a breach of any other representation or warranty in this Agreement or a breach of any covenant in this Agreement (other than a breach of this Section 1.04).
(d) ▇▇▇▇▇▇▇▇▇ and Seller will furnish to each other and to the Independent Expert such work papers and other documents and information relating to the disputed items as the Independent Expert may request and are available to that party (or its independent public accountants) and will be afforded the opportunity to present to the Independent Expert any material related to the disputed items and to discuss the items with the Independent Expert. All matters or items delivered to the Independent Expert by a party shall use commercially reasonable efforts be concurrently delivered to cause the Accounting Arbitrator other parties. None of the parties or any of their respective affiliates will meet or discuss any substantive matters with the Independent Expert without the other party or its representatives present or having the opportunity following at least three business days' notice to deliver be present, either in person or by telephone.
(e) The final determination by the Independent Expert of the matters submitted to all partiesit pursuant to Section 1.04(b) shall: (i) be in writing, as promptly as practicable(ii) include the Independent Expert's calculation of the Adjusted Purchase Price, a written report setting forth (iii) include the resolution Independent Expert's determination of any such disagreement determined each matter submitted to it pursuant to Section 1.04(b), (iv) include the Independent Expert's calculation of interest in accordance with Section 1.04(g) from and including the terms Closing Date to but excluding the date of this Agreement. Such report determination and (v) include a brief summary of the Independent Expert's reasons for its determination of each issue.
(f) The resolution of disputed items by the Independent Expert shall be final and binding upon the parties, absent parties (in the absence of manifest error, in which case the determination will be remitted to the Independent Expert for correction), and the determination of the Independent Expert shall constitute an arbitral award that is final, binding and non-appealable and upon which a judgment may be entered by a court having jurisdiction over the party against which such determination is to be enforced. The fees, costs fees and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made Independent Expert incurred pursuant to this Section 2.04 1.04 shall be allocated in a manner consistent with any allocation agreed borne equally by Purchaser and Seller. For the avoidance of doubt, but subject to pursuant to the last sentence of Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York6.01(c), any dispute as to whether the Statement and the calculation of Closing Working Capital were prepared in accordance with the Balance Sheet Principles shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments resolved pursuant to this Section 2.041.04, irrespective of whether such dispute may give rise to a claim for indemnification under Article VI.
(g) The Purchase Price shall be increased by the amount by which Closing Working Capital exceeds £2,555,187 (the "Target WC Amount") or decreased by the amount by which Closing Working Capital is less than the Target WC Amount (the Purchase Price, as so increased or decreased, the "Adjusted Purchase Price"). If the Closing Date Payment is less than the Adjusted Purchase Price, Purchaser shall, and if the Closing Date Payment is more than the Adjusted Purchase Price, Seller shall, within five business days after the Statement becomes final and binding on the parties, make payment to the other party by wire transfer in immediately available funds in pounds sterling of the amount of such difference, together with interest thereon at the Bank of England's base rate from time to time plus 1 per cent per annum, to be calculated on the basis of the actual number of calendar days elapsed from the Closing Date to but not including the date of payment, divided by 365; provided that if at any time the Bank of England's base rate is less than zero, it shall be deemed to be zero. Whenever conversion of values between pounds sterling and any currency other than pounds sterling for a particular date or period shall be required for purposes of this Section 1.04(g), such conversion shall be made using the mid-market closing rate on the day before Closing as published in the London edition of the Financial Times on the Closing Date.
(h) The term "Working Capital" shall have the meaning set forth on Schedule 1.04 of the Seller Disclosure Schedule. For the avoidance of doubt but subject to Schedule 1.04, Closing Working Capital is to be calculated in the same way, using the same methods, as the line items comprising Working Capital on the Balance Sheet referenced in the definition thereof, whether or not doing so is in accordance with U.S. GAAP or UK GAAP. The foregoing principles are referred to in this Agreement as the "Balance Sheet Principles".
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Purchase Price Adjustment. 2.2.1 The Price shall be increased or decreased, on a euro-for-euro basis, by the amount (aif any) Section 2.04(a) by which the total liabilities of the Seller Disclosure Letter sets forth certain current assets Company and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, Subsidiary on a consolidated basis as of immediately before the effective time of the Closing Date is less than or exceeds the Company’s and the Subsidiary’s (on a consolidated basis) current assets as of the Closing Date (the “Working Capital Adjustment”). For purposes of computing the working capital adjustment, the reasonable costs incurred by Data Presse in (i) Data Presse’s acquisition of the shares of Archipel Production (not to exceed EUR 66,810) and (ii) preparing the different financial statements or estimated interim accounts at January 31, February 28, and March 31, 2010 (not to exceed EUR 31,900) shall be excluded. The Sellers acknowledge and agree that they shall reimburse the Purchaser for the portion of the registration fee (which reimbursement shall not be an adjustment to the Price) as set forth in Section 2.05(a))Schedule 2, determined and the wire instructions contained in Schedule 1 have reflected that reimbursement.
2.2.2 The Sellers delivered to the Purchaser an estimated balance sheet of the Company as of March 31, 2010, prepared in accordance with Section 2.04(a) GAAP (the “Estimated Balance Sheet”), together with supporting schedules, including lists of all trade payables, accrued expenses and accounts receivable of the Seller Disclosure Letter, and Company reflected in the principles, methodologies and policies set forth therein and, Estimated Balance Sheet. A copy of the Estimated Balance Sheet is attached hereto as Exhibit A. Pursuant to the extent not set forth thereinEstimated Balance Sheet the estimated Working Capital Adjustment to the Price (the “Estimated Working Capital Adjustment”) is EUR 237,009.
2.2.3 Within 75 days following the Closing, the Purchaser shall prepare, or cause to be prepared, a balance sheet of the Company as of the Closing Date, prepared in accordance with U.S. GAAP, shall constitute GAAP (the “Modified Working CapitalClosing Date Balance Sheet”). For Promptly thereafter, the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller the Sellers a statement setting forth Purchaser’s calculation certificate, verified as to accuracy by an officer of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 Purchaser (the “Closing StatementDate Payment Certificate”)) (i) attaching a copy of the Closing Date Balance Sheet and (ii) setting forth its determination of the Working Capital Adjustment, if any, which shall be prepared in accordance with GAAP. If within 30 days after the accounting principlesClosing Date Payment Certificate is delivered to the Sellers, methodologies and policies set the Sellers shall not have given written notice to the Purchaser setting forth in Section 2.04 of the Seller Disclosure Letter (and, reasonable detail any objection to the extent not set forth thereinWorking Capital Adjustment, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of then such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller Working Capital Adjustment shall be final and binding upon on the parties.
(d) . If the Sellers, within such 30 day period following delivery of the Closing Date Payment Certificate, shall give written notice to the Purchaser setting forth in reasonable detail any objection to such determination of the Working Capital Adjustment, the Purchaser and Seller the Sellers shall endeavor to reach agreement within the ten business day period following the receipt by the Purchaser of any notice of objection. If the parties are unable to resolve any disagreement as contemplated by Section 2.04(c) reach agreement within thirty (30) days after delivery by Seller such ten business day period, then the matter shall be submitted to the Independent Accountants for determination of a Disagreement Noticethe Working Capital Adjustment, which determination shall be final and binding on the Purchaser and Seller Sellers. In connection with the resolution of any dispute described herein, each party shall jointly select a mutually acceptable nationally recognized third party pay its own fees and expenses, including its own legal, accounting firm, and consulting fees and expenses. If the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, Working Capital Adjustment (as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (Independent Accountants) does not exceed the firm so selected shall be referred to herein Working Capital Adjustment as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice Date Payment Certificate by at least €100,000, then the cost and Purchaser and Seller have not resolved their disagreement. The scope expense of the disputes to Independent Accountants shall be resolved paid by the Accounting Arbitrator shall be limited to whether such calculation was done Sellers, on a joint and several basis; in accordance with the terms hereofall other cases, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, cost and whether there were mathematical errors in the calculation expense of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 Independent Accountants shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined equally by the Accounting Arbitrator Purchaser and the asserted Purchase Price Sellers (in each case, jointly and severally).
2.2.4 If the Working Capital Adjustment is greater than the Estimated Working Capital Adjustment as set forth in the Estimated Closing Statement Date Payment Certificate, then the Sellers shall jointly and severally repay to the Disagreement Notice, respectively.
Purchaser within ten (e10) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time business days following receipt of the Closing Date Payment Certificate or, if disputed, within ten business days following the earlier of the date on which the parties resolve the dispute or the date of determination of the Working Capital Adjustment by the Independent Accountants, the difference between the Working Capital Adjustment and the Estimated Working Capital Adjustment. If the Estimated Working Capital Adjustment is less than the Working Capital Adjustment as published determined herein, then the Purchaser shall pay to the Sellers, on a pro rata basis in accordance with their respective Shares, within ten (10) business days following receipt of the Closing Date Payment Certificate or, if disputed, within ten business days following the earlier of the date on which the parties resolve their dispute or the date of determination of the Working Capital Adjustment by Bloomberg the Independent Accountants, the difference between the Estimated Working Capital Adjustment and the Working Capital Adjustment.
2.2.5 For all purposes of this Agreement, the term “Independent Accountants” shall mean an independent accounting firm of national or regional reputation which is selected by the Purchaser and the Sellers (BGN New Yorkor if they cannot agree by decision of the President of the Commercial Court of Paris given in summary proceedings (statuant en référé), shall be used to convert such amounts into U.S. dollars for purposes upon request of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04either party).
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Purchase Price Adjustment. (a) Section 2.04(aWithin ninety (90) days of the Closing Date (or on the same date Seller Disclosure Letter sets forth certain current assets publicly releases its audited financial statements dated as of and current liabilities accounts and certain for the year ended December 31, 2007, whichever occurs later), Seller shall provide to Purchaser (i) a final closing balance sheet for SGF as of the Closing Date prepared in accordance with generally accepted accounting principles, methodologies and policies principles (“GAAP”) consistent with the accounting principles used in the determination preparation of such accounts. Such accounts of the Business, cumulatively, Seller’s financial statements dated as of immediately December 31, 2006, which balance sheet must be audited by Seller’s independent auditors if the Closing Date occurs on or before December 31, 2007 or reviewed by a nationally recognized independent auditing firm of Seller’s choosing if the effective time Closing Date occurs after December 31, 2007 (the “Final Closing Balance Sheet”), and (ii) based on such Final Closing Balance Sheet, a calculation of Adjusted Net Working Capital of SGF (as defined below) as of the Closing (as set forth in Section 2.05(a))Date, determined as provided in accordance with this Section 2.04(a) of the Seller Disclosure Letter, 1.2. If and the principles, methodologies and policies set forth therein and, to the extent not set forth thereinthat the Adjusted Net Working Capital of SGF (as defined below) as of the Closing Date, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included as reflected in the determination of Final Closing Net Indebtedness, Closing Transaction Expenses Balance Sheet and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated 1.2, exceeds zero, Purchaser shall pay such excess to Seller as additional Purchase Price, payable by wire transfer of immediately available funds to Seller shall pay within ten (10) Business Days following the final determination of Adjusted Net Working Capital as provided in this Section 1.2. If and to Purchaser the total amount extent that the Adjusted Net Working Capital of such deficitSGF as of the Closing Date, as reflected in the Final Closing Balance Sheet and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price1.2, Purchaser is less than zero, Seller shall pay such deficiency to Seller the total amount of such excessPurchaser, in either case payable by wire transfer of immediately available U.S. dollar funds, funds to Seller within three ten (310) Business Days after business days following the final determination of Adjusted Net Working Capital as provided in this Section 1.2. For purposes of this Agreement, the Purchase Price, to an account designated by the party receiving payment no later than two term Adjusted Net Working Capital shall mean Current Assets minus House Funds (2as defined in Section 7.2) Business Days after the final determination of the Purchase Priceminus Current Liabilities.
(cb) As promptly as practicable (andFor purposes of this Agreement, in any eventthe term “Current Assets” means, within ninety (90) days after with respect to the Closing)financial information of SGF, Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 aggregate of the Seller Disclosure Letter (and, following assets to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other that such assets are classified as current under GAAP and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither acquired by Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement: (i) cash plus cash equivalents; (ii) marketable securities; (iii) accounts receivable generated in the ordinary course of business, less a reasonable reserve for doubtful accounts consistent with past practices; (iv) inventories held for use in the ordinary course of business (excluding any inventories that are obsolete or otherwise unusable in the business); (v) prepaid expenses; and (vi) all other assets of any kind classified as current under GAAP. Such report Current Assets shall be final not include any amounts due from HHLV Management Company LLC or any affiliate of ▇▇▇▇▇▇’▇ Entertainment pursuant to the Joint Operating License Agreement, as amended, dated March 10, 2004 and binding upon the partiesPurchase and Sale Agreement, absent manifest error. The feesas amended, costs by and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and among Seller, on the other handHHLV and SGF, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency dated as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York)February 9, shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.042004.
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Purchase Price Adjustment. The Parties agree that the Novita Shares Purchase Price was calculated assuming the working capital indicated in Exhibit 4.2 hereto (a) Section 2.04(a) the “Base Working Capital”), provided that “working capital” shall include the accounts receivable, the accounts payable and the Inventory of the Seller Disclosure Letter sets forth certain current assets BPC Business, as defined and current liabilities calculated in conformity with the methodology, criteria and statements detailed in Exhibit 4.2, based on the Financial Statements. The adjustment to the Novita Shares Purchase Price (the “Purchase Price Adjustment”), if any, shall be calculated as follows: PPAA = TWC – BWC – ND Where: PPAA is the Novita Shares Purchase Price Adjustment Amount. TWC means the working capital transferred to the Companies on or before the Business Closing Date, as defined and calculated in conformity with the methodology, criteria and statements detailed in Exhibit 4.2. BWC means the Base Working Capital. ND means the Companies Net Indebtedness on the Business Closing Date.
4.2.1. Closing Adjustment to the Novita Shares Purchase Price. Not less than ten (10) Business Days prior to the Business Closing Date, Sellers shall present to Buyer (i) an estimated unaudited balance sheet (balanço patrimonial) and trial balance or management accounts (balancete analítico) for the Companies, in each case as of the Business Closing Date; (ii) the amount of the estimated TWC; and (iii) the amount of the estimated Net Indebtedness, which shall be used for purposes of calculating the closing adjustment to the Novita Shares Purchase Price. The information presented as per this Section shall be calculated, by Sellers in good faith in accordance with (A) the definitions of Indebtedness and Net Indebtedness provided in this Agreement, (B) IFRS and (C) provided that the Inventory to be included in the balance sheet and management accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), TWC shall be determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, physical stock taking to be conducted jointly by the Sellers and the principlesBuyer, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance along with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar fundstheir respective experts, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating prior to the Business (including, for Closing Date. The Parties agree that the avoidance of doubt, Inventory calculation will follow the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably same valuation principles Hypermarcas’ past practices with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant respect to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the partiesBPC Business.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Sources: Assignment and Transfer Agreement
Purchase Price Adjustment. (a) Section 2.04(aA post-Closing adjustment to the Initial Purchase Price Payment shall be made as follows: (i) of any decrease to the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principlesNet Working Capital (as finally determined below), methodologies and policies used and/or (ii) any decrease in the determination amount of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing cash (as set forth in Section 2.05(a)finally determined below), determined in accordance with Section 2.04(a) of shall be subtracted from the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Initial Purchase Price Adjustment shall be excluded from the determination of the Modified Working CapitalPayment.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three Within sixty (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (9060) days after following the Closing), the Purchaser shall prepare and deliver to Seller a Sellers an unaudited balance statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) the Company as of the Closing Net Indebtedness, (iii) Date immediately prior to Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Proposed Closing Balance Statement”), which shall (A) indicate the amount of cash available as of the Closing Date immediately prior to the Closing, and (B) include a statement of Net Working Capital as of the Closing Date immediately prior to Closing (the “Closing Working Capital Statement”) prepared in a manner consistent with (i) the balance statement of the Company as of May 31, 2008, attached as Exhibit A hereto (the “Balance Statement”), and (ii) the computation of the Net Working Capital as of May 31, 2008, attached as Exhibit B hereto. The Proposed Closing Balance Statement and the Closing Working Capital Statement shall be prepared in accordance with the accounting principlesAccounting Principles, methodologies subject to the exceptions thereto taken as provided in Schedule 3.2(b), and policies set forth shall be consistent with Past Practice as employed in Section 2.04 the preparation of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP)Company’s audited Financial Statements. The parties agree to provide each other Proposed Closing Balance Statement shall present fairly in all material respects the financial condition of the Company as of that date.
