Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than five (5) Business Days prior to the Closing Date, Parent shall deliver to Purchaser a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”). (b) The Base Purchase Price shall be subject to adjustment at the Closing as follows: (1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess. (2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit. (3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any. (4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any. (5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any. (6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction. (7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction. (8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any. (9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any. (10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any. (11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.” (c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds. (d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”). (e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm. (f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d): (1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser. (2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent. (3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent. (4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser. (5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent. (6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser. (7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent. (8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser. (9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser. (10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent. (11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent. (12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser. (13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent. (14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser. (15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any. (16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser. (g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 2 contracts
Sources: Purchase Agreement (Tyco International LTD /Ber/), Purchase Agreement (Aecom Technology Corp)
Purchase Price Adjustments. (a) Not more As promptly as practicable (but not later than fifteen ninety (1590) and not less than five (5days) Business Days prior to following the Closing Date, Parent Buyer shall deliver to Purchaser Parent a statement certificate setting forth in reasonable detail (A) Buyer’s calculation of (1) Closing Date Working Capital (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing Preliminary Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working CapitalDetermination”), (ii2) Closing Date Cash (the “Preliminary Cash Determination”), (3) Closing Business Date Debt (the “Estimated Preliminary Debt Determination”) and (4) Closing Business Debt”), (iii) the Closing Date Transaction Expenses (the “Estimated Closing Preliminary Transaction ExpensesExpenses Determination”), and (ivB) based on such calculations, a calculation of the Change of Control Payments Purchase Price (the “Estimated Preliminary Purchase Price Determination” and, together with the Preliminary Working Capital Determination, the Preliminary Cash Determination, the Preliminary Debt Determination and the Preliminary Transaction Expenses Determination, the “Preliminary Closing Change of Control PaymentsStatement”), all in accordance with the Accounting Principles; provided, however, that until such time as the calculation of the amounts shown on the Closing Date Working Capital, Closing Date Cash, Closing Date Debt, Closing Date Transaction Expenses and Purchase Price determinations are final and binding on the parties pursuant to this Section 2.5, Buyer and its accountants shall, upon Parent’s reasonable request, make themselves available to discuss with Parent and its accountants during normal business hours at a mutually agreeable time the Preliminary Closing Statement and Parent and its accountants shall be provided copies of, and have access upon reasonable notice at all reasonable times during normal business hours to, subject to Parent’s entrance into a customary confidentiality agreement with Buyer’s accountants (v) the Project Contributions (the “Estimated Project Contributions”if required thereby), (vi) the Chinese DBFO Proceeds (work papers and supporting records of Buyer and its accountants used in connection with the “Estimated Chinese DBFO Proceeds”), (vii) preparation of the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)Preliminary Closing Statement.
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount Following receipt of the Estimated Preliminary Closing Business DebtStatement, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated objections to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced document as prepared by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing DateBuyer, Parent shall be entitled deliver written notice to receive Buyer of such dispute indicating each disputed item (directly or indirectly) Other DBFO Proceeds in an amount equal to including the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate specified dollar amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 each disputed item along with the calculation of such disputed amount) and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is basis for the “Closing Payment.”
(c) Within seventydisagreement therewith within forty-five (7545) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt date of such statement (such 30-day period hereinafter referred to as the “Review Period”)receipt thereof. Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event that Parent does not notify Buyer of a dispute with respect to the PostPreliminary Closing Statement within such 45-day period, the Preliminary Working Capital Determination, Preliminary Cash Determination, Preliminary Debt Determination, Preliminary Transaction Expenses Determination and Preliminary Purchase Price Determination set forth therein shall be final and binding as the “Closing StatementDate Working Capital,” “Closing Date Cash,” “Closing Date Debt,” “Closing Date Transaction Expenses” and “Purchase Price,” respectively, Purchaser for purposes of this Agreement. In the event of notice of such dispute, Parent and Parent Buyer shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the partiesresolve such dispute. If Purchaser Buyer and Parent are unable Parent, notwithstanding such good faith effort, fail to reach a resolution to resolve such effect dispute within thirty (30) calendar days after Purchaser’s receipt Parent provides written notice to Buyer of Parent’s written notice of disagreementobjections, Purchaser then Buyer and Parent shall submit engage the amounts remaining in dispute for resolution Auditors to conduct a review of Parent’s objections to the New YorkPreliminary Working Capital Determination, New York office of KPMG LLP or such other independent accountant firm of international reputation Preliminary Cash Determination, Preliminary Debt Determination, Preliminary Transaction Expenses Determination and/or Preliminary Purchase Price Determination, as is mutually agreed to and appointed by Purchaser and Parent the case may be, as promptly as reasonably practicable (such independent accounting firm being herein referred review to as the “Accounting Firm”). The Accounting Firm shall be directed to, within completed not later than thirty (30) calendar days after submission the Auditors are requested to conduct such review) and, upon completion of such review, to deliver written notice to Parent and Buyer setting forth the dispute, determine Auditors’ resolution of such objections and report the resulting adjustments shall be deemed finally determined for purposes of this Section 2.5. The Auditors’ role in completing such review shall be limited to resolving such objections and determining the parties upon such remaining disputed amounts correct calculations to be used with respect to only the Post-disputed portions of the Preliminary Closing Statement. In resolving such objections, the Auditors shall apply the provisions of this Agreement concerning determination of the amounts set forth in the Preliminary Closing Statement and such report the decision of the Auditors shall be final, binding and conclusive solely based on (i) whether such item objected to was prepared in accordance with the guidelines set forth in this Agreement concerning determination of the amounts set forth therein or (ii) whether the item objected to contains a mathematical or clerical error. The parties hereto and shall constitute an arbitral award upon which a judgment may be entered in not permit the Auditors to conduct any court having jurisdiction thereofex-parte communications with the parties, nor shall the Auditors take into consideration any settlement offers provided or exchanged by the parties. The Accounting Firm shall address only those items in dispute. Purchaser shall bear Preliminary Working Capital Determination, Preliminary Cash Determination, Preliminary Debt Determination, Preliminary Transaction Expenses Determination and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement Preliminary Purchase Price Determination as agreed by Parent that are successful, Buyer and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case or as determined by the Accounting Firm.
(f) No later than five (5) Business Days after Auditors, as the case may be, shall be final resolution of and binding as the “Closing Date Working Capital, ,” “Closing Business Date Cash,” “Closing Date Debt, Change of Control Payments, ,” “Closing Date Transaction Expenses,” and “Purchase Price,” respectively, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with for purposes of this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to PurchaserAgreement.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 2 contracts
Sources: Purchase Agreement (Cryoport, Inc.), Purchase Agreement (Chart Industries Inc)
Purchase Price Adjustments. (a) Not more No later than fifteen (15) and not less than five (5) Business Days prior to the Closing Date, Parent shall deliver to Purchaser a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar 75 days after following the Closing, Purchaser shall prepare cause to be prepared and deliver delivered to Parent Seller a statement (the “Post-Closing Payment Statement”) of setting forth (i) the Closing Working Capital (including all Purchaser’s good faith calculation of the components thereof) prepared in accordance with aggregate amount of the Calculation PrinciplesCash Equivalents, (ii) Purchaser’s good faith calculation of the Closing Business DebtNet Working Capital and the resulting amount, if any, by which the Net Working Capital is less than (or greater than) Target Working Capital, (iii) Purchaser’s good faith estimate of the Closing Transaction ExpensesIndebtedness, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Aggregate Purchase Price based on the foregoing and (v) Purchaser’s calculation of the Loan Receivables. If Seller accepts the Post-Closing Working CapitalPayment Statement in writing, Closing Business Debtor if Seller fails to notify Purchaser of any dispute with respect thereto within 30 days following receipt thereof, Change then the calculation of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds the Aggregate Purchase Price and Other DBFO Proceeds, the components thereof and Purchaser’s calculation of the Loan Receivables as applicable). Parent shall be deemed to have agreed with all other items and amounts included set forth in the Post-Closing Payment Statement delivered pursuant to Section 2.6(c) shall be deemed final and Parent or Purchaser, as applicable, shall pay within five (5) Business Days conclusive and binding upon all parties. If Seller disputes the accuracy of the conclusion calculation of the Review Period Aggregate Purchase Price or any component thereof or the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon calculation of the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to Loan Receivables set forth in the Post-Closing Payment Statement, Seller shall provide written notice to Purchaser no later than 30 days following receipt of the Post-Closing Payment Statement (the “Dispute Notice”), setting forth in reasonable detail those items that Seller disputes, the amounts of any adjustments that are necessary in Seller’s judgment for the computation of the Aggregate Purchase Price or the components thereof or the calculation of the Loan Receivables to conform to the requirements of this Agreement, and the basis for its suggested adjustments. During the 30-day period following delivery of a Dispute Notice, Purchaser and Parent shall Seller will negotiate in good faith with a view to reconcile resolving their differences disagreements over the disputed items. From and any resolution by them as to any disputed amounts shall be final, binding and conclusive on after the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt delivery of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, Payment Statement to Seller and such report shall be final, binding and conclusive on until the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage final determination of the fees Aggregate Purchase Price and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, Loan Receivables in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; Seller and its agents will be provided that, with such payments shall only be made reasonable access during normal business hours to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, relevant portions of the Undisputed Amounts pursuant financial books and records of the Company and its Subsidiary and access to Section 2.6(d):
the agents and employees of the Company and its Subsidiary (1including independent accountants and their work papers, subject to execution of customary access papers) as Seller may reasonably request to enable it to respond to the Post-Closing Payment Statement. If the Closing Working Capital parties resolve their differences over the disputed items in accordance with the foregoing procedure, the Aggregate Purchase Price and the Loan Receivables shall be the amount agreed upon by them. If the parties fail to resolve their differences over the disputed items within such 30-day period, then Purchaser and Seller shall forthwith jointly engage the Accounting Arbitrator to make a binding determination as finally determined to the disputed items in accordance with this Section 2.6 is Agreement. The “Accounting Arbitrator” shall mean such national firm of independent accountants as may be agreed upon by Purchaser and Seller. The Accounting Arbitrator will under the terms of its engagement have no more than 30 days from the date of referral and no more than 15 days from the final submission of information and testimony by Purchaser and Seller within which to render its written decision (including a statement of the reasons therefor) with respect to the disputed items (and only with respect to any unresolved disputed items set forth in the Dispute Notice), which decision shall be final and binding upon the parties and enforceable by any court of competent jurisdiction. The Accounting Arbitrator shall review such submissions and base its determination solely on such submissions. In resolving any disputed item, the Accounting Arbitrator may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the Estimated Closing Working Capital, Parent shall pay the amount of smallest value for such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (item claimed by either party. The fees and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess expenses of the amount by which the Base Purchase Price was reduced pursuant Accounting Arbitrator shall be allocated to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available fundsPurchaser, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates one hand, and shall be calculated daily Seller, on the basis other hand, based upon the percentage which the portion of a year of 365 days and the actual number of days elapsedcontested amount not awarded to each party bears to the amount actually contested by such party, as determined by the Accounting Arbitrator.
Appears in 2 contracts
Sources: Purchase Agreement, Purchase Agreement (Hub Group, Inc.)
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less No later than five (5) Business Days prior to the Closing Date, Seller Parent shall deliver to Purchaser Buyer Parent (i) the Estimated Closing Date Net Working Capital Statement, which shall set forth an estimate of the Current Assets and the Current Liabilities, and (ii) a statement (the “Transaction Estimated Closing Date Net Cash Statement”) that contains Parent’s reasonable good faith estimates which shall set forth an estimate of the Net Cash (i) the “Estimated Net Cash” and together with the Estimated Closing Date Net Working Capital (including all Statement, the “Estimated Statements”), in each case as of the components thereof) Closing. The Estimated Statements shall be prepared in accordance with the Calculation Accounting Principles and as otherwise expressly contemplated by this Agreement. Upon completion of the Estimated Statements, Seller Parent shall derive: (i) the estimated Closing Date Working Capital; (ii)the estimated Closing Net Cash; (iii) the Estimated Closing Date Working Capital Shortfall; and (iv) the Estimated Closing Date Working Capital Excess, if any. The amount of cash to be paid at the Closing (the “Estimated Closing Working CapitalCash Consideration Adjustment Amount”), ) shall be equal to the Cash Consideration minus (iiA) the Closing Business Debt (the “Estimated Closing Business Debt”)Date Working Capital Shortfall, if any, plus (iiiB) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”)Date Working Capital Excess, if any, and plus (ivC) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)Net Cash.
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) 90 calendar days after the Closing, Purchaser Buyer Parent shall prepare and deliver to Seller Parent the Closing Date Net Working Capital Statement, which shall set forth the Current Assets and the Current Liabilities as of Closing, and a statement of Closing Net Cash (the “Post-Closing Statement”) of (i) Date Net Cash” and together with the Closing Date Net Working Capital (including all Statement, the “Closing Statements”), in each case as of the components thereof) Closing. The Closing Statements shall be prepared in accordance with the Calculation Accounting Principles, (ii) . Upon completion of the Closing Business DebtStatements, (iii) Buyer Parent shall derive the Closing Transaction Expenses, (iv) Date Working Capital and the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds Closing Net Cash and (viii) the Other DBFO Proceedsprovide such calculations to Seller Parent.
(dc) Seller Parent shall complete its review of the Closing Statements within 60 days after delivery thereof by Buyer Parent and shall notify Purchaser Buyer Parent in writing of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt Statements prior to the end of such statement period (such 30-day period hereinafter referred to as notice, the “Review PeriodSeller’s Objection”). Any such notice of disagreement The Seller’s Objection shall specify, with a reasonably detailed explanation, those items or amounts as to which Seller Parent disagrees (and shall include Seller Parent’s proposed changes to Purchaser’s calculation of the Closing Working CapitalStatements, Closing Business Debt, Change of Control Payments, Date Net Working Capital and Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicableNet Cash). Seller Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Statements that Seller Parent or Purchaserdoes not dispute. If no Seller’s Objection is timely received, as applicable, the Closing Statements shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”)deemed final.
(ed) In the event of If a dispute with respect to the Post-Closing StatementSeller’s Objection is delivered, Purchaser Buyer Parent and Seller Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the partiesParties. If Purchaser Buyer Parent and Seller Parent are unable to reach a resolution to such effect within thirty (30) calendar days after PurchaserBuyer Parent’s receipt of Parentthe Seller’s written notice of disagreementObjection, Purchaser Buyer Parent and Seller Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”)Reporting Accountants. The Accounting Firm Reporting Accountants shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing StatementStatements, and such report shall be final, binding and conclusive on the parties Parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm Reporting Accountants shall address only those items in dispute. Purchaser Buyer Parent shall bear and pay a percentage of the fees and disbursements of the Accounting Firm Reporting Accountants that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement Statements by Seller Parent that are successful, and Seller Parent shall bear and pay a percentage of the fees an and disbursements of the Accounting Firm Reporting Accountants that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement Statements by Seller Parent that are not successful, in each case as determined by the Accounting FirmReporting Accountants. The Parties, on behalf of themselves and their Controlled Affiliates, agree that the procedure set forth in this Section 3.3 for resolving disputes with respect to adjustments of the Global Purchase Price under this Section 3.3 shall be the sole and exclusive method for resolving any such disputes; provided, however, that this provision shall not prohibit either Party from instituting litigation to enforce any ruling of the Reporting Accountants; provided, further, that the foregoing shall not impair the right to make indemnity claims hereunder.
(fe) No later than five Seller Parent shall provide to Buyer Parent and its accountants reasonable access to the books and records related to the Business and the Transferred Entities for the period prior to the Closing and to any other information, including work papers of its accountants (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that permitted by such accountants), and to any employees during regular business hours and on reasonable advance notice, to the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant extent necessary for Buyer Parent to Section 2.6(d):
(1) If prepare the Closing Working Capital as finally determined Statements. Seller Parent and its accountants shall have reasonable access to relevant information used by Buyer Parent in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If preparing the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than Statements, including the Estimated Closing Working Capital, Purchaser shall pay the amount work papers of such excess to Parent.
its accountants (3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid extent permitted by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedaccountants).
Appears in 2 contracts
Sources: Master Purchase Agreement (Allergan PLC), Master Purchase Agreement (Teva Pharmaceutical Industries LTD)
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than five (5) On the date that is two Business Days prior to the Closing Date, Parent Seller shall deliver to Purchaser a statement (the “Transaction Statement”) that contains Parentcertificate of Dopaco US’s reasonable Chief Financial Officer, prepared in good faith estimates of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with defined terms herein and based on available information setting forth its estimate of the Calculation Principles Net Debt Amount, the Working Capital and Working Capital Adjustment and including reasonable supporting documentation for such calculations (the “Estimated Closing Working CapitalAdjustment Certificate”). Without modifying the terms of this Agreement, (ii) the parties agree that Schedule 1.2 is instructive as to the manner of calculating Working Capital and the Net Debt Amount hereunder, as it reflects the inclusion and exclusion of accounts that would have been used in the calculation of Working Capital and the Net Debt Amount applying the definitions referred to herein to the extent that such calculation of Working Capital and the Net Debt Amount had been made as of the opening of business on December 26, 2010 rather than as of the opening of business on the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)Date.
(b) The Base Estimated Adjustment Certificate shall be used by the parties to make a preliminary adjustment to the Purchase Price on the Closing Date pursuant to Section 2.4(c), subject to further adjustment in accordance with Section 2.4(e).
(c) In the event that the Estimated Working Capital Adjustment is a negative number, the Purchase Price shall be subject reduced in an amount equal to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital Adjustment. In the event that the Estimated Working Capital Adjustment is greater than the Reference Amounta positive number, the Base Purchase Price shall be increased in an amount equal to the Estimated Working Capital Adjustment, but in no event in such case shall the Estimated Working Capital Adjustment exceed Ten Million Dollars ($10,000,000) (the “Adjustment Cap”). In the event the amount of the Estimated Working Capital Adjustment would have exceeded the Adjustment Cap but for the existence of the Adjustment Cap pursuant to the provisions of the immediately preceding sentence, the amount of such excess shall be defined as “Excess Adjustment Amount”. In the event the Net Debt Amount is a positive number, the Purchase Price shall be increased by such excess.
(2) If amount and if the Estimated Closing Working Capital Net Debt Amount is less than the Reference Amounta negative number, the Base Purchase Price shall be reduced by such deficitamount.
(3d) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and Within 60 days after the Closing Date, Parent Purchaser shall be entitled deliver to receive (directly or indirectly) Other DBFO Proceeds Seller a certificate setting forth, in an amount equal to reasonable detail, its calculation of the Permitted Proceeds. The Base Purchase Price shall be reduced by the amountNet Debt Amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount Working Capital and Working Capital Adjustment as of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is Date (the “Closing Payment.Adjustment Certificate”
(c) Within seventy-five (75) calendar days after ), together with a consolidated balance sheet of the Closing, Purchaser shall prepare and deliver to Parent a statement Companies as of the Closing Date (the “Post-Closing StatementBalance Sheet”) of (i) the Closing Working Capital (including all of the components thereof) ), which shall be prepared in accordance with the Calculation Applicable Accounting Principles. Seller shall provide Purchaser with reasonable access to books, (ii) records and personnel of Seller and work papers of its accountants as reasonably necessary and within Seller’s control or possession to enable Purchaser to prepare the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”)Balance Sheet.
(e) Seller shall have 30 days from the date on which the Closing Adjustment Certificate and the Closing Balance Sheet have been delivered to it to raise any objection(s) to the calculations set forth in the Closing Adjustment Certificate, on the basis that they were not prepared accurately in accordance with Section 2.4(d), by delivery of written notice to Purchaser setting forth such objection(s) in reasonable detail (the “Disputed Items”). In the event of a dispute that Seller shall not deliver any such objection(s) with respect to the PostClosing Adjustment Certificate within such thirty-day period, then the Closing StatementAdjustment Certificate shall be deemed final for purposes of this Section 2.4 (such final Closing Adjustment Certificate, the “Final Adjustment Certificate”). In the event that any such objection(s) are so delivered, the Closing Adjustment Certificate shall be deemed not final and Purchaser and Parent Seller shall negotiate attempt, in good faith faith, to reconcile their differences and any resolution by them as to any disputed amounts shall be finalresolve the Disputed Items and, binding and conclusive on the parties. If Purchaser and Parent if they are unable to reach a resolution to resolve all of the Disputed Items within 15 Business Days of delivery of such effect within thirty notice, shall, five Business Days thereafter (30or such earlier date as mutually agreed) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit designate the amounts remaining in dispute for resolution to the New York, New York office of KPMG Ernst & Young LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to serve as the “Accounting FirmAccountant Arbitrator” hereunder (the “Accountant Arbitrator”). The Accounting Firm Accountant Arbitrator shall resolve all remaining Disputed Items in accordance herewith within 20 Business Days from the date of its designation. In connection with the foregoing, the Accountant Arbitrator shall be directed toinstructed to and must (i) limit its determination(s) only to the remaining Disputed Items, within thirty (30ii) calendar days after submission make its determination(s) as to each remaining Disputed Item based upon the application of this Section 2.4 and (iii) not assign a value to any remaining Disputed Item greater than the higher value for such Disputed Item claimed by either Purchaser or Seller or less than the lower value for such Disputed Item claimed by Purchaser or Seller. All determinations by the Accountant Arbitrator shall be final and binding upon the parties for purposes of this Section 2.4, absent fraud or manifest error. The fees and expenses of the dispute, determine Accountant Arbitrator shall be allocated between Purchaser and report Seller in the same proportion to which the dollar amounts of their respective positions on Disputed Items are accepted or rejected by the Accountant Arbitrator. Purchaser and Seller acknowledge and agree that any adjustment made under this Section 2.4 is and shall be treated as an adjustment to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting FirmPurchase Price.
(f) No later than five (5) Business Days after At such time as the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, Adjustment Certificate shall become the Final Adjustment Certificate in accordance with this Section 2.62.4(e), Purchaser or Parent, as applicable, the Estimated Working Capital shall make the following payments; provided that, such payments shall only be made compared to the extent Final Working Capital and the Estimated Net Debt Amount shall be compared to the Final Net Debt Amount. In the event that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Final Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is be a number greater than the Estimated Closing Working Capital, Purchaser shall pay to Seller an amount equal to such difference, plus, if there was an Excess Adjustment Amount, the amount of such excess to Parent.
(3) If Excess Adjustment Amount. In the Closing Business Debt as finally determined in accordance with this Section 2.6 is event that the Final Working Capital shall be a number less than the Estimated Closing Business DebtWorking Capital, either (i) Seller shall pay Purchaser an amount equal to such difference to the extent that such difference is greater than the Excess Adjustment Amount; or (ii) if subtracting such difference from the Excess Adjustment Amount results in a positive number, Purchaser shall pay the an amount of equal to such shortfall positive number to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business DebtSeller. In any event, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expensesif there was an Excess Adjustment Amount, Purchaser shall pay Seller interest on the amount Excess Adjustment Amount accruing at a rate of such shortfall to Parent.
five percent (65%) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for per annum during the period commencing on the Closing Date through and concluding upon the date on which such that payment is to be made calculated pursuant to this Section 2.4(f). If the Final Net Debt Amount is a number greater than the Estimated Net Debt Amount, Purchaser shall pay to Seller an amount equal to such difference. If Final Net Debt Amount is a number less than the Estimated Net Debt Amount, Seller shall pay to Purchaser an amount equal to such difference. For the avoidance of doubt, the payments in respect of Working Capital and Net Debt contemplated by this Section 2.4(f) may be aggregated and netted against one another, if applicable, for purposes of the payments to be made between the parties. Any payment to be made pursuant to this Section 2.4(f) shall be made within five Business Days from the date that the Final Adjustment Certificate is finally determined pursuant to Section 2.4(e), by wire transfer of immediately available funds (i) if due to Purchaser, to an account designated in writing by Purchaser and (ii) if due to Seller, to an account designated in writing by Seller. Any amount so owing and not paid within such five Business Days shall begin accruing interest until paid at the Prime Rate. Such interest rate of five percent (5%) per annum.
(g) Notwithstanding the existence of Disputed Items, if other aspects of the calculation of Working Capital or Net Debt are undisputed, payment shall be payable at made between the same time parties with respect to such items as soon as practicable and the payment to which it relates and mechanisms in Section 2.4(f) shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedadjusted to reflect such earlier payments.
Appears in 2 contracts
Sources: Purchase and Sale Agreement (Cascades Inc), Purchase and Sale Agreement (RenPac Holdings Inc.)
Purchase Price Adjustments. (a) Not more than fifteen The Sellers shall calculate the net amount of cash sent between the Feed Intercompany Cash Sweep Account and the Parent Swingline Account from the close of business on the Reference Date (15such time, the “Intercompany Account Reference Time”) to the close of business on the day that is one Business Day prior to Closing (such time, the “Intercompany Account Measurement Time”). Any net outflow of cash from the Feed Intercompany Cash Sweep Account to the Parent Swingline Account will be expressed as a positive number, and any net inflow of cash to the Feed Intercompany Cash Sweep Account from the Parent Swingline Account will be expressed as a negative number (such amount, whether expressed as a positive or negative number, the “Preliminary Intercompany Account Adjustment Amount”). The Sellers will then subtract from the Preliminary Intercompany Account Adjustment Amount (i) $2,744,616, (ii) $1,300,000 and (iii) any other amounts paid by Westway Group on behalf of any Company or any Company Subsidiary for the benefit of any Company or any Company Subsidiary from the Intercompany Account Reference Time to the Intercompany Account Measurement Time which was not otherwise reflected in a cash transfer between the Feed Intercompany Cash Sweep Account and the Parent Swingline Account, including (x) amounts paid or payable by Westway Group as compensation to employees of Westway Canada, any Company or Company Subsidiary between the Intercompany Account Reference Time and the Intercompany Account Measurement Time, including for payroll expenses, 401(k) and not less other pension contributions, and employee health and welfare benefits at a rate of $825 per employee per month, and (y) an allocation for any real estate taxes for the period between the Intercompany Account Reference Time and the Intercompany Account Measurement Time on any real property owned by Westway Group or any subsidiary of Westway Group (other than five any Company or Company Subsidiary) where such real property was used primarily for the benefit of any Company or Company Subsidiary. The Preliminary Intercompany Account Adjustment Amount as reduced by the immediately preceding sentence will hereafter be referred to as the “Intercompany Account Adjustment Amount.” A sample calculation of the Intercompany Account Adjustment Amount is attached hereto as Exhibit B.
(5b) Beginning on the fifth (5th) Business Days Day prior to Closing or such shorter time as agreed by Buyer and the Sellers, the Sellers and Buyer shall cooperate in the calculation of the Intercompany Account Adjustment Amount as of the close of business the day that is one Business Day prior to the Closing Date. The Sellers shall, Parent and shall use reasonable best efforts to cause the Sellers’ accountants to provide, reasonable access during normal business hours, to the accountants, personnel, books and records, work papers, schedules and calculations relating to the Intercompany Account Adjustment Amount for the purposes of Buyer determining the accuracy thereof. At Closing, the Sellers shall prepare or cause to be prepared and deliver to Purchaser Buyer a statement certificate setting forth the Intercompany Account Adjustment Amount certified by Westway Group’s Chief Financial Officer (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) the Final Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO ProceedsCertificate”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price Buyer shall be subject to adjustment at the Closing as follows:
(1) accept such certificate absent manifest error. If the Estimated Intercompany Account Adjustment Amount set forth on the Final Closing Working Capital Certificate is greater than a negative number, then the Reference Amount, the Base Purchase Price shall be increased by the absolute value of such excess.
(2) amount pursuant to Section 2.2 hereof. If the Estimated Intercompany Account Adjustment Amount set forth on the Final Closing Working Capital Certificate is less than the Reference Amounta positive number, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced decreased by the absolute value of such amount pursuant to Section 2.2 hereof. In determining whether the Final Closing Certificate is reasonably acceptable, the Parties agree that Buyer may only comment on whether the calculation of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project Intercompany Account Adjustment Amount set forth in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Final Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared Certificate was performed in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (terms hereof and the Estimated Other DBFO Proceeds was greater than the aggregate amount books and records of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if anyWestway Group.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 2 contracts
Sources: Purchase Agreement, Purchase Agreement (Westway Group, Inc.)
Purchase Price Adjustments. The Cash Payment shall be adjusted (x) upward on a dollar‑for‑dollar basis by the amount of any Closing Cash and (y) downward on a dollar‑for‑dollar basis by the amount of Closing Indebtedness, in each case as of the Business Day before the Closing Date as set forth below; provided, however, that any Transaction Expenses to be paid by the Company at the Closing shall not be included as Closing Cash for purposes of this Section 2.2:
(a) Not more than fifteen (15) and not less than five three (53) Business Days prior to the Closing Date, Parent the Company shall prepare and deliver to Purchaser a statement (Buyer an officer’s certificate of the “Transaction Statement”) Company that contains Parent’s reasonable a good faith estimates and reasonable best estimate of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles Cash (the “Estimated Closing Working CapitalCash”), (ii) the and Closing Business Debt Indebtedness (the “Estimated Closing Business DebtIndebtedness”), (iii) in each case as of the close of business on the Business Day before the Closing Transaction Expenses (Date. The Cash Payment payable to the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment Sellers at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price Section 2.1 shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced Closing Cash and decreased by an amount equal to the Estimated Chinese DBFO Proceeds, if anyClosing Indebtedness.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(cb) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt the Closing Date, Buyer shall prepare and deliver to the Sellers’ Representative a good faith calculation of such statement the actual Closing Cash and Closing Indebtedness and the amount, if any, by which the Closing Cash and the Closing Indebtedness so determined is less than or greater than the Estimated Closing Cash and Estimated Closing Indebtedness, respectively (such 30-day period hereinafter referred to as the “Review PeriodClosing Statement”). Any such notice Buyer shall cooperate as reasonably requested by Sellers’ Representative in connection with Sellers’ Representative’s review of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaserthe Closing Statement. Sellers’ Representative may dispute Buyer’s calculation of the Closing Working CapitalCash and Closing Indebtedness set forth on the Closing Statement by delivering a written notice (a “Notice of Disagreement”) to Buyer within 15 days following delivery of the Closing Statement. During the 15 days following delivery of a Notice of Disagreement, Buyer and Sellers’ Representative shall seek in good faith to resolve any differences that they may have with respect to the matters specified in the Notice of Disagreement.
(c) If Buyer and Sellers’ Representative have not resolved all issues at the end of the 15-day period referred to in Section 2.2(b), the parties shall submit to Deloitte & Touche LLP (the “Accounting Firm”) for review and resolution of such matters which remain in dispute, and the Accounting Firm shall make a final determination of the Closing Business DebtCash and Closing Indebtedness and the amount, Change if any, by which the Closing Cash and the Closing Indebtedness so determined is less than or greater than the Estimated Closing Cash and Estimated Closing Indebtedness, respectively, in accordance with the guidelines and procedures set forth in this Agreement. The parties will cooperate with the Accounting Firm during the term of Control Paymentsits engagement. The Accounting Firm’s determination will be based solely on presentations by Buyer and Seller or their respective representatives which are in accordance with the definitions set forth in this Agreement (i.e., Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicablenot on the basis of an independent review). Parent The determination of the Closing Cash and Closing Indebtedness shall become final and binding on the parties on the date the Accounting Firm delivers its final resolution in writing to the parties (which final resolution shall be deemed to have agreed delivered not more than 30 days following submission of such disputed matters). The fees and expenses of the Accounting Firm shall be shared equally by Buyer and Seller.
(d) If the Closing Cash calculated in accordance with all other items and amounts included Section 2.2(b) is greater than the Estimated Closing Cash or the Closing Indebtedness determined in accordance with Section 2.2(b) is less than the Post-Estimated Closing Statement delivered pursuant to Section 2.6(c) and Parent or PurchaserIndebtedness, as applicable, then Buyer shall pay promptly (but in any event within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(eDays) In the event of a dispute with respect pay to the Post-Closing StatementSellers the absolute value of such difference, Purchaser and Parent shall negotiate by wire transfer of immediately available funds to an account or accounts designated in good faith to reconcile their differences and any resolution writing by them as to any disputed amounts shall be final, binding and conclusive on the partiesSellers’ Representative. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, Cash calculated in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(12.2(b) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If Cash or the Closing Working Capital as finally determined Indebtedness calculated in accordance with this Section 2.6 2.2(b) is greater than the Estimated Closing Working CapitalIndebtedness, Purchaser then the Sellers shall pay the amount of such excess to Parent.
promptly (3) If the Closing Business Debt as finally determined but in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
any event within five (5) If Business Days) pay to Buyer the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount absolute value of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid difference by wire transfer of immediately available fundsfunds to an account designated by Buyer.
(e) Notwithstanding anything to the contrary in this Section 2.2, together with interest thereon for the period commencing parties agree that the reconciliation amounts due from Buyer to the Sellers and from the Sellers to Buyer pursuant to Section 2.2(c) hereof shall be aggregated and offset one against the other such that only Buyer, on the Closing Date through one hand, or the date Sellers, on which such payment is made calculated at the Prime Rate. Such interest other hand, shall be payable at the same time as the required to make one payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedother party hereunder.
Appears in 1 contract
Sources: Stock Purchase Agreement (IHS Inc.)
Purchase Price Adjustments. (a) Not more later than fifteen ninety (1590) and not less than five (5) Business Days prior to days after the Closing Date, Parent Buyer shall prepare and deliver to Purchaser the Seller Representative an unaudited consolidated balance sheet of the Acquired Companies as of the Sale Time (the "Final Closing Date Balance Sheet") and a reasonably detailed statement (together with the “Transaction Statement”Final Closing Date Balance Sheet, collectively, the "Adjustment Statements") that contains Parent’s reasonable good faith estimates setting forth Buyer's calculations of Closing Date Cash (i) the "Final Closing Date Cash"), Closing Date Indebtedness (the "Final Closing Date Indebtedness"), and Closing Date Net Working Capital (including all of the components thereof) "Final Closing Date Net Working Capital"). The Adjustment Statements delivered by Buyer shall be accompanied by reasonable supporting details and work papers. The Final Closing Date Balance Sheet shall be prepared in accordance with the Calculation Principles (Specified Accounting Principles, provided that the “Estimated Closing Working Capital”), (ii) Acquired Companies' inventory shall reflect the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount results of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced physical inventory count jointly conducted by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed Buyer and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed Seller prior to the Closing then Date for purposes of establishing the count portion of inventory and each component thereof to be included in the Final Closing Date Balance Sheet (Bthe "Physical Inventory Count"), which Physical Inventory Count shall (i) include only inventory of a quality and quantity usable and salable in the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any ordinary course of the Target Shares pursuant applicable Acquired Company's business consistent with past practice, and (ii) reflect adjustments in accordance with the Specified Accounting Principles to a contractual right of first refusal, take into account any days elapsed between the Base Purchase Price shall be reduced by an amount equal to date the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 physical inventory was conducted and the Closing Date. The Base Purchase Pricerespective independent auditors (or other designee) of Seller and the Buyer Parties, as adjusted pursuant if any, shall have the right to observe the taking of the Physical Inventory Count. If Buyer fails to timely deliver the Adjustment Statements, then the Seller Representative shall have the option to declare the Closing Calculation to be deemed the final Adjustment Statements for purposes of this Section 2.6(b), is the “Closing Payment.”
2.07. Within sixty (c60) Within seventy-five (75) calendar days after delivery of the ClosingAdjustment Statements and adequate reasonable supporting information, Purchaser shall prepare and the Seller Representative may deliver to Parent a statement written notice (the “Post-Closing Statement”"Protest Notice") to Buyer of any objections that the Seller Representative may have to the Adjustment Statements, provided that the Seller Representative's objections shall be limited to (i) the Closing Working Capital (including all of the components thereof) Adjustment Statements not being prepared in accordance with this Agreement, including Buyer's failure to correctly apply the Calculation PrinciplesSpecified Accounting Principles or to provide reasonably adequate supporting details and work papers for its calculations, and (ii) arithmetic errors. The Protest Notice shall set forth in reasonable detail the Closing Business Debtbasis of such objection(s) together with the amount(s) in dispute; provided, that the Seller Representative's obligation to provide reasonable detail shall be conditioned on the Seller Representative having had such access and cooperation pursuant to this Subsection (iiia) (as described below) as it shall have deemed reasonably necessary. Upon receipt of the Closing Transaction ExpensesAdjustment Statements, the Seller Representative and its Representatives shall be given prompt and reasonable access, during normal business hours, to all of Buyer's, the Acquired Companies' and their accountants' books and records (ivincluding working papers, schedules and calculations) reasonably relating to the Change preparation of Control Paymentsthe Adjustment Statements, (v) including by Buyer making any applicable records available in electronic form where reasonably requested. The Seller Representative and its Representatives may make inquiries of Buyer, the Project ContributionsAcquired Companies, (vi) and their respective Representatives regarding questions concerning or disagreements with the Chinese DBFO ProceedsAdjustment Statements arising in the course of their review thereof, (vii) and Buyer shall use its, and shall cause the Dalriada DBFO Proceeds Acquired Companies to use their respective, reasonable efforts to cooperate with and (viii) the Other DBFO Proceedspromptly respond to such inquiries.
(db) Parent Upon receipt of a Protest Notice, Buyer and the Seller Representative shall notify Purchaser attempt in good faith to resolve any dispute regarding the Adjustment Statements (and all such discussions related thereto shall, unless otherwise agreed by Buyer and the Seller Representative, be governed by Rule 408 of its acceptance the Federal Rules of Evidence and any applicable similar state rule). If Buyer and the Seller Representative are unable to resolve any disagreement with respect to the Adjustment Statements within thirty (30) days following Buyer's receipt of the Protest Notice, then Buyer and the Seller Representative shall engage, and submit such dispute for resolution to, a mutually agreed upon independent nationally or dispute of any amounts reflected on regionally recognized accounting firm (the Post-Closing Statement"Independent Accountant"). The Independent Accountant will be jointly engaged by Buyer and the Seller Representative, will certify to Buyer and the Seller Representative that it is independent as to such engagement, will act as an expert and not an arbiter, and will be instructed to send to Buyer and the Seller Representative, within thirty (30) calendar days after Parent’s receipt of the date on which such statement (such 30-day period hereinafter dispute is referred to as the “Review Period”). Any such notice of disagreement Independent Accountant, its determination on the specific matters in dispute which calculation shall specify, with a reasonably detailed explanation, those items or amounts be between the determinations prepared by the Seller Representative in the Protest Notice and Buyer in the Adjustment Statements as to which Parent disagrees (Final Closing Date Cash as a whole, Final Closing Date Indebtedness as a whole, and Final Closing Date Net Working Capital as a whole, but otherwise in accordance with the Specified Accounting Principles, and shall include Parent’s proposed changes to Purchaser’s calculation be final and binding on all Parties absent manifest error. The Independent Accountant will determine the allocation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days cost of the conclusion Independent Accountant's review and report based on the inverse of the Review Period percentage its determination (before such allocation) bears to the maximum amounttotal amount of the total items in dispute as originally submitted to the Independent Accountant. For example, if anyshould the items in dispute total an amount equal to $1,000 and the Independent Accountant awards $600 in favor of the Seller Representative's position, which Purchaser 60% of the costs of the Independent Accountant's review would be borne by Buyer and Parent agree 40% of the costs of the Independent Accountant's review would otherwise be owed pursuant to Section 2.6(f), as applicable, upon borne by Seller and the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”)Seller Owners.
(ec) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them The Parties agree as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.follows:
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1i) If the Final Closing Date Net Working Capital as finally determined in accordance with pursuant to the foregoing provisions of this Section 2.6 2.07 is greater than the Estimated Closing Date Net Working Capital, Buyer shall owe the excess to Seller. If the Final Closing Date Net Working Capital as finally determined pursuant to foregoing provisions of this Section 2.07 is less than the Estimated Closing Date Net Working Capital, Parent then Seller and the Seller Owners shall pay owe the amount of such shortfall deficit to PurchaserBuyer.
(2ii) If the Final Closing Working Capital Date Cash as finally determined in accordance with pursuant to the foregoing provisions of this Section 2.6 2.07 is greater than the Estimated Closing Working CapitalDate Cash, Purchaser Buyer shall pay owe the amount of such excess to Parent.
(3) Seller. If the Final Closing Business Debt Date Cash as finally determined in accordance with pursuant to foregoing provisions of this Section 2.6 2.07 is less than the Estimated Closing Business DebtDate Cash, Purchaser Seller and the Seller Owners shall pay owe the amount of such shortfall deficit to ParentBuyer.
(4iii) If the Final Closing Business Debt Date Indebtedness as finally determined in accordance with pursuant to the foregoing provisions of this Section 2.6 2.07 is less than the Estimated Closing Date Indebtedness, Buyer shall owe the deficit to Seller. If the Final Closing Date Indebtedness as finally determined pursuant to foregoing provisions of this Section 2.07 is greater than the Estimated Closing Business DebtDate Indebtedness, Parent Seller and the Seller Owners shall pay owe the amount of such excess to PurchaserBuyer.
(5iv) If The net amount, if any, of amounts owing to Buyer minus amounts owing to Seller pursuant to (i), (ii) and (iii) above is the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than "Buyer Adjustment Amount." The net amount, if any, of amounts owing to Seller minus amounts owing to Buyer pursuant to (i), (ii) and (iii) is the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent"Seller Adjustment Amount." The Parties agree that:
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
A. Within ten (10) If Business Days of the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributionsfinal determination of any Seller Adjustment Amount, Purchaser (i) Buyer shall pay the amount of such excess any Seller Adjustment Amount to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid Seller by wire transfer of immediately available fundsfunds in accordance with written instructions provided by the Seller Representative to Buyer, together with interest thereon and (ii) Eastern, as party to the Escrow Agreement and on behalf of Buyer, and the Seller shall issue joint written instructions to the Escrow Agent for the period commencing release of all amounts remaining in the Working Capital Escrow Fund.
B. Within ten (10) Business Days of the final determination of any Buyer Adjustment Amount, the Seller Representative and Eastern, as party to the Escrow Agreement and on behalf of Buyer, shall issue joint written instructions to Escrow Agent to pay (i) to Buyer from the Closing Date through Working Capital Escrow Fund an amount equal to the Buyer Adjustment Amount, and (ii) to the Seller Representative all amounts remaining, if any, in the Working Capital Escrow Fund after disbursement of the Buyer Adjustment Amount; provided, however, that in the event the Buyer Adjustment Amount is greater than the amount remaining in the Working Capital Escrow Fund (such excess amount, the "Excess Buyer Adjustment Amount"), (A) the Seller Representative and Eastern, as party to the Escrow Agreement and on behalf of Buyer, shall issue joint written instructions to the Escrow Agent to pay to Buyer the entire balance of the Working Capital Escrow Fund, and (B) Seller and the Seller Owners shall pay (or cause Seller Representative to pay on their behalf) to Buyer the amount of the Excess Buyer Adjustment Amount by wire transfer of immediately available funds in accordance with wire instructions provided by Buyer. For clarity, Seller shall be jointly and severally liable for the entire Buyer Adjustment Amount and each Seller Owner shall be severally, but not jointly and severally, liable for his Pro Ration Percentage of the Buyer Adjustment Amount.
C. Any payment of the Seller Adjustment Amount which is owed by Buyer and not so paid when due and payable in accordance Section 2.07(c)(iv)(A) shall bear simple interest from the date on which such the amount is due and payable as provided in this clause (iv) to the date on which the payment is made actually paid at a rate of five percent (5.00%) per annum (calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year 365 day year) which interest shall be payable to the Seller. Any payment of 365 days the Excess Buyer Adjustment Amount which is owed by Seller and the Seller Owners and which is not so paid when due and payable in accordance with Section 2.07(c)(iv)(B) shall bear simple interest from the date on which the amount is due and payable as provided in this clause (iv) to the date on which the payment is actually paid at a rate of five percent (5.00%) per annum (calculated on the basis of a 365 day year) which interest shall be payable to the Buyer.
(d) The Parties agree that the Selling Parties and their Affiliates may engage the Acquired Companies' accountants and advisors at Kraft CPAs PLLC and Bass, ▇▇▇▇▇ & ▇▇▇▇ and their respective Affiliates to advise or represent them in connection with the determination of the Final Closing Date Cash, the Final Closing Date Indebtedness, and the Final Closing Date Net Working Capital and the other matters addressed by this Section 2.07.
(e) The cost of any policy of title insurance obtained by Buyer, and any endorsements issued in connection therewith, any survey or zoning letter or report obtained by Buyer, and any recording fees, search and exam fees related to the Company Real Property shall be paid by Buyer. Other than Transfer Taxes (which are the subject of Section 12.06), all other costs and expenses of the Contemplated Transactions related to the Company Real Property not allocated above shall be divided between Buyer and Seller in accordance with the custom of the jurisdiction where the applicable Company Real Property is located; provided, however, under all circumstances Seller and Buyer shall split evenly (50/50) any such costs incurred if no such custom exists. To the extent required for any particular Company Real Property, Seller and Buyer shall agree prior to Closing upon an appropriate value mutually acceptable to the Parties for such particular Company Real Property for purposes of determining any recordation or transfer tax applicable to each Company Real Property.
(f) All customary charges and rents with respect to the Company Real Property (other than ad valorem real estate taxes, which shall be allocated pursuant to Section 2.07(g) and Section 10.02) shall be prorated and adjusted between the parties as of the Closing Date. If final prorations for those items addressed in this Subsection (f) cannot be made on the Closing Date, then Buyer and Seller agree that such times shall be estimated using the immediately preceding year as the basis, with such final adjustment(s) to the prorations to be made promptly once statements evidencing the actual number figures for the applicable time period are received. Payments in connection with such final adjustments shall be due and paid within thirty (30) days after mutual agreement of the amount(s) due. The prorations made in this Subsection (f) shall be without duplication of any items adjusted pursuant to the Adjustment Statements as set forth above or Subsection (g) below.
(g) To the extent not included in the calculation of Net Working Capital or Section 2.07(f), all real estate Taxes, special or general assessments, assessments under any Permitted Encumbrances, personal property Taxes, water and sewer rents, rates and charges and other municipal permit fees that relate to the Company Real Property or any personal property owned or used by the Acquired Companies in connection with the operation of their respective businesses with respect to time periods before and after the Closing shall be prorated and adjusted between the parties as of the Closing Date. If final prorations for those items addressed in this Subsection (g) cannot be made on the Closing Date, then Buyer and Seller agree that such amounts shall be estimated based on the most recent available ▇▇▇▇ or periodic payment and shall be re-prorated promptly upon receipt of the actual Tax ▇▇▇▇ (such re-proration, if any, the "Property Tax Adjustment"). After the Property Tax Adjustment is complete, payments in connection with any Property Tax Adjustment shall be due and paid within thirty (30) days elapsedafter mutual agreement of the amount(s) due. The prorations made in this Subsection (g) shall be without duplication of any items adjusted pursuant to the Adjustment Statements as set forth above or Subsection (f) above.
(h) Any payments made pursuant to this Section 2.07 (other than fees paid to the Independent Accountant) shall be treated by the Parties as an adjustment to the Purchase Price for Income Tax purposes, except to the extent applicable Law requires such payment to be treated differently.
Appears in 1 contract
Purchase Price Adjustments. The Purchase Price shall be increased or decreased as provided in SCHEDULE 2.1(A)(III) (athe "ADJUSTMENT SCHEDULE") Not more both for "PRE-CLOSING ADJUSTMENTS" and a "YEAR-END BONUS ADJUSTMENT" (as such terms are defined and described therein). No later than fifteen seven (157) and not less than five (5) Business Days days prior to the Closing Date, Parent Seller shall deliver to Parent Seller's calculation of the adjustment required under the Adjustment Schedule ("SELLER'S ADJUSTMENT NOTICE") together with reasonable detail supporting Seller's calculations. If Parent does not deliver a written notice to Seller prior to the Closing that it disputes the calculation and/or methodology contained in Seller's Adjustment Notice, then the amounts of the Pre-Closing Adjustments and the Year-End Bonus Adjustment set forth in Seller's Adjustment Notice, shall be final and binding upon Purchaser and Seller; PROVIDED, HOWEVER, that the amount of the Year-End Bonus Adjustment shall be contingent upon the applicable employees remaining employed with Purchaser through December 31, 2004 and shall be subject to additional adjustment based on final 2004 revenues, all as provided in the Adjustment Schedule (collectively, the "YEAR-END BONUS ADJUSTMENT MODIFICATIONS"). Notwithstanding any objection by Parent to the calculation of the amount thereof, at the Closing, Seller shall deliver to the Escrow Agent, under the terms of the Escrow Agreement, funds equal to its estimate of the amount of the Year-End Bonus Adjustment as stated in the Seller's Adjustment Notice. If Parent delivers a statement written notice to Seller prior to Closing that it disputes the Seller's calculation in Seller's Adjustment Notice, then the Closing shall otherwise occur (subject to the satisfaction of the conditions thereto and the required deliveries of the parties pursuant to the terms of this Agreement) and the amount of the Initial Purchase Price to be delivered by Parent hereunder shall be Seventy-Six Million Dollars ($76,000,000). The parties shall use their reasonable efforts to resolve such dispute within fifteen (15) days following the Closing. If Parent and Seller reach agreement during such 15-day period on the amount of the Pre-Closing Adjustments and/or Year-End Bonus Adjustment, then such agreed-upon amounts of the Pre-Closing Adjustments and/or the Year-End Bonus Adjustment (subject to the Year-End Bonus Adjustment Modifications), as the case may be, shall be final and binding upon Purchaser and Seller. Parent shall, within two (2) business days of such agreement, pay the amount of any increase in the Initial Purchase Price pursuant to the Pre-Closing Adjustment to Seller, or Seller shall, within two (2) business days of such agreement, pay the amount of any decrease in the Initial Purchase Price pursuant to the Pre-Closing Adjustment to Parent, as the case may be. Further, Seller shall, within two (2) business days of such agreement, deliver to the Escrow Agent, under the terms of the Escrow Agreement, funds equal to any agreed-upon increase in the estimated Year-End Bonus Adjustment from the amount thereof stated in Seller's Adjustment Notice and delivered to the Escrow Agent in connection with the Closing. If Parent and Seller do not reach agreement during such 15-day period on the amount of the Pre-Closing Adjustments and/or Year-End Bonus Adjustment, as the case may be, then Parent and Seller shall submit the matter for resolution to a mutually acceptable nationally recognized independent accountant, paid for equally by the parties (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates "ACCOUNTANT"). If Parent and Seller are unable to agree on the procedures to be followed by the Accountant, including procedures with regard to presentation of (i) evidence, within the 15-day period following the Closing Working Capital (including all described above, then the Accountant shall establish such procedures giving due regard to the intention of Parent and Seller to resolve disputes as quickly, efficiently and inexpensively as possible, which procedures may, but need not, be those proposed by either of Parent or Seller. Parent, Seller and their respective representatives will furnish to the Accountant such work papers, schedules and other documents relating to the unresolved disputed issues with respect to Seller's calculation in Seller's Adjustment Notice as the Accountant may request. The Accountant shall be directed to render a written report on the unresolved disputed issues with respect to the Seller's calculation in Seller's Adjustment Notice as promptly as practicable and to resolve only those issues in dispute. The determination by the Accountant shall be based solely on presentations by Parent and Seller, shall not involve any independent investigation and shall not be outside of the components thereofrange defined by the respective amounts proposed by Parent and Seller with respect to the Seller's calculation in Seller's Adjustment Notice. In such event, the determination of the Accountant of the amounts of the Pre-Closing Adjustments and/or the Year-End Bonus Adjustment (subject to the Year-End Bonus Adjustment Modifications), as the case may be, shall be final and binding upon Purchaser and Seller. Parent shall, within two (2) prepared business days of such final determination by the Accountant, pay the amount of the increase in the Initial Purchase Price pursuant to the Pre-Closing Adjustment to Seller, or Seller shall, within two (2) business days of such agreement, pay the amount of the decrease in the Initial Purchase Price pursuant to the Pre-Closing Adjustment to Parent, as the case may be. Further, Seller shall, within two (2) business days of such final determination by the Accountant, deliver to the Escrow Agent, under the terms of the Escrow Agreement, funds equal to any increase (as determined by the Accountant) in the estimated Year-End Bonus Adjustment from the amount thereof stated in Seller's Adjustment Notice and delivered to the Escrow Agent in connection with the Closing. Pursuant to and in accordance with the Calculation Principles (terms of the “Estimated Closing Working Capital”)Escrow Agreement, (ii) Parent and Seller shall jointly direct the Closing Business Debt (Escrow Agent in writing to distribute the “Estimated Closing Business Debt”)funds comprising the estimated Year-End Bonus Adjustment amount delivered by Seller to the Escrow Agent to Parent and/or Seller, (iii) as the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”)case may be, (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
within two (2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating business days following agreement between Parent and Seller with respect to the DBFO project in the City of Beverly HillsYear-End Bonus Adjustment Modifications, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back but no later than February 14, 2005. Any amounts to be paid by Parent or Seller to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted other party pursuant to this Section 2.6(b), is the “Closing Payment.”