(c) Sellers and their respective Representatives reasonable access, during normal business hours auditors shall have the right to examine and upon reasonable notice, to their respective books, records, make copies of the work papers and personnel (other documents generated or reviewed in connection with the preparation of the Proposed Closing Balance Statement and any other information which either party reasonably requests the Closing Working Capital Statement and to access the books and records of the Company relative to the extent relating preparation of the Proposed Closing Balance Statement and the Closing Working Capital Statement (the “Post-Closing Adjustment Documents”).
(d) (i) Sellers shall have thirty (30) days after the receipt of the Proposed Closing Balance Statement and the Closing Working Capital Statement (the “Sellers’ Review Period”) to review the Business (including, for the avoidance of doubtProposed Closing Balance Statement, the Business in Closing Working Capital Statement, and the Post Closing Adjustment Documents.
(ii) If the Sellers dispute any Deferred Asset Jurisdictions)item(s) throughout on the periods during which Proposed Closing Balance Statement or the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Working Capital Statement, Seller Sellers shall notify give the Purchaser in writing written notice of such disagreement within sixty (60) days after delivery prior to the expiration of the Closing Statement, which written notice shall set forth any Sellers’ Review Period specifically identifying the item(s) and amount(s) in dispute and the basis for such disagreement in reasonable detail dispute (the “Disagreement Sellers’ Notice”). The Parties shall use commercially reasonable efforts to reach agreement with respect to such disputed items within thirty (30) days following the delivery of the Sellers’ Notice, or such longer period as may be agreed upon by the Parties (the “Resolution Period”).
(iii) If Seller fails to deliver the Parties mutually agree upon the Proposed Closing Balance Statement and the Closing Working Capital Statement within the Resolution Period, such agreement shall be binding upon the Parties. Any item(s) on the Proposed Closing Balance Statement or the Closing Working Capital Statement not specifically identified in writing as a Disagreement Notice by disputed item before the end of such 60-day period, Seller Sellers’ Review Period shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed been accepted by Seller Sellers and shall not be subject to any further dispute dispute, review or review. Purchaser and Seller shall negotiate in good faith change.
(e) If the Parties fail to resolve any such disagreementdisputes with respect to the Proposed Closing Balance Statement and/or the Closing Working Capital Statement within the Resolution Period, the dispute(s) shall be submitted for resolution within ten (10) days after the expiration of the Resolution Period to, and any resolution agreed to definitely and finally determined by, the Arbitration Institute of the Stockholm Chamber of Commerce (the “Arbitration Tribunal”) in writing by Purchaser and Seller accordance with Section 11.5 hereof. The Arbitration Tribunal’s determination of such dispute(s) shall be final and binding upon made in a manner consistent with the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by principles set forth in this Section 2.04(c) within 3.2 in a written opinion delivered not later than thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment submission of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned same to such item by Seller in the Disagreement Notice and by Purchaser in the Closing StatementArbitration Tribunal. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any Any such disagreement determined in accordance with the terms of this Agreement. Such report determination shall be final and binding upon the parties, absent manifest errorbinding. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Proposed Closing Balance Statement and the Disagreement NoticeClosing Working Capital Statement as mutually agreed to by the Parties or otherwise finally determined in the manner provided shall be referred to, respectively, as the “Closing Balance Statement” and the “Working Capital Determination”.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aAs soon as practicable and in any event not later than sixty (60) days after the Closing Date, the Sellers shall cause Ernst & Young LLP, or such other nationally recognized independent accounting firm chosen by the Sellers, at the expense of the Seller Disclosure Letter sets forth certain current assets Transferred Companies, to prepare and current liabilities accounts deliver to the Sellers and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, Buyer a balance sheet for Ply Gem as of immediately before the effective time of prior to the Closing (as set the "Closing Balance Sheet"), together with a statement (the "Statement") setting forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from reasonable detail the determination of the Modified Net Working Capital of Ply Gem based upon amounts set forth on the Closing Balance Sheet (the "Closing Net Working Capital"). The Buyer shall cause the Transferred Companies to give the Sellers and their authorized representatives reasonable access to all books, records, personnel, offices and other facilities and properties of the Transferred Companies and their accountants as the Sellers may require to prepare the Closing Balance Sheet and the Statement. The Closing Balance Sheet and the Statement shall be prepared in accordance with GAAP, applied in a manner consistent with the preparation of the Financial Statements. The Closing Balance Sheet and the Statement shall be final and binding on the Buyer and the Sellers, subject to the process of objection provided in this Section 1.4 below.
(b) The Buyer may dispute the amounts reflected on the Closing Balance Sheet and Statement, but only on the basis that (1) the Closing Balance Sheet and the Statement have not been prepared in accordance with the provisions of Section 1.4(a) or (2) there has been an error in mathematical calculation relating to the Statement. If the Purchase Price Buyer disagrees with the amount of the Closing Net Working Capital on such basis, the Buyer may, within thirty (30) days after the deliveries of the Closing Balance Sheet and the Statement, deliver a notice to the Sellers (the "Dispute Notice") setting forth the Buyer's calculation of the Closing Net Working Capital and specifying, in reasonable detail, those items or amounts in the Closing Balance Sheet and Statement affecting the calculation of the Closing Net Working Capital as to which it disagrees and the reasons for such disagreement. If prior to the conclusion of such 30-day period the Buyer notifies the Sellers in writing that it will not provide any Dispute Notice or if no Dispute Notice is delivered within such 30-day period, the Closing Net Working Capital, as set forth on the Statement, shall become final, conclusive and binding on the parties hereto for all purposes of this Section 1.4.
(c) If the Buyer delivers a Dispute Notice to the Sellers within the 30-day period described above, the parties shall use reasonable efforts to reach agreement on the disputed items or amounts in order to determine the Closing Net Working Capital. If the Sellers and the Buyer do not resolve all disputed items or amounts set forth in the Dispute Notice within fifteen (15) days after delivery of a Dispute Notice, the remaining disputed items and amounts will be submitted to a nationally recognized independent accounting firm in the U.S. mutually agreed to by the Buyer and the Sellers (the "Independent Accountants") for resolution of such disputed items and amounts. The parties will have the opportunity to present their positions with respect to such disputed items and amounts to the Independent Accountants, and such disputed items and amounts shall be resolved by the Independent Accountants in accordance with the requirements of Section 1.4(a). The Independent Accountants shall prepare a written report setting forth the resolution of such disputed items and amounts and calculating the revised amount of Closing Net Working Capital, which shall be delivered to each of the Sellers and the Buyer promptly, but in no event later than thirty (30) days after such disputed items and amounts are submitted to the Independent Accountants. Such revised amount of Closing Net Working Capital shall not reflect any difference from the amount of Closing Net Working Capital set forth on the Statement other than differences required to reflect the resolution of such disputed items and amounts by the Independent Accountants. The revised amount of Closing Net Working Capital set forth on the Independent Accountants' written report shall be final, conclusive and binding upon the Sellers and the Buyer. The procedures set forth in this Agreement for resolution of disputes concerning the Closing Net Working Capital shall be final and binding on all of the parties, and shall not be subject to appeal of any kind. The fees and disbursements of the Independent Accountants shall be allocated between the Buyer, on the one hand, and the Sellers, on the other hand, such that the Buyer's share of such fees and disbursements shall be in the same proportion that the aggregate amount of the disputed items and amounts submitted by the Buyer to the Independent Accountants that are unsuccessfully disputed by the Buyer (as finally determined by the Independent Accountants) bears to the total amount of such disputed items and amounts so submitted by the Buyer to the Independent Accountants. Each of the Sellers and the Buyer shall execute a reasonably acceptable engagement letter, if requested to do so by the Independent Accountants, and shall provide reasonable access to their respective employees who are responsible for financial matters and in the case of the Buyer, to the books and records of the Transferred Companies.
(d) If the Closing Net Working Capital, as finally determined in accordance with this Section 2.04 1.4, is less than $47,668,000 (the Estimated Purchase Price"Target Net Working Capital"), Seller the Sellers shall pay pay, within five (5) business days after the final determination of the Closing Net Working Capital, an amount to Purchaser the total amount of Buyer equal to such deficitdifference. If the Closing Net Working Capital, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds 1.4, is more than the Estimated Purchase PriceTarget Net Working Capital, Purchaser the Buyer shall pay pay, within five (5) business days after the final determination of the Closing Net Working Capital, an amount to Seller the total amount of WDS equal to such excess, in either case difference. Any payment made pursuant to this Section 1.4 shall be made by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, funds to an account designated by the party receiving payment no later than two (2) Business Days after payee, and shall be deemed by the final determination of parties to be an adjustment to the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and amount of any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise such payment due under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with 1.4(d) shall bear interest at the operations rate of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, 6% per annum from and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of including the Closing Statement, Seller shall notify Purchaser in writing Date through the date of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the partiespayment.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aAs soon as practicable and in any event within 30 days following the Closing, Seller shall deliver to Buyer a preliminary, unaudited balance sheet (the "Preliminary Closing Balance Sheet") relating to the Businesses and a worksheet reflecting the calculation of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts Net Working Capital of the Business, cumulatively, Businesses as of immediately before the effective time of the Closing Date (as set forth in Section 2.05(athe "Preliminary Net Working Capital Calculation")). Simultaneously with the delivery to Buyer of the Preliminary Closing Balance Sheet and the Preliminary Net Working Capital Calculation, determined Seller shall either (i) transfer to Buyer (via wire transfer in accordance with Section 2.04(ainstructions to be provided by Buyer) the amount by which Target Net Working Capital exceeds the Net Working Capital shown on the Preliminary Net Working Capital Calculation, or (ii) invoice Buyer for the amount ("Additional Purchase Price") by which the Net Working Capital on the Preliminary Net Working Capital Calculation exceeds the Target Net Working Capital. Buyer shall transfer to Seller the amount of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, any Additional Purchase Price (via wire transfer in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall instructions to be excluded from the determination provided by Seller) within seven (7) days of the Modified Working Capitaldelivery of such invoice.
(b) If Upon completion of the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase PricePreliminary Net Working Capital Calculation, Seller shall pay engage Pricewaterhouse Coopers LLP ("PWC"), independent auditors for Seller, to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination perform an audit of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Preliminary Net Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared Capital Calculation in accordance with the accounting principles, methodologies principles and policies procedures set forth in Section 2.04 of Appendix II hereto. PWC will be instructed to report on the Seller Disclosure Letter Preliminary Net Working Capital Calculation (and, to the extent not set forth therein, in accordance with U.S. GAAP"PWC Report"). The parties agree to provide each other PWC Report and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel accompanying calculation of Net Working Capital (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)"Closing Date Net Working Capital") throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination as of the Closing Statement, Seller Date (the "Closing Date Net Working Capital Calculation") shall notify Purchaser in writing of such disagreement be delivered to Buyer within sixty (60) days following the Closing. During the preparation of the PWC Report and the period of any dispute within the contemplation of this Section 2.5, Buyer shall (i) provide Seller and Seller's authorized representatives with reasonable access to the Subject Assets and the Executive Management who accept employment with Buyer, (ii) provide Seller within fifteen (15) business days after delivery the Closing Date with normal month-end closing financial information for the period ending on the Closing Date, and (iii) reasonably cooperate with Seller and Seller's authorized representatives, including the provision on a timely basis of all information reasonably necessary to enable Seller to prepare the PWC Report.
(c) Seller shall deliver a copy of the PWC Report to Buyer promptly after it has been prepared. After receipt of the PWC Report, Buyer shall have thirty (30) days to conduct its review thereof and during such time shall have access to the work papers used in preparation thereof. Buyer and its authorized representatives shall have reasonable access to all relevant books and records and employees of Seller to the extent required to complete their review of the PWC Report. Buyer may dispute only those items reflected on the PWC Report which relate to Closing Date Net Working Capital and only on the basis that such amounts were not arrived at in accordance with Appendix II. Buyer shall only be entitled to dispute the PWC Report if Buyer's good faith estimate of the Closing StatementDate Net Working Capital differs from the Closing Date Net Working Capital as shown on the PWC Report by an amount in excess of $500,000, which after taking account of any prior payment of Additional Purchase Price or remittance under Section 2.5(a). Unless Buyer delivers written notice shall set forth any such disagreement to Seller on or prior to the 30th day after Buyer's receipt of the PWC Report specifying in reasonable detail all disputed items and the basis therefor (“Disagreement a "Dispute Notice”") and the amount in dispute is in excess of $500,000, after taking account of any prior payment of Additional Purchase Price or remittance under Section 2.5(a). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller Buyer shall be deemed to have accepted and agreed to the Closing Statement delivered by PurchaserPWC Report. Matters included in If Buyer so notifies Seller of its objection to the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser PWC Report, Buyer and Seller shall negotiate in good faith to resolve any such disagreementshall, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Noticefollowing such Dispute Notice (the "Resolution Period"), Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, attempt to resolve such disagreement (the firm so selected their differences and any resolution by them as to any disputed amounts shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser final, binding, conclusive and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelynon-appealable.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Sources: Asset Purchase and Sale Agreement (L 3 Communications Corp)
Purchase Price Adjustment. (a) Section 2.04(aAt least three Business Days prior to the Closing Date, the Seller Representative shall deliver to Buyer a funds flow statement setting forth (A) Sellers’ good faith estimates of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts Net Working Capital of the Business, cumulatively, Company as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)the “Estimated Net Working Capital”), determined in accordance with Section 2.04(athe Closing Indebtedness (the “Estimated Closing Indebtedness”) and Seller Transaction Expenses (the “Estimated Seller Transaction Expenses”), (B) on the basis of the Seller Disclosure Letterforegoing, a calculation of the Estimated Unit Purchase Price, (C) all payments due pursuant to the LTIP, whether at or after the Closing, including the identity of each recipient of each such payment (the “Specified LTIP Payments”), and (D) each payment to be made at the Closing, including the identity and wire instructions for each payment recipient, and the principles, methodologies and policies set forth therein and, amount of payment to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute be made to each recipient (the “Modified Working CapitalFunds Flow Statement”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital).
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) Within 90 days after the Closing)Closing Date, Purchaser shall prepare and ▇▇▇▇▇ will deliver to Seller Representative a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Post-Closing Statement”), which shall be ) that includes an unaudited consolidated balance sheet of the Company as of the Closing prepared in accordance with GAAP, applied consistently with the accounting principlesNWC Accounting Principles, methodologies and policies set forth in Section 2.04 a written determination of the Net Working Capital of the Company as of the Closing (the “Final Net Working Capital”), the Closing Indebtedness, the Seller Disclosure Letter (andTransaction Expenses, the Final Unit Purchase Price calculated using the foregoing amounts, in reasonably detailed and explanatory form and together with supporting documents and information that Buyer has utilized in connection with the making of such determination. Following delivery of the Post-Closing Statement, Buyer and the Company shall provide Seller Representative and its representatives with reasonable access to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers papers, and personnel (of the Company and any other information which either party items reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolvedrequested, in each case for the purpose of enabling Seller Representative to review Buyer’s calculation and preparation of the Post-Closing Statement; provided that such access shall occur during normal business hours, with reasonable notice and in a manner that does not unreasonably interfere unreasonably with the operations conduct of such party’s businessesthe business of the Company. Notwithstanding Seller Representative may dispute any amount or item on the foregoing, neither Purchaser nor Seller shall be required Post- Closing Statement by delivering to Buyer a written notice of dispute (xthe “Post-Closing Statement
(c) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver Representative timely delivers a Disagreement Notice by the end of such 60Post-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included Dispute Notice to Buyer in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser accordance with Section 2.5(b), Buyer and Seller Representative shall negotiate in good faith attempt to resolve any such disagreementreconcile their differences, and any resolution agreed by them as to in writing by Purchaser any such disputes shall be final, binding and conclusive on Buyer and Sellers. If ▇▇▇▇▇ and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller Representative are unable to resolve any disagreement as contemplated by Section 2.04(c) such dispute within thirty 15 days of ▇▇▇▇▇’s receipt of the Post-Closing Statement Dispute Notice from Seller Representative, either Buyer or Seller Representative shall be permitted to engage (30) days after delivery by Seller on behalf of a Disagreement Notice, Purchaser Buyer and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firmRepresentative) FORVIS, LLP (the retention of which will “Independent Accountant”), acting as an expert and not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaseran arbitrator, to resolve any remaining items in dispute. Within five business days of such disagreement engagement, ▇▇▇▇▇ and Seller Representative shall submit to the Independent Accountant (and the firm so selected shall be referred to herein other party) all documentary materials and analyses that Buyer or Seller Representative, as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable case may be, believes to agree on the appointment be relevant to a resolution of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts dispute set forth in the Post-Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreementDispute Notice, but excluding any work papers of independent certified public accountants. The scope of the disputes to Independent Accountant shall be resolved instructed by the Accounting Arbitrator shall be limited to whether party that engaged such calculation was done Independent Accountant to, within 45 days after such engagement, make a determination in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used standards provided herein and deliver to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser Buyer and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, Representative a written report setting forth (the resolution “Final Post-Closing Statement Report”) containing the Independent Accountant’s determination of any the disputed matters that were so submitted to it and of the Final Net Working Capital, the Positive NWC Adjustment Amount, if any, the Negative NWC Adjustment Amount, if any, the Closing Indebtedness, the Seller Transaction Expenses, the and Final Unit Purchase Price (and only such disagreement determined in accordance with the terms of this Agreement. Such report matters) and such determination shall be final within the range of calculations provided by ▇▇▇▇▇ and binding upon the parties, absent manifest errorSeller Representative. The fees, costs and expenses determination of the Accounting Arbitrator arising Independent Accountant that is contained in connection with this Section 2.04 the Final Post-Closing Statement Report shall be borne final, binding and conclusive on Buyer and Sellers. The fees and costs of the Independent Accountant shall be payable by Purchaser▇▇▇▇▇, on the one hand, and SellerSellers, on the other hand, in proportion based upon the percentage which the portion of the aggregate disputed amount not awarded to each party bears to the differences between the Purchase Price aggregate amount actually contested by such party, as determined by the Accounting Arbitrator Independent Accountant. For example, if Sellers timely submit a dispute notice for $1,000, and if Buyer contests only $500 of such amount, and the asserted Purchase Price set forth Independent Accountant ultimately resolves the dispute by awarding Sellers $300 of the $500 contested, then the costs and expenses of the Independent Accountant will be allocated 60% (i.e., 300/500) to Buyer and 40% (i.e., 200/500) to Sellers. All other costs, fees and expenses incurred by the parties in connection with resolving such dispute shall be borne by the Closing Statement party incurring such cost and the Disagreement Notice, respectivelyexpense.
(ed) Purchaser and Seller agree that any payments made Within five business days after the final determination of the Final Unit Purchase Price pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).2.5:
(fi) With respect to Cash and Cash Equivalents and Indebtedness of If the Business denominated in currencies other than U.S. dollarsFinal Unit Purchase Price, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments finally determined pursuant to this Section 2.042.5, is greater than the Estimated Unit Purchase Price (such difference, the “Underpayment Amount”), then (A) Buyer and Seller shall jointly instruct the Escrow Agent to disburse the balance of the Adjustment Escrow Account to Seller Representative (for further distribution to the Sellers), and (B) Buyer shall pay to Sellers, in accordance with their Pro Rata Shares, an amount in cash equal to the Underpayment Amount.
(ii) If the Final Unit Purchase Price, as finally determined pursuant to this Section 2.5, is less than the Estimated Unit Purchase Price (such difference, the “Overpayment Amount”), then:
(A) if the Overpayment Amount is less than the Adjustment Escrow Amount, then Buyer and Seller Representative shall jointly instruct the Escrow Agent to (1) disburse to Buyer from the Adjustment Escrow Account an amount in cash equal to the Overpayment Amount and (2) disburse to Seller Representative (for further distribution to the Sellers) the remaining balance in the Adjustment Escrow Account after the disbursement to Buyer described in the preceding clause (1);
(B) if the Overpayment Amount is more than the Adjustment Escrow Amount, then (1) Buyer and Seller Representative shall jointly instruct the Escrow Agent to disburse to Buyer the entire balance of the Adjustment Escrow Account, and
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within At least three (3) Business Days after business days prior to the final determination of the Purchase PriceClosing Date, Seller shall prepare, or cause to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (andbe prepared, in any eventusing then available information, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller Purchaser a working capital statement, together with the detailed work papers which support such statement (collectively, the “Estimated Working Capital Statement”) setting forth Purchaserin reasonable detail Seller’s calculation good faith estimate of (i) Modified the Net Working Capital, (ii) Capital as of the Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 Date (the “Closing StatementEstimated Working Capital”), which statement shall be prepared in accordance with the accounting principlesAccounting Standards. The Purchase Price to be paid at the Closing shall (i) be decreased dollar for dollar by the amount the Estimated Working Capital is less than the Target Working Capital or (ii) not be adjusted if the Estimated Working Capital is greater than the Target Working Capital (the Purchase Price, methodologies and policies set as decreased or not adjusted pursuant to this sentence, minus the Asset Purchase Price, the “Share Purchase Price”).
(b) Within ninety (90) days from the Closing Date (or such reasonable extension thereof as approved by Seller, such approval not to be unreasonably withheld), the Purchaser shall prepare a working capital statement setting forth in Section 2.04 the Net Working Capital as of the Seller Disclosure Letter Closing Date (andthe “Closing Working Capital”), to the extent not set forth therein, which statement shall be prepared in accordance with U.S. GAAPthe Accounting Standards (such statement, the “Closing Date Working Capital Statement”). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to To the extent relating necessary to verify and confirm the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination accuracy of the Closing Date Working Capital Statement, Seller shall notify have the right to review the books and records of the Companies for a period of thirty (30) days following delivery by the Purchaser to the Seller of the Closing Date Working Capital Statement (the “Objection Deadline”). The Closing Date Working Capital Statement shall be binding and conclusive upon, and deemed accepted by, Seller unless Seller shall have notified Purchaser in writing by the Objection Deadline of such disagreement within sixty any good faith objection thereto, which objection can only be (60i) days after delivery of that the Closing Working Capital, as reflected on the Closing Date Working Capital Statement, (A) has not been prepared in accordance with the Accounting Standards or (B) contains mathematical errors on its face and/or
(ii) that the underlying amounts used to calculate the Closing Working Capital, as reflected in the Closing Date Working Capital Statement, are incorrect (any such objection, the “Seller’s Objection”), indicating in reasonable detail the basis for its objections and the specific adjustments to the Closing Working Capital reflected on the Closing Date Working Capital Statement which written notice Seller believes should be made. Purchaser and Seller shall set forth any meet and confer in an effort to resolve such disagreement in reasonable detail (“Disagreement Notice”)good faith. If Seller fails to deliver Any items not disputed in a Disagreement Notice by the end of such 60-day period, Seller valid Seller’s Objection shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed been accepted by Seller. If Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) all of their disputes with respect to the calculation of the Closing Working Capital within thirty (30) days after delivery by Seller following Purchaser’s receipt of a Disagreement NoticeSeller’s Objection to the Closing Date Working Capital Statement and the aggregate net effect of all amounts remaining in dispute is less than or equal to $50,000, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected disputed amounts shall be referred deemed to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment have been resolved in favor of the Accounting Arbitrator, as provided above, then calculation of the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts Closing Working Capital set forth in the Closing Date Working Capital Statement delivered by Purchaser to Seller, but if the aggregate net effect of all amounts remaining in dispute exceeds $50,000, then the parties shall refer their remaining differences to an independent public accounting firm mutually agreed to by the parties (the “Accounting Firm”) for decision, which decision shall be final and binding on the parties upon delivery of the Accounting Firm’s written opinion. Within thirty (30) days following the reference of such dispute to the Accounting Firm, Seller shall submit any unresolved elements of Seller’s Objection to the Accounting Firm in writing (with a copy to Purchaser), supported by any documents and/or affidavits upon which it relies. Failure to do so without reasonable cause shall constitute a withdrawal by Seller of Seller’s Objection with respect to any unresolved element to which such failure relates. Within thirty (30) days following Seller’s submission of the unresolved elements of Seller’s Objection as specified in the immediately preceding sentence, Purchaser shall submit its response to the Accounting Firm in writing (with a copy to Seller), supported by any documents and/or affidavits upon which it relies. The Accounting Firm shall act as an expert and not as an arbitrator to determine based solely on the provisions of this Section 1.04 and the submissions of Purchaser and Seller, and not by independent review, only those issues still in dispute and only as to which Purchaser has disagreed pursuant whether: (i) such amounts were arrived at in conformity with the Accounting Standards and Section 1.04(a) hereof; (ii) the Closing Date Working Capital Statement contains mathematical errors on its face and/or (iii) the underlying amounts used to a Disagreement Notice calculate the Closing Working Capital as reflected in the Closing Date Working Capital Statement were incorrect. The Accounting Firm shall review the written submissions from Seller and Purchaser and Seller have not resolved their disagreementshall deliver its written opinion setting forth the proper amount of any disputed item within the scope of its review within a reasonable time following its receipt of such written submissions of Purchaser and Seller. The scope of the disputes to be resolved by the Accounting Arbitrator shall be Firm is limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation unresolved portion of the Closing Statement, Seller’s Objection submitted by Seller and the Accounting Arbitrator shall Firm may not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant assign a value to any independent review. In resolving any such disagreement, disputed item greater than the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established greatest value for such disputed item as determined claimed by reference to any party or less than the lowest value assigned to for such item claimed by Seller in the Disagreement Notice and by Purchaser in the Closing Statementany party. Purchaser and Seller shall use commercially reasonable efforts make readily available to cause the Accounting Arbitrator Firm all relevant books and records and any work papers (including those of the parties’ respective accountants) relating to deliver Seller’s Objection and the Closing Date Working Capital Statement, respectively, and all other items reasonably requested by the Accounting Firm. The fees and expenses of the Accounting Firm, if any, shall be paid by the parties based on the outcome of the dispute referred to all partiesthe Accounting Firm: the party whose calculation of the Net Working Capital as of the Closing Date is farthest from the calculation thereof by the Accounting Firm shall pay such fees and expense and if the difference between the calculations of the Net Working Capital as of the Closing Date by Purchase and Seller, as promptly as practicablerespectively, a written report setting forth and the resolution calculation thereof by the Accounting Firm is equal, the parties shall equally split such fees and expenses.
(c) The Closing Date Working Capital Statement shall become final and binding on the parties upon the earliest of (i) if no Seller’s Objection has been timely filed, the Objection Deadline, (ii) the date of an agreement in writing by Seller and Purchaser that the Closing Date Working Capital Statement, together with any such disagreement determined in accordance with the terms of this Agreement. Such report modifications thereto agreed by Seller and Purchaser, shall be final and binding upon and (iii) the parties, absent manifest errordate on which the Accounting Firm shall issue its written determination with respect to any dispute relating to the Closing Date Working Capital Statement. The feesClosing Date Working Capital Statement, costs and expenses (A) as submitted by Purchaser if no timely Seller’s Objection has been given, (B) as adjusted pursuant to any agreement between the parties or (C) as determined pursuant to the decision of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by PurchaserFirm, on as the one handcase may be, and Seller, on is herein referred to as the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively“Final Working Capital Statement.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.”
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aThe Seller has delivered to the Buyer a statement (the “Estimated Closing Statement”), which is attached hereto as Part 2 of Annex A, setting forth the Group Companies’ reasonable good faith estimates of (i) the Net Working Capital as of the Seller Disclosure Letter sets forth certain current assets Measurement Time (such estimate, the “Estimated Working Capital”), as determined in accordance with the Accounting Methodology and current liabilities accounts and certain accounting principlesAnnex A, methodologies and policies used in (ii) the determination of such accounts. Such accounts Indebtedness of the Business, cumulatively, Group Companies outstanding as of immediately before the effective time of prior to the Closing (such estimate, the “Estimated Indebtedness”), (iii) the Cash of the Group Companies as of the Measurement Time (such estimate, the “Estimated Cash”), (iv) the unpaid portion of the Selling Expenses as of immediately prior to the Closing (such estimate, the “Estimated Selling Expenses”), and (v) the Non-FF Gross Revenues (the “Estimated Non-FF Gross Revenues”), which statement contains reasonable supporting calculations with respect to each of the amounts and components set forth in the Estimated Closing Statement.
(b) Within sixty (60) days after the Closing Date, the Buyer shall prepare and deliver, or cause to be prepared and delivered, to the Seller, a statement prepared in accordance with Annex A (the “Final Statement”), setting forth its calculations of (i) the Net Working Capital as of the Measurement Time (the “Final Working Capital”) as determined in accordance with the Accounting Methodology, (ii) the Indebtedness of the Group Companies outstanding as of immediately prior to the Closing (the “Final Indebtedness”), (iii) the Cash of the Group Companies as of the Measurement Time (the “Final Cash”), (iv) the unpaid portion of the Selling Expenses as of immediately prior to | the Closing (the “Final Selling Expenses”), and (v) the Non-FF Gross Revenues (the “Final Non-FF Gross Revenues”).
(c) Within thirty (30) days following receipt by the Seller of the Final Statement, the Seller shall deliver written notice (an “Objection Notice”) to the Buyer of any dispute it has with respect to the preparation or content of such statement. An Objection Notice must describe in reasonable detail the items contained in the Final Statement that the Seller disputes and the basis for any such disputes. Any items not disputed in the Objection Notice will be deemed to have been accepted by the Seller. Furthermore, if the Seller does not deliver an Objection Notice with respect to the Final Statement within such thirty (30)-day period, such statement will be final, conclusive and binding on the parties. If the Seller delivers a timely Objection Notice, the Buyer and the Seller shall negotiate in good faith to resolve the disputes set forth therein. If the Buyer and the Seller, notwithstanding such good faith effort, fail to resolve such disputes within thirty (30) days after the Seller delivers an Objection Notice, then the Buyer and the Seller, jointly, shall engage the Accounting Firm to resolve only the items then remaining in dispute (the “Disputed Items”) in accordance with the standards set forth in Section 2.05(a2.4(d).