(c2.1(a)(iii) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by paid when due shall bear interest at the Accounting Firm.
(f) No later than five (5) Business Days after rate of 10% per annum from the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment date required to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedhereunder.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen (15) For the purpose of confirming the Closing Date Net Working Capital and the payments contemplated by this Section 3.3, Seller shall prepare, or cause to be prepared, a balance sheet of the Business and calculation of Closing Date Net Working Capital, which balance sheet shall be prepared in accordance with GAAP, consistent with the accounting methods, practices, principles, policies and procedures used in preparing the Financial Statements and Exhibit A; provided, however, that, even if inconsistent with the foregoing, the consolidated balance sheet shall not less than five (5) Business Days prior take into account the Excluded Assets and Excluded Liabilities, except to the Closing Date, Parent shall deliver to extent that Purchaser a statement (the “Transaction Statement”) satisfies any obligations of Seller that contains Parent’s reasonable good faith estimates of (i) the Closing Working Capital (including all of the components thereof) are Excluded Liabilities. The balance sheet prepared in accordance with the Calculation Principles foregoing is referred to as the “Final Closing Date Balance Sheet.”
(b) No later than 30 days after the Closing Date, Seller shall deliver to Purchaser the Final Closing Date Balance Sheet together with a worksheet showing the calculation of the Closing Date Net Working Capital shown on the Final Closing Date Balance Sheet (the “Estimated Closing Final Net Working Capital”). If within 30 days after the date of the delivery to Purchaser of the Final Closing Date Balance Sheet Purchaser determines in good faith that Purchaser disagrees with any portion of the Final Closing Date Balance Sheet (the disputed items being the “Disputed WC Items”), then Purchaser may give written notice (a “WC Dispute Notice”) to Seller within such 30-day period, which WC Dispute Notice shall: (i) set forth Purchaser’s proposed resolution of the Disputed WC Items (including Purchaser’s determination of Final Net Working Capital taking into account such proposed resolution of the Disputed WC Items), (ii) specify in reasonable detail Purchaser’s basis for disagreement with the Final Closing Business Debt (the “Estimated Closing Business Debt”), Date Balance Sheet and (iii) include materials showing in reasonable detail Purchaser’s support for such position. Any matters set forth in the Final Closing Transaction Expenses Date Balance Sheet that are not included as Disputed WC Items in a timely delivered WC Dispute Notice shall be deemed accepted by Purchaser and shall be binding and final for all purposes of this Agreement, and (the “Estimated Closing Transaction Expenses”), (ivA) the Change of Control Payments failure by Purchaser to provide a WC Dispute Notice within such 30-day period or (the “Estimated Closing Change of Control Payments”), (vB) the Project Contributions (delivery by Purchaser to Seller during such 30-day period of a written notice stating that Purchaser has elected not to deliver a WC Dispute Notice, will constitute a full and complete acceptance of the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) Final Closing Date Balance Sheet as determined by Seller and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price such Final Closing Date Balance Sheet shall be subject binding and final for all purposes of this Agreement. If Purchaser and Seller are unable to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating resolve any disagreement among them with respect to the DBFO project in Final Closing Date Balance Sheet within 15 days after the City delivery of Beverly Hillsa WC Dispute Notice by Purchaser to Seller, California then the Disputed WC Items (the “but no others) may be referred by Seller or Purchaser for determination to BDO ▇▇▇▇▇▇▇ Hills DBFO Assets(“BDO”) (or, if they are sold back unable or unwilling to serve, another nationally recognized accounting firm not affiliated with Seller or Purchaser that is mutually selected by Seller and Purchaser). If Seller and Purchaser are unable to select a nationally recognized accounting firm within five Business Days of BDO declining to accept such engagement, either Seller or Purchaser may thereafter request that the American Arbitration Association (“AAA”) make such selection (as applicable, BDO, the firm selected by Seller and Purchaser or the firm selected by the AAA is referred to as the “Independent Accountant”). Each of Seller and Purchaser shall provide the Independent Accountant and the other party with a statement of its position as to the City amount for each Disputed WC Item within 15 days from the date of the referral of the disagreement to the Independent Accountant. The Independent Accountant shall make a written determination as promptly as practicable, but in any event within 30 days after the date on which the disagreement is referred to the Independent Accountant, by selecting from the position of either Seller (on the one hand) or Purchaser (on the other hand) as to the amount of Final Net Working Capital. The Independent Accountant shall be authorized to select only the position as to the amount of Final Net Working Capital as presented by either Seller (on one hand) or Purchaser (on the other hand). If at any ▇▇▇▇ ▇▇▇▇▇▇ Hills prior and Purchaser resolve their dispute, then notwithstanding the preceding provisions of this Section 3.3(b), the Independent Accountant’s involvement promptly shall be discontinued and the Final Closing Date Balance Sheet shall be revised, if necessary, to reflect such resolution and thereupon shall be final and binding for all purposes of this Agreement. The Parties shall make readily available to the Closing, Independent Accountant all relevant books and records relating to the Base Purchase Price Final Closing Date Balance Sheet and all other items reasonably requested by the Independent Accountant in connection with resolving the disagreement regarding the amount of Final Net Working Capital. The costs and expenses of the Independent Accountant shall be reduced shared equally by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed Seller and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to Purchaser. The decision of the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price Independent Accountant shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company final and binding for all purposes of this Agreement and the Final Closing Date Balance Sheet shall be irrevocably entitled revised, if necessary, to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price reflect such decision and thereupon shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed final and binding for all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transactionpurposes of this Agreement.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.For purposes hereof:
Appears in 1 contract
Sources: Asset Purchase Agreement (Strategic Diagnostics Inc/De/)
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than five (5) Business Days prior to the Closing Date, Parent shall deliver to Purchaser a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment adjustment, and payments in respect thereof shall be made in accordance with this Section 1.4.
(a) At least five (5) business days prior to the Closing, the Fortegra Parties shall cause to be prepared and delivered to the Buyer a consolidated balance sheet of the Target Companies as of the Closing (the “Draft Closing Balance Sheet”), which shall be prepared in accordance with GAAP (except for the exclusion of other financial statements and the notes required by GAAP) and, based thereon, a schedule (together with the Draft Closing Balance Sheet, the “Draft Closing Schedule”) setting forth the Working Capital (the “Estimated Working Capital”) and the Long-Term Debt (after giving effect to any Long-Term Debt being paid at Closing) (the “Estimated Long-Term Debt”) of the Target Companies as of the Closing, in all cases as reasonably estimated by the Fortegra Parties in good faith based upon the books and records of the Target Companies and applying the terms of this Agreement. The Fortegra Parties shall cooperate with the Buyer with respect to requests for information necessary to review and verify the amounts reflected in the Draft Closing Schedule, including reasonable access to employees, financial and other records of the Target Companies, and all other information related to or affecting such calculation.
(b) Subject to the terms of this Agreement, at the Closing, and in accordance with the Draft Closing as follows:
Schedule, the Purchase Price shall be: (1i) If decreased on a dollar-for-dollar basis by the amount that the Estimated Closing Working Capital is less than the Working Capital Target, if the Estimated Working Capital is less than the Working Capital Target, and by the amount of the Estimated Long-Term Debt or (ii) increased on a dollar-for-dollar basis by the amount that the Estimated Working Capital is greater than the Reference AmountWorking Capital Target, if the Base Purchase Price shall be increased by such excessEstimated Working Capital is greater than the Working Capital Target.
(2c) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
Within ninety (390) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to days following the Closing, the Base Purchase Price Buyer shall cause to be prepared and delivered to the Seller a consolidated balance sheet of the Target Companies as of the Closing (the “Final Closing Balance Sheet”), which shall be reduced prepared in accordance with GAAP (except for the exclusion of other financial statements and the notes required by Eighteen Million Four Hundred Thousand Dollars GAAP) and, based thereon, a schedule ($18,400,000); provided that such transaction is closed together with the Final Closing Balance Sheet, the “Final Closing Schedule”) setting forth the Working Capital (the “Final Working Capital”) and all funds related thereto are transferred the Long-Term Debt (after giving effect to Parent any Long-Term Debt being paid at Closing) (whether directly the “Final Long-Term Debt”) as of the Closing. The Seller shall have thirty (30) days after receipt of the Final Closing Schedule (the “Review Period”) to review the Final Working Capital and Final Long-Term Debt and to notify the Buyer in writing of a dispute with the Final Closing Schedule. If the Seller does not notify the Buyer in writing on or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreementexpiration of the Review Period of its disagreement with the Final Closing Schedule, but such transaction has not closed prior to the Final Closing then (B) the Base Purchase Price Schedule shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company final and binding on all parties. For purposes of the Seller’s review of the Buyer’s calculations, the Buyer shall, and the Buyer shall be irrevocably entitled cause the Companies to, cooperate with the Seller with respect to receive requests for information necessary to review and verify the proceeds from amounts reflected in the transaction.
(7) If any DBFO joint venture partner exercises its right Final Closing Schedule, including reasonable access to purchase any employees, financial and other records of the Target Shares pursuant Companies, and all other information related to a contractual right or affecting such calculation. If (i) the Seller accepts the Final Closing Schedule by delivery of first refusal, written notice of such acceptance to the Base Purchase Price Buyer or (ii) the Seller fails to timely deliver any objection thereto (in which case it shall be reduced deemed to have accepted the Final Closing Schedule as prepared by the Buyer), then, to reflect a final adjustment to the Purchase Price: (x) if the amount (the “Estimated Amount”) of the Estimated Working Capital less the Estimated Long-Term Debt is greater than the amount (the “Final Amount”) of the Final Working Capital less the Final Long-Term Debt, then the Seller shall pay to the Buyer an amount equal to the dollar amount allocated to such Target Shares difference between the Estimated Amount and the Final Amount, or (on a pro-rata basisy) on Schedule 2.7; provided that such transaction if the Estimated Amount is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior less than the Final Amount, then the Buyer shall pay to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Seller an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to difference between the Estimated Project ContributionsAmount and the Final Amount. In either case, if any.
(9) The Base Purchase Price such amounts shall be reduced become due and payable by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
applicable party no later than ten (10) The Base Purchase Price shall be reduced by an amount equal to business days after acceptance of the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Final Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced Schedule by the amount, if any, that Seller or the Estimated Other DBFO Proceeds exceeds end of the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase PriceReview Period, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceedscase may be.
(d) Parent If the Seller disputes the Final Closing Schedule by providing timely written notice of such dispute (a “Notice of Disagreement”) prior to the expiration of the Review Period, then the Seller and the Buyer shall notify Purchaser use Commercially Reasonable Efforts to resolve and finally determine the amount of its acceptance or the Final Working Capital and Final Long-Term Debt. The Notice of Disagreement delivered by the Seller shall set forth in reasonable detail the basis for the dispute described in the Notice of any amounts reflected on Disagreement. If the Post-Closing StatementSeller and the Buyer are unable to resolve the disagreement within thirty (30) days following the delivery of the Notice of Disagreement, then the Seller and the Buyer shall retain KPMG LLP (the “Independent Accountant”) to resolve the disagreement and make a determination with respect thereto. The Independent Accountant will be retained under a retention letter executed by the Seller and the Buyer that specifies that the determination of the Independent Accountant shall be made, and written notice thereof given to the Seller and the Buyer, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as following the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation date of the Closing Working Capitalretention letter, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in that the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of determination by the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts Independent Accountant shall be final, binding and conclusive on upon the partiesSeller and the Buyer. If Purchaser and Parent are unable to reach a resolution to such effect within thirty The scope of the Independent Accountant’s engagement (30which will not be an audit) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution be limited to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission resolution of the dispute, determine and report to disputed items described in the parties upon such remaining disputed amounts with respect to the Post-Closing StatementNotice of Disagreement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior paymentrecalculation, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Final Working Capital as finally determined and Final Long-Term Debt in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount light of such shortfall to Purchaser.
(2) resolution. If the Closing Working Capital as finally determined in accordance with this Section 2.6 an Independent Accountant is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price engaged pursuant to this Section 2.6 1.4(d), the fees and expenses of the Independent Accountant shall be allocated to the Seller in the same proportion as the aggregate financial amount of disputed matters so submitted to the Independent Accountant that is unsuccessfully disputed by the Seller (as finally determined by the Independent Accountant) bears to the total financial amount of all such disputed items so submitted, and the balance shall be paid by wire transfer the Buyer. Within ten (10) business days after delivery of immediately available fundsa notice of determination by the Independent Accountant as described above, together with interest thereon for the period commencing on the Closing Date through the date on which such any payment is made calculated at the Prime Rate. Such interest required by Section 1.4(c) hereof shall be payable at the same time as the payment to which it relates and shall be calculated daily made based on the basis of a year of 365 days and the actual number of days elapsedsuch determination.
Appears in 1 contract
Purchase Price Adjustments. (ai) Not more than fifteen The Parties acknowledge and agree that Exhibit B to Schedule 2(f) sets forth a description of the minimum volume and the related quality of Crude Oil (15as defined in Exhibit A to Schedule 2(f)) (regardless of whether designated by any Link Party as linefill or operating inventory) necessary to operate the Pipeline Systems (as defined in Exhibit A to Schedule 2(f)) comprising part of the Crude Oil Business Assets and the minimum volume and related quality of Crude Oil necessary for the Crude Oil Business to ship on the pipeline systems not owned by the Link Parties but utilized in the Crude Oil Business in the Ordinary Course of Business. Such Exhibit B describes such minimum volume and quality of Crude Oil. Exhibit D to Schedule 2(f) describes the pricing formula applicable for each such quality of Crude Oil included in such Exhibit B.
(ii) In connection with the Closing, Plains (on behalf of the Plains Parties) and not less than five Link (5on behalf of the Link Parties) Business Days prior shall effect the reconciliation procedures described on Schedule 2(f) to determine the Net Inventory Adjustment (as defined in Exhibit A to Schedule 2(f)). If the Net Inventory Adjustment is a positive amount, such Net Inventory Adjustment shall be included as a current asset in Net Working Capital, and if such Net Inventory Adjustment is a negative amount, then such Net Inventory Adjustment shall be included as a current liability in Net Working Capital.
(iii) The Purchase Price has been agreed upon based on the Net Working Capital at the Effective Time being equal to the Target Net Working Capital.
(iv) Within 60 days after the Closing Date, Parent shall deliver Plains (on behalf of the Plains Parties) will prepare and provide to Purchaser Link a statement signed by Plains (on behalf of the Plains Parties) showing the Net Working Capital of the Crude Oil Business ("Working Capital Statement") at the Effective Time and a statement showing the calculation of the Net Inventory Adjustment (the “Transaction "Crude Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing "). The Working Capital (including all of Statement shall reflect the components thereof) value associated with each line item component comprising the Net Working Capital and shall be prepared in accordance with the Calculation Principles terms of Schedule 1(d). Plains will afford representatives of the Link Parties the opportunity to participate in and review the preparation and calculation of the Working Capital Statement and the Crude Statement, including the opportunity to observe accounting procedures and review all work papers and other relevant documents. At Link's request (which request shall be made no later than 30 days after the “Estimated Closing Working Capital”Date), PWC shall review each of the Working Capital Statement and the Crude Statement. The fees and expenses due PWC for the performance of such review, if so requested by Link, shall be paid by Link. If Link disputes the Working Capital Statement or Crude Statement or any part thereof, then Link shall provide to Plains written notice (ii"Dispute Notice") on or before the Closing Business Debt (30th day after the “Estimated Closing Business Debt”)date of Link's receipt of the Working Capital Statement and the Crude Statement setting forth in reasonable detail the portion or portions of those documents that are disputed by Link. If no Dispute Notice is delivered within such 30-day period, (iii) the Closing Transaction Expenses (Working Capital Statement and Crude Statement shall become final and binding on the “Estimated Closing Transaction Expenses”), (iv) Parties and the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject adjusted pursuant to adjustment at this Section 2(f) based on the Closing as follows:
same. Commencing promptly after delivery of a Dispute Notice, Plains (1on behalf of the Plains Parties) If and Link (on behalf of the Estimated Closing Working Capital Link Parties) shall negotiate in good faith to resolve the dispute and, if no resolution is greater than reached on or before the Reference Amounttenth day after the expiration of such 30-day period, the Base Purchase Price disputed matters shall be increased submitted by such excessthe Parties (and may be submitted by either Party) to the Independent Consultant, and the decision of the Independent Consultant shall be binding on the Parties.
(2v) If the Estimated Closing Working Capital is less than the Reference Amount, the Base The Purchase Price shall will be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced adjusted upward by an amount equal to the dollar amount allocated to such amount, if any, by which the Net Working Capital exceeds the Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Net Working Capital. The Purchase Price shall will be reduced adjusted downward by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that by which the Estimated Other DBFO Proceeds Target Net Working Capital exceeds the Net Working Capital. For example, if Net Working Capital is determined to be -$15.4 million (i.e. current liabilities used in the calculations, as per Schedule 1(d), of Net Working Capital exceed current assets used in the calculation, as per Schedule 1(d), of Net Working Capital by $15.4 million), then the Purchase Price would be adjusted upward by $4.0 million since the Net Working Capital amount of - $15.4 million exceeds the Target Net Working Capital amount of -$19.4 million by $4.0 million.
(vi) If any of the Available Employees are terminated by Link or Link Canada after the date of this Agreement but prior to the Closing with the written consent of Plains (on behalf of the Plains Parties), then the Purchase Price will be adjusted upward by the amount of severance paid by Link or Link Canada to such Available Employees consistent with Link's or Link Canada's severance policy (such severance policy being described on Schedule 2(f)(vi)) or consistent with Link's or Link Canada's employment agreement or change in control agreement with each such Available Employee); provided, such adjustment will not exceed per Available Employee more than two weeks pay per year of service with a maximum of 26 weeks and a minimum of four weeks, in addition to associated payroll Taxes, calculated on the basis of such Available Employee's salary in effect on the date of this Agreement.
(vii) The Purchase Price shall be adjusted downward by $1,553,354.05 (the "Change of Control Adjustment"), the amount by which the aggregate amount to be paid by Plains pursuant to Section 6(c)(ii)(C) to the Specified Available Employees or to Link exceeds the aggregate amount of all Permitted Proceeds Parent is entitled which would have been payable to receive between September 28, 2007 and the Specified Available Employees (if terminated on the Closing Date. The Base ) under the terms of Link's severance plan as in effect on the date of this Agreement, calculated on the basis of the Specified Available Employees' respective salaries in effect on the date of this Agreement (and not to exceed per Specified Available Employee more than two weeks pay per year of service with a maximum of 26 weeks and a minimum of four weeks, in addition to associated payroll Taxes).
(viii) Within two Business Days after all Purchase Price, as adjusted Price adjustments are finally agreed upon or determined pursuant to the preceding provisions of this Section 2.6(b2(f), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser all of such Purchase Price adjustments shall prepare and deliver to Parent be combined on a statement prepared by Plains (on behalf of the Plains Parties) and delivered to Link (on behalf of the Link Parties) (the “"Post-Closing Statement”") and (A) if the combination of such Purchase Price adjustments results in the Purchase Price exceeding the Estimated Purchase Price, then Plains shall pay to Link (i) the Closing Working Capital (including all on behalf of the components thereofLink Parties) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay plus a yield on the amount of such excess to Purchaser.
from (5and including) If the Closing Transaction Expenses as finally determined Date to (but excluding) the date of payment at a yield rate per annum equal to the LIBOR Rate plus 1% per annum (the "Specified Rate"), and (B) if the combination of such Purchase Price adjustments results in accordance with this Section 2.6 are less than the Estimated Closing Transaction ExpensesPurchase Price exceeding the Purchase Price, Purchaser then Link (on behalf of the Link Parties) and Plains (on behalf of the Plains Parties) shall pay execute and deliver to the Escrow Agent a joint letter whereby Link and Plains instruct the Escrow Agent to disburse to Plains (on behalf of the Plains Parties) out of the Escrow Amount (including the Debt Reduction Adjustment) the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expensesexcess, Parent shall pay plus a yield on the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds from (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and including) the Closing Date), Purchaser shall pay Date to (but excluding) the amount date of such shortfall to Parentpayment at the Specified Rate; provided, however that Purchaser all of the Link Parties' obligations under this clause (viii)(B) shall be satisfied solely out of the Escrow Amount (including the Debt Reduction Adjustment), and no Link Party shall be liable to any Plains Party for amounts that cannot be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount satisfied out of such excess to PurchaserEscrow Amount (including the Debt Reduction Adjustment).
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Plains All American Pipeline Lp)
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than five (5) At least three Business Days prior to the Closing Date, Parent Seller shall prepare, or cause to be prepared, and deliver to Purchaser Buyer a statement (the “Transaction Preliminary Closing Statement”) that contains Parent’s reasonable good faith estimates of sets forth (i) a good-faith estimate of (A) the Closing Net Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles Adjustment (the “Estimated Closing Net Working CapitalCapital Adjustment”)) as of the Measurement Time, (iiB) the Closing Business Debt Adjustment Indebtedness (the “Estimated Closing Business DebtAdjustment Indebtedness”)) as of the Measurement Time, (iiiC) Specified Funded Indebtedness (the “Estimated Specified Funded Indebtedness”) (which shall include, for this purpose, a calculation of (x) the amount of Existing Company Notes, (y) interest payments owed in respect of Specified Funded Indebtedness but only to the extent of interest accrued prior to the Measurement Time, and (z) any prepayment penalty or premium, in each case, utilizing the applicable Conversion Rate) as of the Closing Date, (D) Cash (the “Estimated Cash”) as of the Measurement Time, (E) Transaction Expenses (the “Estimated Closing Transaction Expenses”) as of the Closing Date, (F) Construction Projects Outstanding Obligations Amount (the “Estimated Construction Projects Outstanding Obligations Amount”) as of the Closing Date, if any, (G) the Development Projects Adjustment Amount as of the earlier of the Closing Date or December 31, 2024 (the “Estimated Development Projects Adjustment Amount”), (ivH) the Change of Control Payments Property Tax Amount (the “Estimated Closing Change Property Tax Amount”) as of Control Payments”)the Measurement Time, (vI) the Project Contributions Carvers Creek Tax Equity Amount (the “Estimated Project ContributionsCarvers Creek Tax Equity Amount”)) as of the Closing Date, (viJ) the Chinese DBFO Proceeds Clearview Tax Equity Amount, (K) solely if the Closing Date is after the Locked Box Date, the Leakage Amount (the “Estimated Chinese DBFO ProceedsLeakage Amount”)) as of the Closing Date, (viiL) solely if the Dalriada DBFO Proceeds Closing Date is after the Locked Box Date, the Locked Box Period Development Expenditure Amount (the “Estimated Dalriada DBFO ProceedsLocked Box Period Capital Expenditure Amount”) and as of the Closing Date, (viiiM) solely if the Other DBFO Proceeds Closing Date has not occurred on or prior to December 31, 2024, the Development Projects 2025 Pre-Locked Box Spending Amount (the “Estimated Other DBFO ProceedsDevelopment Projects 2025 Pre-Locked Box Spending Amount”) as of the Measurement Time, (N) the ▇▇▇▇▇▇ RNG Sale-Leaseback Amount (the “Estimated ▇▇▇▇▇▇ RNG Sale-Leaseback Amount”) as of the Closing Date, (O) the Development Projects Credit Amount and (P) the Norswiss Tax Equity Amount, based on the Company’s books and records and other information available at the Closing, and prepared on a basis consistent with the Applicable Accounting Principles and definitions herein, and (ii) using the amounts referred to in the preceding clause (i), a calculation of the Estimated Purchase Price (including the amounts contemplated in clause (xi) of the definition thereof).
(b) The Base Purchase Price shall be subject to adjustment at Within 90 days after the Closing as follows:
Date, Buyer shall cause to be prepared and delivered to Seller a written statement (1the “Final Pre-FC Closing Statement”) If that sets forth (i) a good faith calculation in reasonable detail, including reasonably supporting documentation of such amounts, of the Estimated Closing actual (A) Net Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
Adjustment (2) If the Estimated “Closing Net Working Capital is less than Adjustment”) as of the Reference AmountMeasurement Time, (B) Adjustment Indebtedness (“Closing Adjustment Indebtedness”) as of the Base Purchase Price Measurement Time, (C) Specified Funded Indebtedness (“Closing Specified Funded Indebtedness”) (which shall be reduced by such deficit.
include, for this purpose, a calculation of (3x) The Base Purchase Price shall be reduced by the amount of Existing Company Notes, (y) interest payments owed in respect of Specified Funded Indebtedness but only to the Estimated Closing Business Debtextent of interest accrued prior to the Measurement Time, if any.
and (4z) The Base Purchase Price shall be reduced by any prepayment penalty or premium, in each case, utilizing the amount applicable Conversion Rate) as of the Estimated Closing Date, (D) Cash (“Closing Cash”) as of the Measurement Time, (E) Transaction Expenses (“Closing Transaction Expenses, if any.
(5”) The Base Purchase Price shall be reduced by the amount as of the Estimated Closing Change Date, (F) Development Projects Adjustment Amount (“Closing Development Projects Adjustment Amount”) as of Control Paymentsthe earlier of the Closing Date or December 31, if any.
2024, (6G) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California Carvers Creek Tax Equity Amount (the “▇Closing Carvers Creek Tax Equity Amount”) as of the Closing Date, (H) Property Tax Amount (the “Closing Property Tax Amount”) as of the Measurement Time, (I) solely if the Closing Date is after the Locked Box Date, Leakage Amount (the “Closing Leakage Amount”) as of the Closing Date, (J) solely if the Closing Date is after the Locked Box Date, Locked Box Period Development Expenditure Amount (the “Closing Locked Box Period Capital Expenditure Amount”) as of the Closing Date, (K) solely if the Closing Date has not occurred on or prior to December 31, 2024, Development Projects 2025 Pre-Locked Box Spending Amount (the “Closing Development Projects 2025 Pre-Locked Box Spending Amount”) as of the Measurement Time, and (L) and the ▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to RNG Sale-Leaseback Amount (the City of ▇“Closing ▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectlyRNG Sale-Leaseback Amount”) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any as of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent and (ii) using the amounts referred to in the preceding clause (i) and the Estimated Construction Projects Outstanding Obligations Amount provided by Seller, a calculation of the Pre-FC Purchase Price derived therefrom (including the amounts contemplated in clause (xi) of the definition of Pre-FC Purchase Price). The Final Pre-FC Closing Statement shall be entitled to receive (directly or indirectly) Other DBFO Proceeds prepared on a basis consistent with the Applicable Accounting Principles and definitions herein. For the avoidance of doubt, adjustments associated with the Construction Projects Outstanding Obligations Amount are addressed in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b2.3(i), is the “Closing Payment.”
(c) Within seventyThe Final Pre-five FC Closing Statement shall become final and binding on the 60th day following delivery thereof, unless prior to the end of such period, Seller delivers to Buyer written notice of its disagreement (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing StatementNotice of Disagreement”) specifying the nature and amount of (i) any dispute as to the Closing Net Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working CapitalAdjustment, Closing Business DebtAdjustment Indebtedness, Change of Control PaymentsClosing Specified Funded Indebtedness, Closing Cash, Closing Transaction Expenses, Project ContributionsClosing Development Projects Adjustment Amount, Chinese DBFO ProceedsClosing Carvers Creek Tax Equity Amount, Dalriada DBFO Proceeds and Other DBFO ProceedsClosing Property Tax Amount, Closing Leakage Amount, Closing Locked Box Period Capital Expenditure Amount and/or Closing Development Projects 2025 Pre-Locked Box Spending Amount, as applicable)set forth in the Final Pre-FC Closing Statement. Parent Seller shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Net Working Capital, Closing Business DebtAdjustment Indebtedness, Change of Control PaymentsClosing Specified Funded Indebtedness, Closing Net Working Capital Adjustment, Closing Adjustment Indebtedness, Closing Specified Funded Indebtedness, Closing Cash, Closing Transaction Expenses, Project ContributionsClosing Development Projects Adjustment Amount, Chinese DBFO ProceedsClosing Carvers Creek Tax Equity Amount, Dalriada DBFO Proceeds Closing Property Tax Amount, Closing Leakage Amount, Closing Locked Box Period Capital Expenditure Amount, Closing Development Projects 2025 Pre-Locked Box Spending Amount and/or Closing ▇▇▇▇▇▇ RNG Sale-Leaseback Amount, not specifically referenced in the Notice of Disagreement, and Other DBFO Proceedssuch items and amounts shall not be subject to review in accordance with Section 2.3(d).
(d) During the 30-day period following delivery of a Notice of Disagreement by Seller to Buyer, the parties in good faith shall seek to resolve in writing any differences that they may have with respect to the calculation of the Closing Net Working Capital Adjustment, Closing Adjustment Indebtedness, Closing Specified Funded Indebtedness (which shall include, for this purpose, a calculation of (x) the amount of Existing Company Notes, (y) interest payments owed in respect of Specified Funded Indebtedness but only to the extent of interest accrued prior to the Measurement Time, and (z) any prepayment penalty or premium, in each case, utilizing the applicable Conversion Rate), Closing Cash, Closing Transaction Expenses, Closing Development Projects Adjustment Amount, Closing Carvers Creek Tax Equity Amount, Closing Property Tax Amount, Closing Leakage Amount, Closing Locked Box Period Capital Expenditure Amount, Closing Development Projects 2025 Pre-Locked Box Spending Amount and/or Closing ▇▇▇▇▇▇ RNG Sale-Leaseback Amount, as applicable specified therein. Any disputed items resolved in writing between Buyer and Seller within such 30‑day period (or such longer time period as mutually agreed by the parties) shall be final and binding with respect to such items, and if Buyer and Seller agree in writing on the resolution of each disputed item specified by Seller in the Notice of Disagreement and the amount of the Closing Net Working Capital Adjustment, Closing Adjustment Indebtedness, Closing Specified Funded Indebtedness, Closing Cash, Closing Transaction Expenses, Closing Development Projects Adjustment Amount, Closing Carvers Creek Tax Equity Amount, Closing Property Tax Amount, Closing Leakage Amount, Closing Locked Box Period Capital Expenditure Amount, Closing Development Projects 2025 Pre-Locked Box Spending Amount and/or Closing ▇▇▇▇▇▇ RNG Sale-Leaseback Amount, the amounts so determined shall be final and binding on the parties for all purposes hereunder. If Buyer and Seller have not resolved all such differences by the end of such 30-day period, Buyer and Seller shall submit, in writing, to an independent public accounting firm jointly retained by ▇▇▇▇▇ and Seller (the “Undisputed AmountsIndependent Accounting Firm”), their briefs detailing their views as to the correct nature and amount of each item remaining in dispute and the amounts of the Closing Net Working Capital Adjustment, Closing Adjustment Indebtedness, Closing Specified Funded Indebtedness, Closing Cash, Closing Transaction Expenses, Closing Development Projects Adjustment Amount, Closing Carvers Creek Tax Equity Amount, Closing Property Tax Amount, Closing Leakage Amount, Closing Locked Box Period Capital Expenditure Amount, Closing Development Projects 2025 Pre-Locked Box Spending Amount and/or Closing ▇▇▇▇▇▇ RNG Sale-Leaseback Amount, and the Independent Accounting Firm shall make a written determination as to each such disputed item and the amount of the Closing Net Working Capital Adjustment, Closing Adjustment Indebtedness, Closing Specified Funded Indebtedness, Closing Cash, Closing Transaction Expenses, Closing Development Projects Adjustment Amount, Closing Carvers Creek Tax Equity Amount, Closing Property Tax Amount, Closing Leakage Amount, Closing Locked Box Period Capital Expenditure Amount, Closing Development Projects 2025 Pre-Locked Box Spending Amount and/or Closing ▇▇▇▇▇▇ RNG Sale-Leaseback Amount. The Independent Accounting Firm shall be BDO USA, P.C. or, if such firm is unable or unwilling to act, such other independent, internationally recognized public accounting or consulting firm with an active practice area focused on post-mergers and acquisitions purchase price dispute resolution reasonably acceptable to and agreed in writing by ▇▇▇▇▇ and Seller. Buyer and Seller shall use their commercially reasonable efforts to cause the Independent Accounting Firm to render a written decision resolving the matters submitted to it within 30 days following the submission thereof. All communications with the Independent Accounting Firm shall include at least one Representative of each of Buyer and Seller, and no party shall be permitted to communicate with the Independent Accounting Firm other than as expressly set forth herein. The Independent Accounting Firm shall consider only those items and amounts in Buyer’s and Seller’s respective calculations of the Closing Net Working Capital Adjustment, Closing Adjustment Indebtedness, Closing Specified Funded Indebtedness, Closing Cash, Closing Transaction Expenses, Closing Development Projects Adjustment Amount, Closing Carvers Creek Tax Equity Amount, Closing Property Tax Amount, Closing Leakage Amount, Closing Locked Box Period Capital Expenditure Amount, Closing Development Projects 2025 Pre-Locked Box Spending Amount and/or Closing ▇▇▇▇▇▇ RNG Sale-Leaseback Amount that are identified as being items and amounts to which Buyer and Seller have been unable to agree. The Independent Accounting Firm shall not be permitted to make any determination as to whether the Target Net Working Capital or any estimates on the Preliminary Closing Statement are adequate or sufficient. In resolving any disputed item, the Independent Accounting Firm may not assign a value to any item greater than the greatest value or less than the smallest value for such item set forth on the Preliminary Closing Statement or the Final Pre-FC Closing Statement, as applicable. The Independent Accounting Firm’s determination of the Closing Net Working Capital Adjustment, Closing Adjustment Indebtedness, Closing Specified Funded Indebtedness, Closing Cash, Closing Transaction Expenses, Closing Development Projects Adjustment Amount, Closing Carvers Creek Tax Equity Amount, Closing Property Tax Amount, Closing Leakage Amount, Closing Locked Box Period Capital Expenditure Amount, Closing Development Projects 2025 Pre-Locked Box Spending Amount and/or Closing ▇▇▇▇▇▇ RNG Sale-Leaseback Amount shall be based solely on written materials submitted by ▇▇▇▇▇ and Seller (i.e., not on independent review). The determination of the Independent Accounting Firm shall be conclusive and binding upon the parties hereto, absent fraud or manifest error, and shall not be subject to appeal or further review. Judgment may be entered upon the written determination of the Independent Accounting Firm in accordance with Section 9.11. In acting under this Agreement, the Independent Accounting Firm shall function solely as an expert and not as an arbitrator; provided, that the Independent Accounting Firm shall have the power to conclusively resolve differences in disputed items as specified in this Agreement.
(e) In The costs of any dispute resolution pursuant to this Section 2.3, including the event fees and expenses of a dispute with respect the Independent Accounting Firm and of any enforcement of the determination thereof, shall be between Buyer and Seller based upon the percentage of the aggregate contested amount submitted to the Post-Closing StatementIndependent Accounting Firm that is ultimately awarded to Buyer, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreementone hand, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New Yorkor Seller, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay other hand, such that Buyer bears a percentage of such costs and expenses equal to the percentage of the contested amount awarded to Seller and Seller bears a percentage of such costs and expenses equal to the percentage of the contested amount awarded to Buyer. For illustrative purposes only, if the contested amount submitted to the Independent Accounting Firm is $1,000,000, and the Independent Accounting Firm determines that Buyer has a valid claim for $400,000 of the $1,000,000, Buyer shall bear 60% of the fees and expenses of the Accountant and Seller shall bear the remaining 40% of the fees and expenses of the Independent Accounting Firm. For the avoidance of doubt, the fees and disbursements of the Accounting Firm that is equal representatives of each Party incurred in connection with the preparation or review of the Final Pre-FC Closing Statement and any Notice of Disagreement, as well as any submissions and responses to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Independent Accounting Firm, as applicable, shall be borne by such Party.
(f) No later than five Buyer and Seller will, and will cause the Company (5) Business Days in the case of Seller, prior to the Closing and, in the case of Buyer, during the period from and after the final date of delivery of the Final Pre-FC Closing Statement through the resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with any adjustment to the Purchase Price contemplated by this Section 2.62.3) to, Purchaser or Parentafford the other party and its Representatives reasonable access, as applicableduring normal business hours and upon reasonable prior notice, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior paymentpersonnel, if anyproperties, books and records of the Undisputed Amounts pursuant Company Group and to Section 2.6(d):
(1) If any other information reasonably requested for purposes of preparing and reviewing the Closing Working Capital as finally determined in accordance with calculations contemplated by this Section 2.6 is less than 2.3. Each party shall authorize its accountants to disclose work papers generated by such accountants in connection with preparing and reviewing the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined calculations specified in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent2.3; provided, however that Purchaser such accountants shall not be obligated to pay Parent make any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined work papers available except in accordance with this Section 2.6 are greater than such accountants’ disclosure procedures and then only after the Estimated Other DBFO Proceeds (non-client party has signed an agreement relating to access to such work papers in form and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled substance acceptable to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaseraccountants.
(g) Any payment to be made as a result of an adjustment to the Base The Pre-FC Purchase Price pursuant to this Section 2.6 shall be paid determined by wire transfer of immediately available fundsadjusting the Estimated Purchase Price upwards or downwards, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.follo
Appears in 1 contract
Sources: Securities Purchase Agreement (Algonquin Power & Utilities Corp.)
Purchase Price Adjustments. (a) Not more As promptly as practicable (but not later than fifteen ninety (1590) and not less than five (5) Business Days prior to days following the Closing Date), Parent Buyer shall deliver to Purchaser a statement the Stockholder Representative Buyer’s calculation in reasonable detail of the (i) Working Capital as of the close of business on the Business Day immediately preceding the Closing Date (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing Preliminary Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working CapitalDetermination”), (ii) Cash and Cash Equivalents as of the close of business on the Business Day immediately preceding the Closing Business Debt Date (the “Estimated Closing Business DebtPreliminary Cash Determination”), (iii) Closing Date Debt (the “Preliminary Closing Date Debt Determination”) and (iv) Closing Date Transaction Expenses (the “Estimated Preliminary Closing Date Transaction ExpensesExpenses Determination” and, together with the Preliminary Working Capital Determination, the Preliminary Cash Determination and the Preliminary Closing Date Debt Determination, the “Preliminary Closing Statement”); provided, however, that until such time as the calculation of the amounts shown on the Closing Date Working Capital, Closing Date Cash, Closing Date Debt and Closing Date Transaction Expenses determinations are final and binding on the parties pursuant to this Section 2.3, the Stockholder Representative and its accountants (ivat the Stockholder Representative’s expense) shall be permitted to discuss with Buyer and its accountants the Change of Control Payments Preliminary Closing Statement and shall be provided copies of, and have access upon reasonable notice at all reasonable times during normal business hours to, subject to the Stockholder Representative’s entrance into a customary confidentiality and hold harmless agreement with Buyer’s accountants (the “Estimated Closing Change of Control Payments”if required thereby), (v) the Project Contributions (work papers and supporting records of Buyer and its accountants so as to allow the “Estimated Project Contributions”)Stockholder Representative and its accountants to become informed concerning all matters relating to the preparation of the Preliminary Closing Statement and the accounting procedures, (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”)methodologies, (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) tests and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)approaches used in connection therewith.
(b) The Base Purchase Price shall be subject Following receipt of the Preliminary Closing Statement, if the Stockholder Representative has any objections to adjustment at the Closing such document as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amountprepared by Buyer, the Base Purchase Price Stockholder Representative shall be increased by deliver written notice to Buyer of such excess.
dispute within forty-five (245) If days after the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by date of such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California receipt thereof (the “▇▇▇▇▇▇▇ Hills DBFO AssetsDispute Notice”) are sold back to ). In the City of ▇▇▇▇▇▇▇ Hills prior to event that the ClosingStockholder Representative does not deliver a Dispute Notice within such 45-day period, the Base Purchase Price Preliminary Working Capital Determination, Preliminary Cash Determination, Preliminary Closing Date Debt Determination and Preliminary Closing Date Transaction Expenses Determination set forth therein shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed final and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, binding as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare Date Balance Sheet,” “Closing Date Working Capital,” “Closing Date Cash,” “Closing Date Debt” and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Date Transaction Expenses,” respectively, (iv) the Change for purposes of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”)this Agreement. Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to such Dispute Notice is delivered, the Post-Closing Statement, Purchaser Stockholder Representative and Parent Buyer shall negotiate in good faith to reconcile their differences resolve such dispute; provided that any item set forth or reflected on any of the Preliminary Closing Statements that is not identified as being an item of disagreement in the Dispute Notice shall become final and any resolution by them as to any disputed amounts shall be final, binding upon the parties from and conclusive on after the partiesdelivery of the Dispute Notice. If Purchaser Buyer and Parent are unable the Stockholder Representative, notwithstanding such good faith efforts, fail to reach a resolution to resolve such effect dispute within thirty (30) calendar days after Purchaserdelivery of the Dispute Notice, then Buyer shall engage the Arbitrator to conduct a special review of the Stockholder Representative’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution objections to the New YorkPreliminary Working Capital Determination, New York office of KPMG LLP or such other independent accountant firm of international reputation Preliminary Cash Determination, Preliminary Closing Date Debt Determination and/or Preliminary Closing Date Transaction Expenses Determination, as is mutually agreed to and appointed by Purchaser and Parent the case may be, as promptly as reasonably practicable (such independent accounting firm being herein referred review to as the “Accounting Firm”). The Accounting Firm shall be directed to, within completed no later than thirty (30) calendar days after submission the Arbitrator is requested to conduct such special review), which review shall be performed consistent with the Accounting Principles and Exhibit D. Upon completion of such review, the dispute, determine and report Arbitrator shall deliver written notice to the parties upon Stockholder Representative and Buyer setting forth the Arbitrator’s resolution of such remaining disputed amounts objections and the resulting adjustments shall be deemed finally determined for purposes of this Section 2.3. The Arbitrator’s role in completing such review shall be limited to resolving such objections and determining the correct calculations to be used with respect to only the Post-disputed portions of the Preliminary Closing Statement. In resolving such objections, the Arbitrator shall apply the provisions of this Agreement concerning determination of the amounts set forth in the Preliminary Closing Statement, and such report the decision of the Arbitrator shall be final, binding and conclusive solely based on (i) whether such item objected to was prepared in accordance with the parties hereto and shall constitute an arbitral award upon which guidelines set forth in this Agreement concerning determination of the amounts set forth therein or (ii) whether the item objected to contains a judgment may be entered in any court having jurisdiction thereofmathematical or clerical error. The Accounting Firm shall address only those items in disputeparties agree that the Arbitrator 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. Purchaser shall bear The Preliminary Working Capital Determination, Preliminary Cash Determination, Preliminary Closing Date Debt Determination and pay a percentage of Preliminary Closing Date Transaction Expenses Determination as agreed by Buyer and the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case Stockholder Representative or as determined by the Accounting Firm.
(f) No later than five (5) Business Days after Arbitrator, as the case may be, shall be final resolution of and binding as the “Closing Date Working Capital, ,” “Closing Business Date Cash,” “Closing Date Debt, Change of Control Payments, ,” and “Closing Date Transaction Expenses,” respectively, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with for purposes of this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to PurchaserAgreement.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen Within ninety (1590) and not less than five (5) Business Days prior to days after the Closing Date, Parent the Buyer shall prepare, or cause to be prepared, and deliver to Purchaser the Seller a written statement (the “Transaction Final Closing Statement”) that contains Parent’s shall include and set forth a calculation in reasonable good faith estimates detail of the actual (i) the Closing Net Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Net Working Capital”), (ii) the Indebtedness (“Closing Business Debt (the “Estimated Closing Business DebtIndebtedness”), (iii) the Cash (“Closing Cash”), and (iv) Transaction Expenses (the “Estimated Closing Transaction Expenses”)) (with each of the Closing Net Working Capital, Closing Indebtedness, Closing Cash and Closing Transaction Expenses determined as of the Determination Time and, except for (ivA) Closing Transaction Expenses and (B) the Change Existing Credit Facility Release with respect to Closing Indebtedness, without giving effect to the transactions contemplated herein). The Final Closing Statement (1) shall be prepared on a basis consistent with the Applicable Accounting Principles and in the form set out in the Sample Statement and (2) shall be based exclusively on the facts and circumstances as they exist at the Determination Time and shall exclude the effects of Control Payments any event, act, change in circumstances or similar development arising or occurring on or after the Closing Date (the “Estimated Closing Change of Control Payments”), except (vX) with respect to Transaction Expenses and (Y) the Project Contributions Existing Credit Facility Release with respect to Indebtedness); provided that this clause (2) shall not be deemed to limit the “Estimated Project Contributions”)amount of Indebtedness incurred prior to and unpaid as of the Determination Time and of which the Company or Buyer subsequently becomes aware. To the extent any actions following the Closing with respect to the accounting books and records of the Company on which the Final Closing Statement and the foregoing calculations are to be based are not consistent with the Applicable Accounting Principles, (vi) such changes shall not be taken into account in preparing the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)Final Closing Statement or calculating amounts reflected thereon.
(b) The Base Purchase Price Final Closing Statement shall be subject become final and binding on the 45th day following delivery thereof, unless prior to adjustment at the end of such period, the Seller delivers to the Buyer written notice of its disagreement (a “Notice of Disagreement”) specifying the nature and amount of any dispute as to the Closing as follows:
(1) If the Estimated Net Working Capital, Closing Working Capital is greater than the Reference AmountIndebtedness, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Cash and/or Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by as set forth in the amount Final Closing Statement and the Seller’s alternative calculations of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceedsdisputed items. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent Seller shall be deemed to have agreed with all other items and amounts included of Closing Net Working Capital, Closing Indebtedness, Closing Cash and/or Closing Transaction Expenses not specifically referenced in the PostNotice of Disagreement, and such items and amounts shall not be subject to review in accordance with Section 2.5(c).
(c) During the 30-day period following delivery of a Notice of Disagreement by the Seller to the Buyer, the parties in good faith shall seek to resolve in writing any differences that they may have with respect to the calculation of the Closing Net Working Capital, Closing Indebtedness, Closing Cash and/or Closing Transaction Expenses as specified therein. Any disputed items resolved in writing between the Buyer and the Seller within such 30-day period shall be final and binding with respect to such items, and if the Seller and the Buyer agree in writing on the resolution of each disputed item specified by the Seller in the Notice of Disagreement and the amount of the Closing Net Working Capital, Closing Indebtedness, Closing Cash and Closing Transaction Expenses, the amounts so determined shall be final and binding on the parties for all purposes hereunder. If the Buyer and the Seller have not resolved all such differences by the end of such 30-day period, the Buyer and the Seller shall submit, in writing, to an independent public accounting firm (the “Independent Accounting Firm”), their briefs detailing their views as to the correct nature and amount of each item remaining in dispute and the amounts of the Closing Net Working Capital, Closing Indebtedness, Closing Cash and/or Closing Transaction Expenses, and the Independent Accounting Firm shall make a written determination as to each such disputed item and the amount of the Closing Net Working Capital, Closing Indebtedness, Closing Cash and/or Closing Transaction Expenses. The Independent Accounting Firm shall be Ernst & Young LLP or, if such firm is unable or unwilling to act, such other independent public accounting firm as shall be agreed in writing by the Seller and the Buyer. The Buyer and the Seller shall use their commercially reasonable efforts to cause the Independent Accounting Firm to render a written decision resolving the matters submitted to it within thirty (30) days following the submission thereof. The Independent Accounting Firm shall consider only those items and amounts in the Buyer’s and the Seller’s respective calculations of the Closing Net Working Capital, Closing Indebtedness, Closing Cash and/or Closing Transaction Expenses that are identified as being items and amounts to which the Buyer and the Seller have been unable to agree. The scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to correcting mathematical errors and determining whether the items and amounts in dispute were determined in accordance with the Applicable Accounting Principles and in the form set out in the Sample Statement, and the Independent Accounting Firm is not to make any other determination, including any determination as to whether the Target Net Working Capital or any estimates on the Preliminary Closing Statement delivered are correct, adequate or sufficient. In resolving any disputed item, the Independent Accounting Firm may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. The Independent Accounting Firm’s determination of the Closing Net Working Capital, Closing Indebtedness, Closing Cash and Closing Transaction Expenses shall be based solely on written materials submitted by the Buyer and the Seller (i.e., not on independent review). The determination of the Independent Accounting Firm shall be conclusive and binding upon the parties hereto and shall not be subject to appeal or further review, absent manifest error. Judgment may be entered upon the written determination of the Independent Accounting Firm in accordance with Section 10.9. In acting under this Agreement, the Independent Accounting Firm shall function solely as an expert and not as an arbitrator.
(d) The costs of any dispute resolution pursuant to this Section 2.6(c) 2.5, including the fees and Parent expenses of the Independent Accounting Firm and of any enforcement of the determination thereof, shall be borne by the Seller and the Buyer in inverse proportion as they may prevail on the matters resolved by the Independent Accounting Firm, which proportionate allocation shall be calculated on an aggregate basis based on the relative dollar values of the amounts in dispute and shall be determined by the Independent Accounting Firm at the time the determination of such firm is rendered on the merits of the matters submitted. The fees and disbursements of the Representatives of each party incurred in connection with the preparation or Purchaserreview of the Final Closing Statement and preparation or review of any Notice of Disagreement, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”)borne by such party.
(e) In The Buyer and the event Seller will, and will cause the Company (in the case of a dispute with respect the Seller, prior to the Post-Closing Statementand, Purchaser in the case of the Buyer, during the period from and Parent shall negotiate in good faith after the date of delivery of the Final Closing Statement through the resolution of any adjustment to reconcile their differences the Purchase Price contemplated by this Section 2.5) to afford the other party and any resolution by them as its Representatives reasonable access, during normal business hours and upon reasonable prior notice, to the personnel, properties, books and records of the Qdoba Business and to any disputed amounts other information reasonably requested for purposes of preparing and reviewing the calculations contemplated by this Section 2.5. Each party shall authorize its accountants to disclose work papers generated by such accountants in connection with preparing and reviewing the calculations specified in this Section 2.5; provided, that such accountants shall not be final, binding obligated to make any work papers available except in accordance with such accountants’ disclosure procedures and conclusive on then only after the parties. If Purchaser and Parent are unable non-client party has signed an agreement relating to reach a resolution access to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser work papers in form and Parent shall submit the amounts remaining in dispute for resolution substance acceptable to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firmaccountants.
(f) No later than five (5) Business Days after the final resolution of Closing Working CapitalThe Purchase Price shall be adjusted, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds upwards or Other DBFO Proceedsdownwards, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):follows:
(1i) If For the purposes of this Agreement, the “Net Adjustment Amount” means an amount, which may be positive or negative, equal to (A) the Closing Net Working Capital as finally determined in accordance with pursuant to this Section 2.6 is less than 2.5, minus the Estimated Closing Net Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
minus (2B) If the Closing Working Capital Indebtedness as finally determined in accordance with pursuant to this Section 2.6 is greater than 2.5 minus the Estimated Closing Working CapitalIndebtedness, Purchaser shall pay the amount of such excess to Parent.
plus (3C) If the Closing Business Debt Cash as finally determined in accordance with pursuant to this Section 2.6 is less than 2.5, minus the Estimated Closing Business DebtCash, Purchaser shall pay the amount of such shortfall to Parent.
minus (4D) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds2.5, together with interest thereon for minus the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.Estimated Transaction Expenses;
Appears in 1 contract
Sources: Stock Purchase Agreement (Jack in the Box Inc /New/)
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than five (5) Business Days At least two business days prior to the Closing Date, Parent the Company shall deliver to the Purchaser a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) a consolidated balance sheet of the Company and its Subsidiaries estimated as of the Closing Date and (ii) a statement showing the Company’s good faith estimate of Net Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Net Working Capital”), (ii) the Closing Business Debt Cash on Hand (the “Estimated Closing Business DebtCash on Hand”), (iii) the Closing Transaction Expenses Indebtedness (the “Estimated Indebtedness”) and Seller Expenses that are unpaid as of the Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO ProceedsSeller Expenses”) and (viii) the Other DBFO Proceeds (resulting calculation of the “Estimated Other DBFO Proceeds”Purchase Price as set forth in Section 1.02(a). The Estimated Purchase Price shall be prepared using the accounting principles set forth on the Statement of Accounting Principles set forth on Schedule 1.05. A sample calculation of the Estimated Purchase Price as if the Closing Date had occurred on December 31, 2015 is set forth on Schedule 1.05.
(b) The Base Purchase Price shall be subject to adjustment at Within 60 days after the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference AmountDate, the Base Purchase Price shall be increased by such excess.
Purchaser will deliver to the Seller (2i) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount a consolidated balance sheet of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount Company and its Subsidiaries as of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California Date (the “Closing Balance Sheet”) and (ii) a statement showing the Purchaser’s calculation of Net Working Capital, Cash on Hand, Indebtedness and Seller Expenses (together with the Closing Balance Sheet, the “Preliminary Closing Statement”) and the resulting calculation of the Purchase Price. The Closing Balance Sheet shall be prepared using the accounting principles set forth on the Statement of Accounting Principles set forth on Schedule 1.05. The parties agree that the purpose of preparing the Closing Balance Sheet and determining Net Working Capital, Cash on Hand, Indebtedness and Seller Expenses and the related purchase price adjustments contemplated by this Section 1.05(b) is to measure the difference between the Estimated Net Working Capital, Estimated Cash on Hand, Estimated Indebtedness and Estimated Seller Expenses, on the one hand, and the actual Net Working Capital, Cash on Hand, Indebtedness and Seller Expenses, on the other hand, and such processes are not intended to permit the introduction of different accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies as those set forth on the Statement of Accounting Principles is set forth on Schedule 1.05. After delivery of the Preliminary Closing Statement, the Purchaser shall give the Seller and its accountants reasonable access to review the Purchaser’s, the Company’s and its Subsidiaries’ books and records and work papers related to the preparation of the Preliminary Closing Statement. The Seller and its accountants may make inquiries of the Purchaser and the Company and its Subsidiaries and their respective accountants regarding questions concerning or disagreements with the Preliminary Closing Statement arising in the course of its review thereof, and the Purchaser shall use its, and shall cause the Company and its Subsidiaries to use their, commercially reasonable efforts to cause any such accountants to cooperate with and promptly respond to such inquiries. If, after using commercially reasonable efforts to review such books and records and work papers and to make such inquiries, the Seller has any good faith objections to the Preliminary Closing Statement, the Seller shall deliver to the Purchaser a statement setting forth its good faith objections thereto (an “Objections Statement”). If an Objections Statement is not delivered to the Purchaser within 45 days after delivery of the Preliminary Closing Statement, the Preliminary Closing Statement shall be final, binding and non-appealable by the parties hereto. The Seller and the Purchaser shall negotiate in good faith to resolve any such objections, but if they do not reach a final resolution within 30 days after the delivery of the Objections Statement, the Seller and the Purchaser shall submit such dispute to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Hills DBFO AssetsLLP or such other mutually acceptable dispute resolution firm (the “Dispute Resolution Firm”) are sold back ). Any further submissions to the City of ▇▇▇▇▇▇▇ Hills prior Dispute Resolution Firm must be written and delivered to each party to the Closingdispute. The Dispute Resolution Firm shall consider only those items and amounts which are identified in the Objections Statement as being items which the Seller and the Purchaser are unable to resolve. The Dispute Resolution Firm’s determination will be based solely on the definitions of Net Working Capital, Cash on Hand, Indebtedness and Seller Expenses, as applicable, contained in this Agreement and calculated using the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any Statement of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) Accounting Principles set forth on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) 1.05. The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 Seller and the Closing Date, Parent Purchaser shall be entitled use their commercially reasonable efforts to receive (directly or indirectly) Other DBFO Proceeds cause the Dispute Resolution Firm to resolve all disagreements as soon as practicable and in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar any event within 60 days after the Closingsubmission of any dispute. Further, the Dispute Resolution Firm’s determination shall be based solely on the submissions by the Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared Seller which are in accordance with the Calculation Principlesterms and procedures set forth in this Agreement and the Statement of Accounting Principles set forth on Schedule 1.05 (i.e., (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected not on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt basis of such statement (such 30-day period hereinafter referred to as the “Review Period”an independent review). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation The resolution of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in dispute by the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts Dispute Resolution Firm shall be final, binding and conclusive non-appealable on the parties. If Purchaser parties hereto, and Parent are unable any party may seek to reach enforce such decision in a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt court of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”)competent jurisdiction. The Accounting costs and expenses of the Dispute Resolution Firm shall be directed to, within thirty (30) calendar days after submission allocated between the Purchaser and the Seller based upon the percentage which the portion of the dispute, determine and report contested amount not awarded to each party bears to the parties upon such remaining disputed amounts with respect amount actually contested in the presentation to the Post-Closing StatementDispute Resolution Firm. For example, if the Seller submits an Objections Statement for $1,000, and such report shall be final, binding and conclusive on if the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address Purchaser contests only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess $500 of the amount claimed by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11)Seller, and if any.
the Dispute Resolution Firm ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of the Dispute Resolution Firm will be allocated 60% (16i.e. 300/500) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant Purchaser and 40% (i.e., 200/500) to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedSeller.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than At least five (5) Business Days business days prior to the Closing Date, Parent the Stockholders shall prepare and deliver to Purchaser Buyer a statement good faith estimate (the “Transaction Estimate Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing Working Capital (including all of the components thereof) ), prepared in accordance with GAAP, except as noted thereon, applied in a manner consistent with the Calculation Principles preparation of the Company Financial Statements, but including normal GAAP year-end adjustments, and accompanied by a certificate of the Chief Financial Officer of the Companies to that effect, of: the estimated aggregate amount of Working Capital as of the Closing Date (the “Estimated Closing Date Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price which Estimate Statement shall be subject reasonably acceptable to adjustment Buyer; provided that Buyer’s belief that the Estimate Statement is reasonable at that time shall not foreclose, prevent, limit or preclude any rights or remedy of Buyer set forth herein. In the Closing as follows:
(1) If event that the Estimated Closing Working Capital is greater than parties fail to resolve their disagreements over the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills disputed items prior to the Closing, the Base Estimated Closing Date Working Capital as set forth on the Estimate Statement as originally provided to Buyer, or with those modifications, if any, to which the parties shall have agreed shall be deemed to be the Estimated Closing Date Working Capital. The Cash Purchase Price paid at Closing shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior decreased to the Closing; provided further extent that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transactionWorking Capital Deficiency.
(7b) As promptly as practicable after the Closing Date, but in no event more than sixty (60) days following the Closing Date, Buyer will prepare and deliver to the Stockholders a reasonably detailed statement (the “Buyer Statement”) setting forth Working Capital at the Closing Date. If the Stockholders have not received a Buyer Statement within sixty (60) days following the Closing Date, the Estimate Statement shall be final and binding on the parties hereto. Buyer shall prepare the Buyer Statement consistent with the basis of the preparation of the Estimate Statement. Unless within thirty (30) days after its receipt of Buyer Statement the Stockholders shall deliver to Buyer a reasonably detailed statement describing their objections to Buyer Statement (a “Statement of Objection”), the amount of Working Capital at the Closing Date as set forth on Buyer Statement shall be final and binding on the parties hereto (the “Final Working Capital”) and Buyer Statement shall be the final statement hereunder (the “Closing Date Statement”).
(c) If the Stockholders deliver to Buyer a timely Statement of Objection, Buyer and the Stockholders and their respective independent accountants shall negotiate in good faith and use reasonable best efforts to resolve any DBFO joint venture partner exercises dispute. If the parties resolve their disagreements in accordance with the foregoing sentence, the Closing Date Statement and Final Working Capital with those modifications, if any, to which the parties shall have agreed shall be deemed to be the Closing Date Statement and Final Working Capital, respectively. If a final resolution is not reached within thirty (30) days after Buyer or the Stockholders have submitted their Statement of Objection, any remaining disputes shall be resolved by an independent accounting firm selected jointly by the parties (the “Reviewing Accountants”). The Reviewing Accountants shall be instructed to limit its right review to purchase matters specifically set forth in the Statement of Objections and to resolve any matters in dispute as promptly as practicable, but in no event more than thirty (30) days after such matters have been submitted to them, and to set forth their resolution in a statement (the “Accountant Statement”) setting forth the Final Working Capital at the Closing Date. With respect to any disputed matter, the Reviewing Accountants may select Buyer’s figure, the Stockholders’ figure or a figure between the two. The Reviewing Accountant shall act as an arbitrator to determine, based solely on the terms of this Agreement (including the definition of Working Capital set forth herein) and the presentations by the parties and not by independent review of legal, accounting or factual matters, only those issues in dispute. In no event may the Reviewing Accountant consider any issues, amounts or matters not disputed in a Statement of Objection delivered within the applicable 30 day period. The determination of the Target Shares pursuant Reviewing Accountants shall be final and binding on the parties hereto.
(d) The fees and expenses of the Reviewing Accountants shall be borne by Buyer and the Stockholders in inverse proportion as they may prevail on matters resolved by the Reviewing Accountants, and such proportionate allocation shall also be determined by the Reviewing Accountants when their determination is rendered on the merits of the matter submitted. For illustration purposes only, (i) if the total amount of disputed items by the Stockholders is $100,000 and the Stockholders are awarded $50,000 by the Reviewing Accountants, then the Stockholders and Buyer shall bear the Reviewing Accountants’ fees and expenses equally; or (ii) if the total amount of disputed items by the Stockholders is $100,000 and the Stockholders are awarded $75,000 by the Reviewing Accountants, then the Stockholders shall bear 25% and Buyer shall bear 75% of the Reviewing Accountants’ fees and expenses. The Stockholders and Buyer shall cooperate with each other and any Reviewing Accountants in connection with the matters contemplated by this Section 2.3, including Buyer’s preparation of and the Stockholders’ review of Buyer Statement, in each case including by furnishing such information and access to a contractual right books, records (including accountants’ work papers), personnel and properties as may be reasonably requested.
(e) Within three (3) days after the final determination of first refusalthe Final Working Capital in accordance with this Section 2.3, if the Final Working Capital is less than 0, the Base Purchase Price Stockholders shall be reduced pay to Buyer, by wire transfer in immediately available funds to an account designated in writing by Buyer, an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to by which the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Final Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital0, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Cash Purchase Price was reduced pursuant to adjusted in accordance with Section 2.6(b)(112.3(a), if any.
any (16) If the Other DBFO Proceeds as finally determined “Final Working Capital Deficiency”), provided that, in the Stockholders’ discretion, such amount may be satisfied from the Escrow Amount in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser2.4.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen At least three (15) and not less than five (53) Business Days prior to before the scheduled Closing Date, Parent the Company shall deliver to Purchaser a statement (prepare and the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of Company and the Buyer shall jointly finalize (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), Balance Sheet and (ii) the Closing Business Debt (the “Statement of Estimated Closing Business Debt”), (iii) Liabilities; provided that if any disagreement between the Closing Transaction Expenses (Company and the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject Buyer as to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than Balance Sheet or the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Statement of Estimated Closing Working Capital Liabilities is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills not resolved prior to the Closing, the Base Purchase Price Estimated Closing Balance Sheet and the Statement of Estimated Closing Liabilities (as revised to reflect any changes thereto agreed upon by the Company and the Buyer but not any changes thereto that are not agreed upon by such Parties), shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed the Estimated Closing Balance Sheet and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Statement of Estimated Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transactionLiabilities for purposes hereunder.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9i) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that of the Estimated Other DBFO Proceeds exceeds Working Capital Deficit, or increased by the aggregate amount, if any, of the Estimated Working Capital Surplus, in each case as set forth on the Statement of Estimated Closing Liabilities.
(ii) The Purchase Price shall be reduced by the amount, if any, of any unpaid Estimated Closing Indebtedness as reflected on the Statement of Estimated Closing Liabilities.
(iii) The Purchase Price shall be reduced by the amount, if any, of any unpaid Estimated Closing Non-Ordinary Course Liabilities as reflected on the Statement of Estimated Closing Liabilities.
(iv) The Purchase Price shall be increased by the amount, if any, of the Estimated Closing Cash as reflected on the Statement of Estimated Closing Liabilities.
(v) The adjustments set forth in clauses (i) to (iv) of this Section 1.5(a) shall be referred to herein collectively as the “Estimated Closing Adjustment”. The Estimated Closing Adjustment shall be determined without regard to the limitations set forth in Section 8.5.
(b) At least three (3) Business Days before the scheduled Closing Date, the Parties shall jointly prepare and finalize a flow of funds memorandum executed by the Parties (the “Flow of Funds Memorandum”), which sets forth all payments required to be made by or on behalf of all Parties at the Closing, including for each such payment an identification of the payor, the payee, the amount and the wire transfer information, along with a calculation as of the Closing of the amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant Payment payable to this Section 2.6(b), is the “Closing Paymenteach Member.”
(c) Within seventy-five one hundred twenty (75120) calendar days after following the ClosingClosing Date, Purchaser the Buyer shall cause the Company to prepare and deliver to Parent a statement (the “Post-Closing Statement”) of Members’ Representative (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, Balance Sheet and (ii) the Statement of Closing Business DebtLiabilities. The Members’ Representative shall use reasonable efforts to assist the Buyer, at Buyer’s expense, in the preparation of the Statement of Closing Liabilities if reasonably requested by the Buyer. The Closing Working Capital and Post-Closing Adjustment (iiiand components thereof) shall be determined in accordance with GAAP, and, to the Closing Transaction Expensesextent consistent with GAAP, using the methodology, clarifications and principles set forth in the reference balance sheet set forth on Appendix C (iv) the Change “Methodology”), subject to the terms of Control Paymentsthis Section 1.5, (v) and shall take into account the Project Contributionsdefinitions of Indebtedness for Borrowed Money, (vi) Non-Ordinary Course Liabilities, and Cash. For the Chinese DBFO Proceedsavoidance of doubt, (vii) if there is a conflict between GAAP and the Dalriada DBFO Proceeds and (viii) the Other DBFO ProceedsMethodology, GAAP will govern.
(d) Parent The Members’ Representative shall have a period of forty-five (45) days after receipt of the Closing Balance Sheet and the Statement of Closing Liabilities to notify Purchaser the Buyer of its acceptance the Members’ Representative’s election to accept or dispute reject the Buyer’s calculation of any amounts reflected on the amount of the Post-Closing StatementAdjustment (or any component thereof) in a written notice (the “Response Notice”). To the extent reasonably required to complete such review, as determined by the Members’ Representative in good faith, the Buyer will make available to the Members’ Representative and its advisors all records and work papers relating to the Buyer’s calculations set forth in the Statement of Closing Liabilities that the Members’ Representative and its advisors reasonably request in reviewing the Closing Balance Sheet and Statement of Closing Liabilities, and the Buyer will make available to the Members’ Representative and its advisors and the personnel of the Buyer and the Company Entities involved in the preparation of the Closing Balance Sheet and the Statement of Closing Liabilities subject, in all cases, to the Investigation Procedures. In the case of a rejection, such Response Notice shall set forth the line item on the Statement of Closing Liabilities that it is rejecting, the reasons for such rejection in reasonable detail and the amount of the requested adjustment. In the event that no Response Notice is received by the Buyer during such forty-five (45)-day period, the Statement of Closing Liabilities and any required adjustments resulting therefrom shall be deemed final and binding on the Members. In the event that the Members’ Representative shall timely deliver a Response Notice rejecting the Buyer’s calculation of amount of the Post-Closing Adjustment, the Buyer and the Members’ Representative shall promptly (and in any event within thirty (30) calendar days after Parent’s receipt following the date upon which the Buyer received the Response Notice), attempt in good faith to make a joint determination of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) Adjustment and Parent or Purchaser, as applicable, such determination and any required adjustments resulting therefrom shall pay within five (5) Business Days of be deemed final and binding on the conclusion of Members and the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”)Buyer.
(e) In the event that the Members’ Representative and the Buyer shall be unable to agree upon a joint determination of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect Adjustment within thirty (30) calendar days following the date upon which the Buyer received the Response Notice, then within fifteen (15) days after Purchaser’s receipt the expiration of Parent’s written notice of disagreementsuch thirty (30)-day period, Purchaser the Buyer and Parent the Members’ Representative shall submit engage the amounts remaining in dispute for resolution Accounting Firm to the New York, New York office of KPMG LLP or resolve such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent dispute.
(such independent accounting firm being herein referred to as the “Accounting Firm”). f) The Accounting Firm shall consider only those matters set forth in the Response Notice upon which the Buyer and the Members’ Representative have disagreed (the “Disputed Items”) and shall be directed to, within thirty (30) calendar days after submission required to resolve the Disputed Items in accordance with the terms and provisions of this Agreement. In connection with the resolution of the disputeDisputed Items by the Accounting Firm: (i) each of the Buyer and the Members’ Representative shall furnish or cause to be furnished to the Accounting Firm only the data, determine correspondence and other materials it presented to the other party pursuant to this Section 1.5 (including all settlement offers), and no other materials; (ii) the Accounting Firm shall be permitted to ask questions of either party and ask for additional information from either party relating to the Disputed Items; (iii) no ex parte communications with the Accounting Firm shall be initiated by either party; (iv) the Accounting Firm shall only decide the specific Disputed Items and the determination by the Accounting Firm for each Disputed Item shall be equal to one of the values, or within the range between the values, assigned to such Disputed Item by the Buyer and the Members’ Representative in the materials delivered to the Accounting Firm (or if the materials delivered to the Accounting Firm reflect that either party assigned multiple values at various times, such determination by the Accounting Firm shall be equal to one of, or within the range between, the most recent values assigned by the parties); (v) the Accounting Firm shall make its determination for all remaining Disputed Items as of the Closing based on the materials it receives in accordance with this Agreement and not pursuant to any independent review; and (vi) the parties shall request that the determination by the Accounting Firm be delivered in a written report to the parties upon such remaining disputed amounts within sixty (60) days of the submission to the Accounting Firm of the Disputed Items, and shall be final and binding on the parties hereto for purposes of this Agreement, absent manifest clerical or mathematical error or Fraud, in each case on the part of the Accounting Firm. The parties agree to execute, if requested by the Accounting Firm, a reasonable engagement letter with respect the Accounting Firm that shall permit the Accounting Firm to engage a law firm, mutually acceptable to the Buyer and Members’ Representative, to assist with the interpretation of terms of this Agreement relevant to the Disputed Items, the amount of the Post-Closing StatementAdjustment and the definition of Closing Working Capital, Closing Indebtedness, Closing Non-Ordinary Course Liabilities and such report shall be finalClosing Cash. Notwithstanding anything herein to the contrary, binding and conclusive on the parties hereto acknowledge and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The agree that the Accounting Firm shall address only those items in dispute. Purchaser shall bear act as an expert, not an arbitrator, and pay a percentage of neither this Section 1.5(f) nor the fees and disbursements determination of the Accounting Firm that is equal shall be subject to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, any relevant state or federal arbitration law.
(g) The fees and Parent shall bear and pay a percentage of the fees an disbursements expenses of the Accounting Firm that is equal shall be allocated to be paid by the Buyer and/or the Members’ Representative, respectively, based upon the percentage which the portion of the amount contested and not awarded to each party bears to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement contested by Parent that are not successfulsuch party, in each case as determined by the Accounting Firm.
(fh) No later than five (5) Business Days after the final resolution of Closing Working CapitalFor purposes hereof, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing “Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent Deficit” shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.mean:
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Booz Allen Hamilton Holding Corp)
Purchase Price Adjustments. As provided in this Agreement, the Base Purchase Price shall be adjusted (such adjustment may be positive or negative), if at all, on a dollar-for-dollar basis (it being clarified that there shall be no duplication of any amount used in calculating the following), all in accordance with the following:
(a) Not more than fifteen (15) and not less than five two (52) Business Days prior to the Closing DateClosing, Parent shall deliver the Company delivered to Purchaser the Buyer a statement (setting forth the “Transaction Statement”) that contains ParentCompany’s reasonable good faith estimates estimated calculation, as of 12:01 a.m. EST on the Closing Date (without giving effect to the Transactions), of (i) the Closing Net Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Net Working Capital”), (ii) the Indebtedness of the Company as of the Closing Business Debt Date (the “Estimated Indebtedness”) and (iii) the Cash on Hand as of the Closing Date (the “Estimated Closing Business DebtCash on Hand”), (iii) which Estimated Net Working Capital, Estimated Indebtedness, and Estimated Closing Cash on Hand were prepared in accordance with the definitions thereof and, in the case of Estimated Net Working Capital and Estimated Closing Transaction Expenses Cash on Hand, to the extent not inconsistent with the definitions thereof, GAAP and the methodology, clarifications and exceptions set forth in Schedule 1.5(a), and in accordance with the same accounting methods, standards, policies, practices, classifications, estimation methodologies, assumptions, procedures and level of prudence as were used to prepare the year-end Financial Statements (the “Estimated Closing Transaction ExpensesMethodology”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) . If the Estimated Closing Net Working Capital is greater than exceeds the Reference AmountTarget Net Working Capital, then the Base Purchase Price payable to the Sellers at the Closing pursuant to Section 1.4(d) herein shall be increased by such excess.
(2) the amount by which the Estimated Net Working Capital exceeds the Target Net Working Capital. If the Estimated Closing Net Working Capital is less than the Reference AmountTarget Net Working Capital, then the Base Purchase Price shall be reduced by such deficit.
(3payable to the Sellers at the Closing pursuant to Section 1.4(d) The Base Purchase Price herein shall be reduced by the amount of by which the Target Net Working Capital exceeds the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the Net Working Capital. If there is a positive amount of the Estimated Closing Transaction ExpensesIndebtedness (i.e., if any.
(5) The Base Purchase Price shall be reduced by the any amount of the Estimated Closing Change of Control Paymentsgreater than zero dollars), if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, then the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior payable to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to Sellers at the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price Section 1.4(d) herein shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) Estimated Indebtedness. If there is a fully executed definitive purchase agreementpositive amount of Estimated Closing Cash on Hand (i.e., but such transaction has not closed prior to the Closing any amount greater than zero dollars), then (B) the Base Purchase Price shall be reduced by an amount equal payable to the dollar amount allocated Sellers at the Closing pursuant to such Target Shares (on a pro-rata basisSection 1.4(d) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price herein shall be increased by an amount equal to the Estimated Project ContributionsClosing Cash on Hand.
(b) Buyer shall deliver to the Sellers’ Representative, no later than ninety (90) days after the Closing Date, a statement (the “Closing Date Working Capital Statement”) which shall set forth, as of 12:01 a.m. EST on the Closing Date (without giving effect to the Transactions), (i) a calculation of Net Working Capital as of the Closing Date and the amount, if any, by which the Net Working Capital so determined is less than or greater than the Estimated Net Working Capital; (ii) a calculation of the Indebtedness as of the Closing Date and the amount, if any, by which the Closing Indebtedness as of the Closing Date is less than or greater than the Estimated Indebtedness and (iii) a calculation of the Cash on Hand as of the Closing Date and the amount, if any, by which the Cash on Hand as of the Closing Date is less than or greater than the Estimated Closing Cash on Hand; (clauses (i), (ii) and (iii), collectively, the “Adjustment Calculation”). The Closing Date Working Capital Statement and the Adjustment Calculation shall be prepared using and in accordance with GAAP and the Methodology.
(9c) The Base Purchase Price On or prior to the thirtieth (30th) day following the Buyer’s delivery of the Closing Date Working Capital Statement and the Adjustment Calculation, the Sellers’ Representative may give the Buyer a written notice stating in reasonable detail the Sellers’ Representative’s specific objections (an “Objection Notice”) to the items or amounts in the Closing Date Working Capital Statement or the Adjustment Calculation. Any item or amount set forth in the Closing Date Working Capital Statement or Adjustment Calculation that is not the subject of a timely and specific objection in the Objection Notice shall be reduced deemed accepted by the Sellers’ Representative. Following the delivery of any Objection Notice, the Sellers’ Representative and the Buyer shall attempt to negotiate in good faith to resolve such dispute. If the Sellers’ Representative and the Buyer fail to agree on any of the Sellers’ Representative’s proposed adjustments set forth in the Objection Notice within thirty (30) days after the Buyer receives the Objection Notice, the Sellers’ Representative and the Buyer agree that all items and amounts set forth in the Objection Notice that are not resolved shall be submitted for final determination to BDO USA, LLP or, if BDO USA, LLP is unwilling or unable to so act, to another independent accounting firm selected by the Buyer and the Sellers’ Representative, or if the Buyer and the Sellers’ Representative are unable to mutually agree upon such an independent accountant within a ten (10) day period, then the Buyer and the Sellers’ Representative shall each select an accounting firm and such firms together shall select the Accounting Arbitrator (each such accounting firm or certified public accountant making such determination being hereinafter referred to as the “Accounting Arbitrator”). The Accounting Arbitrator shall afford each of the Buyer and the Sellers’ Representative up to thirty (30) days following engagement of the Accounting Arbitrator to present their positions as to the disputed items. If either Party fails to make such a presentation on a timely basis, the Accounting Arbitrator shall be required to decide without further delay or extension on the basis of the submissions made to it and the terms of this Agreement. The Accounting Arbitrator shall resolve all disputed items in a written determination to be delivered within fifteen (15) days following the end of the submission period; provided that any delay in delivering such determination shall not invalidate the award or otherwise deprive the Accounting Arbitrator of jurisdiction. The determination of any of the Closing Date Working Capital Statement or Adjustment Calculation disputed items by the Accounting Arbitrator shall be within, and limited by, the range comprised of the respective determination of each of the Parties’ calculation with respect to such disputed items. The determination of the Closing Date Working Capital Statement or Adjustment Calculation disputed items by the Accounting Arbitrator shall be based on whether such disputed items have been calculated in accordance with the standards set forth in this Section 1.5 (including the relevant definitions), and the Accounting Arbitrator is not to make any other determination. 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. Such resolution shall be final and binding upon the Parties and shall be reflected in any necessary revisions to the Closing Date Working Capital Statement and the Adjustment Calculation. The Sellers shall, jointly and severally, pay a portion of the fees, costs and expenses of the Accounting Arbitrator equal to the percentage by which the portion of the disputed amounts in the Sellers’ Representative’s submission to the Accounting Arbitrator not awarded to the Sellers’ Representative bears to the aggregate amount actually disputed by the Sellers’ Representative in the Sellers’ Representative’s submission to the Accounting Arbitrator, and the Buyer shall pay the remaining portion of such fees, costs and expenses. Such proportional allocations shall be determined by the Accounting Arbitrator at the time that its determination is rendered on the disputed items. Without limiting the foregoing, each of the Buyer and the Sellers shall indemnify and hold each other harmless from the other Party’s failure to pay its portion of the fees and expenses of the Accounting Arbitrator.
(d) For purposes of complying with this Section 1.5, the Parties will (i) furnish to each other and to the Accounting Arbitrator such work papers and other documents and information relating to the disputed issues as each Party and the Accounting Arbitrator may reasonably request and are available to that Party (or its independent public accountants); provided that the obligations of the Parties under this clause (i) shall not result in the interference of the normal business operations of any Party, and (ii) subject to the timing limitation set forth in Section 1.5(c), be afforded the opportunity to present to the Accounting Arbitrator any material related to the disputed items and to discuss the items with the Accounting Arbitrator; provided that the other Party and its Representatives shall be given reasonable notice of, and the opportunity to attend, any meeting with the Accounting Arbitrator.
(e) For purposes hereof, the following terms have the meanings set forth below:
(i) If: (A) the Estimated Net Working Capital exceeds the Net Working Capital after final determination pursuant to Section 1.5(c) (the “Final Net Working Capital”), the amount by which the Estimated Net Working Capital exceeds the Final Net Working Capital is referred to as the “Working Capital Deficit;” and (B) the Final Net Working Capital exceeds the Estimated Net Working Capital, the amount by which the Final Net Working Capital exceeds the Estimated Net Working Capital is referred to as the “Working Capital Surplus;”
(ii) If: (A) the Indebtedness as of the Closing Date, after final determination pursuant to Section 1.5(c) (the “Final Closing Indebtedness”) exceeds the Estimated Indebtedness, the amount by which the Final Closing Indebtedness exceeds the Estimated Indebtedness is referred to as the “Indebtedness Deficit;” and (B) the Final Closing Indebtedness is less than the Estimated Indebtedness, the amount by which the Final Closing Indebtedness is less than the Estimated Indebtedness is referred to as the “Indebtedness Surplus;”
(iii) If: (A) the Estimated Closing Cash on Hand exceeds the Cash on Hand as of the Closing Date, after final determination pursuant to Section 1.5(c) (the “Final Closing Cash on Hand”), the amount by which the Estimated Closing Cash on Hand exceeds the Final Closing Cash on Hand is referred to as the “Cash on Hand Deficit;” and (B) the Estimated Closing Cash on Hand is less than the Final Closing Cash on Hand, the amount by which the Estimated Closing Cash on Hand is less than the Final Closing Cash on Hand is referred to as the “Cash on Hand Surplus;”
(iv) An amount equal to the Estimated Chinese DBFO ProceedsWorking Capital Deficit, plus the Indebtedness Deficit and plus the Cash on Hand Deficit (in each case, if any.applicable) is referred to as the “Aggregate Deficit Amount;” and
(10v) The Base Purchase Price shall be reduced by an An amount equal to the Estimated Dalriada DBFO ProceedsWorking Capital Surplus, plus the Indebtedness Surplus and plus the Cash on Hand Surplus (in each, case if anyapplicable) is referred to as the “Aggregate Surplus Amount.”
(11f) With respect If the Aggregate Deficit Amount exceeds the Aggregate Surplus Amount (the amount by which the Aggregate Deficit Amount exceeds the Aggregate Surplus Amount, referred to each as the “Net Deficit Amount”), then (i) the Sellers’ Representative shall, within ten (10) Business Days of Parent’s fiscal quarters occurring between September 28the determination of the Net Deficit Amount, 2007 and deliver to the Closing DateBuyer, Parent shall be entitled by wire transfer of immediately available funds to receive (directly or indirectly) Other DBFO Proceeds an account designated by the Buyer, funds in an amount equal to the Permitted ProceedsNet Deficit Amount . The Base Purchase Price shall be reduced by If the amount, if any, that the Estimated Other DBFO Proceeds Aggregate Surplus Amount exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement Aggregate Deficit Amount (the “Post-Closing Statement”) of (i) amount by which the Closing Working Capital (including all of Aggregate Surplus Amount exceeds the components thereof) prepared in accordance with the Calculation PrinciplesAggregate Deficit Amount, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review PeriodNet Surplus Amount”). Any such notice of disagreement shall specify, with a reasonably detailed explanationthen, those items or amounts as to which Parent disagrees within three (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (53) Business Days of the conclusion determination of the Review Period Net Surplus Amount, the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect Buyer shall pay to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive Sellers (based on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30each Seller’s Pro Rata Share) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for funds to accounts designated by the period commencing Sellers (less amounts payable to the Transaction Bonus Employees based on the Closing Date through Transaction Bonus Agreements) an amount equal to the date on which such payment is Net Surplus Amount. The Parties shall treat any payments made calculated at pursuant to this Section 1.5 as an adjustment to the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedPurchase Price for all purposes.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more As promptly as practicable (but not later than fifteen sixty (1560) and not less than five (5days) Business Days prior to following the Closing Date, Parent shall deliver to Purchaser a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of Buyer shall:
(i) the Closing Working Capital (including all of the components thereof) prepared prepare, in accordance with the Calculation Principles Accounting Principles, a consolidated balance sheet of the Acquired Companies as of the Effective Time (the “Estimated Preliminary Closing Date Balance Sheet”); and
(iii) deliver to the Stockholder Representative the Preliminary Closing Date Balance Sheet and a certificate setting forth in reasonable detail Buyer’s calculation of the (A) Working CapitalCapital as of the Effective Time (the “Preliminary Working Capital Determination”), (iiB) Cash and Cash Equivalents as of the Closing Business Debt Effective Time (the “Estimated Closing Business DebtPreliminary Cash Determination”), (iiiC) the Closing Transaction Expenses (the “Estimated Closing Preliminary Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO ProceedsExpenses Determination”) and (viiiD) the Other DBFO Proceeds Debt (the “Estimated Other DBFO ProceedsPreliminary Debt Determination” and, together with the Preliminary Closing Date Balance Sheet and the Preliminary Working Capital Determination, the Preliminary Cash Determination and the Preliminary Transaction Expenses Determination, the “Preliminary Closing Statement”). Until such time as the calculation of the amounts shown on the Closing Date Balance Sheet and the Closing Date Working Capital, Closing Date Cash, Closing Date Transaction Expenses and Closing Date Debt determinations are final and binding on the parties pursuant to this Section 2.3, the Stockholder Representative and its accountants (at the Stockholder Representative’s expense) shall be permitted to discuss with Buyer and its accountants the Preliminary Closing Statement and shall be provided copies of, and have access upon reasonable notice at all reasonable times during normal business hours to, subject to the Stockholder Representative’s entrance into a customary confidentiality agreement with Buyer’s accountants (if required thereby), the work papers and supporting records of the Acquired Companies and its accountants that were available for purposes of the preparation and calculation of the Preliminary Closing Statement so as to allow the Stockholder Representative and its accountants to become informed concerning all matters relating to the preparation of the Preliminary Closing Statement and the accounting procedures, methodologies, tests and approaches used in connection therewith; provided, that the Stockholder Representative and its accountants shall have no such right to receive copies of or have access to Buyer’s internal correspondence or analysis to the extent they relate to a matter in dispute between the Stockholder Representative and Buyer.
(b) The Base Purchase Price shall be subject to adjustment at Following receipt of the Preliminary Closing as follows:
(1) If Statement, if the Estimated Stockholder Representative reasonably determines that the Preliminary Closing Working Capital is greater than Statement has not been prepared on a basis consistent with the Reference Amountrequirements set forth in this Agreement concerning determination of the amounts set forth therein or contains a mathematical or clerical error, the Base Purchase Price Stockholder Representative shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating deliver written notice to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventyBuyer within forty-five (7545) calendar days after the Closingdate of such receipt thereof, Purchaser which notice shall prepare set forth a specific description of the basis of each objection of the Stockholder Representative, and deliver to Parent a statement (the “Post-Closing Statement”) of extent then determinable, (i) the Closing Working Capital (including all a specific adjustment to each item of the components thereof) prepared in accordance with Preliminary Closing Statement that the Calculation Principles, Stockholder Representative believes should be made and (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to PurchaserStockholder Representative’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Preliminary Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed AmountsDispute Notice”).
(e) . In the event that the Stockholder Representative does not deliver a Dispute Notice within such forty-five (45)-day period, the Preliminary Closing Date Balance Sheet, Preliminary Working Capital Determination, Preliminary Cash Determination, Preliminary Transaction Expenses Determination and Preliminary Debt Determination set forth therein shall be final and binding as the “Closing Date Balance Sheet,” “Closing Date Working Capital,” “Closing Date Cash,” “Closing Date Transaction Expenses,” and “Closing Date Debt,” respectively, for purposes of a dispute with respect to this Agreement. In the Post-Closing Statementevent such Dispute Notice is delivered, Purchaser the Stockholder Representative and Parent Buyer shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the partiesresolve such dispute. If Purchaser Buyer and Parent are unable the Stockholder Representative, notwithstanding such good faith efforts, fail to reach a resolution to resolve such effect dispute within thirty (30) calendar days after Purchaserdelivery of the Dispute Notice, then each of the Stockholder Representative and Buyer shall engage the Arbitrator to conduct a special review of the Stockholder Representative’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution objections to the New YorkPreliminary Closing Date Balance Sheet and/or Preliminary Working Capital Determination and/or Preliminary Cash Determination and/or Preliminary Transaction Expenses Determination and/or Preliminary Debt Determination, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent the case may be, as promptly as reasonably practicable (such independent accounting firm being herein referred review to as the “Accounting Firm”). The Accounting Firm shall be directed to, within completed no later than thirty (30) calendar days after submission the Arbitrator is requested to conduct such special review), which review shall be performed consistent with the Accounting Principles and Exhibit D. Upon completion of such review, the dispute, determine and report Arbitrator shall deliver written notice to the parties upon Stockholder Representative and Buyer setting forth the Arbitrator’s resolution of such remaining disputed amounts objections and the resulting adjustments shall be deemed finally determined for purposes of this Section 2.3. The Arbitrator’s role in completing such review shall be limited to resolving such objections and determining the correct calculations to be used with respect to only the Post-disputed portions of the Preliminary Closing Statement. In resolving such objections, the Arbitrator shall apply the provisions of this Agreement concerning determination of the amounts set forth in the Preliminary Closing Statement, and such report the decision of the Arbitrator shall be final, binding and conclusive solely based on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal (i) whether such item objected to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, was prepared in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.requirements
Appears in 1 contract
Purchase Price Adjustments. (a) Not more At least two (2) Business Days but no longer than fifteen four (15) and not less than five (54) Business Days prior to the Closing Date, Parent Target shall deliver to Purchaser Acquiror a statement (the “Transaction Statement”) that contains Parentcertificate of Target’s reasonable Chief Financial Officer setting forth Target’s good faith estimates estimate of (i1) the Closing Working Capital (including all as of the components thereof) prepared in accordance with the Calculation Principles Closing Date (the “Estimated Closing Working Capital”), (ii2) the Net Debt as of the Closing Business Debt Date (the “Estimated Closing Business Net Debt”), ) and (iii3) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (ivreflecting in each case Target’s reasonably detailed calculations of each of the components of such Working Capital, Net Debt and Transaction Expenses amounts and the aggregate amounts thereof. The calculation of the Estimated Working Capital, Estimated Net Debt and Estimated Transaction Expenses shall be in the form consistent with Section 2.15(f) of the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)Target Disclosure Schedule.
(b) The Base Purchase Price shall be subject to adjustment at In the Closing as follows:
(1) If event that the Estimated Closing Working Capital is greater a lesser amount than the Reference AmountTarget Working Capital, the Base Purchase Price Merger Consideration shall be increased adjusted downward by such excess.
(2) If the difference of the amount by which the Target Working Capital exceeds the Estimated Closing Working Capital. In the event that the Estimated Working Capital is less a greater amount than the Reference AmountTarget Working Capital, the Base Purchase Price Merger Consideration shall be reduced adjusted upward by the difference of the amount by which the Estimated Working Capital exceeds the Target Working Capital. In the event that the Estimated Net Debt is a positive amount, then the Merger Consideration shall be adjusted upward by such deficit.
(3) The Base Purchase Price amount. In the event that the Estimated Net Debt is a negative amount, then the Merger Consideration shall be reduced adjusted downward by the absolute value of such amount. The Merger Consideration shall be adjusted downward by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amountadjustments, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled referred to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to in this Section 2.6(b), is 2.15(b) are referred to herein as the “Closing PaymentAdjustment Amounts.”
(c) Within seventy-five ninety (7590) calendar days after the ClosingClosing Date, Purchaser Acquiror shall prepare and deliver to Parent Stockholders’ Agent a statement certificate of Acquiror’s Chief Financial Officer (the “Post-Closing StatementCertificate”) setting forth Acquiror’s good faith determination of (i) the Closing Working Capital (including all as of the components thereof) prepared in accordance with the Calculation PrinciplesClosing Date, (ii) the Net Debt as of the Closing Business Debt, Date and (iii) the Closing Transaction Expenses, (ivreflecting in each case Acquiror’s reasonably detailed calculation of each of the components of such Working Capital, Net Debt and Transaction Expenses amounts and the aggregate amounts thereof. Acquiror’s calculations of Working Capital, Net Debt and Transaction Expenses shall be in the form consistent with Section 2.15(f) of the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO ProceedsTarget Disclosure Schedule.
(d) Parent The Stockholders’ Agent shall notify Purchaser have thirty (30) days from the date on which it receives the Closing Certificate to raise any objection(s) to the calculations set forth therein by delivering a written notice to Acquiror setting forth such objection(s) in reasonable detail (the “Disputed Items”). In the event that Stockholders’ Agent does not deliver any such objection(s) with respect to the calculations set forth in the Closing Certificate within such thirty (30) day period, then the calculations set forth in the Closing Certificate shall be deemed final. In the event that any such objection(s) are so delivered, then the calculations set forth in the Closing Certificate shall be deemed not final and Acquiror and Stockholders’ Agent shall attempt, in good faith, to resolve the Disputed Items and, if they are unable to resolve all of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, Disputed Items within thirty (30) calendar days after Parent’s receipt the date of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specifyDisputed Items notice, with a reasonably detailed explanationshall, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay 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 reasonably requested by the Independent Accounting Firm and to the extent available to Acquiror or its Representatives or Stockholders’ Agent or its Representatives. The Acquiror and Stockholders’ Agent shall be afforded the opportunity to present to the Independent Accounting Firm any material related to the Disputed Items and to discuss the issues with the Independent Accounting Firm. The determination by the Independent Accounting Firm, as set forth in a notice that Stockholders’ Agent and Acquiror shall cause the Independent Accounting Firm to deliver to Acquiror and Stockholders’ Agent within thirty (30) days after the submission of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect Disputed Items to the Post-Closing StatementIndependent Accounting Firm, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser Acquiror, Stockholders’ Agent and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”)all Security Holders. The fees and expenses of the Independent Accounting Firm shall be directed tosplit equally between Acquiror, within thirty (30) calendar days after submission of on the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statementone hand, and such report the Security Holders (through payment from the Stockholder Agent Expense Escrow) on the other hand. The Working Capital, Net Debt and Transaction Expenses amounts reflected in the Closing Certificate, as revised to reflect the resolution of any and all Disputed Items in accordance with this Section 2.15(d), shall be finaldeemed to be the “Final Working Capital,” “Final Net Debt” and “Final Transaction Expenses”, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firmapplicable.
(fe) No later than At such time as the calculations set forth in the Closing Certificate shall become final in accordance with Section 2.15(d), the Estimated Working Capital shall be compared to the Final Working Capital, the Estimated Net Debt shall be compared to the Final Net Debt, and the Estimated Transaction Expenses shall be compared to the Final Transaction Expenses, and Stockholders’ Agent and Acquiror shall make or cause to be made whatever payments are necessary, if any, to reflect the increase or decrease in the Merger Consideration that would have resulted if the Estimated Working Capital, Estimated Net Debt and Estimated Transaction Expenses instead had equaled the Final Working Capital, Final Net Debt and Final Transaction Expenses, respectively. Any payment to be made pursuant to this Section 2.15(e) shall be made, within five (5) Business Days after the final resolution of Closing date that the Final Working Capital, Closing Business DebtFinal Net Debt and Final Transaction Expenses are finally determined pursuant to Section 2.15(d), Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such any payments shall only to be made to (A) Acquiror to be made by Stockholders’ Agent and Acquiror causing the extent that Escrow Agent to release to Acquiror the applicable amount (y) initially from the Purchase Price Adjustment Escrow, and (z) thereafter from the Indemnification Escrow, without regard to the Limitation set forth in Section 9.2(d), if the Purchase Price Adjustment Escrow is insufficient to provide full payment to Acquiror as required by this Section 2.15(e) and (B) Security Holders to be made by Acquiror in cash to each Security Holder in an amount equal to its Escrow Pro Rata Share of such payments. The Stockholders’ Agent and Acquiror shall cause the Escrow Agent to release any amounts owed have not otherwise been satisfied by a prior paymentrequired to be paid to Acquiror pursuant to this Section 2.15(e) and remaining in the Purchase Price Adjustment Escrow, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined Security Holders, in accordance with this Section 2.6 is less than the Estimated Closing Working Capitalamounts equal to their respective Escrow Pro Rata Shares, Parent shall pay the amount of such shortfall promptly after giving effect to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment required to be made as a result of an adjustment to the Base Purchase Price Acquiror pursuant to this Section 2.6 shall 2.15(e).
(f) Section 2.15(f) of the Target Disclosure Schedule contains a reasonably detailed example of the calculations to be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment pursuant to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedthis Section 2.15.
Appears in 1 contract
Sources: Merger Agreement (Nuvasive Inc)
Purchase Price Adjustments. (a) Not more than fifteen The Purchase Price shall be: (15i) and not less than five increased by the Post-Closing Adjustment Amount (5if such amount is positive) Business Days prior or (ii) decreased by the Post-Closing Adjustment Amount (if such amount is negative). The Purchase Price shall also be increased by any amount paid to Sellers pursuant to Section 3.4. (b) Within 90 days following the Closing Date, Parent shall deliver to Purchaser a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser Purchasers shall prepare and deliver to Parent Sellers a statement setting forth the Post-Closing Adjustment Amount (the “Post-Closing Adjustment Statement”) ), and such Post-Closing Adjustment Statement shall also set forth Purchasers’ calculation of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Adjustment Amount. Sellers shall cooperate as reasonably requested by Purchasers in connection with Purchasers’ preparation of the Post-Closing Adjustment Statement. Sellers shall have a period (the “Review Period”) of 60 days from the delivery of the Post-Closing Adjustment Statement to Sellers in order to review such Post-Closing Adjustment Statement and supporting documents. In connection therewith, from and after the Closing Date, Purchasers shall provide Sellers with reasonable access to all records and work papers necessary to compute and verify the Post- Closing Adjustment Statement. If, as a result of such review, Sellers disagree with the Post-Closing Adjustment Statement, Sellers shall deliver to Purchasers a written notice of disagreement (a “Dispute Notice”) prior to the expiration of the Review Period setting forth the basis for such dispute, the amounts in dispute and, if practicable, Seller’s alternative calculation of the Post-Closing Adjustment Amount. The Post-Closing Adjustment Amount set forth on the Closing Adjustment Statement shall be final and binding:
(i) If Sellers do not deliver a Dispute Notice to Purchasers prior to the expiration of the Review Period (or they deliver a written notice accepting the Post-Closing Adjustment Statement).
(ii) If Sellers deliver a Dispute Notice to Purchasers in a timely manner, then Sellers and Purchasers shall attempt in good faith to resolve such dispute within thirty (30) calendar 30 days after Parent’s receipt from the date of such statement (Dispute Notice. If Sellers and Purchasers cannot reach agreement within such 30-day period hereinafter referred (or such longer period as they may mutually agree), then Sellers or Purchasers may elect to refer such dispute to a nationally or regionally recognized certified public accounting firm as may be jointly selected by Purchasers and Sellers (the “Review PeriodNeutral Accountant”). Any The parties agree to cooperate with one another in the engagement of the Neutral Accountant for such notice of disagreement purposes. Each party shall specify, with a reasonably detailed explanation, those items or amounts as thereupon furnish to which Parent disagrees (the Neutral Accountant such reasonable work papers and shall include Parent’s proposed changes other documents and information relating to Purchaser’s the calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Adjustment Statement delivered pursuant as that party may desire or as the Neutral Accountant may request, and each party will be afforded the opportunity to Section 2.6(c) present information to the Neutral Accountant and Parent or Purchaser, as applicable, shall pay within five (5) Business Days to discuss the determination of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on Adjustment Statement with the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting FirmNeutral Accountant.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than five (5) At least three Business Days prior to the Closing Date, Parent Seller shall prepare, or cause to be prepared, and deliver to Purchaser Buyer a statement (the “Transaction Preliminary Closing Statement”) that contains Parentsetting forth Seller’s reasonable good good-faith estimates estimate of (i) the Closing Company’s consolidated Net Working Capital (including all as of the components thereof) prepared in accordance with the Calculation Principles Measurement Time (the “Estimated Closing Net Working Capital”), (ii) the Company’s consolidated Indebtedness as of the Measurement Time on the Closing Business Debt Date (the “Estimated Closing Business DebtIndebtedness”), (iii) the Closing Company’s consolidated Cash as of the Measurement Time (the “Estimated Cash”), (iv) Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viiiv) Seller’s calculation of the Other DBFO Proceeds Estimated Purchase Price; provided that except for Estimated Transaction Expenses, none of the foregoing estimates shall give effect to any of the transactions contemplated hereby. The Preliminary Closing Statement (including the Estimated Net Working Capital, Estimated Indebtedness, Estimated Cash, Estimated Transaction Expenses) shall be calculated in accordance with the accounting principles, practices, assumptions, conventions and policies set forth in Exhibit 2.3(a) (the “Estimated Other DBFO ProceedsApplicable Accounting Principles”). An illustrative example of a Preliminary Closing Statement and calculation of Net Working Capital, Indebtedness, Cash and Transaction Expenses is set forth as Exhibit 2.3(a) (the “Sample Statement”).
(b) The Base Purchase Price shall be subject to adjustment at Within 60 days after the Closing as follows:
Date, Buyer shall cause to be prepared and delivered to Seller a written statement (1the “Final Closing Statement”) If setting forth Buyer’s determination of (i) the Estimated Closing Company’s consolidated Net Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount as of the Estimated Measurement Time on the Closing Business DebtDate (“Closing Net Working Capital”), if any.
(4ii) The Base Purchase Price shall be reduced by the amount Company’s consolidated Indebtedness as of the Estimated Measurement Time (“Closing Indebtedness”), (iii) the Company’s consolidated Cash as of the Measurement Time (“Closing Cash”), (iv) Transaction Expenses (“Closing Transaction Expenses”), and (v) Buyer’s calculation of the Purchase Price; provided that except for Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount none of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating foregoing shall give effect to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price transactions contemplated hereby. The Final Closing Statement shall be reduced by an amount equal to prepared in accordance with the dollar amount allocated to such Target Shares (on a pro-rata basisi) on Schedule 2.7; provided that such transaction is closed Applicable Accounting Principles in the same format as the Sample Statement and all funds related thereto are transferred to Parent (whether directly or indirectlyii) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to based exclusively on the dollar amount allocated to such Target Shares facts and circumstances as they exist at the Measurement Time and shall exclude the effects of any event, act, information, decision, change in circumstances or similar development arising or occurring on (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With except with respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly Transaction Expenses) or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and after the Closing Date. The Base Purchase Price, post-Closing purchase price adjustment as adjusted pursuant to set forth in this Section 2.6(b)2.7 is not intended to permit the introduction of different accounting methods, is 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 “Closing Paymentnature of accounts, level of reserves or level of accruals) from the Applicable Accounting Principles.”