(d) As promptly as practicable thereafter (and, in any event, within thirty (30) days after the Accounting Firm’s engagement), determined the Buyer and the Seller shall each prepare and submit a presentation to the Accounting Firm. In resolving such Disputed Items, the Accounting Firm shall consider only the Disputed Items. As soon as practicable thereafter, the Accounting Firm shall (i) make any calculations in accordance with Section 2.04(athe Accounting Methodology, (ii) shall review and determine only those items remaining in dispute between the Buyer and the Seller, and (iii) shall only be permitted or authorized to determine an amount with respect to any such disputed item that is either, or within the numerical range between, the amount of Disputed Items as proposed by Buyer in the Final Statement or the amount of such disputed item as proposed by the Seller Disclosure Letterin the Objection Notice. The Accounting Firm shall act as an expert and not an arbitrator. Save for manifest error or fraud, all determinations made by the Accounting Firm will be final, conclusive and binding on the parties. All fees and expenses relating to the work, if any, to be performed by the Accounting Firm will be allocated between the Buyer, on the one hand, and the principlesSeller, methodologies and policies set forth therein andon the other hand, in the same proportion as the differences between the aggregate amount of the Disputed Items so submitted to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute Accounting Firm that is unsuccessfully disputed by each such party (as finally determined by the “Modified Working Capital”. For Accounting Firm) and the avoidance final total determined amount of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capitalsuch items so submitted.
(be) For purposes of complying with the terms set forth in this Section 2.4, each party hereto shall cooperate with and make available to the other party and its representatives all information, records, data and working papers and shall permit access to its facilities and personnel, as may be reasonably required in connection with the preparation and analysis of the Final Statement and the resolution of any disputes under the Final Statement; provided, however, that (i) the provision of any information or access pursuant to this Section 2.4(e) will be subject to appropriate confidentiality undertakings and, if applicable, execution of customary release letters in favor of the auditors as requested by the auditors in connection with the sharing of work papers and (ii) nothing in this Section 2.4(e) will require any party to disclose information that is subject to attorney-client privilege
(f) Within ten (10) Business Days after the date on which the Final Working Capital, the Final Indebtedness, the Final Cash, the Final Selling Expenses, the Final | Non-FF Gross Revenues, and the Purchase Price resulting therefrom are finally determined pursuant to Section 2.4(d):
(i) If the Purchase Price as finally determined in accordance with this pursuant to Section 2.04 is less than 2.4(c) exceeds the Estimated Initial Purchase Price, Seller shall the Buyer will pay to Purchaser the total Seller, by wire transfer of immediately available funds to the Seller Bank Account or such other single bank account as may be designated in writing by the Seller at least two (2) Business Days prior to the date of such payment, the amount of such deficit, and if excess.
(ii) If the Initial Purchase Price exceeds the Purchase Price as finally determined pursuant to Section 2.4(c), the Buyer and the Seller will jointly instruct the Escrow Agent in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall terms of the Escrow Agreement to pay to Seller the total amount Buyer out of such excessthe Escrow Funds, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after funds to the final determination of the Purchase Price, to an bank account designated in writing by the party receiving payment no later than Buyer at least two (2) Business Days after prior to the final determination date of such payment, the Purchase Priceamount of such deficit.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and Any payments made (ivor deemed to have been made) the Purchase Price pursuant to this Section 2.04 2.4(f) shall constitute an adjustment to the Purchase Price for Tax purposes and shall be treated as such by the parties on their respective Tax Returns and in any communications with any Taxing Authorities, unless otherwise required by applicable Law.
(g) The Seller has delivered to the Buyer the unaudited consolidated balance sheets of the Group Companies as of November 30, 2024 and the unaudited statements of income and statement of cash flows for the eleven (11)-month period ended on November 30, 2024, attached hereto as Annex C (the “Closing StatementConsolidated Financial Statements”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aNot less than three Business Days prior to the anticipated Closing Date, Seller shall prepare in good faith and deliver to Purchaser a statement (the “Estimated Closing Statement”) setting forth (i) Seller’s good faith estimate of Closing Cash as of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principlesReference Time (“Estimated Cash”), methodologies and policies used in the determination (ii) Seller’s good faith estimate of such accounts. Such accounts Closing Working Capital Excess or Closing Working Capital Shortfall as of the Business, cumulativelyReference Time (“Estimated Closing Working Capital Excess” or “Estimated Closing Working Capital Shortfall”, as applicable), (iii) Indebtedness as of immediately before the effective time Reference Time (but giving effect to any subsequent incurrence of Indebtedness prior to the Closing) (“Closing Indebtedness”), (iv) Transaction Expenses incurred but not paid prior to the Closing (as set forth in Section 2.05(a)“Closing Transaction Expenses”), determined in accordance with Section 2.04(a(v) the Change of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, Control Payments to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute paid prior to the Closing (“Modified Working CapitalClosing Change of Control Payments”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (ivvi) the Purchase Price pursuant to this Section 2.04 (the “Initial Closing Statement”), which Date Amount. The Estimated Closing Statement shall be prepared in accordance with the accounting principles, methodologies Accounting Principles and policies be accompanied with reasonable supporting information used by Seller in the preparation of the estimates of each component of the Initial Closing Date Amount and invoices or similar supporting documentation with respect to the estimated Closing Transaction Expenses set forth in Section 2.04 of the Seller Disclosure Letter (and, Estimated Closing Statement. Prior to the extent not Closing, Purchaser shall have an opportunity to review the Estimated Closing Statement and discuss such statement with the persons responsible for its preparation, and Seller shall, and shall cause the Group Companies to, reasonably cooperate with Purchaser in good faith to respond to any questions regarding the Estimated Closing Statement. If Purchaser and Seller mutually agree to any modifications to any items set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests the Estimated Closing Statement prior to the extent relating to the Business (including, for the avoidance of doubtClosing, the Business Estimated Closing Statement shall be revised to reflect such modifications, and the document so modified shall constitute the Estimated Closing Statement. Purchaser’s opportunity to review shall in any Deferred Asset Jurisdictions)) throughout the periods during which no event delay the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Date and if Purchaser and Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall disagree on any items set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the Estimated Closing Statement at the end of such 60-day review period, Seller without any prejudice to Purchaser’s rights under other clauses of this Section 1.04, Seller’s positions shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included reflected in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Estimated Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. The Purchase Price shall be subject to adjustment after the Closing as set forth below:
(a) Section 2.04(a) The Parties agree that the purpose of the adjustment contemplated by this Section 3.2 is to (i) compensate Seller Disclosure Letter sets forth for payments of certain current assets costs relating to the Assigned Patent Rights, and current liabilities accounts (ii) to provide Purchaser with an adjustment to reflect any revenue received by Seller with respect to Assigned Assets, in each case, during the period between the Effective Date and certain accounting principlesthe Closing Date (collectively, methodologies and policies used the “Adjustment Amount”), in the determination of such accounts. Such accounts of the Business, cumulativelyeach case, as of immediately before the effective time of the Closing (as set forth more fully described in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.Exhibit I.
(b) If As soon as practicable, but in no event later than 60 days, after the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase PriceClosing Date, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller Purchaser a closing statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”) setting forth Seller’s good faith calculation of the Adjustment Amount Payable by Purchaser or the Adjustment Amount Payable by Seller, as applicable (in each case as defined in Exhibit I), which shall be determined as of 12:01 a.m. Pacific time on the Closing Date and take into account, and set forth as separate line items, all provisions establishing the basis for such calculation, in each case together with supporting documentation used by Seller in calculating such amounts. The Closing Statement (including the calculations therein) shall be prepared in accordance a manner consistent with Exhibit I.
(c) From and after the accounting principlesClosing, methodologies Seller shall, and policies set forth in Section 2.04 of the Seller Disclosure Letter shall cause its Affiliates to, on reasonable prior notice to Seller, (and, to the extent not set forth therein, in accordance i) provide Purchaser and its representatives with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, access during normal business hours to the books and upon reasonable notice, to their respective books, records, records and work papers of the Seller and/or its Affiliates, and (ii) cooperate with and assist Purchaser and its representatives in connection with the review of such materials, including by making available its employees, accountants and other personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolvedreasonably requested, in each case in a manner that does not interfere unreasonably with the operations of such partyconnection Purchaser’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination review of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the partiesthird-party confidentiality obligations.
(d) If Purchaser has any objections to the Closing Statement or any of the amounts included in the calculation of the Adjustment Amount set forth therein, it shall deliver to Seller a written statement (a “Notice of Objection”) setting forth in reasonable detail the particulars of such disagreement (including the specific items in the Closing Statement that are in dispute and the nature and amount of any disagreement so identified) not later than 60 days after Purchaser’s receipt of the Closing Statement (such 60-day period, the “Review Period”); provided, however, that such 60-day period shall toll during any time that Seller or any of its Affiliates fail to comply in all material respects with Section 3.2(c). If Purchaser fails to deliver a Notice of Objection within the Review Period (or applicable later date if such period is tolled), the Closing Statement and the Adjustment Amount set forth therein shall be deemed to have been accepted by Purchaser and shall be deemed final and binding upon all of the Parties. If Purchaser delivers a Notice of Objection to Seller within the Review Period, Seller and Purchaser shall work in good faith to resolve the Purchaser’s objections within the 30-day period following the delivery of the Notice of Objection.
(e) If the Final Closing Statement sets forth an Adjustment Amount Payable by Purchaser (as defined in Exhibit I), then Purchaser (or an Affiliate designated by Purchaser) shall pay in cash to Seller the Adjustment Amount as reflected in the Final Closing Statement. If the Final Closing Statement sets forth an Adjustment Amount Payable by Seller (as defined in Exhibit I), then Seller (or an Affiliate designated by Seller) shall pay in cash to Purchaser the Adjustment Amount as reflected in the Final Closing Statement. Any Purchase Price adjustment payable under this Section 3.2(e) shall be paid by wire transfer of immediately available funds, on or prior to the 5th business day after the determination of the Final Closing Statement pursuant to this Section 3.2. Without limiting the remedies available for any failure to pay the Adjustment Amount within the 5 business days provided in this Section 3.2(e), any payment due and not timely paid in accordance with this Section 3.2(e) shall accrue interest at the rate of 6% per annum (the “Interest Rate”) from the Final Closing Statement Date until the date of payment.
(f) In the event that Seller and Purchaser are unable to resolve in writing any disagreement of the Purchaser’s objections in the Notice of Objection within the 30-day period (or such longer period as contemplated may be agreed by Section 2.04(cSeller and Purchaser) following the delivery of a Notice of Objection, the resolution of all unresolved items (“Disputed Items”) shall be submitted to an arbiter that is a nationally-recognized accounting firm to be mutually selected by Purchaser and Seller to resolve any remaining disagreements. If (i) such mutually selected arbiter is not willing and able to serve in such capacity or (ii) Purchaser and Seller otherwise fail to appoint an arbiter pursuant to the immediately preceding sentence within thirty (30) 10 business days after delivery the expiration of the resolution period set forth in the immediately preceding sentence, then Purchaser shall deliver to Seller a list of 3 other arbiters of recognized national standing and Seller shall select one of such 3 arbiters (such arbiter as is ultimately selected pursuant to the aforementioned procedures being the “Arbiter”). Purchaser and Seller shall execute any agreement reasonably required by the Arbiter for its engagement hereunder. Purchaser and Seller shall, promptly (but in any event within 10 business days) following the formal engagement of the Arbiter, provide the Arbiter (copying the other upon submission) with a Disagreement Noticesingle written presentation setting forth its respective calculations of and assertions regarding the Disputed Items. Upon receipt of the other Party’s presentation, Purchaser and Seller shall jointly select be entitled (no later than 5 business days following such receipt) to submit to the Arbiter a mutually acceptable nationally recognized third party accounting firm, single written response to such other Party’s initial submission setting forth such Party’s objections or rebuttals to the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts calculations and/or assertions set forth in such initial submission (which responses the Closing Statement Arbiter shall promptly distribute to the other applicable Party). The Arbiter shall be instructed to render its determination with respect to such disagreements as soon as reasonably practicable (which the Parties agree shall not be later than 45 days following the formal engagement of the Arbiter). The adjustment is not intended to which Purchaser has disagreed permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purposes of determining the Adjustment Amount, and the Arbiter shall not conduct an independent investigation but shall instead base its determination on the written submissions of the Parties delivered pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with this Section 3.2(f) with respect to the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation Disputed Items. The determination of the Closing StatementArbiter, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller acting as an expert and not pursuant an arbitrator, with respect to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount disagreements shall be binding and final for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms purposes of this Agreement. Such report The term “Final Closing Statement” as used in this Agreement shall be mean the Closing Statement that is deemed final and binding upon in accordance with Section 3.2(d) or the parties, absent manifest error. The fees, costs and expenses of Closing Statement resulting from the Accounting Arbitrator arising determinations made by the Arbiter in connection accordance with this Section 2.04 shall be borne by Purchaser3.2(f), on as applicable (the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in date that the Closing Statement and is deemed to be the Disagreement NoticeFinal Closing Statement, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(cthe “Final Closing Statement Date”).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later Not fewer than two (2) Business Days after days prior to the final determination Closing Date, the Seller will prepare and deliver to the Purchaser a calculation of the Purchase Price.estimated Closing Working Capital, which shall represent the Seller’s reasonable estimate of the Closing Working Capital as of the close of business on the Closing Date and shall be prepared in accordance with GAAP on the same basis and applying the same accounting principles, policies, practices and methodology that were used in preparing the Audited Financials (the “Estimated Closing Working Capital Statement”)
(cb) As promptly as practicable Within sixty (and, in any event, within ninety (9060) days after the Closing), the Purchaser shall prepare and deliver to the Seller a statement setting forth Purchaser’s its calculation of (i) Modified Closing Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which statement shall be prepared in accordance with GAAP on the same basis and applying the same accounting principles, methodologies policies, practices and policies set forth methodology that were used in Section 2.04 preparing the Estimated Closing Working Capital Statement (the “Closing Working Capital Statement”).
(c) After receipt of the Closing Working Capital Statement, the Seller Disclosure Letter shall have thirty (and30) days (the “Review Period”) to review the Closing Working Capital Statement. During the Review Period, to the extent not set forth therein, in accordance Purchaser shall provide the Seller and its representatives with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, access during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests advance notice to the extent working papers of the Purchaser relating to the Business (Closing Working Capital Statement, and the Purchaser shall cooperate with the Seller and its representatives to provide them with other information used in preparing the Closing Working Capital Statement reasonably requested by the Seller and its representatives including, for the avoidance of doubtupon reasonable advance notice, the Business in any Deferred Asset Jurisdictions)) throughout the periods access during which the Closing Statement is being prepared or evaluated normal business hours to relevant personnel and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination records of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) On or prior to the last day of the Review Period, the Seller may object to the Closing Working Capital Statement by delivering to the Purchaser a written statement setting forth the Seller’s objections in reasonable detail, indicating each disputed item or amount and the basis for the Seller’s disagreement therewith (the “Statement of Objections”). If the Seller fails to deliver the Statement of Objections before the expiration of the Review Period, the Purchaser’s determination of Closing Working Capital as set forth in the Closing Working Capital Statement shall be deemed to be final and binding on the Seller.