(c) Within seventy-five The Final Closing Statement shall become final and binding on the 45th day following delivery thereof, unless prior to the end of such period, Seller delivers to Buyer written notice of its disagreement (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing StatementNotice of Disagreement”) specifying the nature and amount of (i) any dispute as to the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Net Working Capital, Closing Business DebtIndebtedness, Change of Control PaymentsClosing Cash, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO ProceedsExpenses and/or Closing Balance Sheet, as applicable)set forth in the Final Closing Statement. Parent Seller shall be deemed to have agreed with all other items and amounts included of Closing Net Working Capital, Closing Indebtedness, Closing Cash and/or Closing Transaction Expenses not specifically referenced in the PostNotice of Disagreement.
(d) During the 30-day period following delivery of a Notice of Disagreement by Seller to Buyer, the parties in good faith shall seek to resolve in writing any differences that they may have with respect to the calculation of the Closing Net Working Capital, Closing Indebtedness, Closing Cash, and/or Closing Transaction Expenses. Any disputed items resolved in writing between Buyer and Seller within such 30‑day period shall be final and binding with respect to such items, and if Seller and Buyer agree in writing on the resolution of each disputed item specified by Seller in the Notice of Disagreement and the amount of the Closing Net Working Capital, Closing Indebtedness, Closing Cash and Closing Transaction Expenses, the amounts so determined shall be final and binding on the parties for all purposes hereunder. If Buyer and Seller have not resolved all such differences by the end of such 30-day period, Buyer and Seller shall submit, in writing, to an independent public accounting firm (the “Independent Accounting Firm”), their briefs detailing their views as to the correct nature and amount of each item remaining in dispute and the amounts of the Closing Net Working Capital, Closing Indebtedness, Closing Cash, and/or Closing Transaction Expenses, and the Independent Accounting Firm shall make a written determination as to each such disputed item and the amount of the Closing Net Working Capital, Closing Indebtedness, Closing Cash, and/or Closing Transaction Expenses. The Independent Accounting Firm shall be BDO USA, LLP or, if such firm is unable or unwilling to act, such other independent public accounting firm as shall be agreed in writing by Seller and Buyer. Buyer and Seller shall use their commercially reasonable efforts to cause the Independent Accounting Firm to render a written decision resolving the matters submitted to it within 30 days following the submission thereof. The Independent Accounting Firm shall consider only those items and amounts in Buyer’s and Seller’s respective calculations of the Closing Net Working Capital, Closing Indebtedness, Closing Cash, and/or Closing Transaction Expenses that are identified as being items and amounts to which Buyer and Seller have been unable to agree. The Independent Accounting Firm shall act as an expert and not as an arbitrator, and the scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to correcting mathematical errors and determining whether the items and amounts in dispute were determined in accordance with the Applicable Accounting Principles and the Sample Statement, and the Independent Accounting Firm is not to make any other determination. In resolving any disputed item, the Independent Accounting Firm may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. The Independent Accounting Firm’s determination of the Closing Net Working Capital, Closing Indebtedness, Closing Cash, and Closing Transaction Expenses shall be based solely on written materials submitted by Buyer and Seller (i.e., not on independent review) and shall be based upon the terms and definitions set forth in this Agreement. The determination of the Independent Accounting Firm shall be conclusive and binding upon the parties hereto and shall not be subject to appeal or further review. Judgment may be entered upon the written determination of the Independent Accounting Firm in accordance with Section 11.9.
(e) The costs of any dispute resolution pursuant to this Section 2.7, including the fees and expenses of the Independent Accounting Firm and of any enforcement of the determination thereof, shall be borne by Seller and Buyer in inverse proportion as they may prevail on the matters resolved by the Independent Accounting Firm, which proportionate allocation shall be calculated on an aggregate basis based on the relative dollar values of the amounts in dispute and shall be determined by the Independent Accounting Firm at the time the determination of such firm is rendered. The fees and disbursements of the Representatives of each party incurred in connection with the preparation or review of the Final Closing Statement delivered pursuant to Section 2.6(c) and Parent preparation or Purchaserreview of any Notice of Disagreement, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution borne by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firmparty.
(f) No later than five Buyer and Seller will, and will cause the Company (5) Business Days in the case of Seller, prior to the Closing and, in the case of Buyer, during the period from and after the final date of delivery of the Final Closing Statement through the resolution of any adjustment to the Purchase Price contemplated by this Section 2.7) to afford the other party and its Representatives reasonable access, during normal business hours and upon reasonable prior notice, to the personnel, properties, books and records of the Racecar Companies and to any other information reasonably requested for purposes of preparing and reviewing the calculations contemplated by this Section 2.7. Each party shall authorize its outside accountants to disclose work papers generated by such accountants in connection with preparing and reviewing the calculations specified in this Section 2.7; provided, that such accountants shall not be obligated to make any work papers available except in accordance with such accountants’ disclosure procedures. Prior to the Closing, the parties shall act reasonably in resolving in good faith any disagreements concerning the computation of any of the items included in the Preliminary Closing Statement (including the calculations of the Estimated Net Working Capital, Closing Business DebtEstimated Indebtedness, Change of Control Payments, Closing Estimated Cash and Estimated Transaction Expenses); provided that it is acknowledged and agreed that if any disagreements cannot be resolved, Project Contributionsthen the Closing shall occur on the basis of the Preliminary Closing Statement provided by Seller and that any unresolved disagreements shall be deferred for resolution pursuant to the post-closing purchase price adjustment process described in this Section 2.7.
(g) The Purchase Price shall be adjusted, Chinese DBFO Proceeds, Dalriada DBFO Proceeds upwards or Other DBFO Proceedsdownwards, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):follows:
(1i) If For the purposes of this Agreement, the “Net Adjustment Amount” means an amount, which may be positive or negative, equal to (A) the Closing Net Working Capital as finally determined in accordance with pursuant to this Section 2.6 is less than 2.7 minus the Estimated Closing Net Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
minus (2B) If the Closing Working Capital Indebtedness as finally determined in accordance with pursuant to this Section 2.6 is greater than 2.7 minus the Estimated Closing Working CapitalIndebtedness, Purchaser shall pay the amount of such excess to Parent.
plus (3C) If the Closing Business Debt Cash as finally determined in accordance with pursuant to this Section 2.6 is less than 2.7 minus the Estimated Closing Business DebtCash, Purchaser shall pay the amount of such shortfall to Parent.
minus (4D) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for 2.7 minus the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.Estimated Transaction Expenses;
Appears in 1 contract
Sources: Merger Agreement (TopBuild Corp)
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than five (5) Business Days a. At least two business days prior to the Closing Date, Parent shall Seller will prepare, or cause to be prepared, and deliver to Purchaser Buyer a statement (“Estimated Working Capital Statement”), which shall set forth Seller’s good faith estimate of (i) Seller’s current assets of the Business as of the Closing that are Purchased Assets and the current assets of the Transferred Entities as of the Closing minus (ii) the current liabilities included as part of the Assumed Liabilities as of the Closing and the current liabilities of the Transferred Entities as of the Closing (“Estimated Working Capital”). The Estimated Working Capital shall be calculated in accordance with the principles set forth on the Working Capital Schedule and, to the extent not set forth on such schedule, United States generally accepted accounting principles as consistently applied by Seller (“GAAP”).
b. Within 90 days after the Closing Date, Buyer will prepare, or cause to be prepared, and deliver to Seller a statement (the “Transaction Closing Working Capital Statement”) that contains Parent), which shall set forth Buyer’s reasonable good faith estimates calculation of (i) current assets of the Business as of the Closing Working Capital (including all that are Purchased Assets and the current assets of the components thereofTransferred Entities as of the Closing minus (ii) prepared in accordance with current liabilities included as part of the Calculation Principles Assumed Liabilities as of the Closing and the current liabilities of the Transferred Entities as of the Closing (the “Estimated Closing Working Capital”). The Closing Working Capital shall be calculated in accordance with the principles set forth on the Working Capital Schedule and, (ii) to the extent not set forth on such schedule, GAAP.
c. Upon receipt from Buyer, Seller shall have 60 days to review the Closing Business Debt Working Capital Statement (the “Estimated Review Period”). During such review period, Seller shall have access, upon reasonable notice to Buyer, to all relevant books and records and work papers (including those of ▇▇▇▇▇’s accountants and auditors) during normal business hours for the purpose of verifying the Closing Business DebtWorking Capital Statement and all other items reasonably requested by Seller related thereto. If Seller disagrees with ▇▇▇▇▇’s computation of the Closing Working Capital, Seller may, on or prior to the last day of the Review Period, deliver written notice to Buyer (the “Notice of Objection”), (iii) which shall set forth its objections to Buyer’s calculations of the Closing Transaction Expenses (Working Capital. The Notice of Objection shall specify in reasonable detail any contested amounts and the “Estimated basis therefor and shall include a schedule setting forth Seller’s determination of Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)Working Capital.
(bi) The Base Purchase Price Unless Seller delivers the Notice of Objection to Buyer within the Review Period, Seller shall be subject deemed to adjustment at have accepted the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than Statement, including Buyer’s calculations of the Reference AmountClosing Working Capital, the Base Purchase Price shall be increased by and such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price Statement shall be reduced final, binding and non-appealable by such deficit.
(3) The Base Purchase Price ▇▇▇▇▇ and Seller. If a Notice of Objection is delivered prior to the expiration of the Review Period, any amounts not disputed therein shall be reduced final, binding and non-appealable by ▇▇▇▇▇ and Seller. If Seller delivers the Notice of Objection to Buyer within the Review Period, Buyer and Seller shall, during the 60 days following such delivery or any mutually agreed extension thereof, use their commercially reasonable efforts to reach agreement on the disputed items and amounts in order to determine the amount of the Estimated Closing Business DebtWorking Capital. If, if any.
(4) The Base Purchase Price at the end of such period or any mutually agreed extension thereof, Buyer and Seller are unable to resolve their disagreements, they shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating jointly retain and refer their disagreements to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Hills DBFO AssetsLLP (the “Independent Expert”).
(ii) are sold back The Independent Expert shall base its determination solely on written submissions by ▇▇▇▇▇ and Seller and not on the Independent Expert’s independent review. Buyer and Seller shall make available to the City Independent Expert all relevant books and records and other items reasonably requested by the Independent Expert. The Parties shall request that the Independent Expert deliver to Buyer and Seller, as promptly as practicable but in no event later than 60 days after its retention, a report which shall set forth its resolution of the disputed items and amounts and its calculation of the Closing Working Capital or Consent Statement, as applicable. Any determination by the Independent Expert shall not be outside the range defined by the respective amounts in the Closing Working Capital Schedule or Consent Statement, as applicable, proposed by ▇▇▇▇▇▇▇ Hills prior to ’s and Seller’s proposed adjustments thereto set forth in the ClosingNotice of Objection or Consent Protest Notice, as applicable, and absent manifest mathematical error, the Base Purchase Price decision of the Independent Expert shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed final, conclusive and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to binding on the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to Parties. The costs and expenses of the Closing then (B) the Base Purchase Price Independent Expert shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive allocated between Buyer, on the proceeds from one hand, and Seller, on the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any other hand, based upon the percentage that the portion of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an aggregate contested amount equal to the dollar amount allocated not awarded to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred Party bears to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Priceactually contested by such Party, as adjusted determined by the Independent Expert.
e. The date on which the Estimated Closing Payment, including Closing Working Capital, is finally determined pursuant to this Section 2.6(b), is the “Closing Payment.”
(c4(d) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter be referred to as the “Review Period”). Any Determination Date” and such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent amount shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting FirmFinal Closing Payment”). The Accounting Firm On the Determination Date, the Purchase Price shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereofadjusted as follows:
1. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Final Closing Working Capital as finally determined in accordance with this Section 2.6 Payment is less than the Estimated Closing Working CapitalPayment, Parent Buyer and Seller shall pay offset an amount equal to such excess amount against the amount of such shortfall to Purchaser.Note; and
(2) . If the Final Closing Working Capital as finally determined in accordance with this Section 2.6 Payment is greater than the Estimated Closing Working CapitalPayment, Purchaser Buyer and Seller shall pay increase the Note by an amount of such excess equal to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.amount.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) f. Any payment to be made as a result under Section 4(e)(1) shall be made within three business days after the Determination Date, and shall be made by wire transfer of immediately available funds to an account designated in writing by Buyer. Buyer and Seller agree that any adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid treated as an adjustment to the Purchase Price for all tax purposes, and shall not take any inconsistent position for Tax purposes. Buyer and Seller shall file all Tax Returns (including amended returns and claims for refund) and information reports in a manner consistent with such allocation.
g. Buyer shall be entitled to deduct and withhold from the Purchase Price all taxes that Buyer may be required to deduct and withhold under any applicable tax law. All such withheld amounts shall be treated as delivered to Seller hereunder to the extent remitted to the appropriate governmental authority on behalf of Seller to which the withheld amounts pertain. Notwithstanding anything to the contrary in this Section 4(g), prior to deducting or withholding from any payments to be made under this Agreement, Buyer shall notify Seller of its intent to withhold or deduct from the Purchase Price and shall cooperate in good faith with Seller, to eliminate or reduce such withholding or deduction to the extent permitted by wire transfer applicable Law. Seller shall be responsible for all out-of-pocket expenses that Buyer incurs in connection therewith. For the avoidance of immediately available fundsdoubt, together with interest thereon for the period commencing U.S. federal income tax purposes, no withholding is expected on the Closing Date through Purchase Price payable to Seller with respect to the date on which such payment is made calculated at the Prime RatePurchased Assets. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Sources: Share and Asset Purchase Agreement (Tabula Rasa HealthCare, Inc.)
Purchase Price Adjustments. (a) Not more than fifteen As promptly as possible, but in any event within sixty (1560) and not less than five (5) Business Days prior to days after the Closing Date, Parent shall the Purchaser will deliver to Purchaser the Seller a statement showing the calculation of the Closing Net Working Capital, Closing Cash, Closing Indebtedness and Closing Transaction Expenses and a calculation of the Purchase Price, together with reasonable calculation details (the “Transaction Preliminary Closing Statement”) that contains Parent’s reasonable good faith estimates of (i) the ). The Closing Net Working Capital (including all of the components thereof) prepared Capital, Closing Cash, Closing Indebtedness and Closing Transaction Expenses shall each be determined on a consolidated basis in accordance with the Calculation definitions set forth in this Agreement and the Agreed Accounting Principles (to the extent applicable). If the Purchaser does not deliver the Preliminary Closing Statement within 60 days after the Closing Date, the Seller may elect to either (x) deliver a Preliminary Closing Statement to the Purchaser within an additional thirty (30) days thereafter or (and the procedures below shall apply with the Purchaser and the Seller switching roles) or (y) designate the Estimated Purchase Price as the final Purchase Price (in which event the final “Purchase Price” shall mean the Estimated Purchase Price). If the Seller elects to prepare the Preliminary Closing Statement in accordance with the immediately preceding sentence, then all subsequent references in this Section 1.5 to the Purchaser, on the one hand, and the Seller, on the other hand, will be deemed to be references to the Seller, on the one hand, and the Purchaser, on the other hand, respectively. After delivery of the Preliminary Closing Statement, the Purchaser shall give the Seller and its representatives reasonable access to review the Purchaser’s, the Company’s and its Subsidiaries’ books and records and work papers related to the preparation of the Preliminary Closing Statement. Seller and its representatives may make inquiries of the Purchaser, the Company and its Subsidiaries and their respective accountants regarding questions concerning or disagreements with the Preliminary Closing Statement arising in the course of its review thereof, and the Purchaser shall use its, and shall cause the Company and its Subsidiaries to use their, commercially reasonable efforts to cause any such accountants to cooperate with and respond to such inquiries. If Seller has any objections to the Preliminary Closing Statement, Seller shall deliver to the Purchaser a statement setting forth its objections thereto (an “Objections Statement”). Such Objections Statement will include a reasonably detailed description of each disputed item within each of Closing Net Working Capital”), (ii) the Closing Business Debt (the “Estimated Cash, Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) Indebtedness and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) together with reasonable calculation details. If the Business’s land improvements relating an Objections Statement is not delivered to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventywithin forty-five (7545) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all delivery of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Preliminary Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Preliminary Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive non-appealable by the parties hereto; provided that, in the event the Purchaser, the Company or any of its Subsidiaries does not provide any papers or documents reasonably requested by Seller or any of its representatives within five (5) days of request therefor (or such shorter period as may remain in such 45-day period), such 45-day period will be extended by one day for each additional day required for the Purchaser, the Company or any of its Subsidiaries to fully respond to such request; provided, further, that such 45-day period will be extended a minimum of five (5) days following the date on which the partiesPurchaser, the Company and its Subsidiaries have fully responded to such request; provided, further, that, such period shall not be extended more than ninety (90) days after delivery of the Preliminary Closing Statement. If Seller and the Purchaser and Parent are unable shall use commercially reasonable efforts to negotiate in good faith to resolve any such objections, but if they do not reach a final resolution to such effect within thirty (30) calendar days after Purchaser’s receipt the delivery of Parent’s written notice of disagreementthe Objections Statement, Seller and the Purchaser and Parent shall submit the amounts remaining in such dispute for resolution to the New York, New York office of KPMG BDO USA LLP or such other independent accountant mutually acceptable dispute resolution firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Dispute Resolution Firm”). Any further submissions to the Dispute Resolution Firm must be written and delivered to each party to the dispute. The Accounting Dispute Resolution Firm shall consider only those items and amounts which are identified in the Objections Statement as being items which Seller and the Purchaser are unable to resolve. The Dispute Resolution Firm’s determination will be directed tobased solely on the definitions of Closing Net Working Capital, Closing Cash, Closing Indebtedness, Closing Transaction Expenses and the Purchase Price, as applicable, contained herein, and such determination shall not exceed the range of values proposed by Purchaser within the Preliminary Closing Statement or the range of values proposed by Seller within the Objections Statement, for each disputed item. Seller and the Purchaser shall use their commercially reasonable efforts to cause the Dispute Resolution Firm to resolve all disagreements as soon as practicable and in any event within thirty (30) calendar days after the submission of any dispute. Further, the disputeDispute Resolution Firm’s determination shall be based solely on the presentations by the Purchaser, determine the Seller, the Company and report to its Subsidiaries which are in accordance with the parties upon such remaining disputed amounts with respect to terms and procedures set forth in this Agreement (i.e., not on the Post-Closing Statement, and such report basis of an independent review). The resolution of the dispute by the Dispute Resolution Firm shall be final, binding and conclusive non-appealable on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereofhereto, absent manifest error. The Accounting Firm shall address only those items in dispute. Purchaser shall bear costs and pay a percentage expenses of the fees and disbursements Dispute Resolution Firm in resolving any dispute shall be allocated based upon the percentage which the portion of the Accounting Firm that is equal contested amount not awarded to each party bears to the percentage amount actually contested by such party in the presentation to the Dispute Resolution Firm. For example, if Seller submits an Objections Statement for $1,000, and if the Purchaser contests only $500 of the total dollar amount claimed by Seller, and if the Dispute Resolution Firm ultimately resolves the dispute by awarding Seller $300 of changes proposed the $500 contested, then the costs and expenses of the Dispute Resolution Firm will be allocated 60% (i.e., 300/500) to the Post-Purchaser and 40% (i.e., 200/500) to Seller. The Preliminary Closing Statement by Parent that are successfulshall be revised as appropriate to reflect the resolution of any objections thereto pursuant to this Section 1.5, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-and, as so revised, such Preliminary Closing Statement by Parent that are not successful, in each case as determined by shall be deemed to set forth the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Net Working Capital, Closing Business DebtCash, Change of Control PaymentsClosing Indebtedness, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicableExpenses and the Purchase Price, in accordance with this Section 2.6each case, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaserfor all purposes hereunder.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than five (5) Business Days prior The Purchase Price shall be adjusted in an amount equal to the Closing DateNet Worth Adjustment. For purposes hereof, Parent shall deliver to Purchaser a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates Net Worth Adjustment” shall equal the difference of (i) the Closing Working Capital (including all Net Worth of the components thereofCompany (as defined in Section 1.6(e)) prepared in accordance with as of the Calculation Principles Closing Date minus (ii) $11,354,327.00 (the “Estimated Closing Working CapitalNet Worth Threshold”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) . If the Estimated Net Worth Adjustment is positive (i.e., Closing Working Capital Net Worth is greater than the Reference AmountNet Worth Threshold), the Base Purchase Price shall be increased by such excess.
(2) the amount of the Net Worth Adjustment. If the Estimated Net Worth Adjustment is negative (i.e., Closing Working Capital Net Worth is less than the Reference AmountNet Worth Threshold), the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced decreased by the amount of the Estimated Net Worth Adjustment. For purposes of the Closing, the Closing Business DebtNet Worth and the Net Worth Adjustment shall be based on Seller’s good faith preliminary calculation of Closing Net Worth and the Net Worth Adjustment (the “Closing Calculation”), if anysubject to the true-up provisions of this Section 1.6.
(4b) Within thirty (30) days after the Closing Date, Seller will true-up the Closing Calculation of Closing Net Worth and the Net Worth Adjustment, and provide Purchaser with a reasonably detailed calculation of the trued-up Net Worth Adjustment for Purchaser’s review and approval (the “True-up Calculation”). The Base Purchase Price True-Up Calculation shall be reduced deemed to be final and conclusive and agreed to by Purchaser and Seller, and shall be the basis for the true-up of the Net Worth Adjustment provided for in Section 1.6(d), unless Purchaser gives written notice to Seller, within fifteen (15) days of Purchaser’s receipt of the True-Up Calculation, that Purchaser disputes the True-Up Calculation (the “Dispute Notice”). Purchaser and Seller shall attempt, within ten (10) days after any such Dispute Notice is given, to resolve such dispute. If the Parties are unable to resolve such dispute within such ten (10) days, Purchaser and Seller shall resolve the dispute in accordance with the procedure set forth in Section 1.6(c).
(c) If the Parties do not agree on the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
Net Worth Adjustment within ten (10) The Base Purchase Price days after a Dispute Notice is given (as described in Section 1.6(b)), they shall engage a mutually agreeable nationally-recognized public accounting firm for the limited purpose of resolving only the disagreements of the Parties with respect to the True-Up Calculation, provided that all determinations made by such accounting firm shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared made in accordance with this Section 1.6. The determinations of such accounting firm shall be conclusive and binding on the Calculation PrinciplesParties, (iiand the fees and expenses of such accounting firm shall be divided equally between Seller and Purchaser. For purposes hereof, the “Determination Date” shall mean the date on which the final determination of the Net Worth Adjustment is made in accordance with either Section 1.6(b) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceedsor Section 1.6(c).
(d) Parent Purchaser shall notify Purchaser pay to Seller any positive trued-up Net Worth Adjustment (i.e., if the True-Up Calculation of its acceptance or dispute the Net Worth Adjustment is greater than the Closing Calculation of any amounts reflected on the Post-Net Worth Adjustment), in cash, plus interest thereon at a rate of six percent (6.0%) per annum (“Borrowing Rate”) from the Closing StatementDate, within thirty (30) calendar five days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable)Determination Date. Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, Seller shall pay to Purchaser any negative trued-up Net Worth Adjustment (i.e., if the True-Up Calculation of the Net Worth Adjustment is less than the Closing Calculation of the Net Worth Adjustment), in cash, plus interest thereon at the Borrowing Rate from the Closing Date, within five (5) Business Days days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”)Determination Date.
(e) In For the event purpose of a dispute with respect to Section 1.6, the Post-Company’s “Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on Net Worth” means the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission excess of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage assets of the fees Company and disbursements its Subsidiaries (consolidated) over the liabilities of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successfulCompany and its Subsidiaries (consolidated), and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than GAAP applied on a basis consistent with Tecon Water Company, L.P.’s audited balance sheet dated as of December 31, 2003, with the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2additional adjustments set forth on Schedule 1.6(e) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess hereto. An example of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11)calculation of Closing Net Worth as of December 31, if any2003, is set forth on Schedule 1.6(e) hereto.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen (15Attached hereto as Schedule 1.5(A) and not less than five (5) Business Days prior to the Closing Date, Parent shall deliver to Purchaser is a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing Working Capital (including all pro forma balance sheet of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”)Business as of March 26, (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California 2011 (the “▇▇▇▇▇▇▇ Hills DBFO AssetsBase Line Balance Sheet”) are sold back to the City of ). The ▇▇▇▇▇▇▇ Hills Base Line Balance Sheet was prepared in accordance with GAAP applied using the same accounting methods, practices, principles and policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Audited Financial Statements for the year ended December 26, 2009, subject to the modifications and limitations set forth on Schedule 1.5(A) attached hereto.
(b) No later than five Business Days prior to the Closing, the Base Purchase Price Company shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed prepare and all funds related thereto are transferred present to Parent (whether directly or indirectly) prior to Buyer a projected closing balance sheet of the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed Business through the end of the monthly period ending prior to the Closing then (Bthe “Projected Closing Balance Sheet”). The Projected Closing Balance Sheet shall be attached to this Agreement as Schedule 1.5(B-1) and shall be prepared in a manner consistent with the ▇▇▇▇▇▇▇ Base Line Balance Sheet, together with the additional and/or revised accounting principles set forth on Schedule 1.5(B-2) attached hereto.
(c) At Closing, the Purchase Price shall either be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000i) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that by which the Estimated Other DBFO Proceeds exceeds Net Current Assets on the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28Projected Closing Balance Sheet exceed the Net Current Assets on the ▇▇▇▇▇▇▇ Base Line Balance Sheet, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, or (ii) decreased by the amount, if any, by which the Net Current Assets on the ▇▇▇▇▇▇▇ Base Line Balance Sheet exceed the Net Current Assets on the Projected Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO ProceedsBalance Sheet.
(d) Parent On the first day after the Closing Date, the Company shall notify Purchaser conduct a physical inventory (unit count) of its acceptance all items of Inventory on hand at the Acquired Real and Leased Property and the Retained Real Property. Such inventory count, together with all inventory in transit and located at the public warehouse located in Sparks, NV or dispute elsewhere on such date, will be utilized to prepare the Draft Balance Sheet. The Buyer shall make available, under Buyer’s supervision, Acquired Employees for the purpose of any amounts reflected on conducting such physical inventory, and appropriate representatives of the Post-Buyer shall be entitled to observe such physical inventory.
(e) Within 75 calendar days following the Closing, the Company shall deliver to Buyer, a draft of an audited balance sheet of the Business as of the Final Date prepared at the Sellers’ and Parent’s expense (the “Draft Balance Sheet”). The Draft Balance Sheet shall be prepared in a manner consistent with the Projected Closing Statement, Balance Sheet.
(f) Unless Buyer notifies the Company in writing within thirty (30) 30 calendar days after Parent’s its receipt of the Draft Balance Sheet that Buyer objects to the calculation of Net Current Assets set forth therein (“Buyer’s Objection Notice”), and specifies in reasonable detail the basis for such statement objection, the amount in dispute and, if any, the accounting firm assisting Buyer in conjunction with its analysis of the Draft Balance Sheet (such 30-day period hereinafter referred to “Buyer’s Accountants”), the Draft Balance Sheet shall become final and binding on all parties for purposes of this Section 1.5 and shall be known as the “Review PeriodFinal Date Balance Sheet.”
(g) If Buyer has objected to the Draft Balance Sheet, then the Company and the Buyer (or, at Buyer’s option, Buyer’s Accountants) shall attempt to resolve the issues set forth in Buyer’s Objection Notice within 30 calendar days following its delivery. Failing resolution between these parties, the unresolved issues set forth in Buyer’s Objection Notice shall be submitted to the Boston office of McGladrey (the “Neutral Accountants”) for a final and binding resolution. The Neutral Accountants shall resolve the issues in a manner consistent with the Projected Closing Balance Sheet. The parties hereto agree that all adjustments shall be made without regard to materiality.
(h) The Neutral Accountant shall only decide the specific issues set forth in the Buyer’s Objection Notice that are in dispute and their decision for each specific issue in dispute must be within the range of values assigned to each such item in the Draft Balance Sheet and Buyer’s Objection Notice. The Neutral Accountants shall be requested to render their decision within 30 days of engagement, or as soon as practicable thereafter. The decision of the Neutral Accountants shall be made in a writing delivered to the Company and the Buyer containing the Draft Balance Sheet, as adjusted to show such accountants’ determination (the “Accountants Final Date Balance Sheet”), which writing shall contain a certification that the accounting firm made its determination in conformity with the provisions of this Agreement, and such decision with respect to disputed matters shall be final and binding on all parties. Any such notice The fees, costs and expenses of disagreement the Neutral Accountants shall specifybe borne equally by the Sellers and Parent, with a reasonably detailed explanationon the one hand, those items or amounts as to which Parent disagrees (and Buyer, on the other hand. Upon delivery by the Neutral Accountants, the Accountants Final Date Balance Sheet shall become final and binding on all parties for purposes of this Section 1.5 and shall include Parent’s proposed changes to Purchaser’s calculation of be known as the “Final Date Balance Sheet.”
(i) The Purchase Price paid at Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall either be deemed to have agreed with all other items and amounts included in (i) increased by the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, by which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive Net Current Assets on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit Final Date Balance Sheet exceed the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive Net Current Assets on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Projected Closing Statement by Parent that are successfulBalance Sheet, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined or (ii) decreased by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior paymentamount, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing Net Current Assets on the Projected Closing Balance Sheet exceed the Net Current Assets on the Final Date through the date Balance Sheet. Any such increase or decrease (plus interest on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily amount computed on the basis of a 365-day year at the prevailing prime rate quoted by Bank of 365 days America, N.A.) shall be remitted by wire transfer or other delivery of immediately available funds to accounts designated by the receiving party within five Business Days of the Final Date Balance Sheet becoming final and binding on the parties in accordance with the provisions of Section 1.5(e) and (f) or Sections 1.5(g) and (h) hereof. Any payment of the foregoing adjustment owed to Buyer shall be paid by the Escrow Agent from the Net Current Asset Escrow Amount pursuant to the terms of the applicable Escrow Agreement.
(j) In connection with the Company’s preparation of the Draft Balance Sheet, Buyer shall make available to the Company and the actual number Company’s Accountants (i) working papers, worksheets and other documents as reasonably requested by the Company in its preparation of days elapsedthe Draft Balance Sheet, and (ii) personnel involved in the preparation of the Draft Balance; provided that such access shall be in a manner that does not materially interfere with the normal business operations of Buyer.
(k) Any payments made pursuant to this Section 1.5 shall be treated as an adjustment to the Purchase Price by the parties for financial reporting and Tax purposes, unless otherwise required by Law.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen At least three (15) and not less than five (53) Business Days prior to the Closing Date, Parent Seller shall prepare and deliver to Purchaser a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of Buyer:
(i) the Closing Working Capital (including all of the components thereof) prepared a statement in accordance with the Calculation Principles writing (the “Estimated Closing Working CapitalStatement”), ) setting forth Seller’s good faith estimate of (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iiiA) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (ivB) the Change of Control Payments Closing Indebtedness (the “Estimated Closing Change of Control PaymentsIndebtedness”), (vC) the Project Contributions Closing Cash (the “Estimated Project ContributionsClosing Cash”), (viD) the Chinese DBFO Proceeds Net Working Capital (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO ProceedsWorking Capital”) and (viiiE) the Other DBFO Proceeds resulting calculation of the Estimated Closing Valuation and the Closing Payment;
(ii) pay-off letters (the “Pay-Off Letters”) with respect to the Estimated Other DBFO ProceedsIndebtedness identified on Section 2.05(a)(ii) of the Disclosure Schedules (each of which shall (A) include wire instructions for delivery of the applicable pay-off amount set forth therein, (B) provide for the release and discharge, subject to the receipt of the applicable pay-off amount, of all Encumbrances, security interests and guarantees related to such Indebtedness, and (C) authorize Buyer to file terminations evidencing such release and discharge upon delivery of the applicable pay-off amount); provided, that, for the avoidance of doubt, the Company shall be fully-released at the Closing of any Encumbrances, security interests and guarantees in favor of HSBC; and
(iii) invoices (the “Invoices”) for all Estimated Closing Transaction Expenses to be paid by Buyer at the Closing pursuant to Section 2.03(a)(iv) (each of which shall include wire instructions for delivery of the applicable amount set forth therein).
(b) The Base Purchase Price shall be subject to adjustment at the Closing As soon as follows:
practicable (1and in any event within ninety (90) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and days following the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser Buyer shall prepare and deliver to Parent Seller a statement in writing (the “Post-Closing Statement”) setting forth in reasonable detail Buyer’s calculations of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iiiA) the Closing Transaction Expenses, (ivB) the Change of Control PaymentsClosing Indebtedness, (vC) the Project ContributionsClosing Cash, (viD) the Chinese DBFO Proceeds, Net Working Capital and (viiE) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s resulting calculation of the Closing Working Capital, Valuation and the Cash Purchase Price. The Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent Statement shall be deemed to have agreed prepared in a manner consistent with all other items the Accounting Principles and amounts included in accordance with the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”)definitions set forth in this Agreement.
(ec) In the event of a dispute with respect to the Post-The Closing Statement, Purchaser Statement and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission each of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report components thereof shall be final, binding and conclusive on the parties hereto unless Seller provides written notice of any objections thereto to Buyer within thirty (30) days after Seller’s receipt of the Closing Statement (such thirty (30)-day period, the “Objection Period”), which objection notice must specifically identify in reasonable detail each item or amount in the Closing Statement disputed by Seller (a “Disputed Item”), the basis for such dispute and Seller’s proposed calculation of each Disputed Item (a “Closing Statement Objection Notice”). If Seller does not deliver a Closing Statement Objection Notice within the Objection Period, then the Closing Statement shall be deemed irrevocably accepted and agreed to by Seller in its entirety and shall constitute an arbitral award not be subject to dispute, review or change. If Seller delivers a Closing Statement Objection Notice within the Objection Period, then Buyer and Seller shall attempt to resolve each Disputed Item during the thirty (30)-day period following Seller’s delivery of such Closing Statement Objection Notice, and each item or amount in the Closing Statement which is not a Disputed Item shall be deemed irrevocably accepted and agreed to by Seller and shall be final, binding and conclusive on the parties and shall not be subject to dispute, review or change. If Buyer and Seller are unable to resolve any Disputed Item set forth in the Closing Statement Objection Notice within such thirty (30)-day period, then Seller and Buyer shall, within fifteen (15) days, engage the Independent Accounting Firm to render a binding opinion resolving each unresolved Disputed Item in accordance with the provisions of this Agreement. Buyer and Seller will (i) within ten (10) Business Days of engaging the Independent Accounting Firm, deliver to the Independent Accounting Firm (with a copy concurrently delivered to the other party) a written statement setting forth such party’s calculation of each unresolved Disputed Item and the amount thereof, (ii) cooperate with the Independent Accounting Firm and provide to the Independent Accounting Firm such information as the Independent Accounting Firm may reasonably request, (iii) use commercially reasonable efforts to cause the Independent Accounting Firm to resolve such Disputed Items no later than thirty (30) days from engagement of the Independent Accounting Firm, and (iv) instruct the Independent Accounting Firm to set forth in a written statement its determination of such unresolved Disputed Items and the resulting calculation of the Cash Purchase Price based upon which a judgment may be entered such determination and the items and amounts set forth in any court having jurisdiction thereofthe Closing Statement that were not Disputed Items submitted to the Independent Accounting Firm. The In connection with the resolution of the unresolved Disputed Items, the Independent Accounting Firm shall address only those items be given access to all documents, records, work papers, facilities and personnel of the Company, Buyer and Seller as it requests and as is reasonably necessary to resolve such Disputed Items. The Independent Accounting Firm shall review the submissions of Buyer and Seller and base its determination solely on such submissions and the documents it requested and were provided to it by the parties (i.e., not on the basis of an independent review and testimony). The scope of disputes to be resolved by the Independent Accounting Firm shall be limited to whether the Disputed Items submitted to the Independent Accounting Firm were properly calculated in accordance with the terms of this Agreement and the Independent Accounting Firm shall apply the provisions of this Section 2.05 to such Disputed Items, and shall not have any authority or power to alter, modify, amend, add to or subtract from any term or provision of this Agreement. No party nor any of their respective representatives or Affiliates shall have any ex parte communications or meetings with the Independent Accounting Firm regarding the subject matter hereof without the prior written consent of Buyer and Seller. In resolving the unresolved Disputed Item, the Independent Accounting Firm may not assign a value to any such Disputed Item that is greater than the highest value for such Disputed Item claimed by Buyer or Seller, or less than the lowest value for such Disputed Item claimed by Buyer or Seller. Unless the determination by the Independent Accounting Firm is the result of Fraud by either party or the Independent Accounting Firm, or manifest error by the Independent Accounting Firm, the determination of the Independent Accounting Firm shall be deemed final, binding and non-appealable by all of the parties hereto and not subject to dispute, review or change, and shall be enforceable by a court of competent jurisdiction. Purchaser Any expense of Buyer or its accountants or other representatives incurred in connection with the resolution of such unresolved Disputed Items by the Independent Accounting Firm will be borne exclusively by Buyer, and any expense of Seller or his accountants or other representatives incurred in connection with the resolution of such unresolved Disputed Items by the Independent Accounting Firm will be borne exclusively by Seller. Each party shall bear its own costs and pay a percentage expenses in connection with the resolution of such unresolved Disputed Items by the Independent Accounting Firm. Any fees, costs and expenses of the fees Independent Accounting Firm shall be allocated between Buyer, on the one hand, and disbursements Seller, on the other hand, so that the amount of such fees, costs and expenses paid by Buyer (with the remainder of such amount being paid by Seller) shall be equal to the product of (A) and (B), where (A) is the aggregate amount of such fees, costs and expenses of the Independent Accounting Firm, and where (B) is a fraction, the numerator of which is the aggregate amount of the unresolved Disputed Items submitted to the Independent Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement ultimately unsuccessfully disputed by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case Seller (as determined by the Independent Accounting Firm) and the denominator of which is the aggregate amount of the unresolved Disputed Items submitted to the Independent Accounting Firm.
(fd) No later than five If the Estimated Closing Valuation exceeds the Closing Valuation (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts finally determined pursuant to Section 2.6(d):2.05(c)) (such excess, the “Excess Amount”), then
(1i) If Buyer and Seller shall jointly instruct the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working CapitalEscrow Agent to release to Buyer, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available fundsfunds to an account designated by Buyer, together with interest thereon for an amount equal to the period commencing on lesser of (A) the Closing Date through Excess Amount and (B) the date on which amount of the then-remaining Escrow Funds, (ii) to the extent the Excess Amount exceeds the then-remaining Escrow Funds, Seller will have the obligation to pay an amount equal to such payment is made calculated at excess to Buyer, by wire transfer of immediately available funds to an account designated by Buyer, and (iii) to the Prime Rate. Such interest shall be payable at the same time as extent there are Escrow Funds remaining after the payment to which it relates Buyer set forth in clause (i) above, Buyer and Seller shall jointly instruct the Escrow Agent to release such remaining Escrow Funds to Seller, by wire transfer of immediately available funds to an account designated by Seller. If the Closing Valuation (as finally determined pursuant to Section 2.05(c)) exceeds the Estimated Closing Valuation (such excess, the “Shortfall Amount”), then (x) Buyer will pay, or cause the Company to pay, to Seller, by wire transfer of immediately available funds to an account designated by Seller, the Shortfall Amount, and (y) Buyer and Seller shall jointly instruct the Escrow Agent to release to Seller, by wire transfer of immediately available funds to an account designated by Seller, all of the then-remaining Escrow Funds. Any amount to be calculated daily on paid pursuant to this Section 2.05(d) will be paid within three (3) Business Days of the basis final determination of a year of 365 days the Closing Valuation pursuant to Section 2.05(c) and will be treated as an adjustment to the actual number of days elapsedClosing Payment for all purposes. As used herein, “Escrow Funds” means the Escrow Amount, plus all interest and earnings earned from the investment and reinvestment thereof.
Appears in 1 contract
Sources: Stock Contribution and Purchase Agreement (CNL Strategic Capital, LLC)
Purchase Price Adjustments. (a) 4.3.1. Not more than fifteen (15) and not less than five (5) Business Days days prior to the Closing, Seller shall have prepared and delivered to Purchaser (i) a good faith estimate of the Net Working Capital as of the close of business on the Closing Date, Parent shall deliver to Purchaser prepared in accordance with GAAP, except for the absence of footnotes (such statement, the “Initial Closing Statement”), and (ii) a statement certificate of Seller, (A) certifying that the Initial Closing Statement was prepared on the basis described in clause (i) above and (B) containing Seller’s estimate of the Net Working Capital as of the Closing Date (the “Transaction Estimated Net Working Capital”). Commencing with Seller’s delivery of the Initial Closing Statement to Purchaser, Purchaser shall have reasonable access to the books and records and personnel of Seller and the opportunity to consult with Seller for purposes of confirming or disputing the Estimated Net Working Capital. If Purchaser shall disagree, in good faith, with any item set forth in the Estimated Net Working Capital or used to determine the Estimated Net Working Capital, then Purchaser and Seller shall work, in good faith, to reach agreement on such disputed items and the amounts as agreed to by Purchaser and Seller shall constitute the Estimated Net Working Capital. Notwithstanding the foregoing, Purchaser’s agreement with the Estimated Net Working Capital (or any item set forth therein or used to determine the Estimated Net Working Capital) shall not foreclose, prevent, limit or preclude any rights or remedy of Purchaser or Seller set forth in this Agreement.
4.3.2. Notwithstanding the requirements of Section 4.3.1 above, Purchaser and Seller agree that the Estimated Net Working Capital at the Closing Date under Section 4.3.1 shall, solely for purposes of convenience of closing, be deemed to equal the Target Net Working Capital amount; provided that the determination of the actual Net Working Capital as of the close of business on the Closing Date shall still be determined in accordance with Section 4.3.3 below and be subject to the subsequent adjustments and procedures provided for in Sections 4.3.3, 4.3.4 and 4.3.5 below.
4.3.3. Within one hundred twenty (120) days after the Closing Date, Purchaser shall cause its accountants to prepare, at Purchaser’s expense, and deliver to Seller a statement of the Net Working Capital as of the close of business on the Closing Date prepared in the manner described in Section 4.3.1 (the “Final Closing Statement”) that contains Parent). Purchaser’s reasonable good faith estimates accountants shall permit Seller’s accountants, subject to the execution by Seller and/or Seller’s accountants of any release or indemnification agreement reasonably required by Purchaser’s accountants, at the earliest practicable date to review and make copies of all work papers, schedules and calculations used in the preparation thereof.
4.3.4. When Purchaser delivers the Final Closing Statement, Purchaser shall also deliver to Seller a certificate (i) certifying that the Final Closing Working Capital (including all of the components thereof) Statement was prepared in accordance with the Calculation Principles procedures set forth in Section 4.3.3 above, and (ii) containing Purchaser’s calculations, based on the Final Closing Statement (the “Estimated Purchaser’s Proposed Calculations”), of the Net Working Capital as of the Closing Date (the “Closing Date Net Working Capital”), . Within sixty (ii60) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount days after receipt of the Estimated Final Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 Statement and the Closing Dateaccompanying certificate, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent Seller shall notify Purchaser of its acceptance agreement or dispute disagreement, as the case may be, with the Final Closing Statement and the accuracy of any amounts reflected on of Purchaser’s Proposed Calculations. If Seller disputes any aspect of the Post-Final Closing Statement or the amount of any of Purchaser’s Proposed Calculations, then Seller shall have the right to direct its independent accountants, at Seller’s expense, to review and test the Final Closing Statement. Seller’s accountants shall complete their review and test of the Final Closing Statement within thirty (30) days after the date Seller disputes any of Purchaser’s Proposed Calculations. If Seller and its independent accountants, after such review and test, still disagree with Purchaser’s Proposed Calculations, Seller shall submit its proposed alternative calculations (the “Seller’s Proposed Calculations”) of Closing Date Net Working Capital to Purchaser in writing within forty-five (45) days after the date upon which Seller shall have first notified Purchaser that it disputes any of Purchaser’s Proposed Calculations. If Purchaser does not accept Seller’s Proposed Calculations within fifteen (15) days after its receipt thereof, then within fifteen (15) days after Purchaser’s rejection of (or failure to timely accept) Seller’s Proposed Calculations, Seller and Purchaser shall select a mutually acceptable and nationally recognized independent accounting firm, other than Seller’s independent accountants and Purchaser’s independent accountants (such firm, the “Independent Accounting Firm”), to resolve the remaining disputed items (the “Remaining Disputed Items”), within thirty (30) calendar days after Parentthe date of Purchaser’s receipt rejection of such statement (such 30-day period hereinafter referred or failure to timely accept) Seller’s Proposed Calculations of the Remaining Disputed Items, by conducting its own review and test of the Final Closing Statement and thereafter selecting either Purchaser’s Proposed Calculations of the Remaining Disputed Items or Seller’s Proposed Calculations of the Remaining Disputed Items or an amount in between the two. Prior to the selection of the Independent Accounting Firm, each of the parties hereto shall disclose to the other parties any and all affiliations or significant relationships it may have with any accounting firm that is proposed as the Independent Accounting Firm hereunder. Purchaser and Seller agree that they shall be bound by the determination of the Remaining Disputed Items by the Independent Accounting Firm. The fees and expenses of the Independent Accounting Firm shall be paid jointly, one-half by Purchaser and one-half by Seller; provided that, if the difference between the Final Adjustment and the Final Adjustment that would have resulted from the use of the proposed calculations of one of the parties hereto (the “Review PeriodErroneous Party”). Any such notice ) is more than twice as great as the difference between the Final Adjustment and the Final Adjustment that would have resulted from the use of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parentthe other party’s proposed changes calculations, the Erroneous Party shall pay all of the fees and expenses of the Independent Accounting Firm.
4.3.5. Upon the determination pursuant to Purchaser’s calculation Section 4.3.4 of the Final Closing Statement and the Closing Date Net Working Capital, the Closing Cash Amount shall be recalculated (the “Final Adjustment”) in accordance with Section 4.3.4 using the amount of the Closing Date Net Working Capital, . If the Closing Business Debt, Change of Control Payments, Cash Amount as so calculated is less than the Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered Cash Amount initially determined pursuant to Section 2.6(c) and Parent 4.3.1, Seller shall promptly pay to Purchaser an aggregate amount equal to such difference by wire transfer or Purchaser, as applicable, shall pay delivery of other immediately available US funds within five (5) Business Days of business days after the conclusion of date on which the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed Final Closing Statement is finally determined pursuant to Section 2.6(f), 4.3.4. If the Closing Cash Amount as applicable, upon so calculated is more than the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect Cash Amount initially determined pursuant to the Post-Closing StatementSection 4.3.1, Purchaser and Parent shall negotiate in good faith pay to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution Seller an amount equal to such effect excess by wire transfer or delivery of other immediately available US funds within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days business days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment the Final Closing Statement is made calculated at finally determined pursuant to Section 4.3.4.
4.3.6. Purchaser and Seller shall make good faith efforts to comply with the Prime Rate. Such interest timing and response requirement set forth in this Section 4.3, but, in the absence of bad faith, neither party shall be payable at the same time as the payment deemed to which it relates and shall be calculated daily in breach of this Agreement, or to have waived its rights under this Section 4.3, on the basis of a year technical violations of 365 days and the actual number of days elapsedtiming or response requirements.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than At least five (5) Business Days prior to the Closing DateClosing, Parent the Company and the Buyer shall deliver to Purchaser a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “finalize an Estimated Closing Working Capital”), (ii) Statement. If the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change amount of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If shown on the Estimated Closing Statement does not equal the Target Working Capital is less than Capital, then the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business DebtWorking Capital Deficit, if any.
(4) The Base Purchase Price shall be reduced , or increased by the amount of the Estimated Closing Transaction ExpensesWorking Capital Surplus, if any. Such adjustments to the Purchase Price pursuant to this Section 1.4(a) shall be referred to herein collectively as the “Estimated Closing Adjustment.” The Estimated Closing Adjustment shall be determined without regard to the limitations set forth in Section 9.4 and Section 9.5 hereof.
(5b) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
Within ninety (690) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and days following the Closing Date, Parent the Buyer shall be entitled cause the Company to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent the Stockholder a statement (the “Post-Closing Statement”) of (i) , which shall set forth the Closing Balance Sheet and the Closing Working Capital (including all the “Closing Statement”), and a schedule based upon the Closing Statement setting forth any adjustments to the Estimated Closing Adjustment (the aggregate amount of such adjustments, collectively, the “Closing Adjustment”). The Stockholder shall assist the Buyer in the preparation of the components thereofClosing Statement if requested by the Buyer.
(c) prepared in accordance with the Calculation Principles, The Stockholder shall have a period of thirty (ii30) days after receipt of the Closing Business Debt, (iii) Statement to notify the Buyer of the Stockholder’s election to accept or reject the Closing Transaction ExpensesStatement. During such period, the Buyer shall provide the Stockholder (ivand the Stockholder’s Representatives) with reasonable access during normal business hours to the Change books, records and other information relied upon by the Buyer in preparing the Closing Statement. In the event the Stockholder rejects the Closing Statement as prepared by the Buyer, such rejection notice must contain the reasons for such rejection in reasonable detail and must set forth the amount of Control Paymentsthe requested adjustment. In the event no notice is received by the Buyer during such thirty (30)-day period, the Closing Statement and any required adjustments resulting therefrom shall be deemed accepted by the Stockholder and final and binding on the Parties hereto. In the event that the Stockholder shall timely reject the Closing Statement, the Buyer and the Stockholder shall promptly (vand in any event within thirty (30) days following the Project Contributionsdate upon which the Buyer received notice from the Stockholder rejecting the Closing Statement), (vi) attempt to make a joint determination of the Chinese DBFO Proceeds, (vii) Closing Adjustment and such determination and any required adjustments resulting therefrom shall be final and binding on the Dalriada DBFO Proceeds and (viii) the Other DBFO ProceedsParties hereto.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser Stockholder and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent Buyer are unable to reach a resolution to such effect agree upon the Closing Adjustment within thirty one hundred fifty (30150) calendar days after Purchaser’s receipt of Parent’s written notice of disagreementfrom the Closing Date, Purchaser then within one hundred sixty (160) days from the Closing Date, the Buyer and Parent the Stockholder shall submit the amounts remaining in such dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Buyer and the Stockholder shall request that the Accounting Firm render its determination of the Closing Adjustment prior to the expiration of two hundred twenty (220) days from the Closing Date and such determination and any required adjustments resulting therefrom shall be final and binding on all the Parties hereto. The fees and expenses of the Accounting Firm shall be directed toallocated between and paid by the Buyer and/or the Stockholder, within thirty (30) calendar days after submission respectively, based upon the percentage which the portion of the dispute, determine and report contested amount not awarded to each Party bears to the parties upon amount actually contested by such remaining disputed amounts with respect to the Post-Closing StatementParty, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1e) If the Closing Working Capital Adjustment as finally determined in accordance with the provisions of this Section 2.6 1.4 is less than in the Estimated Closing Working CapitalBuyer’s favor, Parent shall pay the amount of thereof shall be paid as an adjustment to the Purchase Price by the Stockholder to the Buyer by wire transfer in immediately available funds within seven (7) days after such shortfall to Purchaser.
(2) determination. If the Closing Working Capital Adjustment as finally determined in accordance with the provisions of this Section 2.6 1.4 is greater than in the Estimated Closing Working CapitalStockholder’s favor, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt thereof shall be paid as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant by the Buyer to the Stockholder by wire transfer in immediately available funds within seven (7) days after such determination. If the Stockholder does not so pay to the Buyer by the due date any amounts due under this Section 2.6 1.4, such amounts due to the Buyer shall be deemed Damages under ARTICLE IX hereof, which Damages together with interest at a rate of nine percent (9%) per annum as of such due date shall be paid in full without regard to the limitations set forth in Section 9.4 and Section 9.5 hereof. If the Buyer does not pay any amount owed to the Stockholder under this Section 1.4 by wire transfer the due date, then such amount will begin to accrue interest at a rate of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which nine percent (9%) per annum as of such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapseddue date.
Appears in 1 contract
Sources: Stock Purchase Agreement (Global Defense Technology & Systems, Inc.)
Purchase Price Adjustments. (a) Not more No later than fifteen three (15) and not less than five (53) Business Days prior to the Closing Date, Parent Sellers shall deliver to Purchaser Buyer a written statement (the “Transaction Estimated Adjustment Statement”) that contains Parent’s reasonable setting forth Sellers’ good faith estimates of estimate of: (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (such estimate, the “Estimated Closing Working Capital”), (ii) the Closing Business Debt Cash (such estimate, the “Estimated Closing Business DebtCash Amount”), (iii) the Closing Transaction Expenses Outstanding Debt (such estimate, the “Estimated Closing Transaction ExpensesOutstanding Debt”), (iv) the Change of Control Payments Swap Amount (such estimate, the “Estimated Closing Change of Control PaymentsSwap Amount”), (v) the Project Contributions Qualifying Net Income (such estimate, the “Estimated Project ContributionsQualifying Net Income”), ) and (vi) the Chinese DBFO Proceeds Company Transaction Expenses (such estimate, the “Estimated Chinese DBFO ProceedsCompany Transaction Expenses”), prepared in accordance with the Sample Closing Statement. The Estimated Closing Working Capital, the Estimated Closing Cash Amount, the Estimated Closing Outstanding Debt, the Estimated Swap Amount, the Estimated Qualifying Net Income and the Estimated Company Transaction Expenses (viias contained in the Estimated Adjustment Statement delivered by Sellers to Buyer) shall be binding, absent manifest error, on the Dalriada DBFO Proceeds (Parties for the “Estimated Dalriada DBFO Proceeds”purposes of determining the payments to be made pursuant to Section 2.3(a) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”Section 2.4(f).
(b) The Base Purchase Price Within 60 days after the Closing Date, Buyer will prepare, or cause to be prepared, and deliver to Sellers an unaudited statement (the “Adjustment Statement”), which shall set forth Buyer’s good faith calculation of: (i) the Closing Working Capital, (ii) Closing Cash, (iii) the Closing Outstanding Debt, (iv) the Swap Amount, (v) the Qualifying Net Income and (vi) the Company Transaction Expenses. For illustrative purposes, an example of the elements of Closing Working Capital, as if the Closing Date were June 30, 2023, is attached as Schedule A. If Buyer does not deliver an Adjustment Statement to Sellers within such 60-day period, Buyer shall be subject deemed to adjustment at the have accepted Sellers’ calculation of Closing as follows:
(1) If Working Capital, Closing Cash, Closing Outstanding Debt, Swap Amount, Qualifying Net Income and Company Transaction Expenses set forth in the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price Adjustment Statement and such calculation shall be increased by such excessfinal, conclusive and binding.
(2c) Upon receipt from Buyer, Sellers shall have 45 days to review the Adjustment Statement (the “Review Period”). At Sellers’ request, ▇▇▇▇▇ (i) shall reasonably cooperate and assist, and shall cause its Subsidiaries, including the Company, and each of their respective Representatives, to reasonably cooperate and assist Sellers and their Representatives in the review of the Adjustment Statement (including by executing such documents and other instruments and taking further actions as may be reasonably required to cause Buyer and the Company and their respective accountants to deliver to Sellers and their Representatives copies of their work papers relating to the Company) and (ii) shall provide Sellers and their Representatives with any information reasonably requested by Sellers that is necessary for their review of the Adjustment Statement. If Sellers disagree with ▇▇▇▇▇’s computation of the Estimated items set forth in the Adjustment Statement, Sellers shall, on or prior to the last day of the Review Period, deliver a written notice to Buyer (the “Notice of Objection”) that sets forth Sellers’ objections to Buyer’s calculation of such items. Any Notice of Objection shall specify those items or amounts with which Sellers disagree, shall describe the reasons for such disagreement in reasonable detail, and shall set forth Sellers’ calculation of Closing Working Capital is less than the Reference Capital, Closing Cash, Closing Outstanding Debt, Swap Amount, the Base Purchase Price shall be reduced by Qualifying Net Income and Company Transaction Expenses, as applicable, based on such deficitobjections.
(3d) The Base Purchase Price If Sellers do not deliver a Notice of Objection to Buyer within the Review Period, Sellers shall be reduced by deemed to have accepted Buyer’s calculation of Closing Working Capital, Closing Cash, Closing Outstanding Debt, Swap Amount, Qualifying Net Income and Company Transaction Expenses, and such calculation shall be final, conclusive and binding. If Sellers deliver a Notice of Objection to Buyer within the Review Period, Buyer and Sellers shall, during the 45 days following such delivery or any mutually agreed extension thereof, use their good faith efforts to reach agreement on the disputed items and amounts in order to determine the amount of the Estimated disputed Closing Business Working Capital, Closing Cash, Closing Outstanding Debt, Swap Amount, Qualifying Net Income or Company Transaction Expenses, as applicable. If, at the end of such period or any mutually agreed extension thereof, Buyer and Sellers are unable to resolve their disagreements, they shall jointly retain and refer their disagreements to the New York office of PricewaterhouseCoopers LLP or if such office of PricewaterhouseCoopers LLP refuses or is unable to serve in such a capacity, a nationally recognized independent accounting firm mutually acceptable to Buyer and Sellers or any individual who, in the reasonable determination of Buyer and Sellers, is qualified and capable to serve in the capacity for which such nationally recognized independent accounting firm would have served pursuant to this Section 2.4 (such office of PricewaterhouseCoopers LLP or such other firm or individual, the “Independent Expert”) it being acknowledged and agreed that any of the “big four” accounting firms will be considered qualified and capable to serve in such capacity. Buyer and Sellers shall instruct the Independent Expert promptly to review this Section 2.4, as well as the Adjustment 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.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated , Closing Working Capital, Closing Cash, Closing Outstanding Debt, Swap Amount, Qualifying Net Income or Company Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Paymentsas applicable, if any.
(6) If the Business’s land improvements relating to the DBFO project set forth in the City of Beverly Hills, California (the “Adjustment Statement requires adjustment. The Independent Expert shall base its determination solely on written submissions by ▇▇▇▇▇ and ▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back and not on an independent review. Buyer and Sellers shall make available to the City 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 Buyer and Sellers a report that sets forth its resolution of ▇▇the disputed items and amounts and its calculation of the items set forth on the Adjustment Statement; provided, however, that the Independent Expert may not assign a value to any item greater than the greatest value for such item claimed by Sellers, on the one hand, or Buyer, on the other hand, nor less than the smallest value for such item claimed by either the Sellers, on the one hand, or Buyer, on the other hand. The decision of the Independent Expert shall be final, conclusive and binding on the Parties. The costs and expenses of the Independent Expert shall be allocated between Sellers, on the one hand, and Buyer, on the other hand, based upon the percentage that the portion of the aggregate contested amount not awarded to Buyer on the one hand, and Sellers, on the other hand, bears to the aggregate amount actually contested by ▇▇▇▇▇ Hills prior and Sellers, as determined by the Independent Expert (for example, if the Sellers claim that the appropriate adjustments are $1,000 greater than the amount determined by the Buyer and the Independent Expert ultimately resolves the dispute by awarding to the ClosingSellers $700 of the $1,000 disputed, then the Base Purchase Price shall fees, costs and expenses of the Independent Expert, giving effect to any initial engagement fee already paid, will be reduced by Eighteen Million Four Hundred Thousand Dollars allocated seventy percent ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent 70%) (whether directly or indirectlyi.e., 700 ÷ 1,000) prior to the Closing; provided further that if Buyer and thirty percent (A30%) there is a fully executed definitive purchase agreement(i.e., but such transaction has not closed prior 300 ÷ 1,000) to the Closing then (B) Sellers). ▇▇▇▇▇ and Sellers agree to execute, if requested by the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any Independent Expert, a reasonable engagement letter, including customary indemnities in favor of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”)Independent Expert.
(e) In the event For purposes of a dispute with respect to the Post-Closing Statementthis Agreement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Final Closing Working Capital”, “Final Closing Business Cash Amount”, “Final Closing Outstanding Debt”, Change of Control Payments“Final Swap Amount”, Closing “Final Qualifying Net Income” and “Final Company Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay ” mean the amount of such shortfall to Purchaser.
items (2i) If the Closing Working Capital as finally determined shown in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess Adjustment Statement delivered by Sellers to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced Buyer pursuant to Section 2.6(b)(112.4(a), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance no Adjustment Statement with this respect thereto is timely delivered by Buyer to Sellers pursuant to Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date2.4(b), Parent shall pay (ii) as shown in the amount Adjustment Statement delivered by Buyer to Sellers pursuant to Section 2.4(b), if no Notice of Objection with respect thereto is timely delivered by Sellers to Buyers pursuant to Section 2.4(c) or (iii) if a Notice of Objection is so delivered, (A) as agreed by ▇▇▇▇▇ and Sellers pursuant to Section 2.4(d) or (B) in the absence of such excess to Purchaser.
(g) Any payment to be made agreement, as a result of an adjustment to shown in the Base Purchase Price Independent Expert’s report delivered pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed2.4(d).
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen [Reserved].
(15b) and not No less than five two (52) Business Days prior to the Closing DateClosing, Parent shall deliver to Purchaser Buyer a statement certificate (the “Transaction StatementSeller’s Pre-Closing Certificate”) that contains setting forth Parent’s reasonable good faith estimates best estimate of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price . Buyer shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by review such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to figures with Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall in good faith consider and make any appropriate changes that may be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to requested by Buyer through and including the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and day before the Closing Date. The Base amount of the Purchase Price, as Price paid at the Closing shall be adjusted pursuant based on such figures agreed to this Section 2.6(b), is the “Closing Paymentby Parent and Buyer.”
(c) Within No later than seventy-five (75) calendar days after following the Closing, Purchaser Buyer shall prepare cause to be prepared and deliver delivered to Parent a statement (the “Post-Closing Statement”) setting forth Buyer’s good faith calculation of (i) the Closing Working Capital. If Parent accepts the Post-Closing Statement in writing, or if Parent fails to notify Buyer of any dispute with respect thereto within 30 days following receipt thereof, then the calculation of the Closing Working Capital (including and the components thereof as set forth in the Post-Closing Statement shall be deemed final and conclusive and binding upon all Parties. If Parent disputes the accuracy of the components thereof) prepared in accordance with the Calculation Principles, (ii) calculation of the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance Working Capital or dispute of any amounts reflected on component thereof set forth in the Post-Closing Statement, within thirty (30) calendar Parent shall provide written notice to Buyer no later than 30 days after Parent’s following receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed AmountsDispute Notice”).
(e) In , setting forth in reasonable detail those items that Parent disputes, the event amounts of any adjustments that are necessary in Parent’s judgment for the computation of the Closing Working Capital or the components thereof to conform to the requirements of this Agreement, and the basis for its suggested adjustments. During the 30-day period following delivery of a dispute with respect to the Post-Closing StatementDispute Notice, Purchaser Buyer and Parent shall will negotiate in good faith with a view to reconcile resolving their differences disagreements over the disputed items. From and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.delivery of
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Purchase Price Adjustments. (a) Not more No later than fifteen three (15) and not less than five (53) Business Days prior to the Closing Date, Parent Seller shall deliver to Purchaser Buyer a written statement (the “Transaction Estimated Closing Statement”) that contains Parentsetting forth Seller’s reasonable good faith estimates of estimate of: (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (such estimate, the “Estimated Closing Working Capital”), (ii) the Closing Business Debt Qualifying Net Income (such estimate, the “Estimated Closing Business DebtQualifying Net Income”), ) and (iii) the Closing Target Group Company Transaction Expenses (such estimate, the “Estimated Closing Target Group Company Transaction Expenses”). The Estimated Closing Statement shall contain a calculation of Estimated Closing Working Capital, prepared in accordance with (ivx) GAAP consistently applied, and (y) the Change of Control Payments (the “Sample Closing Statement. The Estimated Closing Change Working Capital, the Estimated Qualifying Net Income and the Estimated Target Group Company Transaction Expenses (as contained in the Estimated Closing Statement delivered by Seller to Buyer) shall be binding, absent manifest error, on the Parties for the purposes of Control Payments”), (v) determining the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”payments to be made pursuant to Section 2.3(a) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”Section 2.4(f).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
Within ninety (190) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and days after the Closing Date, Parent shall Buyer will prepare, or cause to be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amountprepared, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a Seller an unaudited statement (the “Post-Closing Adjustment Statement”) of ), which shall set forth Buyer’s good faith calculation of: (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation PrinciplesCapital, (ii) the Closing Business Debt, Qualifying Net Income and (iii) the Closing Target Group Company Transaction Expenses, which Adjustment Statement shall contain a balance sheet of the Company as of the Closing Date (ivwithout giving effect to the transactions contemplated herein) and a calculation of Closing Working Capital prepared in accordance with (x) GAAP consistently applied, and (y) the Change Sample Closing Statement. If Buyer does not deliver an Adjustment Statement to Seller within such 90-day period, Buyer shall be deemed to have accepted Seller’s calculation of Control PaymentsClosing Working Capital, (v) Qualifying Net Income and Target Group Company Transaction Expenses set forth in the Project ContributionsEstimated Closing Statement and such calculation shall be final, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds conclusive and (viii) the Other DBFO Proceedsbinding.
(dc) Parent Upon receipt from Buyer, Seller shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within have thirty (30) calendar days after Parent’s receipt of such statement to review the Adjustment Statement (such 30-day period hereinafter referred to as the “Review Period”). At Seller’s request, Buyer (i) shall reasonably cooperate and assist, and shall cause its Representatives, to reasonably cooperate and assist Seller and its Representatives in the review of the Adjustment Statement and (ii) shall provide Seller and its Representatives with reasonable access to the Books and Records of the Target Group Companies, the personnel of, and work papers prepared by, Buyer or Buyer’s accountants to the extent that they relate to the Adjustment Statement and to such historical financial information (to the extent in Buyer’s possession) relating to the Adjustment Statement as Seller may reasonably request for the purpose of reviewing the Adjustment Statement and to prepare a Notice of Objections; provided, that such access shall be in a manner that does not interfere with the normal business operations of Buyer or the Target Group Companies. If Seller disagrees with ▇▇▇▇▇’s computation of the items set forth in the Adjustment Statement, Seller shall, on or prior to the last day of the Review Period, deliver a written notice to Buyer (the “Notice of Objection”) that sets forth Seller’s objections to Buyer’s calculation of such items. Any such notice Notice of disagreement Objection shall specify, with a reasonably detailed explanation, specify those items or amounts as to with which Parent disagrees (Seller disagrees, shall describe the reasons for such disagreement in reasonable detail, and shall include Parent’s proposed changes to Purchaserset forth Seller’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Qualifying Net Income and Target Group Company Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent , based on such objections.
(d) If Seller does not deliver a Notice of Objection to Buyer within the Review Period, Seller shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution accepted Buyer’s calculation of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Qualifying Net Income and Target Group Company Transaction Expenses, Project Contributionsand such calculation shall be final, Chinese DBFO Proceedsconclusive and binding. If Seller delivers a Notice of Objection to Buyer within the Review Period, Dalriada DBFO Proceeds Buyer and Other DBFO ProceedsSeller shall, during the thirty (30) days following such delivery or any mutually agreed extension thereof, use their good faith efforts to reach agreement on the disputed items and amounts in order to determine the amount of the disputed Closing Working Capital, Qualifying Net Income or Target Group Company Transaction Expenses, as applicable applicable. If, at the end of such period or any mutually agreed extension thereof, Buyer and Seller are unable to resolve their disagreements, they shall jointly retain and refer their disagreements to the New York office of PricewaterhouseCoopers LLP or if such office of PricewaterhouseCoopers LLP refuses or is unable to serve in such a capacity, a nationally recognized independent accounting firm mutually acceptable to Buyer and Seller or any individual who, in the reasonable determination of Buyer and Seller, is qualified and capable to serve in the capacity for which such nationally recognized independent accounting firm would have served pursuant to this Section 2.4 (such office of PricewaterhouseCoopers LLP or such other firm or individual, the “Undisputed AmountsIndependent Expert”) it being acknowledged and agreed that any of the “big four” accounting firms will be considered qualified and capable to serve in such capacity. Buyer and Seller shall instruct the Independent Expert promptly to review this Section 2.4, as well as the Adjustment 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, Closing Working Capital, Qualifying Net Income or Target Group Company Transaction Expenses, as applicable, set forth in the Adjustment Statement requires adjustment. The Independent Expert shall base its determination solely on written submissions by ▇▇▇▇▇ and Seller and not on an independent review. Buyer and Seller 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 forty-five (45) days after its retention, the Independent Expert shall deliver to Buyer and Seller a report that sets forth its resolution of the disputed items and amounts and its calculation of the items set forth on the Adjustment Statement; provided, however, that the Independent Expert may not assign a value to any item greater than the greatest value for such item claimed by Seller, on the one hand, or Buyer, on the other hand, nor less than the smallest value for such item claimed by either Seller, on the one hand, or Buyer, on the other hand. The decision of the Independent Expert shall be final, conclusive and binding on the Parties. The costs and expenses of the Independent Expert shall be allocated between Seller, on the one hand, and Buyer, on the other hand, based upon the percentage that the portion of the aggregate contested amount not awarded to Buyer on the one hand, and Seller, on the other hand, bears to the aggregate amount actually contested by ▇▇▇▇▇ and Seller, as determined by the Independent Expert (for example, if Seller claims that the appropriate adjustments are $1,000 greater than the amount determined by Buyer and the Independent Expert ultimately resolves the dispute by awarding to the Seller $700 of the $1,000 disputed, then the fees, costs and expenses of the Independent Expert, giving effect to any initial engagement fee already paid, will be allocated seventy percent (70%) (i.e., 700 ÷ 1,000) to Buyer and thirty percent (30%) (i.e., 300 ÷ 1,000) to Seller). ▇▇▇▇▇ and ▇▇▇▇▇▇ agree to execute, if requested by the Independent Expert, a reasonable engagement letter, including customary indemnities in favor of the Independent Expert.
(e) In the event For purposes of a dispute with respect to the Post-Closing Statementthis Agreement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Final Closing Working Capital”, Closing Business Debt, Change of Control Payments, Closing “Final Qualifying Net Income” and “Final Target Group Company Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay ” mean the amount of such shortfall to Purchaser.
items (2i) If the Closing Working Capital as finally determined shown in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess Statement delivered by Seller to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced Buyer pursuant to Section 2.6(b)(112.4(a), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance no Adjustment Statement with this respect thereto is timely delivered by Buyer to Seller pursuant to Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date2.4(b), Parent shall pay (ii) as shown in the amount Adjustment Statement delivered by Buyer to Seller pursuant to Section 2.4(b), if no Notice of Objection with respect thereto is timely delivered by Seller to Buyer pursuant to Section 2.4(c) or (iii) if a Notice of Objection is so delivered, (A) as agreed by ▇▇▇▇▇ and Seller pursuant to Section 2.4(d) or (B) in the absence of such excess to Purchaser.
(g) Any payment to be made agreement, as a result of an adjustment to shown in the Base Purchase Price Independent Expert’s report delivered pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed2.4(d).
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Altus Power, Inc.)
Purchase Price Adjustments. (a) Not more than fifteen Seller has delivered to Buyer (15i) and not less than five (5) Business Days prior to the Closing Date, Parent shall deliver to Purchaser a statement certificate of KCC’s Chief Financial Officer (the “Transaction StatementEstimated Purchase Price Adjustment Certificate”) that contains Parent’s reasonable good faith estimates setting forth the Estimated Shareholder Equity and (ii) a pro forma consolidated balance sheet of (i) the Acquired Companies as of the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles Date (the “Estimated Closing Working CapitalBalance Sheet”), (ii) which balance sheet sets forth Seller’s good faith estimates of each of the items presented thereon and has been prepared in accordance with GAAP applied on a basis consistent with KCC’s past practices and fairly presents the consolidated financial position as of the Closing Business Debt (Date; provided, however, that the “Shareholder Equity Exclusions have not been included therein. Buyer has reviewed and accepted the Estimated Purchase Price Adjustment Certificate and Estimated Closing Business Debt”)Balance Sheet for purposes of Closing, (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)without waiving its rights pursuant to this Section 2.4.
(b) The Base Within five Business Days of Buyer’s receipt of the audited consolidated financial statements of KCC as of the Closing Date (but in any event no later than 90 days after the Closing), Buyer shall deliver to Seller a certificate setting forth, in reasonable detail, (i) the Shareholder Equity and (ii) the Working Capital, in each case as of the Closing Date (the “Closing Purchase Price Adjustment Certificate”), together with an audited consolidated balance sheet of KCC as of the Closing Date (the “Closing Balance Sheet”), which shall be subject to adjustment prepared by McGladrey (which firm shall be engaged by Buyer for such purpose), at the Closing as follows:
(1) If expense of Seller, in accordance with GAAP applied on a basis consistent with the Estimated Purchase Price Adjustment Certificate and the Estimated Closing Working Capital is greater than Balance Sheet, respectively, and shall fairly present the Reference Amountconsolidated financial position of KCC as of the Closing Date, as adjusted to exclude the Base Shareholder Equity Exclusions and, without duplication, any asset transferred out of the Acquired Companies prior to Closing. The Closing Purchase Price Adjustment Certificate and the Closing Balance Sheet shall be increased by such excesssubstantially in the forms of the Estimated Purchase Price Adjustment Certificate and the Estimated Closing Balance Sheet, respectively, and shall be prepared using the same principles, policies, procedures and methodologies that were used in preparing the Estimated Purchase Price Adjustment Certificate and the Estimated Closing Balance Sheet, respectively.
(2c) If Seller shall have 30 days from the Estimated date on which the Closing Working Capital is less than the Reference Amount, the Base Balance Sheet and Closing Purchase Price shall be reduced by such deficit.
(3Adjustment Certificate have been delivered to Seller to raise any objection(s) The Base to the Closing Purchase Price shall be reduced Adjustment Certificate or the Closing Balance Sheet, by the amount delivery of the Estimated Closing Business Debt, if any.
(4written notice to Buyer setting forth such objection(s) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California reasonable detail (the “Disputed Items”). Buyer will direct and use its reasonable efforts to cause McGladrey to give Seller and its accountants reasonable access to McGladrey’s work papers for the purpose of verifying the Closing Balance Sheet. In the event that Seller shall not deliver any such objection(s) with respect to the Closing Purchase Price Adjustment Certificate or the Closing Balance Sheet within such 30-day period, then the Closing Purchase Price Adjustment Certificate shall be deemed final for purposes of this Section 2.4 (such final Closing Purchase Price Adjustment Certificate, the “Final Purchase Price Adjustment Certificate”). In the event that any such objection(s) are so delivered, the Closing Purchase Price Adjustment Certificate shall be deemed not final, and Buyer and Seller shall attempt, in good faith, to resolve the Disputed Items and, if they are unable to resolve all of the Disputed Items within 15 Business Days of delivery of such notice, shall, five Business Days thereafter (or such earlier date as mutually agreed), submit the Disputed Items to the Chicago office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement LLP (the “Post-Closing StatementAccountant Arbitrator”) for resolution. The Accountant Arbitrator shall resolve all remaining Disputed Items in accordance herewith within 20 Business Days from the date of submission. In connection with the foregoing, the Accountant Arbitrator shall be instructed to and must (i) limit its determination(s) only to the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principlesremaining Disputed Items, (ii) make its determination(s) as to each remaining Disputed Item based upon the Closing Business Debt, application of GAAP and as required by this Section 2.4 and (iii) not assign a value to any remaining Disputed Item greater than the Closing Transaction Expenseshigher value for such Disputed Item claimed by either Buyer or Seller or less than the lower value for such Disputed Item claimed by Buyer or Seller. All determinations by the Accountant Arbitrator shall be final and binding upon the parties for purposes of this Section 2.4 absent fraud or manifest error. The fees and expenses of the Accountant Arbitrator shall be allocated between Buyer, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statementone hand, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as and Seller, on the “Review Period”). Any such notice of disagreement shall specifyother hand, with a reasonably detailed explanation, those items or amounts as based upon the extent to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capitaleach party prevailed, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(fAccountant Arbitrator. Buyer and Seller acknowledge and agree that any adjustment made under this Section 2.4(c) No later than five (5) Business Days after is and shall be treated as an adjustment to the final resolution of Closing Purchase Price for income tax purposes. The terms “Final Shareholder Equity” and “Final Working Capital” shall mean, respectively, the definitive Shareholder Equity and Working Capital as of the Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds Date agreed to (or Other DBFO Proceeds, as applicable, deemed to be agreed to) by Buyer and Seller in accordance with this Section 2.6, Purchaser 2.4(c) or Parent, as applicable, shall make resulting from the following payments; provided that, such payments shall only be determinations made to by the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined Accountant Arbitrator in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall 2.4(c) (in addition to Purchaserthose items theretofore agreed to by Buyer and Seller).
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Sources: Stock Purchase Agreement (Granite Construction Inc)
Purchase Price Adjustments. (a) The Unadjusted Purchase Price shall be subject to adjustment at Closing as follows: (i) increased by the amount, if any, by which the Estimated Net Working Capital exceeds the Target Working Capital; (ii) decreased by the amount, if any, by which the Target Working Capital exceeds the Estimated Net Working Capital; (iii) decreased by the Estimated Closing Debt; (iv) decreased by the Estimated Transaction Expenses; and (v) increased by Estimated Closing Cash.
(b) Not more than fifteen (15) and not less later than five (5) Business Days prior to the Closing Date, Parent Seller shall prepare and deliver to Purchaser Buyer for review a statement preliminary settlement statement, in substantially the form attached hereto as Exhibit E, and attaching reasonable supporting documentation in Seller’s possession to enable a review thereof by Buyer (the “Transaction Estimated Settlement Statement”), setting forth Seller’s estimated calculation of the Adjusted Purchase Price (the “Estimated Adjusted Purchase Price”) that contains Parent’s reasonable after giving effect to all adjustments set forth in Section 2.4(a), including its good faith estimates estimate of (i) the Closing Net Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Net Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), and (iv) the Change of Control Payments Closing Cash (the “Estimated Closing Change of Control PaymentsCash”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
together with applicable wiring instructions. Within two (2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount Business Days after ▇▇▇▇▇’s receipt of the Estimated Closing Business DebtSettlement Statement, Buyer shall deliver to Seller a written report containing all changes that Buyer proposes in good faith to be made to the Estimated Settlement Statement, together with the explanation therefor and the supporting documents thereof, if any.
(4) available. The Base Purchase Price Parties shall be reduced by the amount of in good faith attempt to agree in writing on the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “Settlement Statement as soon as possible after ▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City ’s receipt of ▇▇▇▇▇▇▇ Hills Buyer’s written report, but in any event prior to the Closing. The Estimated Settlement Statement, as agreed upon in writing by the Base Parties, will be used to adjust the Unadjusted Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed at the Closing and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to determine the Adjusted Purchase Price at the Closing; provided further provided, that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.if
(7c) If any DBFO joint venture partner exercises its right to purchase any of Not later than the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and 60th day following the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser Buyer shall prepare and deliver to Parent Seller a statement in substantially the form attached hereto as Exhibit E, and attaching reasonable supporting documentation to enable a review thereof by Seller (the “Post-Closing Final Settlement Statement”) of (i) the Closing Working Capital (including all setting forth Buyer’s estimate of the components thereof) prepared in accordance with final calculation of the Calculation PrinciplesAdjusted Purchase Price and showing the calculation of each adjustment under Section 2.4(a). The Final Settlement Statement shall become final, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds conclusive and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected binding on the Post-Closing Statement, Parties unless Seller delivers to Buyer an Objection Notice (as hereinafter defined) within thirty (30) calendar days after Parent’s receipt of such statement (such the 30-day period hereinafter referred to as following receipt of the Final Settlement Statement (the “Review Period”). Prior to the expiration of the Review Period, Seller may deliver to Buyer a written report or notice containing any changes that Seller proposes be made to the Final Settlement Statement, which shall include an explanation of any such changes, the reasons therefor and the supporting documents thereof in Seller’s possession (such written report, an “Objection Notice”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as changes not so specified in an Objection Notice shall be deemed forever waived, and ▇▇▇▇▇’s determinations with respect to which Parent disagrees (all such elements of the Final Settlement Statement that are not addressed specifically in an Objection Notice shall prevail and shall include Parent’s proposed changes to Purchaser’s calculation of be final, conclusive and binding on the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable)Parties. Parent Seller shall be deemed to have agreed with all other items and amounts included in waived any rights to object to the Post-Closing Final Settlement Statement delivered pursuant unless Seller delivers an Objection Notice to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay Buyer within five (5) Business Days of the conclusion of the Review Period the maximum amountand, if anythe Review Period expires without Seller so delivering an Objection Notice, which Purchaser then the Final Settlement Statement and Parent agree would otherwise be owed pursuant Adjusted Purchase Price shall become final and binding for all purposes of this Agreement. If Seller delivers an Objection Notice to Section 2.6(f)Buyer during the Review Period, as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds then Seller and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect ▇▇▇▇▇ shall use commercially reasonable efforts to the Post-Closing Statement, Purchaser and Parent shall negotiate work together in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive agree on the parties. If Purchaser disputed items and Parent are unable to reach a resolution to such effect within the final Adjusted Purchase Price no later than thirty (30) calendar days after Purchaser’s receipt the date on which Buyer received such Objection Notice from Seller. In the event that the Parties cannot reach agreement within such 30-day period, the Parties shall within ten (10) days following the end of Parent’s written notice of disagreementsuch 30-day period mutually engage and refer the remaining disputed matters to PricewaterhouseCoopers LLP, Purchaser and Parent shall submit the amounts remaining in dispute for resolution or if PricewaterhouseCoopers LLP is unable or unwilling to the New Yorkperform its obligations under this Section 2.4(c), New York office of KPMG LLP or such other nationally- recognized independent accountant accounting firm of international reputation as is mutually agreed to on by Seller and appointed by Purchaser Buyer or if Buyer and Parent (Seller cannot so agree within such time period then such other nationally-recognized independent accounting firm being herein referred appointed by the Denver office of the American Arbitration Association as requested by ▇▇▇▇▇ or Seller (such firm that agrees to as serve hereunder, the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty Within ten (3010) calendar days after submission of following the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements agreement of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed serve hereunder, (i) Buyer and Seller shall deliver to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal and Buyer or Seller, as applicable, the Final Settlement Statement, the Objection Notice and such work papers, invoices and other reports and information relating to the percentage disputed matters as the Accounting Firm may reasonably request and (ii) each of the total dollar amount of changes proposed Buyer and Seller shall (A) summarize its position with regard to the Post-Closing Statement by Parent that are not successfuldisputed matters in the Objection Notice in a written document of twenty (20) pages or less (exclusive of exhibits, in each case schedules or other attachments) and (B) submit such summaries along with reasonable supporting detail (the foregoing items together forming Buyer’s or Seller’s, as determined by applicable, “Submission”). Buyer and Seller shall be afforded the Accounting Firm.opportunity to discuss the
(fd) No later than Within five (5) Business Days after the final resolution earlier of Closing Working Capital(x) the expiration of the Review Period without delivery and receipt of any Objection Notice and (y) the date on which Seller and Buyer, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceedsthe Accounting Firm, as applicable, finally determine the final Adjusted Purchase Price in accordance with the terms and provisions of this Section 2.62.4 (the “Final Adjusted Purchase Price”), Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to occur: (i) if the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 Final Adjusted Purchase Price is less than the Estimated Closing Working CapitalAdjusted Purchase Price, Parent then the Parties shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (promptly execute and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as issue a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.joint written instruction
Appears in 1 contract
Sources: Purchase and Sale Agreement (Summit Midstream Partners, LP)
Purchase Price Adjustments. (a) Not more than fifteen At least three (15) and not less than five (53) Business Days prior to the Closing Date, Parent the Company shall deliver to Purchaser a good faith estimate, as of the Measurement Time, of the Agreed Capital Lease Amount (the “Estimated Agreed Capital Lease Amount”), the Net Working Capital (the “Estimated Net Working Capital”), Company Indebtedness (the “Estimated Company Indebtedness”), Company Cash ( the “Estimated Company Cash”), the Seller Expenses (the “Estimated Seller Expenses”) and the resulting calculation of the Estimated Purchase Price as set forth in Section 1.02. The Estimated Purchase Price shall be prepared using the accounting principles set forth on the Statement of Accounting Principles attached as Exhibit C hereto. The Estimated Purchase Price and its components shall be delivered to the Purchaser at least three (3) Business Days prior to the Closing Date and the Purchaser will have the right to review and provide comments on calculation of the Estimated Purchase Price and the Company and Seller shall consider such comments in good faith.
(b) As promptly as possible, but in any event within 120 days after the Closing Date, Purchaser will deliver to Seller (i) a consolidated balance sheet of the Company and its Subsidiaries as of the Measurement Time (the “Closing Balance Sheet”) and (ii) a statement showing Purchaser’s calculation of the Agreed Capital Lease Amount, Net Working Capital, Company Cash, Company Indebtedness and the Seller Expenses (together with the Closing Balance Sheet, the “Preliminary Closing Statement”). The Closing Balance Sheet shall be prepared using the accounting principles set forth on the Statement of Accounting Principles attached as Exhibit C hereto. After delivery of the Preliminary Closing Statement, Purchaser shall give Seller and its accountants and representatives reasonable access within normal working hours to review Purchaser’s, the Company’s and its Subsidiaries’ books and records and work papers related to the preparation of the Preliminary Closing Statement. Seller and its accountants and representatives may make inquiries of Purchaser and its Subsidiaries and their respective accountants regarding questions concerning or disagreements with the Preliminary Closing Statement arising in the course of its review thereof, and Purchaser shall use its, and shall cause its Subsidiaries to use their, commercially reasonable efforts to cause any such accountants to cooperate with and promptly respond to such inquiries. If, after using commercially reasonable efforts to review such books and records and work papers and to make such inquiries, Seller has any good faith objections to the Preliminary Closing Statement, Seller shall deliver to Purchaser a statement setting forth its good faith objections thereto (the an “Transaction Objections Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject . If an Objections Statement is not delivered to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventywithin forty-five (7545) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all delivery of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Preliminary Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Preliminary Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent Statement shall be deemed to have agreed with all other items final, binding and amounts included in non- appealable by the Post-Closing Statement delivered pursuant to Section 2.6(c) parties hereto. Seller and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile resolve any such objections, but if they do not reach a final resolution within thirty (30) days after the delivery of the Objections Statement, Seller and Purchaser shall submit such dispute to Deloitte LLP or such other mutually acceptable dispute resolution firm (the “Dispute Resolution Firm”). Any further submissions to the Dispute Resolution Firm must be written and delivered to each party to the dispute. The Dispute Resolution Firm shall consider only those items and amounts which are identified in the Objections Statement as being items which Seller and Purchaser are unable to resolve, and the Dispute Resolution Firm shall not be authorized or permitted to resolve any such items by making an adjustment that is outside of the range defined by amounts proposed in the Preliminary Closing Statement or Objections Statement, as applicable. The Dispute Resolution Firm’s determination will be based solely on the definitions of Agreed Capital Lease Amount, Net Working Capital, Company Cash, Company Indebtedness and Seller Expenses, as applicable, contained in this Agreement and in the Statement of Accounting Principles attached hereto as Exhibit C. Seller and Purchaser shall use their differences commercially reasonable efforts to cause the Dispute Resolution Firm to resolve all disagreements as soon as practicable and in any event within 60 days after the submission of any dispute. Further, the Dispute Resolution Firm’s determination shall be based solely on the submissions by Purchaser and Seller which are in accordance with the terms and procedures set forth in this Agreement and the Statement of Accounting Principles attached hereto as Exhibit C (i.e., not on the basis of an independent review). The resolution of the dispute by them as to any disputed amounts the Dispute Resolution Firm shall be final, binding and conclusive non-appealable on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”)parties hereto. The Accounting costs and expenses of the Dispute Resolution Firm shall be directed to, within thirty (30) calendar days after submission allocated based upon the percentage which the portion of the dispute, determine and report contested amount not awarded to each party bears to the parties upon amount actually contested by such remaining disputed amounts with respect party in the presentation to the Post-Closing StatementDispute Resolution Firm. For example, if Seller submits an Objections Statement for $1,000, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address if Purchaser contests only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess $500 of the amount claimed by which Seller, and if the Base Purchase Price was reduced pursuant Dispute Resolution Firm ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of the Dispute Resolution Firm will be allocated 60% (i.e. 300/500) to Section 2.6(b)(11)Purchaser and 40% (i.e., if any.
(16200/500) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedSeller.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more By no later than fifteen (15) and not less than five (5) the third Business Days Day prior to the Closing Date, Parent the Company shall deliver to Purchaser a statement (the “Transaction Pre-Closing Statement”) that contains Parentsetting forth the Company’s reasonable good faith estimates estimate of (i) the Closing Net Working Capital (including all “Estimated Net Working Capital”), the resulting Estimated Working Capital Surplus or Estimated Working Capital Deficit, the Company’s good faith estimate of Cash (“Estimated Cash”), the components thereofCompany’s good faith estimate of Indebtedness (“Estimated Indebtedness”) and the Company’s good faith estimate of Transaction Expenses (“Estimated Transaction Expenses”) and the resulting calculation of Estimated Purchase Price. The Pre-Closing Statement shall be prepared in accordance with the Calculation Principles definitions set forth in this Agreement, including the accounting principles set forth on Exhibit C attached hereto (the “Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change Statement of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO ProceedsAccounting Principles”).
(b) The Base As promptly as reasonably possible, but in any event within 90 days after the Closing Date, Purchaser will deliver to Holdco Seller a statement setting forth Purchaser’s good faith calculation of Final Net Working Capital, Final Cash, Final Indebtedness, Final Transaction Expenses and on the basis of the foregoing, the Final Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “Preliminary Closing Statement”). The Preliminary Closing Statement shall be prepared in accordance with the definitions set forth in this Agreement, including the Statement of Accounting Principles. The parties agree that Purchaser’s preparation of the Preliminary Closing Statement and the Final Purchase Price contemplated by this Section 1.04(b) are not intended to permit the introduction of different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies than those used to prepare the Pre-Closing Statement. After delivery of the Preliminary Closing Statement, Purchaser shall give Holdco Seller and its accountants reasonable access during normal working hours upon reasonable notice to review, and/or provide copies of, the books, records and work papers of the Company related to, or otherwise used by Purchaser in, the preparation of the Preliminary Closing Statement. Holdco Seller and its accountants may make inquiries of Purchaser and the Company and their accountants regarding the Preliminary Closing Statement and Purchaser and the Company shall use their reasonable efforts to cause their respective employees and accountants to cooperate with, and promptly respond to, such inquiries. If Holdco Seller has any objections to the Preliminary Closing Statement, Holdco Seller shall deliver to Purchaser a statement setting forth such objections (an “Objections Statement”) within 30 days after Holdco Seller’s receipt of the Preliminary Closing Statement. If an Objections Statement is not delivered to Purchaser within 30 days after Holdco Seller’s receipt of the Preliminary Closing Statement, the Preliminary Closing Statement (and the resulting Final Purchase Price) shall be final, binding and non-appealable by the parties hereto. If an Objections Statement is delivered to Purchaser within 30 days after Holdco Seller’s receipt of the Preliminary Closing Statement, Holdco Seller and Purchaser shall negotiate in good faith to resolve the objections stated therein and if they do not reach a final resolution of all such objections within 30 days after Holdco Seller’s delivery of the Objections Statement, Holdco Seller and Purchaser shall submit any remaining objections to ▇▇▇▇▇ ▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to US LLP or such other mutually acceptable office of an impartial nationally recognized firm of independent certified public accountants, other than the City accountants of ▇▇▇▇▇▇▇ Hills prior to the ClosingStockholder, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any Affiliates of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review PeriodDispute Resolution Firm”). Any such notice The Dispute Resolution Firm’s determination will be based solely on the definitions of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Final Net Working Capital, Closing Business DebtFinal Cash, Change Final Indebtedness, Final Transaction Expenses and Final Purchase Price set forth in this Agreement, including the Statement of Control PaymentsAccounting Principles, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable)a single written submission from each of Holdco Seller and Purchaser and not on the basis of an independent review. Parent The Dispute Resolution Firm shall be deemed instructed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute render its determination with respect to the Post-Closing Statementdisputed items as soon as reasonably possible (which the parties agree should not be later than 45 days following the date on which the disagreement is referred to the Dispute Resolution Firm), and to send copies of such written determination to Purchaser and Parent Holdco Seller. No hearing shall negotiate be held and no discovery shall be permitted. No party shall engage, directly or indirectly, in good faith to reconcile their differences and any resolution by them as ex parte communications with the Dispute Resolution Firm. The Dispute Resolution Firm shall not assign a value to any disputed amounts item greater than the greatest value for such item submitted by either party to the Dispute Resolution Firm or less than the smallest value for such item submitted by either party to the Dispute Resolution Firm. The Dispute Resolution Firm may not award the parties in the aggregate more than the amount in dispute. The decision of the Dispute Resolution Firm with respect to all objections submitted to it shall be final, binding and conclusive non-appealable on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”)parties hereto. The Accounting costs and expenses of the Dispute Resolution Firm shall be directed topaid by Holdco Seller, within thirty (30) calendar days after submission on the one hand, and Purchaser, on the other hand, based upon the percentage which the portion of the dispute, determine and report disputed items not awarded to each party bears to the parties upon such remaining aggregate amount of disputed amounts with respect to the Post-Closing Statementitems. For example, if Holdco Seller submits an Objections Statement for $1,000, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address if Purchaser contests only those items in dispute. Purchaser shall bear and pay a percentage $500 of the fees amount claimed by Holdco Seller, and disbursements if the Dispute Resolution Firm ultimately resolves the dispute by awarding Holdco Seller $300 of the Accounting Firm that is equal to $500 contested, then the percentage costs and expenses of the total dollar amount of changes proposed Dispute Resolution Firm will be allocated 60% (i.e. 300/500) to the Post-Closing Statement by Parent that are successfulPurchaser and 40% (i.e., and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal 200/500) to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting FirmHoldco Seller.
(fc) No later than Promptly (but in any event within five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds date on which all disputed items required to determine the Final Purchase Price are finally determined by the Dispute Resolution Firm or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6agreed by Holdco Seller and Purchaser), Purchaser or ParentHoldco Seller, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d)::
(1i) If if the Closing Working Capital as finally determined in accordance with this Section 2.6 Final Purchase Price is less than the Estimated Closing Working CapitalPurchase Price, Parent Holdco Seller shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available fundsfunds to the account designated by Purchaser; and
(ii) if the Final Purchase Price is greater than the Estimated Purchase Price, together Purchaser shall pay such excess to Holdco Seller by wire transfer of immediately available funds to the account designated by Holdco Seller.
(d) This Section 1.04 is not intended to be used to adjust for errors or omissions that may be found with interest thereon for respect to the period commencing on Latest Balance Sheet or any other balance sheet referenced in Section 3.05 or any inconsistencies between the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.Latest Balance Sheet or any other balance sheet referenced in Section 3.05
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Universal Corp /Va/)
Purchase Price Adjustments. (a) Not more than fifteen At least ten (15) and not less than five (510) Business Days prior to the Closing Date, Seller Parent shall deliver to Purchaser Bank the Determination Date Balance Sheet and a statement (certificate based on the “Transaction Statement”) that contains Determination Date Balance Sheet setting forth Seller Parent’s reasonable good faith estimates of (i) the Closing Working Capital (including all calculation of the components thereof) Determination Date Tangible Equity, prepared in accordance with the Calculation Principles (Accounting Principles. Seller Parent shall afford Purchaser Bank and its Representatives the “Estimated Closing Working Capital”), (ii) opportunity to review all work papers and documentation used by Seller Parent and its accountants in preparing the Determination Date Balance Sheet and Seller Parent’s calculation of the Determination Date Tangible Equity. The parties acknowledge and agree that the Closing Business Debt (the “Estimated Closing Business Debt”)Date Cash Consideration, (iii) which will be paid by Purchaser Bank at the Closing Transaction Expenses (pursuant to Section 2.04, shall reflect the “Estimated Closing Transaction Expenses”), (iv) Determination Date Balance Sheet and Seller Parent’s calculation of the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)Determination Date Tangible Equity.
(b) The Base Purchase Price shall be subject to adjustment at the Closing As promptly as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreementpracticable, but such transaction has not closed prior to the Closing then no later than ninety (B90) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and days after the Closing Date, Purchaser Bank shall cause to be prepared and delivered to Seller Parent shall be entitled to receive a proposed final consolidated balance sheet of Seller Bank (directly or indirectlyexcluding the Excluded Subsidiaries) Other DBFO Proceeds in an amount equal as of the Effective Time (the “Closing Date Balance Sheet”) and a certificate based on the Closing Date Balance Sheet setting forth Purchaser Bank’s calculation of the Closing Date Tangible Equity and any adjustments to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, Determination Date Balance Sheet and Determination Date Tangible Equity that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 Purchaser Bank deems necessary (such certificate and the Closing DateDate Balance Sheet, the “True-Up Statement”). The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventyTrue-five (75) calendar days after the Closing, Purchaser Up Statement shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) be prepared in accordance with the Calculation Accounting Principles, (ii) . Purchaser Bank shall afford Seller Parent and its Representatives the Closing Business Debt, (iii) opportunity to review all work papers and documentation used by Purchaser Bank and its accountants in preparing the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO ProceedsTrue-Up Statement.
(dc) Parent Except as otherwise expressly provided herein, the True-Up Statement shall notify Purchaser of its acceptance or dispute of any amounts reflected be final and binding on the Post-Closing Statementparties hereto, unless, within thirty (30) calendar days after Parent’s receipt by Seller Parent of such statement the True-Up Statement, Seller Parent shall notify Purchaser Bank in writing of its disagreement with any amount included therein or omitted therefrom (such 30-day period hereinafter referred to as the each dispute, an “Review PeriodObjection”). Any such notice of disagreement Seller Parent and Purchaser Bank shall specify, seek in good faith to resolve any differences that they may have with a reasonably detailed explanation, those items or amounts as respect to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included matters specified in the Post-Closing Statement delivered pursuant Objection. If the parties are unable to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay resolve the Objections within five fifteen (515) Business Days of the conclusion receipt by Purchaser Bank of such notice, Seller Parent and Purchaser Bank shall submit all matters that remain in dispute with respect to the Objection to a nationally recognized independent accounting firm selected by mutual agreement between Seller Parent and Purchaser Parent as set forth on Schedule B, or such other nationally recognized independent accounting firm agreed upon by Seller Parent and Purchaser Bank (the “Accounting Referee”). The Accounting Referee, acting as an expert and not as an arbitrator, shall be instructed to resolve the matters that remain in dispute with respect to the Objection based solely on written submissions of Purchaser Bank, on the one hand, and Seller Parent, on the other hand, and not by independent investigation. The Accounting Referee’s calculation (i) must be made in accordance with the standards and definitions in this Agreement, and (ii) with respect to each item in dispute, such determination shall not be in excess of the Review Period higher, nor less than the maximum amountlower, if anyof the amounts advocated by Seller Parent in the Objection or by Purchaser Bank in the True-Up Statement with respect to such disputed line item. The Accounting Referee’s determination shall be made within fifteen (15) Business Days of engagement, which to the extent reasonably practicable. Purchaser Bank and Seller Parent agree would otherwise shall afford the Accounting Referee the opportunity to review all work papers and documentation used by Purchaser Bank and Seller Parent and their respective accountants in preparing the Determination Date Balance Sheet and the True-Up Statement, to the extent necessary to resolve all Objections. The determination of the Accounting Referee shall be owed final and binding on the parties hereto with respect to the calculation of the unresolved matters specified in the Objection. The Accounting Referee shall allocate its costs and expenses between Seller Parent and Purchaser Bank based upon the percentage of the Objections submitted to the Accounting Referee that is ultimately awarded to Seller Parent on the one hand or Purchaser Bank on the other hand.
(d) Not later than the close of business on the fifth (5th) Business Day following the final determination of the True-Up Statement pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable 2.05(b) (the “Undisputed AmountsAdjustment Payment Date”), (1) if the Closing Date Tangible Equity Adjustment Amount is a positive number, Purchaser Bank shall effect the transfer of cash, in immediately available funds, to Seller equal to the Closing Date Tangible Equity Adjustment Amount, and (2) if the Closing Date Tangible Equity Adjustment Amount is a negative number, Seller shall effect the transfer of cash, in immediately available funds, to Purchaser Bank equal to the Closing Date Tangible Equity Adjustment Amount; provided, that any payment made pursuant to this Section 2.05(d) following the Adjustment Payment Date shall be made together with interest thereon computed from the Adjustment Payment Date up to, but not including, the date of such payment at the rate of three month LIBOR, as published on Bloomberg (or any market accepted alternative rate should such LIBOR rate be discontinued), calculated on a 365-day basis.
(e) In the event Any adjustments provided for in this Section 2.05 shall be deemed, for purposes of a dispute with respect Taxes, to be adjustments to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the partiesPurchase Price. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to To the extent that the amounts owed have not otherwise been satisfied by a prior paymentany fact, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined condition or development directly results in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 2.05, no claim for indemnification under Article VI shall be paid made by wire transfer a party in respect of immediately available fundssuch direct adjustment (it being understood that the foregoing shall not preclude any claim for indemnification under Article VI for Losses incurred by either party, together with interest thereon for directly or indirectly, resulting from, related to or arising out of any such fact, condition or development, other than to the period commencing on extent it directly results in a direct adjustment to the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedPurchase Price).
Appears in 1 contract
Sources: Merger Agreement (Cit Group Inc)
Purchase Price Adjustments. (a) Not more than fifteen At least two (15) and not less than five (52) Business Days prior to the Closing Date, Parent the Company shall deliver to Purchaser Buyer a certificate signed by an officer of the Company, accompanied by reasonable supporting documentation, setting forth in reasonable detail the Company’s good faith estimate of: (i) the Working Capital as of the close of business on the day immediately preceding on the Closing Date (the “Working Capital Estimate”), as well as the calculation of any resulting estimated Working Capital Overage or estimated Working Capital Underage, and (ii) (x) the Cash, (y) the Indebtedness of the Company and the Company Subsidiaries as of the close of business on the day immediately preceding the Closing Date, the amount of such Indebtedness that is to be paid and discharged on the Closing Date, and the Bridge Loan Payoff Amount, and (z) the Transaction Expenses and the Transaction Expenses Payoff Amount, as well as the calculation of the estimated Initial Equity Purchase Price.