(e) If the Seller delivers the Statement of Objections before the expiration of the Review Period, the Seller and the Purchaser and Seller shall use good faith efforts to resolve any dispute involving any matter set forth in the Statement of Objections. If the parties are unable to resolve any disagreement as contemplated by Section 2.04(c) dispute involving any matter set forth in the Statement of Objections within thirty (30) days after the delivery by Seller of a Disagreement Noticethe Statement of Objections, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected dispute shall be referred for decision to herein as an Accounting Firm to decide the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment dispute within thirty (30) days of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreementsuch referral. The scope of the disputes to be resolved by the Accounting Arbitrator Firm’s engagement shall be limited to whether such calculation was done the resolution of the disputed items described in accordance with the terms hereof, Statement of Objections that the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used Seller and the Purchaser are unable to prepare the Closing Statementresolve, and whether there were mathematical errors in the calculation recalculation, if any, of the Closing Statement, and Working Capital in light of such resolution. The decision by the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant Firm with respect to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report items shall be final and binding on the Seller and the Purchaser and shall be based upon a review of any relevant books and records or other documents requested by the parties, absent manifest errorAccounting Firm. The fees, costs fees and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 Firm shall be borne paid by Purchaserthe Seller, on the one hand, and Sellerthe Purchaser, on the other hand, in proportion based upon the percentage that the amount actually contested but not awarded to the differences between Seller or the Purchase Price as determined Purchaser, respectively, bears to the aggregate amount actually contested by the Accounting Arbitrator and Seller or the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c)Purchaser.
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately On or before the effective time fifteenth (15th) day following the final determination of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments Working Capital pursuant to this Section 2.043.3, either (i) the Purchaser shall deliver to the Seller the amount, if any, by which the Closing Working Capital as ultimately determined pursuant to this Section 3.3 is greater than the Closing Working Capital as reflected on the Estimated Closing Working Capital Statement, in immediately available funds by wire transfer to an account designated in writing by the Seller, or (ii) the Seller shall deliver to the Purchaser the amount, if any, by which the Closing Working Capital as ultimately determined pursuant to this Section 3.3 is less than the Closing Working Capital as reflected on the Estimated Closing Statement, in immediately available funds by wire transfer to an account designated in writing by the Purchaser.
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Purchase Price Adjustment. (ai) Within 60 days after the Closing Date, Seller shall prepare and deliver to Buyer a statement (the "STATEMENT"), certified by an independent, nationally recognized accounting firm retained by Seller ("SELLER'S ACCOUNTANTS") to the effect that the Statement has been prepared in compliance with this Section 2.04(a1.02(d), setting forth Working Capital (as defined below) as of the close of business on the Closing Date ("CLOSING WORKING CAPITAL") and a certificate of Seller Disclosure Letter sets forth certain current assets that the Statement has been prepared in compliance with the requirements of this Section 1.02(d). Buyer shall cause the Transferred Subsidiaries and current liabilities accounts their employees to assist Seller and certain accounting principles, methodologies and policies used Seller's Accountants in the determination of such accounts. Such accounts preparation of the BusinessStatement. Buyer or an independent, cumulatively, as of immediately before nationally recognized accounting firm retained by Buyer ("BUYER'S ACCOUNTANTS") may participate in the effective time preparation of the Closing (as set forth in Section 2.05(a))Statement; PROVIDED, determined in accordance with Section 2.04(a) HOWEVER, that Buyer acknowledges that Seller shall have the primary responsibility and authority for preparing the Statement and Seller's Accountants shall have the primary responsibility and authority for certifying the Statement. During the 30-day period following Buyer's receipt of the Statement, Buyer and Buyer's Accountants shall be permitted to review the working papers of Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, Seller's Accountants relating to the extent Statement. The Statement shall become final and binding upon the parties on the thirtieth day following delivery thereof, unless Buyer gives written notice of its disagreement with the Statement ("NOTICE OF DISAGREEMENT") to Seller on or prior to such date. Any Notice of Disagreement shall (A) specify in reasonable detail the nature of any disagreement so asserted, (B) only include disagreements based on mathematical errors or based on Closing Working Capital not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined being calculated in accordance with this Section 2.04 1.02(d), (C) be accompanied by a certificate of Buyer that it has complied with the covenants set forth in Section 1.02(d)(iv) and (D) be accompanied by a certificate of Buyer's Accountants that the Notice of Disagreement has been prepared in compliance with this Section 1.02(d) (which certificate may be qualified or limited in a manner that is substantially similar to any qualification or limitation contained in the certificate delivered by Seller's Accountants in connection with the Statement). If a Notice of Disagreement is received by Seller in a timely manner, then the Statement (as revised in accordance with clause (I) or (II) below) shall become final and binding upon Seller and Buyer on the earlier of (I) the date Seller and Buyer resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement or (II) the date any disputed matters are finally resolved in writing by the Accounting Firm (as defined below). During the 30-day period following the delivery of a Notice of Disagreement, Seller and Buyer shall seek in good faith to resolve in writing any differences which they may have with respect to the matters specified in the Notice of Disagreement. During such period Seller and Seller's Accountants shall have access to the working papers of Buyer and Buyer's Accountants relating to the Notice of Disagreement. At the end of such 30-day period, Seller and Buyer shall submit to a United States office of a nationally recognized independent public accounting firm (the "ACCOUNTING FIRM") for review and resolution any and all matters which remain in dispute and which were properly included in the Notice of Disagreement. The Accounting Firm shall be KPMG Peat Marwick LLP or, if such firm is unable or unwilling to act, such other United States office of a nationally recognized independent public accounting firm as shall be agreed upon by the parties hereto in writing. Seller and Buyer shall use reasonable efforts to cause the Accounting Firm to render a decision resolving the matters submitted to it within 30 days following such submission. Seller and Buyer agree that judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the party against which such determination is to be enforced. The fees and expenses of the Accounting Firm incurred pursuant to this Section 1.02(d) shall be borne 50% by Seller and 50% by Buyer. The fees and disbursements of Seller's Accountants incurred in connection with their certification of the Statement and review of any Notice of Disagreement shall be borne by Seller, and the fees and disbursements of Buyer's Accountants incurred in connection with their review of the Statement and certification of any Notice of Disagreement shall be borne by Buyer.
(ii) The Purchase Price shall be increased by the amount by which Closing Working Capital is greater (less negative) than $(163,530,447) (the "WC AMOUNT"), and the Purchase Price shall be decreased by the amount by which Closing Working Capital is less (more negative) than the WC Amount (the Purchase Price as so increased or decreased shall hereinafter be referred to as the "ADJUSTED PURCHASE PRICE"). If the Purchase Price is less than the Estimated Adjusted Purchase Price, Seller shall pay to Purchaser the total amount of such deficitBuyer shall, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds is more than the Estimated Adjusted Purchase Price, Purchaser shall pay to Seller shall, within 10 business days after the total Statement becomes final and binding on the parties, make payment by wire transfer in immediately available funds of the amount of such excessdifference, in either case together with interest thereon at a rate equal to the rate of interest from time to time announced publicly by wire transfer of immediately available U.S. dollar fundsCitibank, within three (3) Business Days after N.A. as its prime rate, calculated on the final determination basis of the Purchase Priceactual number of days elapsed over 365, to an account designated by from the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, Date to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance date of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the partiespayment.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(a) of Within 120 days after the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principlesClosing, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, Parent may object to the extent not set forth thereincalculation of Company Cash, in accordance with U.S. GAAPCompany Debt, shall constitute the “Modified Transaction Expenses or Closing Net Working Capital”. For the avoidance of doubt, amounts Capital Adjustment included in the determination Closing Spreadsheet (collectively, the “Calculations”), by delivering to the Stockholder a notice (the “Parent Notice”) setting forth Parent’s calculation of Closing Net IndebtednessCompany Cash, Closing Company Debt, Transaction Expenses and Pension Plan Purchase Price the Closing Net Working Capital Adjustment shall be excluded from and the determination of amount by which Company Cash, Company Debt, Transaction Expenses or Company Net Working Capital as calculated by Parent is more or less than Estimated Company Cash, Estimated Company Debt, Estimated Transaction Expenses or the Modified Estimated Closing Net Working CapitalCapital Adjustment, in each case together with supporting documentation, information and calculations.
(b) The Stockholder, after receiving any relevant information which it may reasonably request, may object to the calculation of Company Cash, Company Debt, Transaction Expenses or Closing Net Working Capital Adjustment set forth in the Parent Notice by providing written notice of such objection to Parent within 30 days after Parent’s delivery of the Parent Notice (the “Notice of Objection”), together with supporting documentation, information and calculations. Any matters not expressly set forth in the Notice of Objection shall be deemed to have been accepted by the Stockholder on behalf of the Stockholder.
(c) If the Purchase Price as finally determined Stockholder timely provides the Notice of Objection, then Parent and the Stockholder shall confer in good faith for a period of up to 30 days following delivery of the Notice of Objection in an attempt to resolve any disputed matter set forth in the Notice of Objection, and any resolution by them shall be in writing and shall be final and binding on the Parties.
(d) If, after the 30 day period set forth in Section 2.07(c), Parent and the Stockholder cannot resolve any matter set forth in the Notice of Objection, then Parent and the Stockholder shall engage ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, or, if such firm is not able or willing to so act, another nationally recognized auditing firm acceptable to both Parent and the Stockholder and independent of both the Company and Parent (the “Reviewing Accountant”) to review only the matters in the Notice of Objection that are still disputed by ▇▇▇▇▇▇ and the Stockholder. The Reviewing Accountant shall base its review solely on the presentations and supporting material provided by the Parties and not on an independent review. After its review, the Reviewing Accountant shall promptly (and in any event within 60 days following its engagement) determine the resolution of such remaining disputed matters, which determination shall be final and binding on the Parties, and the Reviewing Accountant shall provide Parent and the Stockholder with a calculation of Company Cash, Company Debt, Transaction Expenses and Closing Net Working Capital Adjustment in accordance with this Section 2.04 such determination.
(e) If the Final Amount is less than the Estimated Purchase Closing Amount, then within two Business Days following the final determination of the Final Adjustment, and provided there is no dispute between the Parties, the Parties shall jointly instruct the Escrow Agent to immediately release to Parent, as directed by Stockholder in Stockholder’s sole discretion, one of the following (or a combination thereof): (i) a number of Parent Payment Shares equal in value to the amount of the Final Adjustment, (ii) an amount in cash equal to the Final Adjustment (provided there is sufficient cash in the Escrow Account), or (iii) a combination of Parent Payment Shares and cash, in each case totaling the amount of the Final Adjustment. For purposes of this Section 2.07(e), the number of Parent Payment Shares to be released to Parent shall be calculated using the Parent Trading Price.
(f) If the Final Amount is greater than the Closing Amount, Seller then within ten Business Days following the final determination of the Final Adjustment, and provided there is no dispute between the Parties, Parent shall pay to Purchaser the total amount of the Final Adjustment in Parent Payment Shares to the Stockholder; provided, however, that if such deficitpayment would exceed 19.99% of the outstanding Parent Common Stock on the date of payment or if Parent is otherwise unable to issue all of the Parent Payment Shares required to be issued under this Agreement, and if the Purchase Price as finally determined portion of the Parent Payment Shares exceeding 19.99% or such portion that Parent is otherwise unable to issue shall instead be paid in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case cash by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after funds to the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase PriceStockholder.
(cg) As promptly as practicable (and, in any event, within ninety (90) days after If the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which Final Amount is neither greater than nor less than the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolvedAmount, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall then there will be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentenceno additional adjustments, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall Final Adjustment will be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties$0.
(dh) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses expenses, if any, of the Accounting Arbitrator arising in connection with this Section 2.04 Reviewing Accountant shall be borne paid pro rata by Purchaser, Parent on the one hand, hand and Seller, by the Stockholder on the other hand, in proportion hand on behalf of the Stockholder from the Stockholder Expense Account based on the inverse of the percentage that the Reviewing Accountant’s determination (before such allocation) bears to the differences between total amount of the Purchase Price total items in dispute as determined by originally submitted to the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelyReviewing Accountant.
(ei) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 The Final Adjustment shall be allocated in a manner consistent with any allocation agreed treated as an adjustment to pursuant to Section 2.03(c)the Merger Consideration for Tax purposes, unless otherwise required by applicable Law.
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
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Sources: Merger Agreement (Ondas Inc.)
Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (andpracticable, in any event, within ninety (90) but no later than 30 calendar days after the Closing)Closing Date, Purchaser Buyer shall prepare cause to be prepared and deliver delivered to Seller a the closing statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which . The Closing Statement shall present Buyer’s good faith calculation of the value of the Purchased Inventory as of the close of business on the Closing Date (“Closing Inventory Value”) and shall be prepared calculated in accordance with GAAP, the past practices of Seller, and the accounting principles, methodologies and policies protocol used by Seller to prepare the Inventory workpaper as set forth in Section 2.04 on Schedule 3.2(a), which includes agreed-upon Purchased Inventory unit costs and the value of the Seller Disclosure Letter (and, to the extent not set forth therein, Purchased Inventory in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations 3.2.
(b) Within 30 calendar days of such partySeller’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination receipt of the Closing Statement, Seller shall notify Purchaser in writing may deliver a written notice of such disagreement within sixty (60a “Dispute Notice”) days after delivery to Buyer setting forth Seller’s good faith calculation of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”)Inventory Value. If Seller fails to does not deliver a Disagreement Dispute Notice by the end of to Buyer within such 60-30 calendar day period, Seller shall be deemed to have accepted then the Closing Statement delivered by Purchaser. Matters included in the calculations Inventory Value set forth in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreementfinal, and any resolution agreed to in writing by Purchaser and Seller shall be final conclusive and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator parties in all respects. Any such Dispute Notice shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only specify those items and or amounts set forth in the Closing Statement as to which Purchaser has disagreed Seller disagrees, and Seller shall be deemed to have agreed with all other items, amounts and calculations contained in the Closing Statement delivered pursuant to Section 3.2(a) not objected to in such notice.
(c) If a Disagreement Dispute Notice is duly delivered pursuant to Section 3.2(b), Buyer and Seller shall, during the ten Business Days following such delivery, use their commercially reasonable efforts to reach agreement on the disputed items or amounts in order to determine, as may be required, the amount of Closing Inventory Value. If the parties so resolve all disputes, the Closing Inventory Value, as amended to the extent necessary to reflect the resolution of the dispute, shall be conclusive and binding on the parties. If during such period, Buyer and Seller are unable to reach an agreement, they shall promptly thereafter cause the Independent Accountant to review the disputed items or amounts for the purpose of resolving each disputed item and calculating Closing Inventory Value (it being understood that in making such calculation, the Independent Accountant shall be functioning as an arbitrator and not as an accountant). In resolving such disputed items and making such calculation, the Independent Accountant shall consider only those items or amounts in the Closing Statement and the Dispute Notice and Purchaser and Seller have not resolved their disagreement. The scope the actual quantities of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereofPurchased Inventory, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent reviewif necessary. In resolving any such disagreementdisputed item, the Accounting Arbitrator Independent Accountant may only select an amount for each not assign a value to any item in dispute that is within range of values established greater than the greatest value for such disputed item as determined claimed by reference to either party or less than the smallest value assigned to for such item claimed by Seller in the Disagreement Notice and by Purchaser in the Closing Statementeither party. Purchaser and Seller The Independent Accountant shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all partiesBuyer and Seller, as promptly as practicable, practicable (but in any case no later than 30 calendar days from the date of engagement of the Independent Accountant) a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreementcalculation. Such report shall be final and binding upon Buyer and Seller with no right to appeal the parties, absent decision of the Independent Accountant and which shall not be subject to collateral attack for any reason (other than fraud or manifest error) and shall be in writing and signed by the Independent Accountant and made in accordance with this Agreement. Buyer and Seller agree to execute, if requested by the Independent Accountant, a reasonable engagement letter in customary form. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 Independent Accountant’s review and report shall be borne by Purchaser, on the one handparty whose aggregate estimate of the disputed amounts differs most greatly from the determination of the Independent Accountant.