(b) Within ninety (90) days after the Closing Date, the Company shall prepare in good faith and deliver to Seller a combined balance sheet which shall set forth its calculation of the assets and liabilities of the Company and the Company Subsidiaries as of the close of business on the day immediately preceding the Closing Date (the “Closing Date Balance Sheet”) and a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Working Capital derived from the Closing Date Balance Sheet (the “Closing Working Capital Capital”) and (including all ii) (x) the Cash, (y) the Indebtedness of the components Company and the Company Subsidiaries as of the close of business on the day immediately preceding the Closing Date, the amount of such Indebtedness that was paid and discharged on the Closing Date and the Bridge Loan Payoff Amount, and (z) the Transaction Expenses and the Transaction Expenses Payoff Amount, as well as its calculation of the Initial Equity Purchase Price derived therefrom and from the Closing Date Balance Sheet (the “Equity Purchase Price”), together with reasonable supporting calculations and documentation. Seller’s independent accountants may participate in the preparation of the Closing Date Balance Sheet and the Statement; provided, however, that Seller acknowledges that the Company shall have the primary responsibility and authority for preparing the Closing Date Balance Sheet and the Statement. -21- (c) During the forty-five (45) day period following Seller’s receipt of the Closing Date Balance Sheet and the Statement, Seller and its independent accountants shall be given access at all reasonable times to the personnel, properties, books and records of the Company and the Company Subsidiaries and shall be permitted to review the working papers relating to the Closing Date Balance Sheet and the Statement. The Closing Date Balance Sheet and the Statement shall become final and binding upon the parties on the 45th day following delivery thereof, unless Seller gives written notice of its disagreement with the Closing Date Balance Sheet and the Statement (a “Notice of Disagreement”) prepared to Buyer prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so asserted. If a Notice of Disagreement is received by Buyer in a timely manner, then the Closing Date Balance Sheet and the Statement (as revised in accordance with this sentence) shall become final and binding upon Seller and Buyer on the earlier of (A) the date Seller and Buyer resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement and (B) the date any disputed matters are finally resolved in writing by the Accounting Firm. During the forty-five (45) day period following the delivery of a Notice of Disagreement (the “Resolution Period”), Seller and Buyer shall seek in good faith to resolve any differences that they may have with respect to the matters specified in the Notice of Disagreement. If at the end of the Resolution Period any matters properly included in the Notice of Disagreement remain in dispute, Seller and Buyer shall each submit to PricewaterhouseCoopers or, if such firm is unable or unwilling to act, such other nationally recognized independent public accounting firm as shall be agreed upon by the parties hereto in writing (in any such case, the “Accounting Firm”) for resolution, in accordance with the Calculation Principlesstandards set forth in this Section 2.5, (ii) any and all such matters, in the Closing Business Debt, (iii) form of a written brief delivered to the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, Accounting Firm within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation end of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”)Resolution Period. The Accounting Firm shall be directed instructed to, and Seller and Buyer shall use reasonable efforts to cause the Accounting Firm to, render a written decision resolving the matters submitted to the Accounting Firm within thirty (30) calendar days after submission of the dispute, determine receipt of such submission. The scope of the disputes to be resolved by the Accounting Firm shall be limited to whether the Closing Working Capital and report the Equity Purchase Price were calculated in accordance with the standards set forth in this Section 2.5 (including the Balance Sheet Principles) and the definitions set forth in this Agreement and whether there were errors in the Closing Date Balance Sheet and the Statement and the Accounting Firm is not to make any determination as to whether the Balance Sheet Principles are appropriate or as to whether the WC Target is correct. The Accounting Firm’s decision shall be conclusive and binding upon the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive based solely on the parties hereto written submissions by Seller and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereofBuyer and their respective representatives and not by independent review. The Accounting Firm shall address only those items in disputedispute and may not assign a value greater than the greatest value for such item claimed by either party or smaller than the smallest value for such item claimed by either party. Purchaser 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 4.6 or any other representation or warranty in this Agreement or as to compliance by the Company with any of its covenants or agreements in this Agreement (other than in this Section 2.5). 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 cost of any arbitration (including the fees and expenses of the Accounting Firm and reasonable attorney fees and expenses of the parties) pursuant to this Section 2.5 shall bear be borne by Buyer and pay a percentage Seller 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 -22- at the time the determination of the Accounting Firm is rendered on the merits of the matters submitted. For the avoidance of doubt and solely as an illustration of the methodology set forth in the preceding sentence, if (i) the Notice of Disagreement delivered by Seller assigns values to the disputed matters such that the Closing Working Capital set forth in the Statement would be increased by $1,000,000, (ii) Buyer maintains that the Closing Working Capital set forth in the Statement is correct and (iii) the Accounting Firm’s final resolution of the disputed items in accordance with this Section 2.5(c) is that the Closing Working Capital is increased from the amount set forth in the Statement by $600,000 (i.e., sixty percent (60%) of the amount in dispute is resolved in favor of Seller), then Seller shall be responsible for 40% of such cost of arbitration and Buyer shall be responsible for 60% of such cost of arbitration. Except as provided in the two preceding sentences, the fees and disbursements of the Accounting Firm that is equal to the percentage Buyer’s independent auditors incurred in connection with their review of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through Balance Sheet, the date on which such payment is made calculated at the Prime Rate. Such interest Statement and any Notice of Disagreement shall be payable at borne by Buyer, and the same time as fees and disbursements of Seller’s independent accountants incurred in connection with their review of the payment to which it relates Closing Date Balance Sheet, the Statement and any Notice of Disagreement shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedborne by Seller.
Appears in 1 contract
Sources: Stock Purchase Agreement
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less No later than five (5) Business Days prior to the Closing Date, Parent Buyer shall deliver to Purchaser Seller a statement (the “Transaction Estimated Closing Statement”) that contains Parent), prepared in good faith, setting forth Buyer’s reasonable calculations (based on Buyer’s good faith estimates of (iconsistent with past practice and including reasonable supporting documentation therefor) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles Adjustment Amount (the “Estimated Closing Working CapitalAdjustment Amount”), (ii) and of the Closing Business Debt resulting Purchase Price (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO ProceedsPurchase Price”).
(b) The Base Purchase Price shall be subject to adjustment at From the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount delivery of the Estimated Closing Business DebtStatement until the Closing Date, if any.
Seller shall have the opportunity to review and comment on the Estimated Closing Statement, including the estimates and calculations contained therein (4) The Base Purchase Price and Buyer shall be reduced by make reasonably available to Seller Buyer’s representatives who were responsible for preparing the amount Estimated Closing Statement), Buyer shall consider in good faith any changes that Seller proposes to the Estimated Closing Statement, and Seller and Buyer shall cooperate in good faith to resolve any disagreements in respect of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed Statement prior to the Closing then (B) Date, but the Base resolution of such disagreements shall not be a condition to or delay the Closing. The Estimated Closing Statement, as modified to reflect any changes agreed to by Seller and Buyer, shall be binding on the Parties for the purposes of determining the payment of the Estimated Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to at the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution first Distribution Date after Closing on which distributions of Net Available Cash (as defined in the Existing Partnership Agreement) are made pursuant to Section 6.1(a) of the Existing Partnership Agreement for the fiscal quarter of the Target during which the Closing Working Capitaloccurs, Buyer shall deliver to Seller a statement (the “Final Closing Business DebtStatement”), Change prepared in good faith consistent with past practice, setting forth Buyer’s calculations (including reasonable supporting detail therefor) of Control Paymentsthe Adjustment Amount, together with any adjustment to the Purchase Price (from the Estimated Purchase Price) resulting therefrom. Upon ▇▇▇▇▇▇’s receipt of the Final Closing Transaction ExpensesStatement, Project ContributionsSeller shall have thirty (30) days to review the Final Closing Statement (the “Seller Review Period”). If Seller disagrees with ▇▇▇▇▇’s determination of any of the items set forth in the Final Closing Statement, Chinese DBFO ProceedsSeller shall, Dalriada DBFO Proceeds on or Other DBFO Proceedsprior to the last day of the Seller Review Period, deliver a written notice to Buyer (the “Dispute Notice”) that sets forth Seller’s objections to Buyer’s calculation of such items.
(d) If Seller does not deliver a Dispute Notice to Buyer within the Seller Review Period, Seller shall be deemed to have accepted and agreed to the Final Closing Statement and all items therein (including Buyer’s calculation of any adjustment to the Estimated Purchase Price) and the same shall be final, conclusive and binding on the Parties for all purposes of this Agreement. If Seller delivers a Dispute Notice to Buyer within the Seller Review Period, Buyer and Seller shall, during the thirty (30) day period immediately following such delivery, use their good faith efforts to reach agreement to determine any adjustment to the Estimated Purchase Price. If, at the end of such period, Buyer and Seller are unable to resolve all of their disagreements, they shall jointly retain and refer their remaining disagreements to a nationally recognized independent accounting firm mutually acceptable to Buyer and Seller (the “Independent Expert”). Buyer and Seller shall instruct the Independent Expert promptly to review this Section 2.2 as well as the Estimated Closing Statement, the Final Closing Statement, the Dispute Notice and any other materials reasonably requested by the Independent Expert and to determine whether and to what extent, if any, the Estimated Purchase Price requires adjustment. Buyer and Seller shall provide the Independent Expert with access to the relevant books and records and other items reasonably requested by the Independent Expert used to prepare the calculations set forth in the Estimated Closing Statement, the Final Closing Statement and the Dispute Notice. As promptly as practicable, but in no event later than thirty (30) days after engaging the Independent Expert, the Independent Expert shall deliver to Buyer and Seller a report that sets forth its determination of its calculation of the Final Closing Statement. The determinations of the Independent Expert shall be final, conclusive and binding on the Parties for all purposes of this Agreement. ▇▇▇▇▇ and Seller shall execute, if requested by the Independent Expert, a reasonable engagement letter, including customary indemnities in favor of the Independent Expert. The cost of the Independent Expert’s review and determination pursuant to this Section 2.2 shall be borne 50% by Buyer, on the one hand, and 50% by Seller, on the other.
(e) For purposes of this Agreement, “Final Adjustment Amount” means, as applicable, (i) the Adjustment Amount reflected in accordance with this the Final Closing Statement delivered by Buyer under Section 2.62.2(c), Purchaser if Seller does not timely deliver a Dispute Notice under Section 2.2(c) or Parentif, as applicable, shall make the following payments; provided that, such payments shall only be made prior to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, end of the Undisputed Amounts pursuant Seller Review Period, Seller provides Buyer with written notice that it agrees with the entirety of the Final Closing Statement; (ii) the Adjustment Amount as mutually agreed to by Seller and Buyer under Section 2.6(d):
2.2(d); or (1iii) If the Closing Working Capital Adjustment Amount as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date2.2(d), Purchaser shall pay the amount of such shortfall following Seller’s and Buyer’s failure to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing mutually agree on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedAdjustment Amount under Section 2.2(d).
Appears in 1 contract
Sources: Purchase and Sale Agreement (Eastern Energy Gas Holdings, LLC)
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than five (5) Business Days prior to The Statement of Closing Date Receivables shall be deemed final for the Closing Date, Parent shall deliver to Purchaser a statement (purposes of this Section 2.4 upon the “Transaction Statement”) that contains Parent’s reasonable good faith estimates earliest of (i) the Closing Working Capital (including all failure of Seller to notify Purchaser of a dispute within 15 Business Days of Purchaser's delivery of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Statement of Closing Working Capital”)Date Receivables to Seller, (ii) the Closing Business Debt (the “Estimated Closing Business Debt”resolution of all disputes, pursuant to Section 2.4(b), by Seller and Purchaser and (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”resolution of all disputes, pursuant to Section 2.4(b), (iv) by the Change Independent Accounting Firm. Within three Business Days of Control Payments (the “Estimated Statement of Closing Change of Control Payments”)Date Receivables being deemed final, (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price adjustments shall be subject to adjustment at the Closing made as follows:
(1I) If In the Estimated event that the Target Closing Working Capital Receivables is at least $25 million greater than the Reference AmountClosing Date Receivables reflected on the Statement of Closing Date Receivables, then the Base Purchase Price shall be increased adjusted downward in an amount (the "Receivables Downward Adjustment Amount") equal to the product of (x) 0.30 multiplied by such excess.
(2y) If the Estimated difference between the Target Closing Working Capital is less than Receivables minus $25 million and the Reference Amount, Closing Date Receivables; provided that no adjustment to the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted made pursuant to this Section 2.6(b), is 2.4(c)(I) if the “difference between the Target Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare Receivables and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 Date Receivables is less than the Estimated Closing Working Capital, Parent $25 million. Seller shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11)Receivables Downward Adjustment Amount, if any.
(16) If the Other DBFO Proceeds as finally determined applicable, to Purchaser in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid cash by wire transfer of immediately available funds, together with interest thereon for federal funds to such bank account(s) as shall be designated in writing by Purchaser to Seller within one (1) Business Day of the period commencing on Statement of Closing Date Receivables being deemed final.
(II) In the event that the Closing Date through Receivables reflected on the date on which such payment Statement of Closing Date Receivables is made calculated at least $25 million greater than the Prime Rate. Such interest Target Closing Receivables, then the Purchase Price shall be payable at adjusted upward in an amount (the same time as "Receivables Upward Adjustment Amount") equal to the payment product of (x) 0.30 multiplied by (y) the difference between the Closing Date Receivables minus $25 million and the Target Closing Receivables; provided that no adjustment to which it relates and the Purchase Price shall be calculated daily on made pursuant to this Section 2.4(c)(II) if the basis of a year of 365 days difference between the Closing Date Receivables and the actual number Target Closing Receivables is less than $25 million. Purchaser shall pay the Receivables Upward Adjustment Amount, if applicable, to Seller in cash by wire transfer of days elapsedimmediately available federal funds to such bank account(s) as shall be designated in writing by Seller to Purchaser within one (1) Business Day of the Statement of Closing Date Receivables being deemed final.
Appears in 1 contract
Sources: Stock and Asset Purchase Agreement (Washington Mutual Finance Corp)
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than five (5) Business Days At least two business days prior to the Closing Date, Parent the Company shall deliver to the Purchaser a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates estimate of (i) the Closing Net Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Net Working Capital”), (ii) the Closing Business Debt Cash on Hand (the “Estimated Closing Business DebtCash on Hand”), Indebtedness (iiithe “Estimated Indebtedness”) the Closing and Seller Transaction Expenses (the “Estimated Closing Seller Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viiithe resulting calculation of the Estimated Cash Purchase Price as set forth in Section 1.02. The Estimated Cash Purchase Price shall be prepared using the accounting principles set forth on the Statement of Accounting Principles attached as Schedule 9.01(b) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)hereto.
(b) The Base Purchase Price shall be subject to adjustment at As promptly as possible, but in any event within 75 days after the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference AmountDate, the Base Purchase Price shall be increased by such excess.
Purchaser will deliver to the Seller (2i) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount a consolidated balance sheet of the Estimated Company and its Subsidiaries (the “Closing Business DebtBalance Sheet”) and (ii) a statement showing the Purchaser’s calculation of Net Working Capital, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Cash on Hand, Indebtedness and Seller Transaction Expenses, if any.
(5) The Base and the resulting calculation of the Final Cash Purchase Price (together with the Closing Balance Sheet, the “Preliminary Closing Statement”). The Closing Balance Sheet shall be reduced prepared in accordance with the definitions set forth in this Agreement and using the accounting principles set forth on the Statement of Accounting Principles attached as Schedule 9.01(b) hereto. The parties agree that the purpose of preparing the Closing Balance Sheet and determining Net Working Capital, Cash on Hand, Indebtedness, Seller Transaction Expenses and the related purchase price adjustments contemplated by this Section 1.05(b) is to measure changes in Net Working Capital and the amount levels of Cash on Hand, Indebtedness and Seller Transaction Expenses, and such processes are not intended to permit the Estimated Closing Change introduction of Control Paymentsdifferent judgments, if any.
(6accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies as those set forth on the Statement of Accounting Principles attached as Schedule 9.01(b) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hillshereto. Seller shall, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, and Purchaser shall, following the Base Closing through the date that the Final Cash Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted finally determined pursuant to this Section 2.6(b1.05(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closingtake all actions reasonably necessary to maintain and preserve copies of all accounting books and records, Purchaser shall prepare policies and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all procedures on which each of the components thereof) prepared in accordance with determination of the Calculation Principles, (ii) Estimated Cash Purchase Price and the Preliminary Closing Business Debt, (iii) Statement are based. During the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parentdelivery of the Preliminary Closing Statement and during any period of dispute with respect thereto thereafter, the Purchaser shall give the Seller and its accountants reasonable access to review the Company’s receipt and its Subsidiaries’ books and records and work papers related to the preparation of the Preliminary Closing Statement (and, solely to the extent relevant thereto, to the Purchaser’s books and records and work papers) for purposes of Seller’s review of the Preliminary Closing Statement. The Seller and its accountants may make inquiries of the Purchaser and its Subsidiaries and their respective accountants regarding questions concerning or disagreements with the Preliminary Closing Statement arising in the course of its review thereof, and the Purchaser shall use its, and shall cause its Subsidiaries to use their, commercially reasonable efforts to cause any such accountants to provide reasonable cooperation with and reasonably promptly respond to such inquiries; provided, however, that the independent accountants of Purchaser shall not be obligated to make any working papers available to Seller unless Seller has signed a customary confidentiality and hold harmless agreement relating to such access to working papers in form and substance reasonably acceptable to such independent accountants. If the Seller has any objections to the Preliminary Closing Statement, the Seller shall deliver to the Purchaser a statement setting forth its objections thereto (such 30-day period hereinafter referred to as the an “Review PeriodObjections Statement”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as If an Objections Statement is not delivered to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation the Purchaser within 30 days after delivery of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Preliminary Closing Statement, the Preliminary Closing Statement shall be final, binding and non-appealable by the parties hereto. The Seller and the Purchaser and Parent shall negotiate in good faith to reconcile resolve any such objections, but if they do not reach a final resolution within 15 days after the delivery of the Objections Statement, the Seller and the Purchaser shall submit such dispute to KPMG LLP or such other mutually acceptable dispute resolution firm (the “Dispute Resolution Firm”). Any further submissions to the Dispute Resolution Firm must be written and delivered to each party to the dispute. The Dispute Resolution Firm shall consider only those items and amounts which are identified in the Objections Statement as being items which the Seller and the Purchaser are unable to resolve. The Dispute Resolution Firm’s determination will be based solely on the definitions of Net Working Capital, Cash on Hand, Indebtedness and Seller Transaction Expenses, as applicable, contained in this Agreement and in the Statement of Accounting Principles attached hereto as Schedule 9.01(b). The Seller and the Purchaser shall use their differences commercially reasonable efforts to cause the Dispute Resolution Firm (who shall be acting as an expert and not as an arbitrator) to resolve all disagreements as soon as practicable and in any event within 60 days after the submission of any dispute. Further, the Dispute Resolution Firm’s determination shall be based solely on the submissions by the Purchaser and the Seller which are in accordance with the terms and procedures set forth in this Agreement and in the Statement of Accounting Principles attached hereto as Schedule 9.01(b) (i.e., not on the basis of an independent review). Purchaser and Seller will cooperate with the Dispute Resolution Firm during the term of its engagement. The resolution of the dispute by them as to any disputed amounts the Dispute Resolution Firm shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Postnon-Closing Statement, and such report shall be final, binding and conclusive appealable on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereoftheir Affiliates. The Accounting costs and expenses of the Dispute Resolution Firm shall address only those items in dispute. Purchaser shall bear and pay a be allocated based upon the percentage which the portion of the fees contested amount not awarded to each party bears to the amount actually contested by such party in the presentation to the Dispute Resolution Firm. For example, if the Seller submits an Objections Statement for $1,000, and disbursements if the Purchaser contests only $500 of the Accounting amount claimed by the Seller, and if the Dispute Resolution Firm that is equal ultimately resolves the dispute by awarding the Seller $300 of the $500 contested, then the costs and expenses of the Dispute Resolution Firm will be allocated 60% (i.e. 300/500) to the percentage of the total dollar amount of changes proposed Purchaser and 40% (i.e., 200/500) to the Post-Closing Statement by Parent that are successfulSeller. For purposes hereof, and Parent shall bear and pay a percentage “Final Cash Purchase Price” (which, for the avoidance of doubt, does not include the fees Stock Consideration) means an disbursements of the Accounting Firm that is equal to the percentage of the total dollar aggregate amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall 1.05(b) equal to Purchaser.
(2i) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
seven hundred fifty million dollars (3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date$750,000,000), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of plus (ii) the amount by which Net Working Capital exceeds Target Working Capital (or minus the Base Purchase Price was reduced pursuant to Section 2.6(b)(11amount by which Target Working Capital exceeds Net Working Capital), if any.
plus (16iii) If the Other DBFO Proceeds total amount of Cash on Hand, minus (iv) the outstanding amount of Indebtedness, minus (v) the unpaid Seller Transaction Expenses, in each case, as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be 1.05(b), as applicable. For the avoidance of doubt, the Stock Consideration paid by wire transfer of immediately available fundsPurchaser to Seller in accordance with Section 1.04 shall not be subject to any adjustment pursuant to this Section 1.05 or any other section hereof except, together if applicable, in accordance with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedSection 6.09.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more No later than fifteen (15) and not less than five (5) two Business Days prior to the anticipated Closing Date, the Parent shall prepare and deliver to the Purchaser a statement (that sets forth the “Company’s estimate of the Company’s and Holdings’ Net Working Capital, Indebtedness, and Transaction Statement”) that contains Parent’s reasonable Expenses as of the Closing Date, which estimate shall be prepared in good faith estimates of (i) and in accordance with GAAP and consistent with the Closing Working Capital (including all of the components thereof) prepared Company’s and Holdings’ historical accounting practices and policies and in accordance with the Calculation Principles calculation of Net Working Capital based upon the Latest Balance Sheet as set forth in Exhibit 1.02(a) (“Estimated Net Working Capital”). To the extent the Estimated Net Working Capital is less than the Target Net Working Capital, the amount to be paid by the Purchaser to the Parent at the Closing shall be reduced by the absolute value of such amount (the “Estimated Closing NWC Shortfall Amount”). To the extent the Estimated Net Working Capital is more than the Target Net Working Capital”), (ii) the amount to be paid by the Purchaser to the Parent at the Closing Business Debt shall be increased by such amount (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO ProceedsNWC Excess Amount”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and Within 90 days following the Closing Date, Parent the Purchaser shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal deliver to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement report (the “Post-Closing StatementReport”), which shall set forth the Purchaser’s calculation of Indebtedness (to the extent not paid at Closing), Transaction Expenses (to the extent not paid at Closing), and Net Working Capital as of the Closing Date (such amount of Net Working Capital, the “Proposed Net Working Capital”) of and which shall (i) the Closing Working Capital (including all of the components thereof) prepared be calculated in good faith and in accordance with the Calculation PrinciplesGAAP, (ii) be calculated consistent with the Closing Business Debt, Company’s historical accounting practices and policies and (iii) be calculated consistent with the Closing Transaction Expenses, (iv) the Change calculation of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Net Working Capital as set forth in Exhibit 1.02(a). The Parent shall notify Purchaser have a period of its acceptance or dispute 45 days after the delivery of any amounts reflected on the Post-Closing Statement, within thirty Report (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review NWC Response Period”) to present in writing to the Purchaser notice of any objections the Parent may have to the calculations set forth therein (the “NWC Objections Notice”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of If the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in raise any objections within the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or PurchaserNWC Response Period, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith and use commercially reasonable efforts to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the partiesresolve such dispute. If Purchaser and Parent are unable the parties fail to reach a resolution to such effect agree within thirty (30) calendar 15 days after Purchaser’s receipt the delivery of Parent’s written notice of disagreementthe NWC Objections Notice, Purchaser and Parent shall submit then such dispute will be resolved through the amounts remaining dispute resolution procedures set forth in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent Section 1.03 (such independent accounting firm being herein referred to as the “Accounting FirmDispute Resolution Procedures”). The Accounting Firm shall be directed to, within thirty .
(30c) calendar days after submission Following delivery of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing StatementReport, and such report shall be finaluntil the final resolution of the Net Working Capital, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear (A) provide the Parent and pay a percentage its authorized representatives with reasonable access to the relevant books and records of the fees Company, the Purchaser’s and disbursements their accountants’ work papers, schedules and other supporting data as may reasonably be requested by the Parent; and (B) otherwise reasonably cooperate with the Parent and its authorized representatives, including by providing on a timely basis information reasonably necessary in the determination of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to calculations and amounts set forth in the Post-Closing Statement by Parent that are successfulReport.
(d) The amount of Net Working Capital, Indebtedness (to the extent not paid at Closing), and Parent shall bear and pay a percentage Transaction Expenses (to the extent not paid at Closing) as of the fees an disbursements Closing Date shall be finally determined (such finally determined amount of Net Working Capital, the “Final Net Working Capital”) as follows: (i) by written agreement of the Accounting Firm that is equal Parent and the Purchaser, (ii) by the Accountant pursuant to the percentage dispute resolution procedures set forth in Section 1.03, or (iii) to the extent the Parent does not timely object to Purchaser’s determination of such unpaid Indebtedness, 2 such unpaid Transaction Expenses or the total dollar amount of changes proposed to Proposed Net Working Capital set forth in the Post-Closing Statement by Parent that are not successful, in each case as determined by Report within the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided thatNWC Response Period, such payments amount(s) of unpaid Indebtedness, unpaid Transaction Expenses or Proposed Net Working Capital shall only be made to binding on the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, parties without further adjustment. If there is any amount of unpaid Indebtedness or unpaid Transaction Expenses as of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If Closing Date, then the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on amount of such unpaid Indebtedness or unpaid Transaction Expenses within three Business Days of the Closing Date through final determination of such amount(s). If the date on which Final Net Working Capital is greater than the Estimated Net Working Capital (such payment excess, the “Final NWC Excess Amount”), the Purchaser shall pay to the Parent, by wire transfer of immediately available funds, an amount equal to the Final NWC Excess Amount within three Business Days of the final determination of the Final Net Working Capital. If the Final Net Working Capital is less than the Estimated Net Working Capital (such shortfall, the “Final NWC Shortfall Amount”), the Parent shall pay to the Purchaser, by wire transfer of immediately available funds, an amount equal to the absolute value of the Final NWC Shortfall Amount within three Business Days of the final determination of the Final Net Working Capital.
(e) Any payments made calculated at the Prime Rate. Such interest pursuant to this Section 1.02 shall be payable at treated as an adjustment to the same time as Purchase Price by the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedparties for Tax purposes, unless otherwise required by Law.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than At least five (5) Business Days prior to the Closing Date, Parent the Seller shall prepare, or cause to be prepared, and deliver to Purchaser the Buyer a statement (the “Transaction Preliminary Closing Statement”) that contains Parentsetting forth, in reasonable detail, a good-faith estimate of the Company’s reasonable good faith estimates of (i) the Closing Net Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Net Working Capital”), (ii) the Closing Business Debt Indebtedness (the “Estimated Closing Business DebtIndebtedness”), (iii) Cash (the Closing “Estimated Cash”) and (iv) Transaction Expenses (the “Estimated Transaction Expenses”), with Net Working Capital and Cash determined as of the Calculation Time and Indebtedness and Transaction Expenses determined as of the Closing (and, except for the Estimated Transaction Expenses, without giving effect to the transactions contemplated hereby). The Preliminary Closing Statement shall be prepared on a basis consistent with the Applicable Accounting Principles and the terms of this Agreement. Following the delivery of the Preliminary Closing Statement and prior to the Closing, the Seller will make available or deliver via e-mail to Buyer and its Representatives copies of the applicable financial books and records of the Company and its Subsidiaries used in preparing the Preliminary Closing Statement. The Buyer shall be afforded an opportunity to review and comment on the Preliminary Closing Statement. The Seller shall consider in good faith any revisions to the Preliminary Closing Statement proposed by the Buyer prior to the Closing Date. To the extent the Seller agrees to any such revisions in its sole discretion, the Preliminary Closing Statement shall be modified to include such revisions; provided, that, if the Seller and the Buyer are not able to reach mutual agreement prior to the Closing Date, the Preliminary Closing Statement provided by the Seller to the Buyer shall be binding for purposes of this Section 2.4(a). For the avoidance of doubt, neither acceptance of the Preliminary Closing Statement by the Buyer nor rejection by the Seller of any proposed changes shall waive any of the Buyer’s rights or remedies under this Agreement. A sample calculation of Cash, Indebtedness, Transaction Expenses and Net Working Capital is set forth on Schedule 2.4(a).
(b) Within 90 days after the Closing Date, the Buyer shall cause to be prepared and delivered to the Seller a written statement (the “Final Closing Statement”) that shall include and set forth a calculation in reasonable detail of the actual (i) Net Working Capital (“Closing Net Working Capital”), (ii) Indebtedness (“Closing Indebtedness”), (iii) Cash (“Closing Cash”) and (iv) Transaction Expenses (“Closing Transaction Expenses”), (iv) with Net Working Capital and Cash determined as of the Change Calculation Time and Indebtedness and Transaction Expenses determined as of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amountand, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) except for the Closing Transaction Expenses, without giving effect to the transactions contemplated hereby). The Final Closing Statement shall be prepared on a basis consistent with the Applicable Accounting Principles and the terms of this Agreement. If, for any reason, the Buyer fails to deliver the Final Closing Statement within the time period required by this Section 2.4(b), then at the election of Seller, the Preliminary Closing Statement shall be deemed to be the Final Closing Statement (ivwhich shall be deemed to be delivered 90 days after the Closing Date for purposes of Section 2.4(c) and Section 2.4(f)) and Seller may deliver a Notice of Disagreement with respect thereto in accordance with Section 2.4(c), provided that, prior to any such election becoming effective, Seller shall have delivered to the Change Buyer at least five Business Days in advance written notice of Control Paymentsits intent to make such election, (v) and the Project Contributions, (vi) Buyer shall not have delivered the Chinese DBFO Proceeds, (vii) Final Closing Statement prior to the Dalriada DBFO Proceeds expiration of such five Business Days. In no event may the Buyer amend or adjust the Final Closing Statement or the underlying balances and (viii) calculations thereof following delivery to the Other DBFO ProceedsSeller.
(dc) Parent The Final Closing Statement shall notify Purchaser become final and binding on the 60th day following delivery thereof, unless prior to the end of such period, the Seller delivers to the Buyer written notice of its acceptance or dispute disagreement (a “Notice of any amounts reflected on Disagreement”) specifying the Post-Closing Statementnature and amount of, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as well as the “Review Period”). Any such notice of disagreement shall specifybasis for, with a reasonably detailed explanation, those items or amounts any dispute as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Net Working Capital, Closing Business DebtIndebtedness, Change of Control Payments, Closing Cash and/or Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds as set forth in the Final Closing Statement. The Seller may only submit one Notice of Disagreement and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts of Closing Net Working Capital, Closing Indebtedness, Closing Cash and/or Closing Transaction Expenses not specifically referenced in the Notice of Disagreement, and such items and amounts shall not be subject to review in accordance with Section 2.4(d). If all or a portion of the Adjustment Escrow Fund would not be needed to satisfy the Seller’s obligations under this Section 2.4 assuming the Buyer prevails on all items it disputes in the Notice of Disagreement, then within three Business Days of the delivery by the Seller of its Notice of Disagreement to the Buyer, the Buyer and the Seller shall jointly instruct the Escrow Agent to release to the Seller such portion of the Adjustment Escrow Fund that would not be required to satisfy the Seller’s obligations under this Section 2.4 assuming the Buyer prevails on all items it disputes in the Notice of Disagreement. The remaining portion of the Adjustment Escrow Fund, if any, shall be retained in escrow and disbursed in accordance with the final determination of the Net Adjustment Amount as provided in this Section 2.4.
(d) During the 30-day period following delivery of a Notice of Disagreement by the Seller to the Buyer, the parties in good faith shall seek to resolve in writing any differences that they may have with respect to the calculation of the Closing Net Working Capital, Closing Indebtedness, Closing Cash and/or Closing Transaction Expenses as specified therein (collectively, the “Disputed Items”). Any Disputed Items resolved in writing between the Buyer and the Seller within such 30-day period shall be final and binding with respect to such Disputed Items, and if the Seller and the Buyer agree in writing on the resolution of each Disputed Item specified by the Seller in the Notice of Disagreement and the amount of the Closing Net Working Capital, Closing Indebtedness, Closing Cash and Closing Transaction Expenses, the amounts so determined shall be final and binding on the parties for all purposes hereunder. If the Buyer and the Seller have not resolved all such Disputed Items by the end of such 30-day period, the Buyer and the Seller shall submit, in writing, to an independent public accounting firm with relevant experience in resolving purchase price disputes, jointly retained by the Buyer and the Seller (the “Independent Accounting Firm”), their briefs detailing their views as to the correct nature and amount of each unresolved Disputed Item and the amounts of the Closing Net Working Capital, Closing Indebtedness, Closing Cash and/or Closing Transaction Expenses, and the Independent Accounting Firm shall make a written determination as to each such Disputed Item and the amount of the Closing Net Working Capital, Closing Indebtedness, Closing Cash and/or Closing Transaction Expenses. Within 10 days of completion of the 30-day period following the delivery of a Notice of Disagreement, the Buyer and the Seller shall jointly seek to enter into an engagement letter with the Independent Accounting Firm. The Independent Accounting Firm shall be RSM US LLP or, if such firm is unable or unwilling to act, such other independent public accounting firm as shall be agreed in writing by the Seller and the Buyer. The Buyer and the Seller shall use their commercially reasonable efforts to cause the Independent Accounting Firm to render a written decision resolving all Disputed Items submitted to it within 30 days following the submission thereof (including a reasonable basis for such decision), or such longer period as the Independent Accounting Firm may reasonably require; provided, however, that the failure of the Independent Accounting Firm to strictly conform to any deadline or time period contained herein shall not render the determination of the Independent Accounting Firm invalid and shall not be a basis for seeking to overturn any determination rendered by the Independent Accounting Firm. The Independent Accounting Firm shall consider only those Disputed Items and amounts in the Buyer’s and the Seller’s respective calculations of the Closing Net Working Capital, Closing Indebtedness, Closing Cash and Closing Transaction Expenses that are identified as being Disputed Items and amounts to which the Buyer and the Seller have been unable to agree. The scope of the disputes to be resolved by the Independent Accounting Firm shall be limited to correcting mathematical errors and determining whether the items and amounts in dispute were determined in accordance with the Applicable Accounting Principles and the Independent Accounting Firm is not permitted to make any other determination, including any determination as to whether the Target Net Working Capital or any estimates on the Preliminary Closing Statement are correct, adequate or sufficient; provided, however, that any disputes with respect to the extent or nature of reasonable access, as contemplated by Section 2.4(f), shall be referred to the Independent Accounting Firm for its determination, which determination shall be final and binding upon the parties. In resolving any Disputed Item, the Independent Accounting Firm may not assign a value to any Disputed Item greater than the greatest value for such Disputed Item claimed by either party or less than the smallest value for such Disputed Item claimed by either party in the Final Closing Statement or the Notice of Disagreement, respectively; provided that if the resolution of any Disputed Item gives rise to a corresponding entry, such corresponding entry shall be included in the Post-Independent Accounting Firm’s determination procedures (for example, a misclassification of outstanding checks between accounts payable and cash will require adjustment to both accounts, even if the Disputed Item related only to accounts payable and not cash). The Independent Accounting Firm’s determination of the Closing Net Working Capital, Closing Indebtedness, Closing Cash and Closing Transaction Expenses shall be based solely on written materials submitted by the Buyer and the Seller (i.e., not on independent review) and the terms and conditions of this Agreement; provided, that, if mutually agreed by the Buyer and the Seller, the parties may seek an oral hearing with the Independent Accounting Firm in supplement of such written materials. The determination of the Independent Accounting Firm shall be conclusive and binding upon the parties hereto and shall not be subject to appeal or further review. Judgment may be entered upon the written determination of the Independent Accounting Firm in accordance with Section 11.8(b). In acting under this Agreement, the Independent Accounting Firm shall function solely as an expert and not as an arbitrator. In no event shall either party engage in any ex parte communications with the Independent Accounting Firm with respect to any dispute hereunder.
(e) The costs of any dispute resolution pursuant to this Section 2.4, including the fees and expenses of the Independent Accounting Firm and of any enforcement of the determination thereof, shall be borne by the Seller and the Buyer in inverse proportion as they may prevail on the matters resolved by the Independent Accounting Firm, which proportionate allocation shall be calculated on an aggregate basis based on the relative dollar values of the amounts in dispute and shall be determined by the Independent Accounting Firm at the time the determination of such firm is rendered on the merits of the matters submitted. For example, if the disputed amount is $1,000 and the Independent Accounting Firm awards $600 in favor of the Buyer’s position, then 40% of the fees and costs of the Independent Accounting Firm would be borne by the Buyer and 60% of such fees and costs would be borne by the Seller. The fees and disbursements of the Representatives of each party incurred in connection with the preparation or review of the Final Closing Statement delivered pursuant to Section 2.6(c) and Parent preparation or Purchaserreview of any Notice of Disagreement, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution borne by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firmparty.
(f) No later than five (5) Business Days The Buyer Parties will, and will cause the Company and its Subsidiaries, during the period from and after Closing through the final resolution of any adjustment to the Purchase Price contemplated by this Section 2.4, to afford the Seller and its Representatives reasonable access, during normal business hours and upon reasonable prior notice, to the extent used or relied on in the preparation of the Final Closing Working CapitalStatement (or otherwise relevant to the calculations set forth in the Final Closing Statement), Closing Business Debtto the personnel, Change properties, books and records of Control Paymentsthe Company and its Subsidiaries and to any other information reasonably requested for purposes of preparing and reviewing the calculations contemplated by this Section 2.4; provided, Closing Transaction Expenseshowever, Project Contributionsthat any such access shall be conducted at the Seller’s expense, Chinese DBFO Proceedsduring normal business hours, Dalriada DBFO Proceeds or Other DBFO Proceedsunder the supervision of the Company’s personnel and in such a manner as not unreasonably to interfere with the normal operations of the Company and its Subsidiaries and shall be subject to any limitations resulting from any Public Health Measures. Each party shall authorize its accountants to disclose work papers generated by such accountants in connection with preparing and reviewing the calculations specified in this Section 2.4; provided, as applicable, that such accountants shall not be obligated to make any work papers available except in accordance with this Section 2.6such accountants’ disclosure procedures and then only after the non-client party has signed an agreement relating to access to such work papers in form and substance acceptable to such accountants.
(g) The Purchase Price shall be adjusted, Purchaser upwards or Parentdownwards, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):follows:
(1i) If For the purposes of this Agreement, the “Net Adjustment Amount” means an amount, which may be positive or negative, equal to (A) the Closing Net Working Capital as finally determined in accordance with pursuant to this Section 2.6 is less than 2.4 minus the Estimated Closing Net Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
minus (2B) If the Closing Working Capital Indebtedness as finally determined in accordance with pursuant to this Section 2.6 is greater than 2.4 minus the Estimated Closing Working CapitalIndebtedness, Purchaser shall pay the amount of such excess to Parent.
plus (3C) If the Closing Business Debt Cash as finally determined in accordance with pursuant to this Section 2.6 is less than 2.4 minus the Estimated Closing Business DebtCash, Purchaser shall pay the amount of such shortfall to Parent.
minus (4D) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for 2.4 minus the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.Estimated Transaction Expenses;
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen seven (157) and not Business Days nor less than five two (52) Business Days prior to the Closing Date, Parent the Sellers shall deliver to Purchaser Buyer a statement (the “Transaction Estimated Closing Statement”) that contains Parent’s reasonable showing the Sellers’ good faith estimates of (i) the Closing Working Capital (including all estimate of the components thereof) prepared Estimated Working Capital, including the calculation thereof in reasonable detail calculated in accordance with the Calculation Principles (terms of this Agreement and reasonable back-up documentation regarding the “calculation of Estimated Working Capital. Buyer and its Representatives will be entitled to reasonable access during normal business hours to the relevant records, personnel and working papers of the Companies and Sellers to aid in its review of the Estimated Closing Statement and the calculation of the Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) . Sellers and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price Buyers shall be subject work together in good faith to adjustment at the Closing as follows:
(1) If agree on the Estimated Closing Working Capital is greater than prior to the Reference AmountClosing; provided, however, that the Base Purchase Price failure to agree on such amounts shall be increased by such excess.
(2) If not delay or otherwise prevent the Closing and, to the extent of any remaining dispute, Sellers’ calculation of the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) prevail. If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreementthe Estimated Working Capital exceeds the Target Working Capital, but such transaction has not closed prior to then the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the payable at Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to such difference or (B) the Estimated Project ContributionsWorking Capital is less than the Target Working Capital, if any.
(9) The Base then the Purchase Price payable at Closing shall be reduced decreased by an amount equal to such difference (such excess or deficiency, as the case may be, the “Estimated Chinese DBFO Proceeds, if anyWorking Capital Adjustment”).
(10b) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
No more than sixty (1160) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and days after the Closing Date, Parent shall Buyer will prepare (or cause to be entitled to receive (directly or indirectlyprepared) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent the Sellers a statement (the “Post-Closing Statement”) showing Buyer’s calculation of (i) the Closing Working Capital (Capital, including all of the components thereof) prepared calculation thereof in reasonable detail calculated in accordance with the Calculation Principlesterms of this Agreement. Buyer shall promptly provide to the Sellers such backup or supporting data relating to the preparation of the Post-Closing Statement and the calculation of Closing Working Capital reflected thereon as the Sellers may reasonably request. Buyer shall also provide the Sellers and their respective Representatives with such reasonable access to the books, (ii) records and personnel of the Purchased Companies, at reasonable times and upon reasonable notice, as the Sellers may request for the purposes of evaluating the Post-Closing Business Debt, (iii) the Statement and Buyer’s calculation of Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO ProceedsWorking Capital.
(dc) Parent shall The Sellers shall, within the thirty (30) day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, notify Purchaser Buyer of its acceptance or dispute non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital reflected thereon. If no such notice is delivered to Buyer by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital reflected thereon shall be deemed to have been accepted by the Sellers and shall be binding thereon for all purposes of this Agreement. If the Post-Closing Statement and the calculation of Closing Working Capital reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any amounts related amounts, as contemplated by this Section 1.7(c), shall be made pursuant to Section 1.7(e). If the Sellers give notice (a “Dispute Notice”) to Buyer within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital reflected on the Post-Closing Statement, the Sellers shall describe in such Dispute Notice the nature of any disagreement so asserted. Buyer and the Sellers shall endeavor in good faith to resolve all such disagreements within the thirty (30) calendar days after Parent’s receipt day period (the “Negotiating Period”) following the delivery by the Sellers of such statement Dispute Notice.
(such 30-day period hereinafter referred d) If Buyer and the Sellers are unable to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in resolve any disagreements regarding the Post-Closing Statement delivered pursuant and the calculations reflected thereon within the Negotiating Period, then all such disputes shall be promptly referred to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amountPricewaterhouseCoopers LLP or, if anysuch firm declines to serve, which Purchaser then such other nationally recognized independent accounting firm as is mutually acceptable to Buyer and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable Sellers (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report instructed only to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed resolve all outstanding disagreements relating to the Post-Closing Statement by Parent and the calculation of Closing Working Capital reflected thereon, and shall be instructed not to otherwise investigate such matters independently or introduce different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies in connection therewith. The Neutral Accounting Firm shall investigate only those items that are successfulin dispute and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of Buyer or the Sellers or (B) lower than the lowest value for such item claimed by either of Buyer or the Sellers. The Neutral Accounting Firm’s determination shall be based only upon written submissions by Buyer and the Sellers, and Parent not upon an independent review by the Neutral Accounting Firm. The parties shall bear instruct the Neutral Accounting Firm, acting as experts and pay a percentage not as arbitrators, to render its determination within thirty (30) Business Days of the fees an disbursements referral of such matter thereto, and the determination of the Neutral Accounting Firm that is equal to shall be final and binding upon Buyer and the percentage Sellers for all purposes of this Agreement. Judgment may be entered upon the determination of the total dollar amount Neutral Accounting Firm in any court having jurisdiction over the party against which such determination is to be enforced. Neither Buyer nor the Sellers shall have any ex parte communications or meetings with the Neutral Accounting Firm without the prior consent of changes proposed Buyer (in the case of the Sellers) or the Sellers (in the case of Buyer). The fees and expenses of the Neutral Accounting Firm shall be borne one-half by Buyer, on the one hand, and one-half by the Sellers, on the other hand. The fees and expenses of the Sellers and their respective Representatives incurred in connection with the Post-Closing Statement and any Dispute Notice shall be borne by each of the Sellers, and the fees and expenses of Buyer and its Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by Buyer.
(e) Promptly following the final resolution of all disputes, if any, relating to the Post-Closing Statement by Parent that are not successfulcalculations and amounts reflected thereon in accordance with this Section 1.7, but in each case as determined by the Accounting Firm.
(f) No later no event more than five (5) Business Days after thereafter, (A) if the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the finally determined Closing Working Capital as finally determined in accordance with this Section 2.6 is less than exceeds the Estimated Closing Working CapitalCapital (such amount, Parent the “Actual Surplus”), then Buyer shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid Sellers, by wire transfer of immediately available fundsfunds to such account or accounts as may be designated by the Sellers to Buyer in writing, together an amount equal to such Actual Surplus in accordance with interest thereon for Section 1.7(f), or (B) if the period commencing on finally determined Closing Working Capital is less than the Estimated Working Capital (such amount, the “Actual Deficiency”), then Buyer and the Sellers shall deliver a written instruction to the Escrow Agent to pay to Buyer from the Working Capital Escrow Fund an amount equal to such Actual Deficiency in accordance with Section 1.7(f) by wire transfer of immediately available funds to such account or accounts as may be designated by Buyer to the Sellers in writing.
(f) In the event that the adjustments contemplated by Section 1.7(e) result in amounts owed by the Sellers to Buyer, then, in such event, such payments shall be satisfied solely by release to Buyer of such amounts from the Working Capital Escrow Fund in accordance with the Closing Date through Escrow Agreement. In the date on which such event that the amounts owed by the Sellers pursuant to Section 1.7(e) exceed the amount of the Working Capital Escrow Fund, no further payment is made calculated at the Prime Rate. Such interest shall be payable at owed by the same time as Sellers. In the payment event that the adjustments contemplated by Section 1.7(d) result in amounts owed by Buyer to which it relates and the Sellers, such amount shall be calculated daily on paid by Buyer to the basis Sellers. Promptly following the final determination of a year of 365 days the Closing Working Capital, and any payments made pursuant to Section 1.7(e), if there are any amounts remaining in the Working Capital Escrow Fund, then Buyer and the actual number Sellers shall deliver a written instruction to the Escrow Agent to pay to the Sellers such remaining amounts by wire transfer of days elapsedimmediately available funds to such account or accounts as may be designated by the Sellers in writing.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less No later than five (5) Business Days prior to the Closing Date, Seller Parent shall deliver to Purchaser Buyer Parent (i) the Estimated Closing Date Net Working Capital Statement, which shall set forth an estimate of the Current Assets and the Current Liabilities, and (ii) a statement (the “Transaction Estimated Closing Date Net Cash Statement”) that contains Parent’s reasonable good faith estimates which shall set forth an estimate of the Net Cash (i) the “Estimated Net Cash” and together with the Estimated Closing Date Net Working Capital (including all Statement, the “Estimated Statements”), in each case as of the components thereof) Closing. The Estimated Statements shall be prepared in accordance with the Calculation Accounting Principles and as otherwise expressly contemplated by this Agreement. Upon completion of the Estimated Statements, Seller Parent shall derive: (i) the estimated Closing Date Working Capital; (ii)the estimated Closing Net Cash; (iii) the Estimated Closing Date Working Capital Shortfall; and (iv) the Estimated Closing Date Working Capital Excess, if any. The amount of cash to be paid at the Closing (the “Estimated Closing Working CapitalCash Consideration Adjustment Amount”), ) shall be equal to the Cash Consideration minus (iiA) the Closing Business Debt (the “Estimated Closing Business Debt”)Date Working Capital Shortfall, if any, plus (iiiB) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”)Date Working Capital Excess, if any, and plus (ivC) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)Net Cash.
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) 90 calendar days after the Closing, Purchaser Buyer Parent shall prepare and deliver to Seller Parent the Closing Date Net Working Capital Statement, which shall set forth the Current Assets and the Current Liabilities as of Closing, and a statement of Closing Net Cash (the “Post-Closing Statement”) of (i) Date Net Cash” and together with the Closing Date Net Working Capital (including all Statement, the “Closing Statements”), in each case as of the components thereof) Closing. The Closing Statements shall be prepared in accordance with the Calculation Accounting Principles, (ii) . Upon completion of the Closing Business DebtStatements, (iii) Buyer Parent shall derive the Closing Transaction Expenses, (iv) Date Working Capital and the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds Closing Net Cash and (viii) the Other DBFO Proceedsprovide such calculations to Seller Parent.
(dc) Seller Parent shall complete its review of the Closing Statements within 60 days after delivery thereof by Buyer Parent and shall notify Purchaser Buyer Parent in writing of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt Statements prior to the end of such statement period (such 30-day period hereinafter referred to as notice, the “Review PeriodSeller’s Objection”). Any such notice of disagreement The Seller’s Objection shall specify, with a reasonably detailed explanation, those items or amounts as to which Seller Parent disagrees (and shall include Seller Parent’s proposed changes to Purchaser’s calculation of the Closing Working CapitalStatements, Closing Business Debt, Change of Control Payments, Date Net Working Capital and Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicableNet Cash). Seller Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Statements that Seller Parent or Purchaserdoes not dispute. If no Seller’s Objection is timely received, as applicable, the Closing Statements shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”)deemed final.
(ed) In the event of If a dispute with respect to the Post-Closing StatementSeller’s Objection is delivered, Purchaser Buyer Parent and Seller Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the partiesParties. If Purchaser Buyer Parent and Seller Parent are unable to reach a resolution to such effect within thirty (30) calendar days after PurchaserBuyer Parent’s receipt of Parentthe Seller’s written notice of disagreementObjection, Purchaser Buyer Parent and Seller Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”)Reporting Accountants. The Accounting Firm Reporting OC\1▇▇▇▇▇▇.10 Accountants shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing StatementStatements, and such report shall be final, binding and conclusive on the parties Parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm Reporting Accountants shall address only those items in dispute. Purchaser Buyer Parent shall bear and pay a percentage of the fees and disbursements of the Accounting Firm Reporting Accountants that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement Statements by Seller Parent that are successful, and Seller Parent shall bear and pay a percentage of the fees an and disbursements of the Accounting Firm Reporting Accountants that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement Statements by Seller Parent that are not successful, in each case as determined by the Accounting FirmReporting Accountants. The Parties, on behalf of themselves and their Controlled Affiliates, agree that the procedure set forth in this Section 3.3 for resolving disputes with respect to adjustments of the Global Purchase Price under this Section 3.3 shall be the sole and exclusive method for resolving any such disputes; provided, however, that this provision shall not prohibit either Party from instituting litigation to enforce any ruling of the Reporting Accountants; provided, further, that the foregoing shall not impair the right to make indemnity claims hereunder.
(fe) No later than five Seller Parent shall provide to Buyer Parent and its accountants reasonable access to the books and records related to the Business and the Transferred Entities for the period prior to the Closing and to any other information, including work papers of its accountants (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that permitted by such accountants), and to any employees during regular business hours and on reasonable advance notice, to the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant extent necessary for Buyer Parent to Section 2.6(d):
(1) If prepare the Closing Working Capital as finally determined Statements. Seller Parent and its accountants shall have reasonable access to relevant information used by Buyer Parent in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If preparing the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than Statements, including the Estimated Closing Working Capital, Purchaser shall pay the amount work papers of such excess to Parent.
its accountants (3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid extent permitted by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedaccountants).
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less No later than five (5) Business Days prior to the Closing Date, Parent Company shall deliver to Purchaser Purchasers a statement (the “Transaction Preliminary Closing Statement”) that contains Parent’s setting forth in reasonable detail a good faith estimates calculation of (i) the Closing Company Estimated Net Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”)Adjusted Amount, (ii) the Closing Business Debt (the “Colombia Estimated Closing Business Debt”)Net Working Capital Adjusted Amount, (iii) the Closing Transaction Expenses (the “China Estimated Closing Transaction Expenses”), Net Working Capital Adjusted Amount and (iv) the Change Bangladesh Estimated Net Working Capital Adjusted Amount (the aggregate amount of Control Payments (i), (ii), (iii), and (iv), positive or negative, the “Estimated Closing Change of Control PaymentsNet Working Capital”). The First Closing Cash Payment shall be increased, dollar-for-dollar, by the amount by which the Estimated Net Working Capital is a positive number and shall be decreased, dollar-for-dollar, by the amount by which the Estimated Net Working Capital is a negative number (v) the Project Contributions (amount by which the First Closing Cash Payment is adjusted, positive or negative, the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO ProceedsNet Working Capital Adjustment Amount”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing As promptly as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreementpracticable, but such transaction has not closed prior to the Closing then in no event later than sixty (B60) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and days following the Closing Date, Parent Purchasers shall cause to be entitled prepared and delivered to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent Sellers a statement (the “Post-Final Closing Statement”) which sets forth in reasonable detail a calculation of (i) the Company Closing Net Working Capital (including all of the components thereof) prepared in accordance with the Calculation PrinciplesAdjusted Amount, (ii) the Colombia Closing Business DebtNet Working Capital Adjusted Amount, (iii) the China Closing Transaction Expenses, Net Working Capital Adjusted Amount and (iv) the Change Bangladesh Closing Net Working Capital Adjusted Amount (the aggregate amount of Control Payments(i), (vii), (iii), and (iv), positive or negative, the “Closing Net Working Capital”). Purchasers shall provide Sellers the work papers used in the preparation of the Final Closing Statement. Except as set forth below, the Final Closing Statement shall be deemed to be and shall be final, binding and conclusive on the parties upon the earlier of (the “Final Resolution Date”): (i) Sellers’ delivery of a written notice to Purchasers of their approval of the Final Closing Statement; (ii) the Project Contributions, failure of Sellers to notify Purchasers in writing of a dispute with the Final Closing Statement within thirty (vi30) days of the delivery of such documents to Sellers; (iii) the Chinese DBFO Proceedsresolution of all disputes, pursuant to Section 1.10(c), by Purchasers and Sellers; and (viiiv) the Dalriada DBFO Proceeds and (viii) resolution of all disputes, pursuant to Section 1.10(c), by the Other DBFO ProceedsIndependent Accounting Firm.
(dc) Parent shall notify Purchaser of its acceptance or Sellers may dispute of any amounts reflected on the Post-Final Closing Statement, within thirty Statement by delivery of a written notice to Purchasers (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review PeriodFinal Closing Statement Dispute Notice”). Any such notice of disagreement shall specify, with If Sellers deliver a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Final Closing Statement delivered pursuant Dispute Notice to Section 2.6(c) Purchasers, Purchasers and Parent or Purchaser, as applicable, Sellers shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith attempt to reconcile their differences the parties’ differences, and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser Purchasers and Parent Sellers are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt the delivery of Parent’s written notice of disagreementthe Final Closing Statement Dispute Notice, Purchaser Purchasers and Parent Sellers shall submit their respective determinations and calculations and the amounts items remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Independent Accounting Firm”). The parties shall cause the Independent Accounting Firm shall be directed toto submit a report to Purchasers and Sellers with a determination regarding the remaining disputed items, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statementmatter, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment conclusive. Any party may be entered in any court having jurisdiction thereofseek enforcement of such report pursuant to Section 11.12(b). The fees, costs and expenses of the Independent Accounting Firm shall address only those be paid by Purchasers and Sellers in the same proportion that the aggregate amount of such remaining disputed items in dispute. Purchaser shall bear and pay a percentage of so submitted to the fees and disbursements of the Independent Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement unsuccessfully disputed by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case such party as finally determined by the Independent Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made Firm bears to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the total amount of such shortfall to Purchaserremaining disputed items.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Sources: Asset Purchase Agreement (Clean Energy Fuels Corp.)
Purchase Price Adjustments. (ai) Not more than fifteen If Meadowlands' audited Adjusted EBITDA, which shall be twelve times the average monthly EBITDA for the eighteen (1518) and not less than five (5) Business Days prior to month trailing period as of the close of business on the Closing Date, Parent shall deliver to Purchaser a statement is more or less than $726,000 (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) the "EBITDA Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”Deviation"), there shall be an adjustment to the Purchase Price made by adding or subtracting (as appropriate) $2.00 for each $1.00 of EBITDA Closing Deviation.
(ii) If Meadowlands' Net Current Assets as disclosed on the Closing Business Debt audited June 30, 2007 balance sheets to be received pursuant to Section 4(c)(i) are more or less than $710,000 (the “Estimated Closing Business Debt”"Net Current Asset Deviation"), there shall be an adjustment to the Purchase Price which shall be made by adding or subtracting (as appropriate) one dollar for every dollar of Net Current Asset Deviation.
(iii) Any Purchase Price credit for a positive Net Current Asset Deviation shall be evidenced by a promissory note made by Somerset in favor of the Closing Transaction Expenses Sellers, payable in twelve (12) equal monthly installments, without interest, commencing on the first day of the thirteenth month following the closing (the “Estimated Closing Transaction Expenses”"NCA Note"), . The form of the NCA Note is attached hereto and made a part hereof as Exhibit C. Somerset's obligations under the NCA Note shall be included in the Corporate Guaranty and Stock Pledge Agreement. A Purchase Price adjustment for a negative Net Current Asset Deviation shall be treated as a reduction in the then outstanding principal balance of the Convertible Note. The credit shall be applied in the inverse order of principal payments.
(iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Any Purchase Price credit for a positive EBITDA Closing Deviation shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased paid by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating Buyer to the DBFO project Sellers in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar single lump sum payment no later than 270 days after the Closing, Purchaser . Such obligation shall prepare and deliver to Parent be evidenced by a statement promissory note made by Somerset in favor of the Sellers (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”"EBITDA Adjustment Note"). Any such notice The form of disagreement shall specify, with EBITDA Adjustment Note is attached hereto and made a reasonably detailed explanation, those items or amounts part hereof as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of Exhibit D. Somerset's obligations under the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent EBITDA Adjustment Note shall be deemed to have agreed with all other items and amounts included in the Post-Corporate Guaranty and Stock Pledge Agreement. Any Purchase Price adjustment for a negative EBITDA Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, Deviation shall be treated as applicable, shall pay within five (5) Business Days a reduction in the then outstanding principal balance of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts Convertible Note. The credit shall be final, binding and conclusive on applied in the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt inverse order of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firmprincipal payments.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Sources: Stock Purchase Agreement (Somerset International Group,inc.)
Purchase Price Adjustments. (a) Not more than fifteen At least three (153) and not less than five (5) Business Days business days prior to the Closing, the Company and the Buyer shall finalize an Estimated Balance Sheet. The Closing DatePayment to be paid at the Closing shall be reduced by the following amounts, Parent shall deliver to Purchaser a statement (if any, as set forth on the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of Estimated Balance Sheet: (i) the Closing Working Capital (including all amount of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), any Indebtedness for Borrowed Money and (ii) the amount of any Non-Ordinary Course Liabilities. The Closing Business Debt (the “Estimated Payment to be paid at Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall also be reduced by the amount of the Estimated Closing Business DebtWorking Capital Deficit, if any.
(4) The Base Purchase Price shall be reduced , or increased by the amount of the Estimated Closing Transaction ExpensesWorking Capital Surplus, if any. Such adjustments shall be referred to herein collectively as the “Estimated Adjustment.” The Estimated Adjustment shall be determined without regard to the limitations set forth in Sections 9.4 and 9.5 hereof.
(5b) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
At least two (62) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills business days prior to the Closing, the Base Purchase Price Parties shall agree upon a flow of funds memorandum which shall set forth all payments required to be reduced made by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and or on behalf of all funds related thereto are transferred to Parent (whether directly or indirectly) prior to Parties at the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but including for each such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any payment an identification of the Target Shares pursuant to a contractual right of first refusalpayor, the Base Purchase Price shall be reduced by an payee, the amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Paymentwire transfer information.”
(c) Within seventyninety (90) days following the Closing Date, the Buyer shall furnish the Sellers’ Representative with a Closing Balance Sheet, which shall set forth the Indebtedness for Borrowed Money, the Non-five (75) calendar days after the Closing, Purchaser shall prepare Ordinary Course Liabilities and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital Capital, and a schedule based upon the Closing Balance Sheet setting forth any adjustments to the Estimated Adjustment (including all collectively, the “Closing Adjustment”). The Sellers’ Representative shall assist the Buyer in the preparation of the components thereof) prepared in accordance with Closing Balance Sheet if reasonably requested by the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO ProceedsBuyer.
(d) Parent The Sellers’ Representative shall have a period of twenty (20) days after receipt of the Closing Balance Sheet to notify Purchaser the Buyer of its acceptance election to accept or dispute reject the Closing Balance Sheet. In the case of a rejection, such notice must contain the reasons for such rejection in reasonable detail and must set forth the amount of the requested adjustment. In the event no notice is received by the Buyer during such twenty (20) day period, the Closing Balance Sheet and any amounts reflected required adjustments resulting therefrom shall be deemed accepted by the Sellers’ Representative and final and binding on the Post-Parties hereto. In the event that the Sellers’ Representative shall timely reject the Closing StatementBalance Sheet, the Buyer and the Sellers’ Representative shall promptly (and in any event within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred following the date upon which the Sellers’ Representative shall reject the Closing Balance Sheet), attempt to as the “Review Period”). Any such notice of disagreement shall specify, with make a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation joint determination of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds Adjustment and Other DBFO Proceeds, as applicable). Parent such determination and any required adjustments resulting therefrom shall be deemed to have agreed with all other items final and amounts included in binding on the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”)Parties hereto.
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser Sellers’ Representative and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts the Buyer shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach agree upon a resolution to such effect joint determination of the Closing Adjustment within thirty one hundred forty (30140) calendar days after Purchaser’s receipt of Parent’s written notice of disagreementfrom the Closing Date, Purchaser then within one hundred fifty (150) days from the Closing Date, the Buyer and Parent the Sellers’ Representative shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Buyer and the Sellers’ Representative shall request that the Accounting Firm render its determination prior to the expiration of two hundred ten (210) days from the Closing Date and such determination and any required adjustments resulting therefrom shall be final and binding on all the Parties hereto. The fees and expenses of the Accounting Firm shall be directed toallocated to be paid by the Buyer and/or the Sellers, within thirty (30) calendar days after submission respectively, based upon the percentage which the portion of the dispute, determine and report contested amount not awarded to each party bears to the parties upon amount actually contested by such remaining disputed amounts with respect to the Post-Closing Statementparty, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital Adjustment as finally determined in accordance with the provisions of this Section 2.6 1.4 is less than in the Estimated Closing Working CapitalBuyer’s favor, Parent shall pay the amount of thereof shall be paid as an adjustment to the Purchase Price by the Sellers to the Buyer by wire transfer in immediately available funds within seven (7) days after such shortfall to Purchaser.
(2) determination. If the Closing Working Capital Adjustment as finally determined in accordance with the provisions of this Section 2.6 1.4 is greater than in the Estimated Closing Working CapitalShareholders’ favor, Purchaser shall pay the amount of such excess thereof shall be paid as an adjustment to Parent.
(3) If the Closing Business Debt as finally determined Purchase Price by the Buyer to the Shareholders by wire transfer in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
immediately available funds within seven (7) days after such determination. If either Party does not so pay to the Change of Control Payments as finally determined other Party by the due date, such amounts shall be deemed Damages under Article IX hereof, which shall be paid in accordance with this Section 2.6 are less than full without regard to the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined limitations set forth in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (Sections 9.4 and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser9.5 hereof.
(g) Any payment to be made as a result The Buyer shall make the work papers and back-up materials used in preparing the Closing Balance Sheet and Closing Adjustment, and the books, records, and financial staff of an adjustment the Company, available to the Base Purchase Price pursuant to this Section 2.6 shall be paid Sellers’ Representative and his accountants and other representatives at reasonable times and upon reasonable notice at any time during (i) the review by wire transfer the Sellers’ Representative of immediately available funds, together with interest thereon for the period commencing on the Closing Date through Balance Sheet and Closing Adjustment for purposes of such review and (ii) the date on which resolution by the Parties of any objections thereto for purposes of such payment is made calculated at resolution; provided, that no such access shall unreasonably interfere with the Prime Rate. Such interest shall be payable at operations or business of the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedBuyer or its Affiliates or their respective Representatives.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen (15) A. On the basis of the representations and not less than five (5) Business Days prior warranties herein contained, subject to the Closing Dateterms and conditions set forth herein, Parent shall deliver eBenefits agrees to Purchaser a statement purchase the Assets from Santeon for the aggregate purchase price of Five Hundred Thousand Dollars ($500,000) in cash (the “Transaction StatementBase Purchase Price”) that contains Parent’s reasonable good faith estimates of (i) the Closing ), less any Final Working Capital Adjustment (including all as defined below). All payments to be made under this Agreement shall be by wire transfer of the components thereof) prepared immediately available funds in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).instructions attached hereto as Exhibit A.
(b) B. The Base Purchase Price shall be subject to adjustment at preliminarily adjusted as of the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, Date by reducing or increasing the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount Net Working Capital Number as of the Estimated Closing Transaction ExpensesDate. On the Closing Date, if any.
(5) The Base Purchase Price the Parties shall be reduced by calculate the amount Net Working Capital as of the Estimated Closing Change of Control PaymentsDate, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO AssetsClosing Date Net Working Capital Number”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to . If the Closing then (B) Date Net Working Capital Number is negative, eBenefits shall pay to Santeon in cash on the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by Closing Date an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price minus the negative Closing Date Net Working Capital Number. If the Closing Date Net Working Capital Number is postive, eBenefits shall be reduced by pay to Santeon in cash on the Closing Date an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased plus the positive Closing Date Net Working Capital Number. The adjusted purchase price paid by an amount equal eBenefits to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and Santeon on the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared Date in accordance with the Calculation Principles, (ii) above provisions shall be referred to hereinafter as the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds“Preliminary Adjusted Purchase Price.”
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within C. Within thirty (30) calendar days after Parent’s receipt of such following the Closing, eBenefits shall deliver to Santeon a final statement (such 30-day period hereinafter referred to setting forth the Net Working Capital Number as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days Date based on a final review of the conclusion Assumed Accounts Receivable as of the Review Period Closing Date and the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), Assumed Liabilities as applicable, upon of the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable Date (the “Undisputed AmountsFinal Net Working Capital Number”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts which final statement shall be final, binding and conclusive on signed by an authorized officer of eBenefits. Santeon shall cooperate as reasonably requested in connection with eBenefits' preparation of the partiesFinal Net Working Capital Number. If Purchaser and Parent are unable to reach a resolution to such effect within Santeon shall have thirty (30) calendar days after Purchaser’s receipt delivery of Parent’s written notice of disagreement, Purchaser the Final Net Working Capital Number to review the Final Net Working Capital Number (the “Santeon Review Period”) and Parent shall submit the amounts remaining in dispute for resolution have full access to the New York, New York office relevant books and records of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made eBenefits to the extent that they relate to the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Final Net Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to PurchaserNumber.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen At least two (15) and not less than five (52) Business Days prior to the Closing Date, Parent Seller shall prepare and deliver to Purchaser Buyer a statement (the “Transaction Statement”) that contains Parent’s reasonable setting forth its good faith estimates estimate of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), which statement shall contain an estimated balance sheet (iiprepared in accordance with GAAP (other than as provided in Appendix II) consistently applied in accordance with the Statement of Accounting Principles) for the Business as of 12:01 a.m. PT on the Closing Business Debt Date (without giving effect to the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”transactions contemplated herein) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Seller’s calculation of Estimated Closing Working Capital Capital. If the Closing Adjustment is greater than the Reference Amounta positive number, the Base Initial Purchase Price shall be increased by such excess.
(2) the amount of the Closing Adjustment. If the Estimated Closing Working Capital Adjustment is less than the Reference Amounta negative number, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Initial Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if anyAdjustment.
(4i) The Base Purchase Price Within sixty (60) days after the Closing Date, Buyer shall be reduced by prepare and deliver to Seller a statement setting forth its calculation of Closing Working Capital, which statement shall contain the amount balance sheet (prepared in accordance with GAAP (other than as provided in Appendix II) consistently applied in accordance with the Statement of Accounting Principles) for the Business as of 12:01 a.m. PT on the Closing Date (without giving effect to the transactions contemplated herein) (the “Closing Working Capital Statement”). If the Drop Dead Date is extended beyond the Initial Drop Dead Date, then the Estimated Closing Transaction Expenses, Working Capital and Closing Working Capital shall be calculated under this Section 2.06 as if anythe Closing Date occurred on the Initial Drop Date.
(5i) The Base Purchase Price After receipt of the Closing Working Capital Statement, Seller shall have thirty (30) days (the “Review Period”) to review the Closing Working Capital Statement. From and after the Closing until the expiration of the Review Period, Seller and Seller’s Representatives shall have full access to Buyer’s books and records, employees, and work papers prepared by Buyer and/or Buyer’s Representatives to the extent that they relate to the Closing Working Capital Statement and to such historical financial information (to the extent in Buyer’s possession) relating to the Closing Working Capital Statement as Seller may reasonably request for the purpose of reviewing the Closing Working Capital Statement, provided, that such access shall be reduced by permitted upon reasonable advance notice during normal business hours in a manner that does not interfere with the amount normal business operations of the Estimated Closing Change of Control Payments, if anyBuyer.
(6ii) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”A) are sold back to the City of ▇▇▇▇▇▇▇ Hills On or prior to the Closingexpiration of the Review Period, Seller may deliver to Buyer a written statement setting forth Seller’s objections to the Base Purchase Price Closing Working Capital Statement (an “Objection Statement”). After delivery of an Objection Statement, Buyer and Seller shall negotiate in good faith to resolve such objections and if they are unable to reach an agreement within twenty (20) days after delivery of the Objection Statement, then any amounts remaining in dispute shall be reduced submitted for resolution to the Independent Accountant. The Independent Accountant shall act as an expert, and not as an arbitrator, and shall decide only the specific items under dispute by Eighteen Million Four Hundred Thousand Dollars the Parties, which decision shall be within the range of values assigned to each such item in the Closing Working Capital Statement and the Objection Statement, respectively.
($18,400,000); provided that A) The Independent Accountant shall be directed to issue a final and binding decision within thirty (30) days after submission of the Objection Statement to the Independent Accountant and such transaction is closed decision shall be final and all funds related thereto are transferred binding on the Parties. If Seller does not deliver an Objection Statement to Parent (whether directly Buyer on or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreementexpiration of the Review Period, but such transaction has not closed prior to the Closing then Working Capital Statement shall be final and binding on the Parties.
(B) The fees and expenses of the Base Purchase Price Independent Accountant shall be reduced allocated between Buyer and Seller based upon the percentage which the portion of the contested amount not awarded to each Party bears to the amount actually contested by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive such Party, as determined by the proceeds from the transactionIndependent Accountant.
(7iii) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price The post-closing adjustment shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly Closing Working Capital as agreed or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted determined pursuant to this Section 2.6(b), is 2.06 minus the “Estimated Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement Working Capital (the “Post-Closing StatementAdjustment”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on ). If the Post-Closing StatementAdjustment is a positive number, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, Buyer shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect Seller an amount equal to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the partiesAdjustment. If Purchaser and Parent are unable the Post-Closing Adjustment is a negative number, Seller shall pay to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect Buyer an amount equal to the Post-Closing StatementAdjustment.
(iv) Except as otherwise provided herein, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage payment of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent Adjustment shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(fA) No later than five be due (5x) within ten (10) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, earlier of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If acceptance of the applicable Closing Working Capital as finally determined in accordance with this Section 2.6 Statement by Buyer or, if no Objection Statement is less than delivered, the Estimated Closing Working Capitalexpiration of the Review Period, Parent shall pay the amount of such shortfall to Purchaser.
or (2y) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capitalif an Objection Statement was delivered, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
then within ten (10) If Business Days after the Project Contributions as finally determined resolution described in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
clause (11ii) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
above; and (12B) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available fundsfunds to such account as is directed by Buyer or Seller, together with interest thereon for as the period commencing on the Closing Date through the date on which such payment is case may be.
(v) Any payments made calculated at the Prime Rate. Such interest pursuant to this Section 2.06 shall be payable at treated as an adjustment to the same time as Purchase Price by the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedParties for Tax purposes, unless otherwise required by Law.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than five (5) Business Days prior to the Closing Date, Parent shall deliver to Purchaser a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Closing Net Working Capital is less than the Estimated Closing Net Working Capital, then the Purchase Price shall be adjusted downward by the amount of such difference (the “Net Working Capital Decrease”) and, within five Business Days following the Purchase Price Adjustment Date, the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser, from the amount of the Adjustment Holdback available for the payment of the Net Working Capital Decrease as of the date of such payment (in this Section 2.6(1), the “remaining amount”), the amount of the Net Working Capital Decrease. If the Net Working Capital Decrease is greater than the remaining amount of the Adjustment Holdback, then, within five Business Days following the Purchase Price Adjustment Date: (A) the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser the remaining amount of the Adjustment Holdback and (B) the amount of the Net Working Capital Decrease in excess of the remaining amount of the Adjustment Holdback shall be paid by the Vendor to the Purchaser as the Purchaser may direct, acting reasonably. If the Closing Net Working Capital is greater than the Reference AmountEstimated Closing Net Working Capital, then the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced adjusted upward by the amount of such difference (the Estimated Closing “Net Working Capital Increase”) and, within five Business Debt, if any.
(4) The Base Days following the Purchase Price Adjustment Date: (A) the Purchaser and the Vendor shall be reduced by jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Vendor the Adjustment Holdback and (B) the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by Net Working Capital Increase in excess of the amount of the Estimated Closing Change of Control Payments, if any.
(6) If Adjustment Holdback shall be paid by the Business’s land improvements relating Purchaser to the DBFO project Vendor’s Counsel, in the City of Beverly Hillstrust, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back for distribution to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to PurchaserVendor.
(2) If the Closing Working Capital as finally determined Cash is less than the Estimated Closing Cash, then the Purchase Price shall be adjusted downward by the amount of such difference (the “Cash Decrease”) and, within five Business Days following the Purchase Price Adjustment Date, the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser, from the amount of the Adjustment Holdback available for the payment of the Cash Decrease as of the date of such payment (in this Section 2.6 2.6(2), the “remaining amount”), the amount of the Cash Decrease. If the Cash Decrease is greater than the remaining amount of the Adjustment Holdback, then, within five Business Days following the Purchase Price Adjustment Date: (A) the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser the remaining amount of the Adjustment Holdback and (B) the amount of the Cash Decrease in excess of the remaining amount of the Adjustment Holdback shall be paid by the Vendor to the Purchaser as the Purchaser may direct, acting reasonably. If the Closing Cash is greater than the Estimated Closing Working CapitalCash, Purchaser then the Purchase Price shall pay be adjusted upward by the amount of such excess difference (the “Cash Increase”) and the amount of the Cash Increase shall be paid by the Purchaser to Parentthe Vendor’s Counsel, in trust, within five Business Days following the Purchase Price Adjustment Date, for distribution to the Vendor.
(3) If the Closing Indebtedness is greater than the Estimated Closing Indebtedness, then the Purchase Price shall be adjusted downward by the amount of such difference (the “Indebtedness Increase”) and, within five Business Debt Days following the Purchase Price Adjustment Date, the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser, from the amount of the Adjustment Holdback available for the payment of the Indebtedness Increase as finally determined of the date of such payment (in this Section 2.6(3), the “remaining amount”), the amount of the Indebtedness Increase. If the Indebtedness Increase is greater than the remaining amount of the Adjustment Holdback, then, within five Business Days following the Purchase Price Adjustment Date: (A) the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser the remaining amount of the Adjustment Holdback and (B) the amount of the Indebtedness Increase in excess of the remaining amount of the Adjustment Holdback shall be paid by the Vendor to the Purchaser as the Purchaser may direct, acting reasonably. If the Closing Indebtedness is less than the Estimated Closing Indebtedness, then the Purchase Price shall be adjusted upward by the amount of such difference (the “Indebtedness Decrease”) and the amount of the Indebtedness Decrease shall be paid by the Purchaser to the Vendor’s Counsel, in trust, within five Business Days following the Purchase Price Adjustment Date, for distribution to the Vendor.
(4) To the extent that any Transaction Expenses are not paid at the Closing in accordance with Section 2.3(2)(b), then the Purchaser may deliver written notice to the Vendor setting out the amount of all such unpaid Transaction Expenses (provided that such notice must be delivered by the Purchaser to the Vendor on or before the Purchase Price Adjustment Date) and, within five Business Days following the date of written notice by the Purchaser to the Vendor in accordance with this Section 2.6(4), the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser, from the amount of the Adjustment Holdback available for the payment of the unpaid Transaction Expenses as of the date of such payment (in this Section 2.6(4), the “remaining amount”), the amount of all such unpaid Transaction Expenses. If the amount of all such unpaid Transaction Expenses is greater than the remaining amount of the Adjustment Holdback, then, within five Business Days following the date of written notice by the Purchaser to the Vendor in accordance with this Section 2.6(4): (i) the Purchaser and the Vendor shall jointly deliver a joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with the Escrow Agreement instructing the Escrow Agent to release to the Purchaser the remaining amount of the Adjustment Holdback and (ii) the amount of all such unpaid Transaction Expenses in excess of the remaining amount of the Adjustment Holdback shall be paid by the Vendor to the Purchaser or as the Purchaser may direct, acting reasonably. If the Purchaser and the Vendor disagree with respect to the amount of the unpaid Transaction Expenses and are unable to reach an agreement within five Business Days following the date of written notice by the Purchaser to the Vendor in accordance with this Section 2.6(4), then the Purchaser may, but shall not be required to, refer the matter to the Closing Statements Dispute Auditor and Sections 2.5(3) to 2.5(5) shall apply mutatis mutandis to the resolution of any such determination of the unpaid Transaction Expenses. Within five Business Days following the date of agreement of the Purchaser and the Vendor or the decision of the Closing Statements Dispute Auditor, as the case may be, the Purchaser and the Vendor shall jointly deliver the applicable joint, irrevocable and unconditional written direction to the Escrow Agent in accordance with this Section 2.6(4). The Purchase Price shall be adjusted downward by the amount of any Transaction Expenses paid pursuant to this Section 2.6(4) to the extent such Transaction Expenses have not previously been deducted from the Purchase Price.
(5) The determination and adjustment of the Purchase Price in accordance with this Section 2.6 is less than will not limit or affect any other rights or causes of action that the Parties may have with respect to the representations, warranties, covenants and indemnities in its favour contained in this Agreement. The Parties agree that there shall be no double counting to the detriment of any of the Parties in respect of the calculation of any part of Estimated Closing Net Working Capital, the Closing Net Working Capital, the Estimated Closing Business DebtCash, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than Cash, the Estimated Closing Business DebtIndebtedness, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Indebtedness, the Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parentand/or any Claims.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Purchase Price Adjustments. (a) 4.3.1. Not more than fifteen (15) and not less than five (5) Business Days days prior to the Closing, Seller shall have prepared and delivered to Purchaser (i) a good faith estimate of the balance sheet of the GlobalTrak Business as of the close of business on the Closing Date, Parent shall deliver to Purchaser prepared in accordance with GAAP, except for the absence of footnotes (such statement, the “Initial Closing Statement”), and (ii) a statement certificate of Seller, (A) certifying that the Initial Closing Statement was prepared on the basis described in clause (i) above and (B) containing Seller’s estimate of the Net Working Capital as of the Closing Date (the “Transaction StatementEstimated Net Working Capital”). Commencing with Seller’s delivery of the Estimated Net Working Capital to Purchaser, Purchaser shall have reasonable access to the books and records and personnel of Seller and the opportunity to consult with Seller for purposes of confirming or disputing the Estimated Net Working Capital. If Purchaser shall disagree, in good faith, with any item set forth in the Estimated Net Working Capital or used to determine the Estimated Net Working Capital, then Purchaser and Seller shall work, in good faith, to reach agreement on such disputed items and the amounts as agreed to by Purchaser and Seller shall constitute the Estimated Net Working Capital. Notwithstanding the foregoing, Purchaser’s agreement with the Estimated Net Working Capital (or any item set forth therein or used to determine the Estimated Net Working Capital) that contains Parent’s reasonable good faith estimates shall not foreclose, prevent, limit or preclude any rights or remedy of Purchaser or Seller set forth in this Agreement.
4.3.2. If (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Net Working Capital is less than the Reference AmountTarget Net Working Capital, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price Cash Amount shall be reduced by an amount equal to such deficiency or (ii) the dollar amount allocated to such Estimated Net Working Capital is greater than the Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreementNet Working Capital, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price Cash Amount shall be increased by an amount equal to such excess. Such adjustment shall be calculated based on the Estimated Project ContributionsInitial Closing Statement and the certificate delivered pursuant to Section 4.3.1 above. The adjustment made at Closing pursuant to this Section 4.3.2 shall be subject to subsequent adjustment as provided in Sections 4.3.3., if any4.3.4 and 4.3.5.
4.3.3. Within ninety (990) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and days after the Closing Date, Parent Purchaser shall be entitled cause its accountants to receive (directly or indirectly) Other DBFO Proceeds in an amount equal prepare, at Purchaser’s expense, and deliver to Seller a statement of the Permitted Proceeds. The Base Purchase Price shall be reduced by Net Working Capital as of the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount close of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and business on the Closing Date. The Base Purchase Price, as adjusted pursuant to this Date prepared in the manner described in Section 2.6(b), is 4.3.1 (the “Final Closing PaymentStatement”).”
(c) Within seventy-five (75) calendar days after 4.3.4. When Purchaser delivers the ClosingFinal Closing Statement, Purchaser shall prepare and also deliver to Parent Seller a statement (the “Post-Closing Statement”) of certificate (i) certifying that the Final Closing Working Capital (including all of the components thereof) Statement was prepared in accordance with the Calculation Principlesprocedures set forth in Section 4.3.3 above, and (ii) containing Purchaser’s calculations, based on the Final Closing Statement (the “Purchaser’s Proposed Calculations”), of the Net Working Capital as of the Closing Business DebtDate (the “Closing Date Net Working Capital”). Within sixty (60) days after receipt of the Final Closing Statement and the accompanying certificate, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent Seller shall notify Purchaser of its acceptance agreement or dispute disagreement, as the case may be, with the Final Closing Statement and the accuracy of any amounts reflected on of Purchaser’s Proposed Calculations. If Seller disputes any aspect of the Post-Final Closing Statement or the amount of any of Purchaser’s Proposed Calculations, then Seller shall have the right to direct its independent accountants, at Seller’s expense, to review and test the Final Closing Statement. Seller’s accountants shall complete their review and test of the Final Closing Statement within thirty (30) days after the date Seller disputes any of Purchaser’s Proposed Calculations. If Seller and its independent accountants, after such review and test, still disagree with Purchaser’s Proposed Calculations, Seller shall submit its proposed alternative calculations (the “Seller’s Proposed Calculations”) of Closing Date Net Working Capital to Purchaser in writing within forty-five (45) days after the date upon which Seller shall have first notified Purchaser that it disputes any of Purchaser’s Proposed Calculations. If Purchaser does not accept Seller’s Proposed Calculations within ten (10) days after its receipt thereof, then within ten (10) days after Purchaser’s rejection of (or failure to timely accept) Seller’s Proposed Calculations, Seller and Purchaser shall select a mutually acceptable and nationally recognized independent accounting firm, other than Seller’s independent accountants and Purchaser’s independent accountants (such firm, the “Independent Accounting Firm”), to resolve the remaining disputed items (the “Remaining Disputed Items”), within thirty (30) calendar days after Parentthe date of Purchaser’s receipt rejection of such statement (such 30or failure to timely accept) Seller’s Proposed Calculations of the Remaining Disputed Items, by conducting its own review and test of the Final Closing Statement and thereafter selecting either Purchaser’s Proposed Calculations of the Remaining Disputed Items or Seller’s Proposed Calculations of the Remaining Disputed Items or an amount in between the two. Purchaser and Seller agree that they shall be bound by the determination of the Remaining Disputed Items by the Independent Accounting Firm. The fees and expenses of the Independent Accounting Firm shall be paid jointly, one-day period hereinafter referred half by Purchaser and one-half by Seller.
4.3.5. Upon the determination pursuant to as Section 4.3.4 of the Final Closing Statement and the Closing Date Net Working Capital, the Closing Cash Amount shall be recalculated (the “Review PeriodFinal Adjustment”). Any such notice of disagreement shall specify, ) in accordance with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation Section 4.3.4 using the amount of the Closing Date Net Working Capital, . If the Closing Business Debt, Change of Control Payments, Cash Amount as so calculated is less than the Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered Cash Amount initially determined pursuant to Section 2.6(c) and Parent 4.3.1, Seller shall promptly pay to Purchaser an aggregate amount equal to such difference by wire transfer or Purchaser, as applicable, shall pay delivery of other immediately available US funds within five (5) Business Days of business days after the conclusion of date on which the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed Final Closing Statement is finally determined pursuant to Section 2.6(f)4.3.4. If the Closing Cash Amount as so calculated is more than the Closing Cash Amount initially determined pursuant to Section 4.3.1, as applicablePurchaser shall pay to Seller an amount equal to such excess by wire transfer or delivery of other immediately available US funds within five (5) business days after the date on which the Final Closing Statement is finally determined pursuant to Section 4.3.4.
4.3.6. Purchaser and Seller shall make good faith efforts to comply with the timing and response requirement set forth in this Section 4.3, upon but, in the final resolution absence of bad faith, neither party shall be deemed to be in breach of this Agreement, or to have waived its rights under this Section 4.3, on the basis of technical violations of timing or response requirements.
4.3.7. At the earliest practical date, the Purchaser will make the work papers and back-up materials used in preparing the Final Closing Statement and determining the Closing Date Net Working Capital, Closing Business Debtand the books, Change records and financial staff of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect Purchaser available to the Post-Closing StatementSeller and its accountants and other representatives (provided if the work papers are of an independent accounting firm, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall availability will be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution subject to such effect within thirty firm’s customary reasonable requirements for access) at reasonable times and upon reasonable notice at any time during (30i) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to review by the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission Seller of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Final Closing Statement, and such report shall be final, binding and conclusive on (ii) the resolution by the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in of any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firmobjections thereto.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more As promptly as practicable (but not later than fifteen sixty (1560) and not less than five (5days) Business Days prior to following the Closing Date, Parent shall deliver to Purchaser a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of Buyer shall:
(i) the Closing Working Capital (including all of the components thereof) prepared prepare, in accordance with the Calculation Accounting Principles and in a manner consistent with the illustration and adjustment methodologies set forth in Exhibit C (which sets forth the Closing Date Working Capital as if the Closing occurred on the Balance Sheet Date), a consolidated balance sheet of the Acquired Companies as of the close of business on the Business Day immediately preceding the Closing Date (the “Estimated Preliminary Closing Date Balance Sheet”); and
(ii) deliver to Dover US the Preliminary Closing Date Balance Sheet and a certificate setting forth in reasonable detail (A) Buyer’s calculation of (1) Working CapitalCapital as of the close of business on the Business Day immediately preceding the Closing Date (the “Preliminary Working Capital Determination”), (ii2) Cash and Cash Equivalents as of the close of business on the Business Day immediately preceding the Closing Business Date (the “Preliminary Cash Determination”), (3) Closing Date Debt (the “Estimated Preliminary Debt Determination”) and (4) Closing Business Debt”), (iii) the Closing Date Transaction Expenses (the “Estimated Closing Preliminary Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO ProceedsExpenses Determination”) and (viiiB) based on such calculations, a calculation of the Other DBFO Proceeds Purchase Price (the “Estimated Other DBFO ProceedsPreliminary Purchase Price Determination” and, together with the Preliminary Closing Date Balance Sheet, the Preliminary Working Capital Determination, the Preliminary Cash Determination, the Preliminary Debt Determination and the Preliminary Transaction Expenses Determination, the “Preliminary Closing Statement”); provided, however, that until such time as the calculation of the amounts shown on the Closing Date Balance Sheet and the Closing Date Working Capital, Closing Date Cash, Closing Date Debt, Closing Date Transaction Expenses and Purchase Price determinations are final and binding on the parties pursuant to this Section 2.3, Dover US and its accountants shall be permitted to discuss with Buyer and its accountants the Preliminary Closing Statement and shall be provided copies of, and have access upon reasonable notice at all reasonable times during normal business hours to, subject to Dover US’s entrance into a customary confidentiality agreement with Buyer’s accountants (if required thereby), the work papers and supporting records of Buyer and its accountants so as to allow Dover US and its accountants to become informed concerning all matters relating to the preparation of the Preliminary Closing Statement and the accounting procedures, methodologies, tests and approaches used in connection therewith.
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount Following receipt of the Estimated Preliminary Closing Business DebtStatement, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction Dover US has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated objections to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that document as prepared by Buyer, Dover US shall deliver written notice to Buyer of such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventydispute within forty-five (7545) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt date of such statement (such 30-day period hereinafter referred to as the “Review Period”)receipt thereof. Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event that Dover US does not notify Buyer of a dispute with respect to the PostPreliminary Closing Statement within such 45-day period, the Preliminary Closing StatementDate Balance Sheet, Purchaser Preliminary Working Capital Determination, Preliminary Cash Determination, Preliminary Debt Determination, Preliminary Transaction Expenses Determination and Parent Preliminary Purchase Price Determination set forth therein shall be final and binding as the “Closing Date Balance Sheet,” “Closing Date Working Capital,” “Closing Date Cash”, “Closing Date Debt”, “Closing Date Transaction Expenses” and “Purchase Price”, respectively, for purposes of this Agreement. In the event of notice of such dispute, Dover US and Buyer shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the partiesresolve such dispute. If Purchaser Buyer and Parent are unable Dover US, notwithstanding such good faith effort, fail to reach resolve such dispute within fifteen (15) days after Dover US provides written notice to Buyer of Dover US’s objections, then Buyer and Dover US shall engage the Auditors to conduct a resolution review of Dover US’s objections to the Preliminary Closing Date Balance Sheet, Preliminary Working Capital Determination, Preliminary Cash Determination, Preliminary Debt Determination, Preliminary Transaction Expenses Determination and/or Preliminary Purchase Price Determination, as the case may be, as promptly as reasonably practicable (such effect within review to be completed not later than thirty (30) calendar days after Purchaser’s receipt the Auditors are requested to conduct such review) and, upon completion of Parent’s such review, to deliver written notice to Dover US and Buyer setting forth the Auditors’ resolution of disagreement, Purchaser such objections and Parent the resulting adjustments shall submit the amounts remaining in dispute be deemed finally determined for resolution to the New York, New York office purposes of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”)this Section 2.3. The Accounting Firm Auditors’ role in completing such review shall be directed to, within thirty (30) calendar days after submission of limited to resolving such objections and determining the dispute, determine and report correct calculations to the parties upon such remaining disputed amounts be used with respect to only the Post-disputed portions of the Preliminary Closing Statement. In resolving such objections, the Auditors shall apply the provisions of this Agreement concerning determination of the amounts set forth in the Preliminary Closing Statement and such report the decision of the Auditors shall be final, binding and conclusive solely based on (i) whether such item objected to was prepared in accordance with the parties hereto and shall constitute an arbitral award upon which guidelines set forth in this Agreement concerning determination of the amounts set forth therein or (ii) whether the item objected to contains a judgment may be entered in any court having jurisdiction thereofmathematical or clerical error. The Accounting Firm shall address only those items in dispute. Purchaser shall bear Preliminary Closing Date Balance Sheet, Preliminary Working Capital Determination, Preliminary Cash Determination, Preliminary Debt Determination, Preliminary Transaction Expenses Determination and pay a percentage of the fees Preliminary Purchase Price Determination as agreed by Buyer and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case Dover US or as determined by the Accounting Firm.
(f) No later than five (5) Business Days after Auditors, as the case may be, shall be final resolution of and binding as the “Closing Date Balance Sheet,” “Closing Date Working Capital,” “Closing Date Cash”, “Closing Business Date Debt”, Change of Control Payments, “Closing Date Transaction Expenses” and “Purchase Price”, Project Contributionsrespectively, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with for purposes of this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to PurchaserAgreement.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than five (5) Business Days prior to Within 75 days after the Closing Date, Parent shall deliver may object to Purchaser the calculation of the Closing Cash, Closing Indebtedness, Closing Net Working Capital, and/or the Company Transaction Expenses included in the Consideration Schedule delivered by the Company on the Closing Date by delivering to the Holder Representative a statement notice (the “Transaction StatementParent Objection Notice”) that contains setting forth Parent’s reasonable good faith estimates determinations of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”)Cash, (ii) the Closing Business Debt (the “Estimated Closing Business Debt”)Indebtedness, (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”)Net Working Capital, and/or (iv) the Change of Control Payments (Company Transaction Expenses, in each case together with supporting documentation, information and calculations. Any matters in the “Estimated Closing Change of Control Payments”)Consideration Schedule not expressly objected to in the Parent Objection Notice shall be deemed to have been irrevocably accepted by Parent. If Parent fails to timely provide the Parent Objection Notice, (v) then the Project Contributions (amounts set forth in the “Estimated Project Contributions”), (vi) Consideration Schedule shall be final and binding on the Chinese DBFO Proceeds (parties hereto and the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)Indemnifying Holders.
(b) The Base Purchase Price shall be subject Holder Representative may object to adjustment at the calculation of any or all of the Closing as follows:
(1) If Cash, Closing Indebtedness, Closing Net Working Capital, and/or Company Transaction Expenses set forth in the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased Parent Objection Notice by providing written notice of such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount objection to Parent within 20 Business Days after Parent’s delivery of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California Parent Objection Notice (the “▇▇▇▇▇▇▇ Hills DBFO AssetsHolder Representatives’ Objection Notice”) are sold back ), together with supporting documentation, information and calculations. Any matters in the Parent Objection Notice not expressly objected to in the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price Holder Representatives’ Objection Notice shall be reduced deemed to have been irrevocably accepted by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any Holder Representative on behalf of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transactionIndemnifying Holders.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after If the ClosingHolder Representative fails to timely provide the Holder Representatives’ Objection Notice, Purchaser then the amounts set forth in the Parent Objection Notice shall prepare be final and deliver binding on the parties hereto and the Indemnifying Holders. If the Holder Representative timely provides the Holder Representatives’ Objection Notice, then Parent and the Holder Representative shall confer in good faith for a period of up to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all 20 Business Days following Parent’s timely receipt of the components thereof) prepared Holder Representatives’ Objection Notice in accordance with an attempt to resolve the Calculation Principlesobjections set forth in the Holder Representatives’ Objection Notice, (ii) and any resolution by them shall be in writing and shall be final and binding on the Closing Business Debt, (iii) parties hereto and the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO ProceedsIndemnifying Holders.
(d) If, after the 20 Business Day period set forth in Section 2.11(c) Parent and the Holder Representative cannot resolve any objection set forth in the Holder Representatives’ Objection Notice, then Parent and the Holder Representative shall notify Purchaser engage the Reviewing Accountant to review only the objections in the Holder Representatives’ Objection Notice that are still disputed by Parent and the Holder Representative. The Reviewing Accountant will make its determination as an expert and not an arbitrator. After such review and a review of the Company’s relevant books and records, the Reviewing Accountant shall promptly (and in any event within 60 days following its acceptance or dispute of any amounts reflected on engagement) determine the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt resolution of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specifyremaining objections, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent determination shall be deemed to have agreed with all other items final and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and the Indemnifying Holders, and the Reviewing Accountant shall constitute an arbitral award upon which provide Parent and the Holder Representative with a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage calculation of the fees Closing Cash, Closing Indebtedness, Company Transaction Expenses and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Net Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6such determination. In making its determination, Purchaser the Reviewing Accountant shall not assign any value with respect to a disputed amount that is greater than the highest value for such amount claimed by either the Holder Representative or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent Parent or that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay lowest value for such amount claimed by either the amount of such shortfall to PurchaserHolder Representative or Parent.
(2e) If the Closing Working Capital as finally determined Adjusted Transaction Value calculated in accordance with the amounts finally determined pursuant to this Section 2.6 2.11 is less than the Adjusted Transaction Value calculated by the Company in the Consideration Schedule delivered on the Closing Date (the absolute value of such difference, the “Negative Adjustment Amount”), then:
(i) Parent and the Holder Representative shall provide written instruction to the Escrow Agent in accordance with the Escrow Agreement and cause the Escrow Agent to distribute to Parent out of the Adjustment Escrow Fund, an amount equal to the lesser of (x) the Negative Adjustment Amount and (y) the amount held in the Adjustment Escrow Fund; and
(ii) if such Negative Adjustment Amount is less than the Adjustment Escrow Amount, after giving effect to Section 2.11(e)(i), Parent and the Holder Representative shall provide written instruction to the Escrow Agent in accordance with the Escrow Agreement and cause the Escrow Agent to distribute the remainder of the Adjustment Escrow Fund to the Paying Agent for further payment by the Paying Agent to the Indemnifying Holders, in accordance with the Pro Rata Share of such Indemnifying Holders.
(f) If the Adjusted Transaction Value calculated in accordance with the amounts finally determined pursuant to this Section 2.11 is greater than the Estimated Adjusted Transaction Value calculated by the Company in the Consideration Schedule delivered on the Closing Working Capital, Purchaser shall pay Date (the amount absolute value of such excess to Parent.difference, the “Positive Adjustment Amount”), then:
(3i) If Parent shall promptly, and in any event within 10 Business Days, deposit or cause to be deposited an amount in cash equal to the Closing Business Debt as finally determined Positive Adjustment Amount with the Paying Agent for further payment by the Paying Agent to the Indemnifying Holders in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount Pro Rata Share of such shortfall to Parent.Indemnifying Holder; and
(4ii) If Parent and the Closing Business Debt as finally determined Holder Representative shall provide written instruction to the Escrow Agent in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay Escrow Agreement to cause the Escrow Agent to deposit the amount of such excess held in the Adjustment Escrow Fund with the Paying Agent for further payment by the Paying Agent to Purchaser.
(5) If the Closing Transaction Expenses as finally determined Indemnifying Holders, in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount Pro Rata Share of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to PurchaserIndemnifying Holders.
(g) Any payment to Notwithstanding Section 2.11(e) and Section 2.11(g), if the Positive Adjustment Amount or the Negative Adjustment Amount is less than $100,000, then no additional payments will be made as a result of an adjustment under this Section 2.11, and Parent and the Holder Representative shall provide written instruction to the Base Purchase Price pursuant Escrow Agent in accordance with the Escrow Agreement to this Section 2.6 cause the Escrow Agent to deposit the amount held in the Adjustment Escrow Fund with the Paying Agent for further payment by the Paying Agent to the Indemnifying Holders, in accordance with the Pro Rata Share of such Indemnifying Holders.
(h) The fees, costs and expenses of the Reviewing Accountant shall be paid by wire transfer the Holder Representative (on behalf of immediately available fundsthe Indemnifying Holders) and Parent on an inversely proportional basis, together with interest thereon based upon the relative portions of the items and matters in dispute that have been submitted to the Reviewing Accountant for resolution that ultimately are awarded in favor of the period commencing on Indemnifying Holders and Parent, as the Closing Date through case may be, (e.g., if $100,000 is in dispute, and of that amount the date on which such payment is Reviewing Accountant awards $75,000 in favor of Parent and $25,000 in favor of the Indemnifying Holders, then Parent will be responsible for 25%, and the Indemnifying Holders for 75%, of the costs and fees of the Reviewing Accountant).
(i) Any payments made calculated at the Prime Rate. Such interest pursuant to Section 2.10 or this Section 2.11 shall be payable at treated as adjustments to the same time as Adjusted Transaction Value for all Tax purposes to the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedmaximum extent permitted under applicable Laws.
Appears in 1 contract
Sources: Merger Agreement (Arteris, Inc.)
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than For the purpose of determining the Estimated Purchase Price, at least five (5) Business Days prior to the Closing Date, Parent Newpark shall deliver cause to Purchaser be prepared and delivered to Buyer the Estimated Balance Sheet and a statement (the “Transaction Estimated Closing Statement”) that contains Parent’s reasonable setting forth a good faith estimates estimate of (i) the Closing Net Working Capital (including all as of the components thereof) prepared in accordance with the Calculation Principles Effective Time (the “Estimated Closing Net Working Capital”) and the Estimated Closing Indebtedness, each as shown on the Estimated Balance Sheet, and the components and calculation thereof, determined in accordance with Section 2.4(f). The Estimated Balance Sheet and the Estimated Closing Statement shall be subject to review by Buyer, (ii) and Newpark and Buyer shall cooperate in good faith to resolve any dispute regarding the Estimated Balance Sheet or the Estimated Closing Statement prior to the Closing; provided, however, that if any item of dispute regarding the Estimated Balance Sheet or the Estimated Closing Statement and the calculations set forth therein is not resolved by agreement in writing between Newpark and Buyer by the second Business Day prior to the Closing Business Debt (Date, then Newpark’s estimate of such disputed item, together with any resolved disputed items, shall be deemed final solely for purposes of determining the “Estimated Net Working Capital and the Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)Indebtedness.
(b) The Base Estimated Closing Statement shall be used to determine the Estimated Purchase Price shall be subject to adjustment at by adjusting the Closing Base Amount as follows:
(1i) If To the extent the Estimated Closing Net Working Capital is greater than the Reference Target Net Working Capital Amount (such difference being herein referred to as the “Estimated Net Working Capital Excess Amount”), the Base Purchase Price Amount shall be increased by such excess.
(2) If the amount of the Estimated Closing Net Working Capital Excess Amount. To the extent the Estimated Net Working Capital is less than the Reference Target Net Working Capital Amount (such difference being herein referred to as the “Estimated Net Working Capital Deficiency Amount”), the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price Amount shall be reduced by the amount of the Estimated Closing Business Debt, if anyNet Working Capital Deficiency Amount.
(4ii) The Base Amount shall be decreased by an amount equal to the Estimated Closing Indebtedness.
(c) Subject to Section 5.1(f), within ninety (90) calendar days following the Closing Date, Buyer shall cause to be prepared and delivered to Newpark the Final Balance Sheet and a statement (the “Final Closing Statement”) setting forth the actual Net Working Capital as of the Effective Time (the “Final Net Working Capital”) and the Final Closing Indebtedness, each as shown on the Final Balance Sheet, and the components and calculation thereof, determined in accordance with Section 2.4(f). The Final Closing Statement shall be used to determine the Final Purchase Price Price, by adjusting the Base Amount (without application of any adjustments to the Base Amount pursuant to Section 2.4(b)) as follows:
(i) To the extent the Final Net Working Capital is greater than the Target Net Working Capital Amount (such difference being herein referred to as the “Final Net Working Capital Excess Amount”), the Base Amount shall be increased by the amount of the Final Net Working Capital Excess Amount. To the extent the Final Net Working Capital is less than the Target Net Working Capital Amount (such difference being herein referred to as the “Final Net Working Capital Deficiency Amount”), the Base Amount shall be reduced by the amount of the Estimated Closing Transaction Expenses, if anyFinal Net Working Capital Deficiency Amount.
(5ii) The Base Purchase Price Amount shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced decreased by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Final Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transactionIndebtedness.