(d) Buyer and Seller shall, and Sellershall cause their respective Representatives to, on cooperate and assist in the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in preparation of the Closing Statement and the Disagreement Noticecalculation of Closing Inventory Value and in the conduct of the review referred to in Section 3.2(c), respectivelyincluding the making available to the extent necessary of books, records, work papers and personnel.
(e) Purchaser and If the Final Inventory Value is less than the Inventory Target, Seller agree that any payments made pursuant shall pay to this Buyer, in the manner set forth in Section 2.04 3.2(f), the amount of the shortfall. If the Final Inventory Value is more than the Inventory Target, Buyer shall pay to Seller, in the manner set forth in Section 3.2(f), the amount of the excess. If the Final Inventory Value is equal to the Inventory Target, there shall be allocated in a manner consistent with any allocation agreed no adjustment to pursuant to Section 2.03(c)the Purchase Price.
(f) With respect Any payment pursuant to Cash and Cash Equivalents and Indebtedness of Section 3.2(e) shall be made within five Business Days after the Business denominated in currencies other than U.S. dollarsFinal Inventory Value has been determined by wire transfer by Buyer or Seller, as the Applicable Exchange Rate for each such currency as case may be, of immediately before the effective time available funds to an account of the Closing such other party as published may be designated in writing by Bloomberg (BGN New Yorksuch other party; provided, however, if Seller owes Buyer any amount pursuant to Section 3.2(e), Buyer may, but shall not be used required to, cause the Escrow Agent to convert pay to Buyer any such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with amount from the adjustments pursuant to this Section 2.04Escrow Amount.
Appears in 1 contract
Purchase Price Adjustment. (a) No later than three Business Days prior to the Closing Date, the Seller shall deliver to the Buyer a statement prepared in accordance with this Section 2.04(a2.4(a) (the “Estimated Closing Statement”). The Estimated Closing Statement shall be prepared and calculated in a manner consistent with the applicable definitions contained in this Agreement, the Sample Calculation and in accordance with the Accounting Principles. The Estimated Closing Statement shall set forth the Seller’s good faith estimate of: (i) the Closing Working Capital (such estimate, the “Estimated Closing Working Capital”); (ii) the Closing Cash (such estimate, the “Estimated Closing Cash”); (iii) the Closing Indebtedness (such estimate, the “Estimated Closing Indebtedness”); (iv) the Closing Transaction Costs (such estimate, the “Estimated Closing Transaction Costs”); (v) the Escrow Amount (which, for the avoidance of doubt, shall not be an estimate, but shall be the amount set forth in this Agreement); and (vi) the resulting Closing Payment. The Estimated Closing Statement shall also include instructions that identify (A) the bank account(s) for the Seller and the amount of the Closing Payment to be paid to the Seller’s bank account(s) and (B) the bank accounts designated to facilitate direct payment by the Buyer of the Estimated Closing Indebtedness, the Estimated Closing Transaction Costs, and the Escrow Amount to the applicable payees on behalf of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts the Company Entities. The Estimated Closing Working Capital, the Estimated Closing Cash, the Estimated Closing Indebtedness and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Estimated Closing Transaction Costs (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Estimated Closing Statement delivered by the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment Buyer) shall be excluded from binding on the determination Parties for the purposes of determining the Modified Working CapitalClosing Payment.
(b) If As soon as reasonably practicable following the Purchase Price as finally determined Closing, but in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment any event no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) 90 days after the Closing)Closing Date, Purchaser shall the Buyer will prepare and deliver deliver, or cause to be prepared and delivered, to the Seller a an unaudited statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which setting forth the Buyer’s good faith calculation of each of the Closing Amounts and the Closing Payments. The Closing Statement shall be prepared and calculated in accordance with the accounting principlesAccounting Principles. In the event the Buyer does not deliver the Closing Statement to the Seller within 90 days after the Closing Date, methodologies and policies set forth in Section 2.04 the Estimated Closing Statement shall be deemed to have been delivered by the Buyer to the Seller on the date that is 90 days after the Closing Date.
(c) Upon receipt from the Buyer, the Seller shall have 45 days to review the Closing Statement (the “Review Period”). At the request of the Seller, the Buyer shall (i) reasonably cooperate with and assist, and shall cause its Subsidiaries, including the Company Entities, and each of their respective Representatives to reasonably cooperate with and assist, the Seller Disclosure Letter and its Representatives in the review of the Closing Statement (and, including by executing such documents and other instruments and taking further actions as may be reasonably required to cause the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other Buyer and the Company Entities and their respective accountants to deliver to the Seller and its Representatives reasonable access, during normal business hours and upon reasonable notice, to copies of their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business Company Entities) and (including, ii) provide the Seller and its Representatives with any information reasonably requested by the Seller that is necessary for the avoidance its review of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes Statement; provided, that may arise under this Section 2.04 are being resolved, in each case such access shall be in a manner that does not materially interfere unreasonably with the normal business operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser Buyer or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable LawsCompany. If the Seller disagrees with the determination Buyer’s computation of the Closing Amounts (each as set forth in the Closing Statement), the Seller shall notify Purchaser in writing shall, on or prior to the last day of such disagreement within sixty the Review Period, deliver a written notice to the Buyer (60the “Notice of Objection”) days after delivery that sets forth the Seller’s objections to the Buyer’s calculation of the Closing StatementAmounts, as applicable. Any Notice of Objection shall specify those items or amounts with which written notice the Seller disagrees and shall set forth any the Seller’s calculation of the Closing Amounts and the Closing Payment based on such disagreement in reasonable detail objections.
(“Disagreement Notice”). d) If the Seller fails to does not deliver a Disagreement Notice by of Objection to the end of such 60-day periodBuyer with respect to an item contained in the Closing Statement within the Review Period, the Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in Buyer’s calculation of the calculations in underlying item of the Closing Statement to which Seller does not object in the Disagreement Notice Amounts, as applicable, and such calculation shall be deemed accepted by final, conclusive and binding. If the Seller delivers a Notice of Objection to the Buyer within the Review Period, the Buyer and shall not be subject to further dispute the Seller shall, during the 30 days following such delivery or review. Purchaser and Seller shall negotiate in any mutually agreed extension thereof, use their good faith efforts to resolve any such disagreementreach agreement on the disputed items and amounts in order to determine the amount of the disputed Closing Amounts, as applicable, and the Closing Payment. If, at the end of such 30-day period or any resolution mutually agreed to in writing by Purchaser extension thereof, the Buyer and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Noticetheir disagreements, Purchaser and Seller they shall jointly select retain and refer their disagreements to KPMG, US, LLP or if such Person refuses such engagement, a nationally recognized independent accounting firm mutually acceptable nationally recognized third party accounting firm, to the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by Buyer and the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting ArbitratorIndependent Expert”). In The Buyer and the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator Independent Expert promptly to consider only those review this Section 2.4, as well as the Closing Statement, Notice of Objection and any other materials reasonably requested by the Independent Expert, and to determine, solely with respect to the disputed items and amounts so submitted, whether and to what extent, if any, the Closing Amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreementrequire adjustment. The scope Independent Expert shall base its determination solely on written submissions by the Buyer and the Seller and the terms of this Agreement and not on an independent review. The Parties shall make available to the Independent Expert all relevant books and records and other items reasonably requested by the Independent Expert. As promptly as practicable, but in no event later than 45 days after its retention, the Independent Expert shall deliver to the Buyer and the Seller a report that sets forth its resolution of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, disputed items and whether there were mathematical errors in the amounts and its calculation of the Closing StatementAmounts; provided, and however, that the Accounting Arbitrator shall Independent Expert may not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant assign a value to any independent review. In resolving any such disagreement, item greater than the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established greatest value for such disputed item as determined claimed by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by PurchaserBuyer, on the one hand, and the Seller, on the other hand, nor less than the smallest value for such item claimed by the Buyer, on the one hand, and the Seller, on the other hand. The decision of the Independent Expert shall be final, conclusive and binding on the Parties (absent manifest error), and no determinations by the Independent Expert, including any work or analyses performed by the Independent Expert in proportion connection with its resolution of any dispute under this Section 2.4(d), shall be admissible as evidence in any Proceeding among the Parties, except to the differences extent necessary to enforce payment obligations under this Section 2.4. The costs and expenses of the Independent Expert shall be allocated between the Purchase Price Buyer, on the one hand, and the Seller, on the other hand, based upon the percentage that the portion of the aggregate contested amount not awarded to such Party bears to the aggregate amount actually contested by such Party, as determined by the Accounting Arbitrator Independent Expert. For example, if (i) the Seller submits a Notice of Objection for $1,000, (ii) the Buyer contests only $500 of the amount claimed by the Seller, and (iii) the Independent Expert ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of the Independent Expert would be allocated 60% (i.e., 300/500) to the Buyer and 40% (i.e., 200/500) to the Seller. The Buyer and the asserted Purchase Price set forth Seller agree to execute, if requested by the Independent Expert, a reasonable engagement letter, including customary indemnities in favor of the Closing Statement and the Disagreement Notice, respectivelyIndependent Expert.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for For purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.Agreement:
Appears in 1 contract
Purchase Price Adjustment. (i) At least three (3) Business Days prior to the Closing (or, if later, two (2) Business Days after delivery of the Closing Date Notice), Seller shall prepare and deliver to Buyer (a) Section 2.04(a) an estimated consolidated balance sheet of August Cayman Intermediate and its Subsidiaries as of the Seller Disclosure Letter sets Adjustment Calculation Time (the “Estimated Closing Balance Sheet”), and (b) a statement (the “Estimated Closing Statement”) setting forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time Seller’s good faith estimate of the Closing Net Working Capital (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Estimated Closing Net Working Capital”. For ), the Closing Net Indebtedness (the “Estimated Closing Net Indebtedness”) and the Purchase Price resulting therefrom (the “Estimated Purchase Price”), which Estimated Purchase Price, for the avoidance of doubt, amounts included in shall be calculated as the determination of result equal to (i) the Base Purchase Price, minus (ii) the Estimated Closing Net Indebtedness, plus (iii) the amount (if any) by which the Estimated Closing Transaction Expenses Net Working Capital exceeds $78,400,000, minus (iv) the amount (if any) by which $68,400,000 exceeds the Estimated Closing Net Working Capital. The Estimated Closing Balance Sheet shall be prepared on a consolidated basis in accordance with GAAP applied on a basis consistent with the methodologies, practices, estimation techniques, assumptions and Pension Plan principles used in the preparation of the Latest Balance Sheet. The Estimated Closing Statement shall, with respect to the Estimated Closing Net Working Capital and any Cash included in the Estimated Closing Net Indebtedness, be derived from the Estimated Closing Balance Sheet, and shall, with respect to the Estimated Closing Net Working Capital and the Estimated Closing Net Indebtedness and the Estimated Purchase Price resulting therefrom, be prepared in accordance with the definitions in this Agreement. From and after delivery of the Estimated Closing Balance Sheet and the Estimated Closing Statement until the Closing, Seller shall, and shall cause the Company Entities to, (1) provide Buyer and its Representatives with reasonable access at all reasonable times during normal business hours and upon reasonable prior notice to the books and records, supporting data, facilities and employees of the Company Entities (including all work papers and other documents and all relevant personnel responsible for accounting and finance) and the Company Entities’ accountants and advisors, in each case to the extent reasonably requested by Buyer or any of its Representatives in connection with their review of the Estimated Closing Balance Sheet and the Estimated Closing Statement, and (2) cooperate with Buyer and its Representatives in connection with their review of the Estimated Closing Balance Sheet and the Estimated Closing Statement.
(ii) Within ninety (90) days following the Closing Date, Buyer shall prepare and deliver to Seller (a) an unaudited consolidated balance sheet of August Cayman Intermediate and its Subsidiaries as of the Adjustment Calculation Time (the “Closing Balance Sheet”), and (b) a statement (the “Closing Statement”) setting forth Buyer’s calculation of the Closing Net Working Capital, the Closing Net Indebtedness and the Purchase Price resulting therefrom. The Closing Balance Sheet shall be excluded prepared on a consolidated basis in accordance with GAAP applied on a basis consistent with the methodologies, practices, estimation techniques, assumptions and principles used in the preparation of the Latest Balance Sheet. The Closing Statement shall, with respect to the Closing Net Working Capital and any Cash included in the Closing Net Indebtedness, be derived from the Closing Balance Sheet, and shall, with respect to the Closing Net Working Capital and the Closing Net Indebtedness and the Purchase Price resulting therefrom, be prepared in accordance with the definitions in this Agreement. After Seller’s receipt of the Closing Balance Sheet and the Closing Statement, Buyer shall, and shall cause the Company Entities to, (1) provide Seller and its Representatives with reasonable access at all reasonable times during normal business hours and upon reasonable prior notice to the books and records, supporting data, facilities and employees of Buyer and its Subsidiaries (including the Company Entities) (including all work papers and other documents and all relevant personnel responsible for accounting and finance) and their accountants and advisors, in each case to the extent reasonably requested by Seller or any of its Representatives in connection with their review of the Closing Balance Sheet and the Closing Statement, and (2) cooperate with Seller and its Representatives in connection with their review of the Closing Balance Sheet and the Closing Statement.
(iii) The Closing Balance Sheet and the Closing Statement, and the Closing Net Working Capital, the Closing Net Indebtedness and the Purchase Price set forth thereon, shall become final and binding upon the parties sixty (60) days following Seller’s receipt thereof unless Seller gives written notice of its good faith disagreement (a “Notice of Disagreement”) to Buyer prior to such date; provided that the Closing Balance Sheet and the Closing Statement, and the Closing Net Working Capital, the Closing Net Indebtedness and the Purchase Price set forth thereon, shall become final and binding upon the parties upon Seller’s delivery, prior to the expiration of such sixty (60)-day period, of written notice to Buyer of its acceptance of the Closing Balance Sheet and the Closing Statement, and the Closing Net Working Capital, the Closing Net Indebtedness and the Purchase Price set forth thereon. Any Notice of Disagreement shall specify in reasonable detail the nature and amount of any disagreement so asserted.
(iv) If a timely Notice of Disagreement is delivered by Seller, then the Closing Balance Sheet and the Closing Statement (as revised in accordance with this Section 1E(iv)), and the Closing Net Working Capital, the Closing Net Indebtedness and the Purchase Price set forth thereon, shall become final and binding upon the parties on the earlier of (a) the date all matters specified in the Notice of Disagreement are finally resolved in writing by Buyer and Seller and (b) the date all matters specified in the Notice of Disagreement not resolved by Buyer and Seller are finally resolved in writing by a nationally recognized accounting, consulting or valuation firm (other than a so-called “Big Four” accounting firm) mutually selected by Buyer and Seller (such firm, the “Arbiter”). The Closing Balance Sheet and the Closing Statement shall be revised to the extent necessary to reflect any mutually agreed final resolution by Buyer and Seller and/or any final resolution made by the Arbiter in accordance with this Section 1E(iv). During the thirty (30) days immediately following the delivery of a Notice of Disagreement, or such longer period as Buyer and Seller may agree in writing, Buyer and Seller shall seek in good faith to resolve in writing any differences which they may have with respect to any matter specified in the Notice of Disagreement, and all such discussions related thereto shall (unless otherwise agreed by Buyer and Seller) be governed by Rule 408 of the Federal Rules of Evidence (as in effect as of the date of this Agreement) and any applicable similar state rule. At the end of such thirty (30)-day period or such agreed-upon longer period, Buyer and Seller shall submit to the Arbiter for review and resolution all matters (but only such matters) which remain in dispute and which were properly included in the Notice of Disagreement. Buyer and Seller shall instruct the Arbiter to, and the Arbiter shall, make a final determination of the Modified items included in the Closing Balance Sheet and the Closing Statement (but only to the extent such amounts are in dispute) in accordance with the guidelines and procedures set forth in this Agreement. Buyer and Seller will cooperate with the Arbiter during the term of its engagement. Buyer and Seller shall instruct the Arbiter not to, and the Arbiter shall not, assign a value to any item in dispute greater than the greatest value for such item assigned by Buyer, on the one hand, or Seller, on the other hand, or less than the smallest value for such item assigned by Buyer, on the one hand, or Seller, on the other hand. Buyer and Seller shall also instruct the Arbiter to, and the Arbiter shall, make its determination based solely on written presentations by Buyer and Seller that are in accordance with the guidelines and procedures set forth in this Agreement (i.e., not on the basis of an independent review). The Closing Balance Sheet and the Closing Statement, and the Closing Net Working Capital, the Closing Net Indebtedness and the Purchase Price set forth thereon, shall become final and binding on the parties hereto on the date the Arbiter delivers its final resolution in writing to Buyer and Seller (which final resolution shall be requested by the parties to be delivered not more than thirty (30) days following submission of such disputed matters), and such resolution by the Arbiter shall not be subject to court review or otherwise appealable. The fees and expenses of the Arbiter pursuant to this Section 1E(iv) shall be paid 50% by Buyer and 50% by Seller.
(bv) If the Estimated Purchase Price is less than the Purchase Price as finally determined in accordance with this Section 2.04 is less than 1E (such shortfall, the “Adjustment Amount”), then within two (2) Business Days after the Closing Balance Sheet and the Closing Statement, and the Closing Net Working Capital, the Closing Net Indebtedness and the Purchase Price set forth thereon, become final and binding on the parties pursuant to this Section 1E, (a) Buyer shall make payment to Seller, by wire transfer of immediately available funds to an account specified in writing by Seller, of the Adjustment Amount, and (b) Buyer and Seller shall deliver joint written instructions to the Escrow Agent to make payment as soon as reasonably practicable (and in any event within two (2) Business Days after receipt of such joint written instructions) to Seller, by wire transfer of immediately available funds to an account specified in writing by Seller, of all of the Adjustment Escrow Funds then contained in the Adjustment Escrow Account.
(vi) If the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if Price is greater than the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of 1E (such excess, in either case by wire transfer of immediately available U.S. dollar fundsthe “Excess Amount”), then within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare Closing Balance Sheet and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreementClosing Net Working Capital, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator Net Indebtedness and the asserted Purchase Price set forth in thereon, become final and binding on the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made parties pursuant to this Section 2.04 1E, Buyer and Seller shall be allocated (a) deliver joint written instructions to the Escrow Agent to make payment as soon as reasonably practicable (and in a manner consistent any event within two (2) Business Days after receipt of such joint written instructions) to Buyer, by wire transfer of immediately available funds to an account specified in writing by Buyer, of the Excess Amount from the Adjustment Escrow Funds then contained in the Adjustment Escrow Account, and (b) if the Excess Amount is less than the Adjustment Escrow Funds then contained in the Adjustment Escrow Account, simultaneously with delivery of the joint written instructions contemplated by the immediately foregoing clause (a), deliver joint written instructions to the Escrow Agent to make payment as soon as reasonably practicable (and in any allocation agreed event within two (2) Business Days after receipt of such joint written instructions) to pursuant Seller, by wire transfer of immediately available funds to Section 2.03(can account specified in writing by Seller, of all of the Adjustment Escrow Funds remaining in the Adjustment Escrow Account after giving effect to the payment to Buyer contemplated by the immediately foregoing clause (a).
(fvii) With respect to Cash Buyer agrees that (a) the net indebtedness adjustment and Cash Equivalents the working capital adjustment provided for in this Section 1E, and Indebtedness of the Business denominated dispute resolution provisions provided for in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York)this Section 1E, shall be used the sole and exclusive remedies for the matters addressed or that could be addressed by this Section 1E, (b) the payment of the Excess Amount (if any) from the Adjustment Escrow Funds then contained in the Adjustment Escrow Account pursuant to convert such and in accordance with this Section 1E shall be the sole and exclusive remedy of Buyer for payment of the Excess Amount (if any), and (c) the Adjustment Escrow Funds contained from time to time in the Adjustment Escrow Account shall be Buyer’s sole and exclusive source of recovery for any amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments owing to Buyer pursuant to this Section 2.041E, even if the Excess Amount exceeds the Adjustment Escrow Funds contained in the Adjustment Escrow Account. For the avoidance of doubt, and without limiting the generality of the foregoing, no claim by Buyer for the payment of the Excess Amount shall be asserted against any of the Seller Parties.
(viii) Buyer agrees that following the Closing it will not, and it will cause its Subsidiaries (including the Company Entities) not to, take any actions with respect to the accounting books, records, methodologies, practices, estimation techniques, assumptions and principles of the Company Entities that would obstruct or prevent the preparation of the Closing Balance Sheet or the Closing Statement as provided in this Section 1E.
Appears in 1 contract
Sources: Share Purchase Agreement (Sensata Technologies Holding N.V.)
Purchase Price Adjustment. (a) Section 2.04(aWithin 90 days after the Closing Date, CBS shall at its expense prepare and deliver to Purchaser a statement of Working Capital (the "Statement --------- of Working Capital") and a statement of Net Assets (the "Statement of Net ------------------ ---------------- Assets") as of the Seller Disclosure Letter sets close of business on the Closing Date setting forth certain current assets Working Capital (as defined below) and current liabilities accounts Net Assets (as defined below), respectively, together with separate special-purpose reports of CBS's independent auditors to the effect that the Statement of Working Capital and certain accounting principles, methodologies the Statement of Net Assets have been prepared and policies used audited in compliance with the determination requirements of such accountsthis Section 2.5. Such accounts The Statement of Working Capital and Statement of Net Assets are collectively the "Statements." ----------- During the 60-day period following Purchaser's receipt of the BusinessStatements, cumulatively, as of immediately before the effective time Purchaser and its independent auditors shall be permitted to review and make copies reasonably required of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) working papers of the Seller Disclosure Letter, CBS and the principles, methodologies and policies set forth therein and, its independent auditors relating to the extent Statements and shall have reasonable access to CBS representatives and its independent auditors. The Statement of Working Capital shall become final and binding upon the parties on the 60/th/ day following delivery thereof, unless Purchaser gives written notice of its disagreement with the Statement of Working Capital ("Notice of Disagreement") to ---------------------- CBS prior to such date. Any Notice of Disagreement shall (A) specify in reasonable detail the nature of any disagreement so asserted, (B) only include disagreements based on mathematical errors or based on Working Capital not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined being calculated in accordance with this Section 2.04 is less than 2.5, (C) only include disagreements based on the Estimated Purchase Price, Seller shall pay to Purchaser the total amount Statement of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (iiD) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance accompanied by a signed written confirmation by Purchaser that it has complied with the accounting principles, methodologies and policies covenants set forth in Section 2.04 2.5(e), and (E) if Purchaser's independent auditors are engaged by Purchaser in connection with the preparation of the Seller Disclosure Letter Notice of Disagreement, be accompanied by a written confirmation of Purchaser's independent auditors that they concur with each of the positions taken by Purchaser in the Notice of Disagreement. If a Notice of Disagreement complying with the preceding sentence is received by CBS in the period specified, then the Statement of Working Capital (and, to the extent not set forth therein, as revised in accordance with U.S. GAAPclause (I) and (II) below) shall become final and binding upon the parties on the earlier of (I) the date CBS and Purchaser resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement or (II) the date any disputed matters are finally resolved in writing by the Accounting Firm (as defined below). The parties agree During the 60-day period following the delivery of a Notice of Disagreement that complies with the preceding paragraph, CBS and Purchaser shall seek in good faith to provide each other resolve in writing any differences which they may have with respect to the matters specified in the Notice of Disagreement. During such period, CBS and its independent auditors shall be permitted to review and make copies reasonably required of the working papers of Purchaser and shall have reasonable access to its representatives and its independent auditors, including their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work working papers and personnel (and any other information which either party make copies reasonably requests to the extent required relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination preparation of the Closing StatementNotice of Disagreement. If, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by at the end of such 60-day period, Seller CBS and Purchaser have not so resolved such differences, CBS and Purchaser shall be deemed submit to have accepted an independent accounting firm (the Closing Statement delivered by Purchaser. Matters "Accounting Firm") --------------- mutually acceptable to the parties for review and resolution any and all matters which remain in dispute and which were properly included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or reviewof Disagreement. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice CBS and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator Firm to deliver render a decision resolving the matters in dispute within 30 days following the submission of such matters to all partiesthe Accounting Firm. CBS and Purchaser agree that judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the party against which such determination is to be enforced. Except as specified in the following sentence, as promptly as practicable, a written report setting forth the resolution cost of any such disagreement arbitration (including the fees and expenses of the Accounting Firm) pursuant to this Section 2.5 shall be borne by CBS and Purchaser in inverse proportion as they may prevail on matters resolved by the Accounting Firm, which proportionate allocations shall also be determined by the Accounting Firm at the time the determination of the Accounting Firm is rendered on the merits of the matters submitted. The fees and expenses of CBS's independent auditors incurred in accordance connection with the terms issuance of this Agreement. Such report their special- purpose reportS relating to the Statements and review of any Notice of Disagreement shall be borne by CBS, and the fees and expenses of Purchaser's independent auditors incurred in connection with their review of the Statements shall be borne by Purchaser.
(b) The Purchase Price shall be increased by the amount by which Working Capital exceeds the Target Amount (as defined below), and the Purchase Price shall be decreased by the amount by which Working Capital is less than the Target Amount (the Purchase Price as so increased or decreased shall hereinafter be referred to as the "Adjusted Purchase Price"). The Target Amount shall be ----------------------- $(16,263,000). If the Purchase Price is less than the Adjusted Purchase Price, Purchaser shall, and if the Purchase Price is greater than the Adjusted Purchase Price, CBS shall, within 10 business days after the Statement of Working Capital becomes final and binding upon the parties, absent manifest error. The fees, costs and expenses make payment to the other party by wire transfer in immediately available funds of the Accounting Arbitrator arising amount of such difference, together with interest thereon at the three-month treasury ▇▇▇▇ rate (as reported by The Wall Street Journal or, if not reported thereby, by another authoritative source) in connection with effect on the Closing Date plus .25% (the "Rate"), ---- calculated on the basis of the actual number of days elapsed over 365, from the Closing Date to the date of actual payment, compounded annually. Notwithstanding the foregoing provisions of this Section 2.04 shall be borne 2.5, if the Statement of Working Capital delivered by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to CBS pursuant to Section 2.03(c2.5(a) and any Notice of Disagreement delivered by Purchaser pursuant to Section 2.5(a) both reflect a calculation of Working Capital that if correct would require a payment by the same party, then within 10 days after delivery of the Notice of Disagreement that party shall make a payment to the other, in the manner and with interest as provided elsewhere in this Section 2.5(b), in an amount equal to the lesser of (i) the amount payable by that party pursuant to the calculation reflected in the Statement of Working Capital and (ii) the amount payable by that party pursuant to the calculation reflected in the Notice of Disagreement. Any amount paid pursuant to the preceding sentence shall be applied against, and correspondingly reduce, the amount otherwise payable under this Section 2.5(b).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04.
Appears in 1 contract
Purchase Price Adjustment. (a) Section 2.04(aWithin ninety (90) days after the Closing Date, Pfizer shall deliver to Purchaser a statement of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts Working Capital of the Business, cumulatively, Business as of immediately before the effective time of the Closing Date (the "Working Capital Statement"). The Working Capital Statement shall be unaudited and shall state the Working Capital of the Business as set forth of the Closing Date, calculated using the spot exchange rates for the appropriate currencies as published in the Wall Street Journal, Eastern Edition, on the Closing Date taking into account any transfers made pursuant to Section 2.3(c) and the settlement of any 42 Liabilities referred to in Section 2.05(a))2.6(e) after the Closing Date, determined in accordance with Section 2.04(a) which for the purposes of the Seller Disclosure LetterWorking Capital Statement shall be deemed to have been settled on the Closing Date at the amount settled. Purchaser shall provide Pfizer with access to the books, records, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination personnel of the Modified Business necessary for Pfizer to prepare the Working CapitalCapital Statement.
(b) If Purchaser may dispute the Purchase Price as finally determined amounts reflected on the line items of the Working Capital Statement (a "Disputed Item"), but only (i) on the basis that an entry contained on such Working Capital Statement is based on facts or occurrences arising solely between the date of the Financial Statements and the date of the Working Capital Statement, (ii) a Disputed Item does not reflect, or has not been made in accordance with a manner consistent with, the provisions of this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficitAgreement, and if (iii) to the Purchase Price as finally determined extent the amount disputed with respect to all Disputed Items exceeds $2,750,000 in accordance with this Section 2.04 exceeds the Estimated Purchase Priceaggregate; provided, however, the Purchaser shall pay to Seller notify Pfizer in writing of each Disputed Item, and specify the total amount of such excess, thereof in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after dispute and the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any eventbasis therefor, within ninety (90) days after receipt of the ClosingWorking Capital Statement. The failure by Purchaser to provide a notice of Disputed Items to Pfizer within such ninety (90) day period 43 will constitute Purchaser's acceptance of all the items in the Working Capital Statement.
(c) If a notice of Disputed Items shall be timely delivered pursuant to subclause (b) above, Pfizer and the Purchaser shall, during the ten (10) Business Days following the date of such delivery (the "Resolution Period"), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”), which shall be prepared in accordance with the accounting principles, methodologies and policies set forth in Section 2.04 of the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve the Disputed Items. If during such Resolution Period the parties are unable to reach agreement, Pfizer and the Purchaser shall refer all unresolved Disputed Items to PriceWaterhouseCoopers, or any other independent accounting firm as Pfizer and Purchaser shall mutually agree upon (the "Independent Accountant"). The Independent Accountant shall make a determination with respect to each unresolved Disputed Item within fifteen (15) days after its engagement by Pfizer and Purchaser to resolve such disagreementDisputed Items, which determination shall be made in accordance with the rules set forth in this Section 2.8. The Independent Accountant shall deliver to Pfizer and any resolution Purchaser, within such fifteen (15) day period, a report setting forth its adjustments, if any, to the Working Capital Statement and the calculations supporting such adjustments. Such report shall be final, binding on the parties and conclusive. Pfizer and Purchaser shall each pay 44 one-half of all the costs incurred in connection with the engagement of the Independent Accountant. As used herein, "Final Working Capital" shall mean (i) if no notice of Disputed Items is delivered by Purchaser within the period provided in subclause (b) above, Working Capital of the Business as shown in the Working Capital Statement as prepared by Pfizer, or (ii) if such a notice of Disputed Items is delivered by Purchaser, either (x) Working Capital of the Business as agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller Pfizer and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment y) Working Capital of the Accounting Arbitrator, Business as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth shown in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such Independent Accountant's calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of this Agreement. Such report shall be final and binding upon the parties, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, on the one hand, and Seller, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made delivered pursuant to this Section 2.04 shall be allocated subclause (c) provided that such calculation is at least $2,750,000 less than the amount shown in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
the Working Capital Statement as prepared by Pfizer or (fz) With respect to Cash and Cash Equivalents and Indebtedness if such Independent Accountant's calculation is not at least $2,750,000 less than the amount shown in the Working Capital Statement as prepared by Pfizer, Working Capital of the Business denominated as shown in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency Working Capital Statement as of immediately before the effective time of the Closing as published prepared by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04Pfizer.
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Purchase Price Adjustment. (a) Section 2.04(aPREPARATION OF FINAL WORKING CAPITAL STATEMENT. As promptly as practicable following the Closing Date (but in no event later than 60 days after the Closing Date), the Buyer shall prepare, and cause Ernst & Young LLP, the accountants of the Buyer (the "Buyer's Accountants"), to certify, a statement (the "Final Working Capital Statement") setting forth the computation of the Final Working Capital (as defined below) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within ninety (90) days after the Closing), Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s calculation of (i) Modified Working Capital, (ii) Closing Net Indebtedness, (iii) Closing Transaction Expenses and (iv) the Purchase Price pursuant to this Section 2.04 (the “Closing Statement”)Date, which statement shall be prepared in accordance with generally accepted accounting principles ("GAAP") consistently applied with the accounting principles, methodologies and policies set forth in Section 2.04 historical financials of the Seller Disclosure Letter (and, to Seller. For purposes of preparing the extent not set forth therein, in accordance with U.S. GAAP). The parties agree to provide each other and their respective Representatives reasonable access, during normal business hours and upon reasonable notice, to their respective books, records, work papers and personnel (and any other information which either party reasonably requests to the extent relating to the Business (including, for the avoidance of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statement is being prepared or evaluated and any disputes that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Final Working Capital Statement, Seller "Final Working Capital" shall notify Purchaser in writing of such disagreement within sixty (60) days after delivery of the Closing Statement, which written notice shall set forth any such disagreement in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day period, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement mean working capital as contemplated by Section 2.04(c) within thirty (30) days after delivery by Seller of a Disagreement Notice, Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firm, the retention of which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller and Purchaser, to resolve such disagreement (the firm so selected shall be referred to herein as the “Accounting Arbitrator”). In the event that Purchaser and Seller are unable to agree on the appointment of the Accounting Arbitrator, as provided above, then the Accounting Arbitrator shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done in accordance with the terms hereof, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions or procedures used to prepare the Closing Statement, and whether there were mathematical errors in the calculation of the Closing Statement, and the Accounting Arbitrator shall not make any other determination. The Accounting Arbitrator shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all parties, as promptly as practicable, a written report setting forth the resolution of any such disagreement determined in accordance with Chapter 3 of Accounting Research Bulletin 43 and other GAAP, consistently applied with the terms of this Agreement. Such report shall be final Seller's historical financials, and binding upon (i) specifically including the partiesSeller's prepaid deposits to the extent such deposits have value and are recoverable, absent manifest error. The fees, costs and expenses of the Accounting Arbitrator arising in connection with this Section 2.04 shall be borne by Purchaser, but specifically excluding security deposits on outstanding operating leases considered as other assets on the one handSeller's financial statements, (ii) specifically excluding current liabilities included in Designated Debt, (iii) specifically excluding prepaid expenses with no value on a going-forward basis, and Seller(iv) inventory shall be, on the other hand, in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectively.
(e) Purchaser and Seller agree that any payments made pursuant to this Section 2.04 shall be allocated in a manner consistent with any allocation agreed to pursuant to Section 2.03(c).
(f) With respect to Cash and Cash Equivalents and Indebtedness of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time of the Closing as published Date, good, usable and of merchantable quality. The Seller's inventory shall include no items, unless a reserve has been established with respect thereto on the books of the Seller, which are (A) over one year old, (B) in excess of one year's sales requirements, based on the Seller's historical sales to its continuing customers, (C) decorated or colored items (other than white) for which the Seller has no customer purchase orders, or any item, or the matching component to any item, which has been discontinued in the Seller's product line or (D) discontinued by Bloomberg (BGN New York), shall be used to convert such amounts into U.S. dollars the Seller's customers for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04which there are no other current customers.
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Purchase Price Adjustment. (a) Section 2.04(a) of the Seller Disclosure Letter sets forth certain current assets and current liabilities accounts and certain accounting principles, methodologies and policies used in the determination of such accounts. Such accounts of the Business, cumulatively, as of immediately before the effective time of the Closing (as set forth in Section 2.05(a)), determined in accordance with Section 2.04(a) of the Seller Disclosure Letter, and the principles, methodologies and policies set forth therein and, to the extent not set forth therein, in accordance with U.S. GAAP, shall constitute the “Modified Working Capital”. For the avoidance of doubt, amounts included in the determination of Closing Net Indebtedness, Closing Transaction Expenses and Pension Plan Purchase Price Adjustment shall be excluded from the determination of the Modified Working Capital.
(b) If the Purchase Price as finally determined in accordance with this Section 2.04 is less than the Estimated Purchase Price, Seller shall pay to Purchaser the total amount of such deficit, and if the Purchase Price as finally determined in accordance with this Section 2.04 exceeds the Estimated Purchase Price, Purchaser shall pay to Seller the total amount of such excess, in either case by wire transfer of immediately available U.S. dollar funds, within three (3) Business Days after the final determination of the Purchase Price, to an account designated by the party receiving payment no later than two (2) Business Days after the final determination of the Purchase Price.
(c) As promptly as practicable (and, in any event, within Within ninety (90) days after the Closing)Closing Date, Purchaser Buyer shall prepare and deliver to Seller Parent a statement setting forth Purchaser’s calculation of Closing Working Capital and a statement of Closing Debt and the balance sheet of the Business as of the close of business on the Closing Date (i) Modified Working Capitalcollectively, (ii) the “Closing Net IndebtednessStatements”). The Closing Statements shall be reviewed by KPMG LLP or, (iii) Closing Transaction Expenses if KPMG LLP is unavailable, another accounting firm of recognized international standing upon which Parent and (iv) the Purchase Price pursuant to this Section 2.04 Buyer shall mutually agree (the “Closing StatementStatement Firm”), which with the cost of such review to be shared equally by Buyer and Parent, and shall be prepared in accordance with the accounting principles, methodologies and policies principles set forth in Section 2.04 of on Schedule 2.8(a) (the Seller Disclosure Letter (and, to the extent not set forth therein, in accordance with U.S. GAAP“Accounting Principles”). The parties Closing Statements shall be accompanied by an agreed upon procedures report duly executed by the Closing Statement Firm. Parent and Buyer shall work together in good faith to agree within fifteen (15) Business Days of the date hereof upon the procedures to provide each other be followed by the Closing Statement Firm in its review of the Closing Statements. During the preparation of the Closing Statements by Buyer and the period of any dispute with respect to the application of this Section 2.8, Parent shall, and shall cause the Subsidiary Sellers and their respective Representatives Affiliates to, (i) provide Buyer and Buyer’s accountants, advisors and other representatives with reasonable access, access during normal business hours to the Books and upon reasonable noticeRecords, to their respective books, records, work papers properties and personnel (and any other information which either party reasonably requests of Parent to the extent relating relevant to the Business (including, for the avoidance preparation of doubt, the Business in any Deferred Asset Jurisdictions)) throughout the periods during which the Closing Statements and (ii) assist Buyer and Buyer’s accountants, advisors and other representatives in the preparation of the Closing Statements.
(b) Parent may dispute the amounts reflected on the line items of a Closing Statement is (each, a “Disputed Item”), but only on the basis of (i) mathematical errors or (ii) such Closing Statement not being prepared or evaluated and any disputes calculated in accordance with Section 2.8; provided, however, that may arise under this Section 2.04 are being resolved, in each case in a manner that does not interfere unreasonably with the operations of such party’s businesses. Notwithstanding the foregoing, neither Purchaser nor Seller shall be required to (x) violate any obligation of confidentiality to which Purchaser or Seller 31 may be subject in discharging their obligations pursuant to the immediately preceding sentence, and (y) provide access to or disclose information where, upon the advice of counsel, such access or disclosure would jeopardize the attorney-client privilege of such party or contravene any applicable Laws. If Seller disagrees with the determination of the Closing Statement, Seller Parent shall notify Purchaser Buyer in writing of such disagreement within sixty (60) days after delivery of the Closing Statementeach Disputed Item, which written notice shall set forth any such disagreement and specify in reasonable detail (“Disagreement Notice”). If Seller fails to deliver a Disagreement Notice by the end of such 60-day periodamount thereof in dispute and the basis therefor, Seller shall be deemed to have accepted the Closing Statement delivered by Purchaser. Matters included in the calculations in the Closing Statement to which Seller does not object in the Disagreement Notice shall be deemed accepted by Seller and shall not be subject to further dispute or review. Purchaser and Seller shall negotiate in good faith to resolve any such disagreement, and any resolution agreed to in writing by Purchaser and Seller shall be final and binding upon the parties.
(d) If Purchaser and Seller are unable to resolve any disagreement as contemplated by Section 2.04(c) within thirty (30) days after such Closing Statement has been received by Parent. The failure by Parent to provide a notice of Disputed Items to Buyer within such period will constitute Parent’s final and binding acceptance of all items in such Closing Statement.
(c) If a notice of Disputed Items shall be timely delivered pursuant to clause (b) above, Parent and Buyer shall, during the ten (10) Business Days following the date of such delivery by Seller of a Disagreement Notice(the “Resolution Period”), Purchaser and Seller shall jointly select a mutually acceptable nationally recognized third party accounting firmnegotiate in good faith to resolve the Disputed Items. If, during the Resolution Period, the retention parties reach an agreement, such agreement shall be evidenced in writing and such Closing Statement (as revised pursuant to such written agreement) shall become final and binding on the date of such agreement. If, during the Resolution Period, the parties are unable to reach agreement, Parent and Buyer shall refer all unresolved Disputed Items to BDO ▇▇▇▇▇▇▇ LLP or, if BDO ▇▇▇▇▇▇▇ LLP is unavailable, another independent accounting firm of recognized international standing upon which will not give rise to present or potential future auditor independence problems for Seller, Purchaser or any of their respective Affiliates or Subsidiaries, as determined by the reasonable discretion of Seller Parent and Purchaser, to resolve such disagreement Buyer shall mutually agree (the firm so selected shall be referred to herein as the “Accounting ArbitratorIndependent Accountant”). In the event that Purchaser The Independent Accountant shall make a determination, acting as an expert and Seller are unable not as an arbitrator, with respect to agree on the appointment of the Accounting Arbitratorunresolved Disputed Items within thirty (30) days after its engagement by Parent and Buyer, as provided above, then the Accounting Arbitrator which determination shall be appointed, at the request of either Purchaser or Seller, by the American Arbitration Association, which Accounting Arbitrator shall be another nationally recognized third party accounting firm. The parties shall instruct the Accounting Arbitrator to consider only those items and amounts set forth in the Closing Statement as to which Purchaser has disagreed pursuant to a Disagreement Notice and Purchaser and Seller have not resolved their disagreement. The scope of the disputes to be resolved by the Accounting Arbitrator shall be limited to whether such calculation was done made in accordance with the terms hereofrules set forth in this Section 2.8. In making such determinations, the accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions Independent Accountant shall consider only the Disputed Items (and not any other items or procedures used to prepare the amounts in such Closing Statement), and whether there were mathematical errors in shall resolve the calculation amount of each Disputed Item within the Closing Statement, range of difference between Buyer’s and the Accounting Arbitrator shall not make any other determinationParent’s calculations of such item. The Accounting Arbitrator Independent Accountant shall make its determination based solely on written submissions, presentations and supporting material provided by Purchaser and Seller and not pursuant to any independent review. In resolving any such disagreement, the Accounting Arbitrator may only select an amount for each item in dispute that is within range of values established for such disputed item as determined by reference to the value assigned to such item by Seller in the Disagreement Notice and by Purchaser in the Closing Statement. Purchaser and Seller shall use commercially reasonable efforts to cause the Accounting Arbitrator to deliver to all partiesParent and Buyer, as promptly as practicablewithin such thirty (30) day period, a written report setting forth (i) its adjustments, if any, to such Closing Statement and (ii) the resolution of any calculations supporting such disagreement determined in accordance with the terms of this Agreementadjustments. Such report shall be final final, conclusive and binding upon on the parties, absent manifest error. The fees, Parent and Buyer shall share equally all costs and expenses of the Accounting Arbitrator arising incurred in connection with this Section 2.04 the engagement of the Independent Accountant.
(d) If the Estimated Closing Working Capital exceeds the Final Closing Working Capital, or if the Final Closing Debt exceeds the Estimated Closing Debt, then Parent, for itself and as agent for the Subsidiary Sellers, shall be borne by Purchaserpay to Buyer, on for itself and as agent for the one handAffiliated Buyers, the amount of such shortfall in accordance with paragraph (e). If the Final Closing Working Capital exceeds the Estimated Closing Working Capital, or if the Estimated Closing Debt exceeds the Final Closing Debt, then Buyer, for itself and Selleras agent for the Affiliated Buyers, on shall pay to Parent, for itself and as agent for the other handSubsidiary Sellers, the amount of the excess in proportion to the differences between the Purchase Price as determined by the Accounting Arbitrator and the asserted Purchase Price set forth in the Closing Statement and the Disagreement Notice, respectivelyaccordance with paragraph (e).
(e) Purchaser and Seller agree that any All payments to be made pursuant under paragraph (d) will be paid by the party obligated to make such payment under this Section 2.04 2.8 (the “Paying Party”) to the other party (the “Receiving Party”), for itself and as agent for its Affiliates (as applicable), within ten (10) days after the determination of the Agreed Closing Statement, in dollars by wire transfer of immediately available funds, in accordance with written instructions given by the Receiving Party to the Paying Party (which instructions shall be allocated in provided by the Receiving Party promptly, and no later than eight (8) days, after the determination of the Agreed Closing Statement (or such later time as may be agreed by Parent and Buyer)), together with interest on such amount from the Closing Date to the date of such payment, at a manner consistent with any allocation agreed rate equal to pursuant to Section 2.03(c)the Interest Rate on the Closing Date.
(f) With respect to Cash and Cash Equivalents and Indebtedness For purposes of the Business denominated in currencies other than U.S. dollars, the Applicable Exchange Rate for each such currency as of immediately before the effective time preparation of the Closing as published by Bloomberg (BGN New YorkStatements and determining amounts of payments to be made under Section 2.8(d), all amounts in a currency other than dollars shall be used converted to convert dollars at the applicable Bloomberg Currency Composite Rate (London (CMPL)) (or any successor thereto) at 6 p.m., London time, on the Business Day prior to the Closing Date, or such amounts into U.S. dollars other date as Parent and Buyer may agree to be appropriate for purposes of determining Closing Net Indebtedness in connection with the adjustments pursuant to this Section 2.04relevant calculation.
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