(8) The Base d) If the Final Closing Statement reflects a difference between the Estimated Purchase Price and the Final Purchase Price, Newpark shall have thirty (30) calendar days following the receipt of the Final Balance Sheet and the Final Closing Statement to review the components and calculation of the Final Net Working Capital and the Final Closing Indebtedness. During such thirty (30) calendar day period, Buyer shall provide Newpark and its legal and accounting advisors with reasonable access, during normal business hours, to all financial information used in the preparation of the Final Balance Sheet and the calculation of the Final Net Working Capital and the Final Closing Indebtedness. If Newpark objects to any portion of the Final Balance Sheet or Final Closing Statement and Buyer’s calculation of the amounts set forth therein, Newpark may send notice to Buyer specifying the reasons for Newpark’s objections (the “Objection Notice”) no later than 5:00 p.m., Houston, Texas time, on the final day of such thirty (30) calendar day period. The failure of Newpark to send the Objection Notice within such thirty (30) calendar day period shall be increased deemed to be an acceptance by an amount equal Newpark of the Final Balance Sheet, the Final Closing Statement and the amounts set forth therein. If Buyer and Newpark agree on all matters in the Final Balance Sheet and the Final Closing Statement, or if Newpark otherwise fails to timely object to such matters, then:
(i) if the Final Purchase Price is greater than the Estimated Purchase Price, then such difference shall be paid by Buyer to Newpark (by wire transfer of immediately available funds to the account designated in writing by Newpark) within three (3) Business Days of Newpark’s acceptance, or deemed acceptance, of the Final Closing Statement; and
(ii) if the Final Purchase Price is less than the Estimated Project ContributionsPurchase Price, if anythen such difference shall be paid by Newpark to Buyer (by wire transfer of immediately available funds to the account designated in writing by Buyer) within three (3) Business Days of Newpark’s acceptance, or deemed acceptance, of the Final Closing Statement. The amount of the difference between the Final Purchase Price and the Estimated Purchase Price (whether a positive or negative number) is referred to herein as the “Final Adjustment Amount”.
(9e) The Base Purchase Price In the event Newpark has provided a timely Objection Notice to Buyer, and Newpark and Buyer are unable to agree on the calculations set forth in the Final Closing Statement within fifteen (15) calendar days after receipt by Buyer of such Objection Notice, such dispute between Newpark and Buyer with respect to such calculations and the Final Adjustment Amount shall be reduced resolved by an amount equal a recognized accounting firm reasonably acceptable to Newpark and Buyer and who shall not be Buyer’s, Lariat’s or Newpark’s accounting firm (the Estimated Chinese DBFO Proceeds, if any.
(10) “Accounting Arbitrator”). The Base Purchase Price Accounting Arbitrator shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
engaged within fifteen (11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (7515) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all expiration of the components thereoffifteen (15) prepared day period following delivery of the Objection Notice. If either Buyer or Newpark fails to take action with respect to any matter referred to in accordance with the Calculation Principlesprevious sentences of this Section 2.4(e), (ii) then if Buyer has failed to take action, Newpark, or if Newpark has failed to take action, Buyer, may engage the Accounting Arbitrator on behalf of all Parties. The Accounting Arbitrator shall make such review and examination of the relevant facts and documents as the Accounting Arbitrator deems appropriate, and an independent determination of Final Net Working Capital, Final Closing Business DebtIndebtedness and the Final Adjustment Amount, (iii) and shall permit Buyer and Newpark to make a written presentation of their respective determinations of such amounts, provided, however, that the Closing Transaction ExpensesAccounting Arbitrator shall require all facts, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds documents and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, written presentations from Buyer and Newpark to be completely submitted within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”)Accounting Arbitrator has been engaged. Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within Within thirty (30) calendar days after Purchaserthe date required for submission of such facts, documents and written presentations, and regardless of whether such submissions shall have been made, the Accounting Arbitrator shall resolve all disputed items in writing and shall prepare and deliver its decision, which shall be final and binding upon the Parties without further recourse or collateral attack and, as to each disputed matter, which shall accept (i) either Buyer’s receipt or Newpark’s position on each disputed matter set forth in the Objection Notice or (ii) the stipulated position of Parent’s Buyer and Newpark with respect to any matter which prior to such stipulation was disputed. Any required payments by Buyer to Newpark, on the one hand, or by Newpark to Buyer, on the other hand, based on such determination shall be made within three (3) Business Days of the final resolution of such dispute by the Parties, or the Accounting Arbitrator, as applicable. All fees and expenses of the Accounting Arbitrator shall be paid by the Party who is the least successful in such process, which shall be determined by comparing (A) the position asserted by each Party on all disputed matters taken together, with each matter weighted by its financial significance, to (B) the final decision of the Accounting Arbitrator on all disputed matters taken together. For purposes of the preceding sentence, the “disputed matters” shall be all matters raised in the Objection Notice, and the “position asserted” by Buyer and Newpark shall be determined by reference to their respective written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution presentations submitted to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed Accounting Arbitrator pursuant to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”this Section 2.4(e). The Accounting Firm Arbitrator shall be directed to, within thirty (30) calendar days after submission not preside over any hearing of the Parties nor permit the Parties to make any oral arguments. Buyer and Newpark shall pay their respective advisor’s fees, charges and expenses incurred by such Person in connection with the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution For purposes of Closing this Agreement, “Net Working Capital” shall (i) be calculated as of the Effective Time on a combined basis for the Transferred Entities and (ii) mean the amount equal to the current assets of the Transferred Entities minus the current liabilities (including accrued property taxes and, Closing Business Debtto the extent not payable by Newpark, Change employee liabilities relating to periods prior to the Closing) of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, the Transferred Entities computed in accordance with this Section 2.6GAAP on a basis consistent with the most recent Annual Financial Statement, Purchaser or Parent, as applicable, except that (x) current liabilities shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
include: (1A) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between outstanding checks of the Transferred Entities as of the Effective Date Time, and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount (B) an accrual for 2014 employee bonuses in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between not less than $100,000, and (y) the Effective Date current assets and the Closing Date)current liabilities shall not include: (A) intercompany receivables and payables between or among the Transferred Entities, Parent shall pay Newpark Entities and their respective Affiliates; (B) any bank or other funded Indebtedness of Newpark; (C) any liability for income or franchise taxes payable by any of the amount Transferred Entities that are actually paid or payable, when due, by Newpark or one of such excess its Affiliates other than the Transferred Entities; (D) cash and cash equivalents; and (E) accrued compensation or bonuses to Purchaser.
(gemployees listed on Schedule 3.12(e)(ix) Any payment to that will be made as a result of an adjustment to the Base Purchase Price pursuant payable by Newpark on or after Closing. Exhibit A to this Section 2.6 shall be paid by wire transfer Agreement sets forth an illustrative calculation of immediately available fundsthe Net Working Capital as of December 31, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed2013.
Appears in 1 contract
Sources: Membership Interests Purchase Agreement (Newpark Resources Inc)
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than At least five (5) Business Days prior to the Closing Date, Parent Seller shall deliver an estimate prepared by Seller of the Purchase Price (the “Estimated Purchase Price”), calculated as:
(i) the Base Purchase Price, plus
(ii) an estimate of the amount of Cash held in the accounts of the Acquired Entities as of the Closing Date (“Estimated Cash”), minus
(iii) an estimate of the amount of Indebtedness of the Acquired Entities as of the Closing Date (“Estimated Debt”), plus
(iv) the difference (positive or negative value) obtained by subtracting Target Working Capital from the Estimated Working Capital; minus
(v) the difference (positive or negative value) obtained by subtracting an estimate of the amount of the costs and expenditures associated with the Growth Capital Expansion Projects actually paid as of the Closing Date (“Estimated Cap Ex”) from $29,300,000. For clarity, the Purchase Price includes an amount equal to Target Working Capital. The Estimated Working Capital (and Closing Working Capital) shall be calculated in a manner consistent with the manner in which the Target Working Capital was calculated in accordance with Schedule 3.2(a).
(b) Within 90 days after the Closing Date, Seller shall prepare and deliver to Purchaser a statement (the “Transaction Closing Statement”) that contains Parent’s reasonable good faith estimates ), certified by an officer of Seller, setting forth (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with Cariflex Business as of the Calculation Principles close of business on the Closing Date (the “Estimated Closing Working Capital”), (ii) the amount of Cash held in the accounts of the Acquired Entities as of the Closing Business Debt Date (the “Estimated Closing Business DebtCash”), (iii) the amount of Indebtedness of the Acquired Entities as of the Closing Transaction Expenses Date (the “Estimated Closing Transaction ExpensesDebt”), and (iv) the Change amount of Control Payments the costs and expenditures associated with the Growth Capital Expansion Projects as of the Closing Date (“Closing Cap Ex”); provided that in the case of (iv), to the extent final information is available as of the date on which the Closing Statement is prepared and delivered. A physical inventory of the Finished Inventory, the IR Inventory, the Raw Materials, the WIP Inventory and the Spare Parts shall be conducted by Seller for the purpose of preparing the Closing Working Capital. For purposes of calculating the Estimated Working Capital and Closing Working Capital, the Finished Inventory, the Raw Materials, the WIP Inventory, the IR Inventory and the Spare Parts will be valued at the book value for such inventory, raw materials and spare parts.
(c) During the 30-day period following delivery of the Closing Statement to Purchaser, Seller shall provide Purchaser with reasonable access to the books and records and personnel of Seller necessary to enable Purchaser to evaluate the accuracy of the Closing Statement. If Purchaser disagrees with the determination of any component of the Closing Statement calculations, then Purchaser shall notify Seller in writing (an “Objection Notice”) of such disagreement within 30 days after delivery of the Closing Statement, which Objection Notice shall describe the nature of any such disagreement in reasonable detail. If Purchaser does not deliver an Objection Notice to Seller within such 30-day period, then the Closing Statement shall be conclusive and binding upon the Parties.
(d) If Purchaser and Seller are unable to resolve all disagreements properly identified by Purchaser pursuant to Section 3.2(c) within 30 days after delivery to Seller of the Objection Notice, then such disagreements shall be resolved by an independent accounting firm to be selected by the mutual agreement by the Parties (the “Estimated Closing Change of Control PaymentsIndependent Accounting Firm”), (vand such determination shall be final and binding on the Parties. If Seller and Purchaser cannot mutually agree on the identity of the Independent Accounting Firm, then Seller and Purchaser shall each submit to the other Party’s independent auditor the name of an internationally-recognized accounting firm that does not currently act as its independent auditor, and the Independent Accounting Firm shall be selected by lot from these two firms. Any fees and expenses relating to the engagement of the Independent Accounting Firm in respect of its services pursuant to this Section 3.2(d) shall be paid 50% by Seller and 50% by Purchaser. The Independent Accounting Firm shall be instructed to use commercially reasonable efforts to perform its services within 20 days after submission of the Project Contributions (the “Estimated Project Contributions”)dispute to it and, (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”)in any case, (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)as promptly as practicable after such submission.
(be) The Base Purchase Price shall be subject to adjustment at the Closing as followsdeemed:
(i) increased by: (1) If the Estimated amount by which Closing Working Capital is greater than the Reference Amountexceeds Target Working Capital, the Base Purchase Price shall be increased by such excess.
(2) If the amount by which Closing Cash exceeds Estimated Cash, (3) the amount by which Estimated Debt exceeds Closing Debt, and (4) the amount by which Closing Cap Ex exceeds $29,300,000; and
(ii) reduced by: (1) the amount by which Closing Working Capital is less than Target Working Capital, (2) the Reference Amountamount by which Closing Cash is less than Estimated Cash, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the by which Estimated Debt is less than Closing Business Debt, if any.
Debt and (4) the amount by which Closing Cap Ex is less than $29,300,000. The Base Purchase Price shall be as so increased or reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b3.2(e), is referred to in this Agreement as the “Closing Payment.Adjusted Purchase Price”
(c) Within seventy-five (75) calendar days after . If the ClosingAdjusted Purchase Price is higher than the Estimated Purchase Price, Purchaser shall prepare and deliver pay the difference to Parent a statement (Seller. If the “Post-Closing Statement”) of (i) Adjusted Purchase Price is lower than the Closing Working Capital (including all of Estimated Purchase Price, Seller shall pay the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes difference to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with Any amounts due under this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts 3.2 (other than pursuant to Section 2.6(d):
(13.2(g)) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by the owing Party to the other Party by wire transfer of immediately available funds, together with interest thereon for funds to an account or accounts designated by the period commencing receiving Party on or before the fifth Business Day after the Closing Statement becomes final and binding on the Closing Date through Parties.
(g) With respect to the Growth Capital Expansion Projects:
(i) Within 60 days after the completion of the Growth Capital Expansion Projects, the completing Party shall deliver to the other Party a completion statement setting forth, among others, details of itemized payments (the “Completion Statement”), certified by an officer of the completing Party. Each Party shall have the right to audit the books and records of the other Party regarding the costs and expenditures of the Growth Capital Expansion Projects on reasonable notice and during normal business hours, and at the auditing Party’s sole cost, provided that such audit is initiated on or before the 30th day after delivery of the Completion Statement. The Parties will discuss and work together in good faith to agree on the aggregate amount of costs and expenditures by Seller and Purchaser (and their Affiliates) with respect to the Growth Capital Expansion Projects. If the Parties are unable to agree on this amount within 30 days after the later of completion of the audit, if applicable, or delivery of the Completion Statement, the Parties shall resolve any remaining disagreement in accordance with the procedures set forth in Section 3.2(d).
(ii) If the aggregate amount of the costs and expenditures associated with the Growth Capital Expansion Projects as determined in accordance with Section 3.2(g)(i) is greater than or less than $37,600,000, the Parties will share on a 50/50 basis any such additional costs or savings, as the case may be. Any amounts due from one Party to the other Party under this Section 3.2(g)(ii) will be paid to the owing Party by wire transfer of immediately available funds to an account designed by the owed Party on the later of (1) the fifth Business Day after the final determination thereof and (2) the date on which contemplated by Section 3.2(f).
(iii) Each Party agrees that it will make a good faith commercially reasonable effort to progress the Growth Capital Expansion Projects in accordance with (1) the estimated costs and timeline set forth in Schedule 3.2(g) and (2) the original design, and will not make modifications except as required by Law or as approved in writing by the other Party (such payment is made calculated at approval not to be unreasonably withheld, conditioned or delayed).
(iv) Notwithstanding the Prime Rate. Such interest shall be payable at foregoing, if there are any material deviations in the same time as costs or timeline outlined within Schedule 3.2(g) (1) prior to the payment to which it relates Effective Time, Seller will provide Purchaser written notice of such deviations and shall be calculated daily on (2) after the basis Effective Time, Purchaser will provide Seller written notice of a year of 365 days and the actual number of days elapsedsuch deviations.
Appears in 1 contract
Sources: Asset and Stock Purchase and Sale Agreement (Kraton Corp)
Purchase Price Adjustments. (a) Not more than fifteen At least two (15) and not less than five (52) Business Days prior to the Closing Date, Parent the Company shall deliver to Purchaser Buyer a certificate signed by an officer of the Company, accompanied by reasonable supporting documentation, setting forth in reasonable detail the Company’s good faith estimate of: (i) the Working Capital as of the close of business on the day immediately preceding on the Closing Date (the “Working Capital Estimate”), as well as the calculation of any resulting estimated Working Capital Overage or estimated Working Capital Underage, and (ii) (x) the Cash, (y) the Indebtedness of the Company and the Company Subsidiaries as of the close of business on the day immediately preceding the Closing Date, the amount of such Indebtedness that is to be paid and discharged on the Closing Date, and the Bridge Loan Payoff Amount, and (z) the Transaction Expenses and the Transaction Expenses Payoff Amount, as well as the calculation of the estimated Initial Equity Purchase Price.
(b) Within ninety (90) days after the Closing Date, the Company shall prepare in good faith and deliver to Seller a combined balance sheet which shall set forth its calculation of the assets and liabilities of the Company and the Company Subsidiaries as of the close of business on the day immediately preceding the Closing Date (the “Closing Date Balance Sheet”) and a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Working Capital derived from the Closing Date Balance Sheet (the “Closing Working Capital Capital”) and (including all ii) (x) the Cash, (y) the Indebtedness of the components Company and the Company Subsidiaries as of the close of business on the day immediately preceding the Closing Date, the amount of such Indebtedness that was paid and discharged on the Closing Date and the Bridge Loan Payoff Amount, and (z) the Transaction Expenses and the Transaction Expenses Payoff Amount, as well as its calculation of the Initial Equity Purchase Price derived therefrom and from the Closing Date Balance Sheet (the “Equity Purchase Price”), together with reasonable supporting calculations and documentation. Seller’s independent accountants may participate in the preparation of the Closing Date Balance Sheet and the Statement; provided, however, that Seller acknowledges that the Company shall have the primary responsibility and authority for preparing the Closing Date Balance Sheet and the Statement.
(c) During the forty-five (45) day period following Seller’s receipt of the Closing Date Balance Sheet and the Statement, Seller and its independent accountants shall be given access at all reasonable times to the personnel, properties, books and records of the Company and the Company Subsidiaries and shall be permitted to review the working papers relating to the Closing Date Balance Sheet and the Statement. The Closing Date Balance Sheet and the Statement shall become final and binding upon the parties on the 45th day following delivery thereof, unless Seller gives written notice of its disagreement with the Closing Date Balance Sheet and the Statement (a “Notice of Disagreement”) prepared to Buyer prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so asserted. If a Notice of Disagreement is received by Buyer in a timely manner, then the Closing Date Balance Sheet and the Statement (as revised in accordance with this sentence) shall become final and binding upon Seller and Buyer on the earlier of (A) the date Seller and Buyer resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement and (B) the date any disputed matters are finally resolved in writing by the Accounting Firm. During the forty-five (45) day period following the delivery of a Notice of Disagreement (the “Resolution Period”), Seller and Buyer shall seek in good faith to resolve any differences that they may have with respect to the matters specified in the Notice of Disagreement. If at the end of the Resolution Period any matters properly included in the Notice of Disagreement remain in dispute, Seller and Buyer shall each submit to PricewaterhouseCoopers or, if such firm is unable or unwilling to act, such other nationally recognized independent public accounting firm as shall be agreed upon by the parties hereto in writing (in any such case, the “Accounting Firm”) for resolution, in accordance with the Calculation Principlesstandards set forth in this Section 2.5, (ii) any and all such matters, in the Closing Business Debt, (iii) form of a written brief delivered to the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, Accounting Firm within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation end of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”)Resolution Period. The Accounting Firm shall be directed instructed to, and Seller and Buyer shall use reasonable efforts to cause the Accounting Firm to, render a written decision resolving the matters submitted to the Accounting Firm within thirty (30) calendar days after submission of the dispute, determine receipt of such submission. The scope of the disputes to be resolved by the Accounting Firm shall be limited to whether the Closing Working Capital and report the Equity Purchase Price were calculated in accordance with the standards set forth in this Section 2.5 (including the Balance Sheet Principles) and the definitions set forth in this Agreement and whether there were errors in the Closing Date Balance Sheet and the Statement and the Accounting Firm is not to make any determination as to whether the Balance Sheet Principles are appropriate or as to whether the WC Target is correct. The Accounting Firm’s decision shall be conclusive and binding upon the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive based solely on the parties hereto written submissions by Seller and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereofBuyer and their respective representatives and not by independent review. The Accounting Firm shall address only those items in disputedispute and may not assign a value greater than the greatest value for such item claimed by either party or smaller than the smallest value for such item claimed by either party. Purchaser 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 4.6 or any other representation or warranty in this Agreement or as to compliance by the Company with any of its covenants or agreements in this Agreement (other than in this Section 2.5). 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 cost of any arbitration (including the fees and expenses of the Accounting Firm and reasonable attorney fees and expenses of the parties) pursuant to this Section 2.5 shall bear be borne by Buyer and pay a percentage Seller 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. For the avoidance of doubt and solely as an illustration of the methodology set forth in the preceding sentence, if (i) the Notice of Disagreement delivered by Seller assigns values to the disputed matters such that the Closing Working Capital set forth in the Statement would be increased by $1,000,000, (ii) Buyer maintains that the Closing Working Capital set forth in the Statement is correct and (iii) the Accounting Firm’s final resolution of the disputed items in accordance with this Section 2.5(c) is that the Closing Working Capital is increased from the amount set forth in the Statement by $600,000 (i.e., sixty percent (60%) of the amount in dispute is resolved in favor of Seller), then Seller shall be responsible for 40% of such cost of arbitration and Buyer shall be responsible for 60% of such cost of arbitration. Except as provided in the two preceding sentences, the fees and disbursements of the Accounting Firm that is equal to the percentage Buyer’s independent auditors incurred in connection with their review of the total dollar amount Closing Date Balance Sheet, the Statement and any Notice of changes proposed to the Post-Closing Statement Disagreement shall be borne by Parent that are successfulBuyer, and Parent shall bear the fees and pay a percentage disbursements of Seller’s independent accountants incurred in connection with their review of the fees an disbursements Closing Date Balance Sheet, the Statement and any Notice of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement Disagreement shall be borne by Parent that are not successful, in each case as determined by the Accounting FirmSeller.
(fd) No later than five Within ten (510) Business Days after the determination of the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO ProceedsDate Balance Sheet and the Statement: (i) if the Equity Purchase Price, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts adjusted pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital2.5(c), Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working CapitalInitial Equity Purchase Price, Purchaser Buyer shall pay pay, or cause the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated Company to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11)Seller, if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together cash in an amount equal to such excess, and (ii) if the Equity Purchase Price, as adjusted pursuant to Section 2.5(c), is less than the Initial Equity Purchase Price, Seller shall pay to Buyer, by wire transfer of immediately available funds, cash in an amount equal to such deficit. If the Equity Purchase Price is equal to the Initial Equity Purchase Price, neither Buyer nor Seller shall be required to make any payment. Any amounts due under this Section 2.5(d) which are not paid when due shall bear interest from such due date until paid at the prime rate as published in The Wall Street Journal, Eastern Edition on such due date.
(e) The term “Working Capital” means Current Assets minus Current Liabilities as of the close of business on the day immediately preceding the Closing Date. The terms “Current Assets” and “Current Liabilities” mean, respectively, the total combined current assets and total combined current liabilities of the Company and the Company Subsidiaries covered by the line items set forth in the Form of Working Capital Statement attached as Exhibit G (the “Form of Working Capital Statement”), calculated in accordance with interest thereon for the period commencing Balance Sheet Principles; provided that: (i) “Current Assets” shall not include: (x) any Cash, (y) any Tax assets or Tax receivables or (z) any intercompany assets or receivables as between Seller and its Subsidiaries (other than the Company and the Company Subsidiaries) on the one hand, and the Company and the Company Subsidiaries, on the other hand, and (ii) “Current Liabilities” shall not include: (u) any Bridge Loan Costs; (v) any Tax liabilities or Taxes payable (other than the employer’s portion of applicable payroll taxes described in the definition of Employee Payment); (w) any Transaction Expenses; (x) any Indebtedness; (y) any amounts payable (whether or not accrued) in respect of any Employee Payment or 2014 annual incentive compensation; provided, however, that (1) Employee Payments shall be included in “Current Liabilities” to the extent they exceed $22,000,000 in the aggregate and (2) if any Employee Payment is made by the Company or its Affiliates prior to the Closing, then the amount so paid shall be treated as a “Current Asset” (less the value of any available U.S. federal Tax deduction associated with such payment, assuming a tax rate of 35%), or (z) any intercompany liabilities or payables as between Seller and its Subsidiaries (other than the Company and the Company Subsidiaries) on the one hand, and the Company and the Company Subsidiaries, on the other hand. Except as set forth in this Section 2.5, the Closing Working Capital and its components, Current Assets and Current Liabilities, shall be calculated and the Closing Date through Balance Sheet and the date on which such payment is made calculated at the Prime Rate. Such interest Statement shall be prepared in accordance with GAAP, without change in or introduction of new or different reserves, accruals, accounting methods, policies, practices, principles, procedures, classifications, judgments, estimation methodologies or line items from those reflected in the audited combined balance sheet of the Company Business as of December 31, 2012 included in the Company Financial Statements (the “Balance Sheet Principles”); provided, however, that, in the event that the Balance Sheet Principles conflict with GAAP, GAAP shall prevail. All intercompany payables and intercompany receivables that are payable at the same time or receivable, as the payment to which it relates case may be, between the Company and the Company Subsidiaries, on the one hand, and Seller and its Affiliates (other than the Company and the Company Subsidiaries), on the other hand, shall be calculated daily cancelled as of the close of business on the basis of a year of 365 days day immediately preceding the Closing Date, other than the Transaction and the actual number of days elapsedManagement Fee Agreement.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen (15) and not No less than five two (52) Business Days prior to the Closing Date, Parent shall deliver prepare and deliver, or cause to Purchaser be prepared and delivered, to the Buyer, a statement that contains a calculation of the Estimated Closing Date Net Working Capital of the Company as of 11:59 p.m. (Nashville, Tennessee time) on the Closing Date (the “Transaction Preliminary Adjustment Statement”). Not later than one (1) Business Day prior to the Closing, Buyer shall identify any adjustments that contains Parent’s reasonable it believes are required to be made to the Preliminary Adjustment Statement, which Sellers will consider in good faith estimates of (i) faith, and Parent will re-deliver to Buyer the Preliminary Adjustment Statement with such revisions to which Sellers agree. If the Estimated Closing Date Net Working Capital is less than the Target Closing Date Net Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (such deficiency, the “Estimated Closing Working CapitalCapital Deficit”), (ii) then the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing adjusted as follows:
(1) set forth in Section 2.2. If the Estimated Closing Date Net Working Capital is greater than the Reference AmountTarget Closing Date Net Working Capital (such excess, the Base “Estimated Working Capital Surplus”), then the Purchase Price shall be increased by such excessadjusted as set forth in Section 2.2 .
(2b) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and As soon as reasonably practicable after the Closing Date, Parent shall be entitled to receive but not later than sixty (directly or indirectly60) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and days after the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser Buyer shall prepare and deliver to Parent a statement Sellers an unaudited consolidated balance sheet of the Business as of 11:59 p.m. (Nashville, Tennessee time) on the Closing Date (the “Post-Final Closing StatementDate Balance Sheet”) and a reasonably detailed statement (together with the Final Closing Date Balance Sheet, collectively, the “Adjustment Statements”) setting forth Buyer’s calculations of Closing Date Cash (ithe “Final Closing Date Cash”) the and Closing Date Net Working Capital (including all of the components thereof) “Final Closing Date Net Working Capital”). The Adjustment Statements shall be accompanied by reasonable supporting details and work papers. The Final Closing Date Balance Sheet shall be prepared in accordance with the Calculation Principlesmethodologies, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds standards and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included principles applied in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than preparing the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to PurchaserDate Balance Sheet.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Sources: Purchase Agreement (Genesco Inc)
Purchase Price Adjustments. (ai) Not As promptly as practicable following the Closing Date, but in no event more than fifteen sixty (1560) and not less than five (5) Business Days prior to days following the Closing Date, Parent shall will prepare and deliver to Purchaser the Stockholder Representative a closing statement (the “Transaction Closing Statement”) that contains Parent’s reasonable good faith estimates which shall include (A) a balance sheet of (i) the Company together with its Subsidiaries as of 12:01 a.m. on the Closing Working Capital (including all of the components thereof) Date prepared in accordance with GAAP applied on a basis consistent with the Calculation Principles basis used in the preparation of the Most Recent Balance Sheet (the “Estimated Closing Balance Sheet”), (B) the Cash (the “Closing Cash”) and (B) the Working Capital (the “Closing Working Capital”), (ii) in each case along with reasonable supporting detail to evidence the calculation of such amount. Notwithstanding any other provision in this Agreement to the contrary, the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) Cash and the Closing Transaction Expenses (Working Capital shall be the “Estimated applicable amounts set forth on the Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”Statement finally determined pursuant to this Section 2(i).
(bii) The Base Purchase Price Unless within thirty (30) days after delivery of the Closing Statement, the Stockholder Representative shall deliver to Parent a notice setting forth, in reasonable detail, any good faith dispute as to the determination of the Closing Cash or the Closing Working Capital (a “Dispute Notice”), the determination of the Closing Cash and the Closing Working Capital shall be subject to adjustment at deemed accepted and shall be final and binding. During such thirty (30) day period, Parent and its Subsidiaries, including the Surviving Corporation, shall cooperate with the Stockholder Representative and its representatives in connection with their review of the Closing Statement, including by furnishing such information as followsmay be reasonably requested by the Stockholder Representative. Failure to deliver a Dispute Notice within thirty (30) days after delivery of the Closing Statement shall have the effect of deeming the Closing Statement acceptable and final and binding.
(iii) If a Dispute Notice is delivered by the Stockholder Representative, the Parties shall endeavor in good faith to resolve by mutual agreement all matters in the Dispute Notice for a period of thirty (30) days after Parent’s receipt thereof. If the Parties are unable to resolve any matter in the Dispute Notice within such thirty (30) day period, Parent and the Stockholder Representative shall engage McGladrey (or another nationally recognized, independent accounting firm mutually acceptable to the Parties, the “Reviewing Accountant”). The fees and expenses of the Reviewing Accountant will be paid 50% by the Parent and 50% by the Company, with the Company’s fees being paid out of the Reserve Fund.
(iv) Parent and the Stockholder Representative shall instruct the Reviewing Accountant to resolve the disputed matters, and only the disputed matters, as promptly as practicable. The Parties shall cooperate with each other and the Reviewing Accountant in connection with the matters set forth in this Section 2(i), including by furnishing such information as may be reasonably requested by the Reviewing Accountant or any other Party. Parent and the Stockholder Representative shall afford each other the opportunity to participate in all communications with the Reviewing Accountant. The determination of the Reviewing Accountant with respect to any adjustments to the Closing Cash and/or the Closing Working Capital based upon disputed matters raised in the Dispute Notice, and the Closing Cash and/or the Closing Working Capital, as so adjusted, shall be final and binding, absent manifest error.
(v) Within three (3) Business Days following (A) the thirty (30) day period specified in Section 2(i)(ii) if the Stockholder Representative has not delivered a Dispute Notice to Parent or (B) the final determination of the Closing Cash and/or the Closing Working Capital in accordance with this Section 2(i), as applicable, the following adjustments shall be made to the amount of the Merger Consideration:
(1) If if (x) the Estimated Working Capital was greater than the Target Maximum Working Capital and (y) the Closing Working Capital is greater than the Reference AmountEstimated Working Capital, then Parent shall pay to the Base Purchase Price Exchange Agent (for further distribution to the applicable Company Securityholders) the amount by which the Closing Working Capital is greater than the Estimated Working Capital (for illustration purposes only, if the Estimated Working Capital was $6,000,000 and the Closing Working Capital is $8,000,000, then Parent shall be increased by such excess.pay $2,000,000 to the Exchange Agent);
(2) If if (x) the Estimated Working Capital was greater than the Target Maximum Working Capital and (y) the Closing Working Capital is less than the Reference AmountEstimated Working Capital but greater than the Target Minimum Working Capital, then the Base Purchase Price Stockholder Representative and Parent shall be reduced jointly instruct the Escrow Agent to pay to Parent from the Escrow Fund the amount by such deficit.which (I) the greater of the Closing Working Capital or the Target Maximum Working Capital is less than (II) the Estimated Working Capital (for illustration purposes only, if the Estimated Working Capital was $6,000,000 and the Closing Working Capital is $4,750,000, then the Escrow Agent shall distribute $1,000,000 to Parent);
(3) The Base Purchase Price shall be reduced by the amount of if (x) the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of Working Capital was greater than the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares Maximum Working Capital and (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (iy) the Closing Working Capital is less than the Target Minimum Working Capital, then the Stockholder Representative and Parent shall jointly instruct the Escrow Agent to pay to Parent from the Escrow Fund (including all I) the amount by which the Closing Working Capital is less than the Target Minimum Working Capital plus (II) the amount by which the Estimated Working Capital was greater than the Target Maximum Working Capital (for illustration purposes only, if the Estimated Working Capital was $6,000,000 and the Closing Working Capital is $4,000,000, then the Escrow Agent shall distribute $1,500,000 to Parent);
(4) if (x) the Estimated Working Capital was less than the Target Maximum Working Capital but greater than the Target Minimum Working Capital and (y) the Closing Working Capital is greater than the Target Maximum Working Capital, then Parent shall pay to the Exchange Agent (for further distribution to the applicable Company Securityholders) the amount by which the Closing Working Capital is greater than the Target Maximum Working Capital (for illustration purposes only, if the Estimated Working Capital was $4,750,000 and the Closing Working Capital is $6,000,000, then the Escrow Agent shall distribute $1,000,000 to Parent);
(5) if (x) the Estimated Working Capital was less than the Target Maximum Working Capital but greater than the Target Minimum Working Capital and (y) the Closing Working Capital is less than the Target Maximum Working Capital but greater than the Target Minimum Working Capital, then no adjustment shall be made to the amount of Merger Consideration (for illustration purposes only, if the Estimated Working Capital was $4,750,000 and the Closing Working Capital is $4,950,000, then no adjustment shall be made);
(6) if (x) the Estimated Working Capital was less than the Target Maximum Working Capital but greater than the Target Minimum Working Capital and (y) the Closing Working Capital is less than the Target Minimum Working Capital, then the Stockholder Representative and Parent shall jointly instruct the Escrow Agent to pay to Parent from the Escrow Fund the amount by which the Closing Working Capital is less than the Target Minimum Working Capital (for illustration purposes only, if the Estimated Working Capital was $4,750,000 and the Closing Working Capital is $4,000,000, then the Escrow Agent shall distribute $500,000 to Parent);
(7) if (x) the Estimated Working Capital was less than the Target Minimum Working Capital and (y) the Closing Working Capital is greater than the Target Maximum Working Capital, then Parent shall pay to the Exchange Agent (for further distribution to the applicable Company Securityholders) (I) the amount by which the Closing Working Capital is greater than the Target Maximum Working Capital plus (II) the amount by which the Estimated Working Capital was less than the Target Minimum Working Capital (for illustration purposes only, if the Estimated Working Capital was $4,000,000 and the Closing Working Capital is $6,000,000, then Parent shall pay $1,500,000 to the Exchange Agent);
(8) if (x) the Estimated Working Capital was less than the Target Minimum Working Capital and (y) the Closing Working Capital is greater than the Estimated Working Capital but less than the Target Maximum Working Capital, then Parent shall pay to the Exchange Agent (for further distribution to the applicable Company Securityholders) the amount by which (I) the lesser of the components thereofClosing Working Capital or the Target Minimum Working Capital is greater than (II) prepared the Estimated Working Capital (for illustration purposes only, if the Estimated Working Capital was $4,000,000 and the Closing Working Capital is $4,250,000, then Parent shall pay $250,000 to the Exchange Agent);
(9) if (x) the Estimated Working Capital was less than the Target Minimum Working Capital and (y) the Closing Working Capital is less than the Estimated Working Capital, then the Stockholder Representative and Parent shall jointly instruct the Escrow Agent to pay to Parent from the Escrow Fund the amount by which the Closing Working Capital is less than the Estimated Working Capital (for illustration purposes only, if the Estimated Working Capital was $4,000,000 and the Closing Working Capital is $3,000,000, then the Escrow Agent shall distribute $1,000,000 to Parent);
(10) if the Closing Cash is greater than the Estimated Cash, Parent shall pay to the Exchange Agent (for further distribution to the applicable Company Securityholders) the amount by which the Closing Cash is greater than the Estimated Cash; and
(11) if the Closing Cash is less than the Estimated Cash, the Stockholder Representative and Parent shall jointly instruct the Escrow Agent to pay to Parent from the Escrow Fund the amount by which the Closing Cash is less than the Estimated Cash. Notwithstanding the foregoing, all payments under this Section 2(i)(v) shall be netted and made by check or wire transfer of cash in immediately available funds; provided, however, any payments to Parent from the Escrow Fund pursuant to this Section 2(i)(v) shall be made in the same combination of shares of Parent Common Stock and cash as initially deposited into the Escrow Fund (to the extent such shares are not replaced with cash in accordance with the Calculation PrinciplesEscrow Agreement during the Escrow Indemnity Period and, to the extent such shares are replaced with cash, as determined by the Stockholder Representative in its sole and absolute discretion) and with shares of Parent Common Stock valued at the Parent Per Share Value (ii) to the Closing Business Debt, (iii) extent any shares of Parent Common Stock remain in the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, Escrow Fund).
(vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent The Merger Consideration shall be deemed to have agreed with all other items and amounts included in been increased or decreased by the Post-Closing Statement delivered amount paid pursuant to Section 2.6(cSections 2(h) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f2(i), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Sources: Merger Agreement (Telular Corp)
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than five (5) Business Days prior to the Closing Date, Parent shall deliver to Purchaser a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after following the ClosingClosing Date, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of Buyer shall:
(i) the Closing Working Capital (including all of the components thereof) prepared prepare, in accordance with the Calculation Accounting Principles, a consolidated balance sheet of the Acquired Companies as of the close of business on the Business Day immediately preceding the Closing Date (the “Preliminary Closing Date Balance Sheet”); and
(ii) deliver to Seller the Preliminary Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds Date Balance Sheet and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchasercertificate setting forth in reasonable detail Buyer’s calculation of the (A) Net Working Capital as of the close of business on the Business Day immediately preceding the Closing Date (the “Preliminary Net Working Capital Determination”), (B) Cash and Cash Equivalents as of the close of business on the Business Day immediately preceding the Closing Date (the “Preliminary Cash Determination”), (C) Indebtedness as of the close of business on the Business Day immediately preceding the Closing Date (the “Preliminary Indebtedness Determination”), (D) the Capital Expenditure Amount (the “Preliminary Capital Expenditure Amount Determination”), (E) Pre-Closing Tax Obligations (“Preliminary Pre-Closing Tax Obligations Determination”) and (F) Transaction Expenses as of the close of business on the Business Day immediately preceding the Closing Date (the “Preliminary Transaction Expenses Determination and, together with the Preliminary Closing Date Balance Sheet, the Preliminary Net Working Capital Determination, the Preliminary Cash Determination, the Preliminary Indebtedness Determination, the Preliminary Capital Expenditure Amount Determination and the Preliminary Pre-Closing Tax Obligations Determination, the “Preliminary Closing Statement”); provided, however, that until such time as the calculation of the amounts shown on the Closing Date Balance Sheet and the Closing Date Net Working Capital, Closing Business Debt, Change of Control PaymentsDate Cash, Closing Date Indebtedness, Capital Expenditure Amount, Pre-Closing Tax Obligations and Closing Date Transaction ExpensesExpenses determinations are final and binding on the parties pursuant to this Section 2.3, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds Seller and Other DBFO Proceeds, as applicable). Parent its accountants (at Seller’s expense) shall be deemed permitted to have agreed discuss with all other items Buyer and amounts included in its accountants the Post-Preliminary Closing Statement delivered pursuant and shall be provided copies of, and have access upon reasonable notice at all reasonable times during normal business hours to, subject to Section 2.6(c) Seller’s entering into a customary confidentiality agreement with Buyer’s accountants (if required thereby), the work papers and Parent or Purchaser, supporting records of Buyer and its accountants so as applicable, shall pay within five (5) Business Days to allow Seller and its accountants to become informed concerning all matters relating to the preparation of the conclusion of Preliminary Closing Statement and the Review Period the maximum amountaccounting procedures, if anymethodologies, which Purchaser tests and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”)approaches used in connection therewith.
(eb) Following receipt of the Preliminary Closing Statement, if Seller has any objections to such document as prepared by Buyer, Seller shall deliver written notice to Buyer of such dispute within forty-five (45) days after the date of such receipt thereof. In the event that Seller does not notify Buyer of a dispute with respect to the PostPreliminary Closing Statement within such forty-five (45) day period, the Preliminary Closing Date Balance Sheet, Preliminary Net Working Capital Determination, Preliminary Cash Determination, Preliminary Indebtedness Determination, Preliminary Capital Expenditure Amount Determination and Preliminary Transaction Expenses Determination set forth therein shall be final and binding as the “Closing Date Balance Sheet,” “Closing Date Net Working Capital,” “Closing Date Cash,” “Closing Date Indebtedness,” “Capital Expenditure Amount” and “Closing Date Transaction Expenses,” respectively, for purposes of this Agreement; provided, however, that the Pre-Closing StatementTax Obligations shall not be deemed final until the expiration of the statute of limitations period applicable to the matters covered thereby and, Purchaser for avoidance of doubt, any amount of the Pre-Closing Tax Obligations that shall not have been deducted for purposes of determining the Purchase Price pursuant to this Article II shall be subject to indemnification to the extent provided in Article VII or Article X. In the event that Seller does notify Buyer of a dispute with respect to the Preliminary Closing Statement within such forty-five (45) day period, Seller and Parent Buyer shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the partiesresolve such dispute. If Purchaser Buyer and Parent are unable Seller, notwithstanding such good faith effort, fail to reach resolve such dispute within fifteen (15) days after Seller provides such written notice to Buyer, then Buyer shall engage the Accounting Firm to conduct a resolution review of Seller’s objections to the Preliminary Closing Date Balance Sheet or Preliminary Net Working Capital Determination or Preliminary Cash Determination or Preliminary Indebtedness Determination or Preliminary Capital Expenditure Amount Determination or Preliminary Transaction Expenses Determination, as the case may be, as promptly as reasonably practicable (such effect within review to be completed no later than thirty (30) calendar days after Purchaser’s receipt the Accounting Firm is requested to conduct such review) and, upon completion of Parent’s such review, to deliver written notice to Seller and Buyer setting forth the Accounting Firm’s resolution of disagreementsuch objections, Purchaser and Parent the resulting adjustments shall submit be deemed finally determined and shall be final and binding on the parties for purposes of this Section 2.3. The Accounting Firm’s role in completing such review shall be limited to resolving such objections and determining the correct calculations to be used with respect to only the disputed portions of the Preliminary Closing Statement. In resolving such objections, the Accounting Firm shall apply the provisions of this Agreement concerning determination of the amounts remaining set forth in dispute for resolution to the New York, New York office Preliminary Closing Statement and the decision of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty solely based on (30i) calendar days after submission whether such item objected to was prepared in accordance with the guidelines set forth in this Agreement concerning determination of the disputeamounts set forth therein, determine and report including, for the avoidance of doubt, the Accounting Principles or (ii) whether such item objected to contains a mathematical or clerical error; provided, however, that, in making such decision, the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm not apply any dollar figure that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds either lower or Other DBFO Proceedshigher, as applicable, than those which were proposed by Buyer and Seller. For the avoidance of doubt, unless otherwise jointly agreed to by Seller and Buyer, (i) the Accounting Firm shall not review the Preliminary Pre-Closing Tax Obligations Determination; and (ii) Seller and Buyer shall negotiate in good faith to resolve any dispute as to the Preliminary Pre-Closing Tax Obligations Determination in accordance with this Section 2.67.1(b)(i) (relating to the preparation and review of Tax Returns) within the timeframe specified by such Section. In the event that after good faith negotiations the parties cannot agree, Purchaser then the Purchase Price shall be adjusted by the amounts or Parentitems that are not disputed, as applicable, and any remaining adjustments attributable to any disputed item shall make the following payments; provided that, such payments shall only be made based on, and determined at the time, and at the time the Tax Returns that include the Pre-Closing Tax Obligations relating to the extent that the amounts owed disputed items are filed. Notwithstanding any other provision of this Agreement, Buyer shall have not otherwise been satisfied no obligation to mitigate any Tax Liability (including penalties and interest) with respect to any disputed item by a prior paymentadvancing, if any, of the Undisputed Amounts pursuant depositing or paying any Tax (including estimated Tax) with respect to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.disputed
Appears in 1 contract
Purchase Price Adjustments. (a) Not more later than fifteen (15) and not less than five (5) three Business Days prior to the Closing Date, Parent Selling Shareholder shall deliver to Purchaser Buyer a statement (the “Transaction "Preliminary Statement”") that contains Parent’s reasonable setting forth a calculation of the Purchase Price, including its good faith estimates estimate of (i) the Closing Actual Net Working Capital (including all based on the calculations prepared by the chief financial officer of the components thereof) prepared in accordance with the Calculation Principles Selling Shareholder (the “"Estimated Closing Net Working Capital”"), (ii) the aggregate amount of Funded Debt outstanding as of immediately prior to the Closing, (iii) the amount of Net Cash as of immediately prior to the Closing Business Debt and (iv) the “Estimated amount of the Company Expenses. The Preliminary Statement shall be subject to the review of Buyer and shall be reasonably acceptable to Buyer. Included in Exhibit 2.3(a) are the principles for calculating Target Net Working Capital and Actual Net Working Capital, which are referred to in this Agreement as the "Net Working Capital Calculation Principles." As promptly as practicable, but no later than 90 days after the Closing Business Debt”Date, Buyer shall at its expense cause to be prepared and delivered to Selling Shareholder a certificate setting forth the adjusted Purchase Price including (i) the Closing Balance Sheet, (ii) the Actual Net Working Capital (as determined in accordance with the Net Working Capital Calculation Principles), (iii) the Closing Transaction Expenses (aggregate amount of Funded Debt outstanding as of immediately prior to the “Estimated Closing Transaction Expenses”)Closing, (iv) the Change amount of Control Payments (Net Cash as of immediately prior to the “Estimated Closing Change of Control Payments”), and (v) the Project Contributions amount of the Company Expenses, together with supporting calculations and documentation in reasonable detail (the “Estimated Project Contributions”"Adjustment Certificate"). In the event that the Purchase Price set forth in the Adjustment Certificate as finally determined by the Arbitrating Accountant in accordance with Section 2.3(d) (the "Adjusted Purchase Price") is less than the Closing Cash Amount, then within five Business Days after the date the Adjustment Certificate becomes final in accordance with Section 2.3(d), (vi) Selling Shareholder shall pay to Buyer, by wire transfer, the Chinese DBFO Proceeds (amount of the “Estimated Chinese DBFO Proceeds”), (vii) shortfall on a dollar for dollar basis. In the Dalriada DBFO Proceeds (event that the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Adjusted Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Closing Cash Amount, then within five Business Days after the Base Purchase Price date the Adjustment Certificate becomes final in accordance with Section 2.3(d), Buyer shall be increased pay to Selling Shareholder, by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amountwire transfer, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debtsurplus on a dollar for dollar basis. In the event payment is not made within the time required by this Section, if any.
(4) The Base Purchase Price interest shall accrue on the unpaid amount at the Revolver Rate until paid. Selling Shareholder and its independent accountants shall be reduced afforded, at Selling Shareholder's expense, access to any work papers prepared by Buyer or its independent accountants in connection with the amount Adjustment Certificate (subject to customary access agreements). The Adjustment Certificate shall become final and binding upon Selling Shareholder for purposes of this Agreement unless Selling Shareholder gives written notice of disagreement (a "Notice of Disagreement") to Buyer within 30 days following Selling Shareholder's receipt of the Estimated Closing Transaction ExpensesAdjustment Certificate. Any such Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so asserted. For a period of 30 days following Buyer's receipt of a Notice of Disagreement, if any.
(5) The Base Purchase Price Selling Shareholder and Buyer shall be reduced by attempt to resolve in writing any differences that they may have with respect to any matter specified in the amount Notice of Disagreement. If, at the Estimated Closing Change end of Control Paymentssuch 30 day period, if any.
(6) If Buyer and Selling Shareholder have failed to reach written agreement with respect to all such matters, then Buyer and Selling Shareholder shall promptly submit all such matters as specified in the Business’s land improvements relating Notice of Disagreement, as to which such written agreement has not been reached, to the DBFO project in the City national transaction services office of Beverly Hills, California (the “BDO ▇▇▇▇▇▇▇ Hills DBFO Assets”▇, LLP (the "Arbitrating Accountant") are sold back for review. Buyer and Selling Shareholder shall each submit a written statement of position to the City Arbitrating Accountant concerning the calculation of the Net Working Capital Target, Actual Net Working Capital or amount of Funded Debt, Net Cash or Company Expenses, as the case may be, and shall cause the Arbitrating Accountant to act promptly to determine whether to accept either the position of Buyer or the position of Selling Shareholder, taking into account whether the calculations of the Net Working Capital Target and Actual Net Working Capital were done in accordance with the Net Working Capital Calculation Principles, and the Arbitrating Accountant shall not make any other determination, including any determination as to whether the Net Working Capital Target, Actual Net Working Capital or amount of Funded Debt, Net Cash or Company Expenses in either party's position statement is correct, provided that the Arbitrating Accountant shall be required to accept the position of the party that is closest to what the Arbitrating Accountant believes to be the correct position. In reaching its determination, the only alternatives available to the Arbitrating Accountant will be to (i) accept the position of Buyer or (ii) accept the position of Selling Shareholder. The Arbitrating Accountant shall have access to all documents and facilities necessary to perform its functions as arbitrator, and may at its discretion establish binding rules of procedure for the conduct of the arbitration. The costs and expenses of the Arbitrating Accountant shall be paid by Selling Shareholder, on the one hand, and Buyer, on the other hand, in inverse proportion (based on value) as Selling Shareholder and Buyer prevail on any disputed matters, as determined by the Arbitrating Accountant. The determination of the Arbitrating Accountant with respect to such matters shall be the exclusive method for the resolution of such matters, shall be final, non-appealable and binding upon the parties hereto and may be enforced by any court of competent jurisdiction. Closing The purchase and sale of the Share (the "Closing") provided for in this Agreement will take place at the offices of ▇▇▇▇▇▇▇ Hills prior ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.L.L., counsel to Selling Shareholder, located at One Cleveland Center, 20th Floor, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. (local time) on the date that is five Business Days following the satisfaction of the conditions set forth in Articles 7 and 8, or at such other time and place as the parties may agree. Subject to the Closingprovisions of Section 11, failure to consummate the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed purchase and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any sale of the Target Shares pursuant to a contractual right of first refusal, Share provided for in this Agreement on the Base Purchase Price shall be reduced by an amount equal to date and time and at the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted place determined pursuant to this Section 2.6(b), is will not result in the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare termination of this Agreement and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute will not relieve any party of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”)obligation under this Agreement.
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Sources: Stock Purchase Agreement (Hawk Corp)
Purchase Price Adjustments. (a) Not more than fifteen At least three (15) and not less than five (53) Business Days prior to the Closing, Seller will cause to be prepared and delivered to Buyer Seller’s good faith estimates of:
(i) the Estimated Cash Payment,
(ii) the Estimated Indebtedness Payment, and
(iii) the Estimated Closing Working Capital Adjustment. The Estimated Closing Working Capital Adjustment will be accompanied by a certificate of the Chief Financial Officer of Seller specifying that the Estimated Closing Working Capital Adjustment was prepared in accordance with the provisions of this Section 2.5 and Exhibit E and shall include only those categories of current assets and current liabilities and line items included in, and be in a form consistent with, the Sample Calculation of Net Working Capital set forth in Exhibit E and will be based on changes from the Reference Net Working Capital set forth in Exhibit E. Seller shall deliver supporting documentation and data for the Estimated Closing Working Capital Adjustment, the Estimated Indebtedness Payment, and the Estimated Cash Payment.
(b) Exhibit E to this Agreement sets forth a sample formula and the mechanics and methodology and Minimum Adjustment against which any Purchase Price Adjustment will be made to the Closing Date Purchase Price. As promptly as possible and in any event within sixty (60) calendar days after the Closing Date, Parent shall deliver Seller will prepare or cause to Purchaser a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of be prepared, and will provide to Buyer:
(i) the Closing Working Capital Date Balance Sheet which shall be prepared for purposes of showing the actual working capital (including all of the components thereof) prepared calculated in accordance with Exhibit E) as of the Calculation Principles Effective Time;
(ii) a written statement setting forth its detailed determination of the actual cash, cash equivalents and the cash value of all marketable securities on hand that were held by the Companies as of the Effective Time (the “Preliminary Cash Amount”) and the difference between the Estimated Cash Payment and the Preliminary Cash Amount (the “Preliminary Cash Adjustment”);
(iii) a written statement setting forth its detailed determination of the actual Indebtedness that was owed by the Companies as of the Effective Time (the “Preliminary Indebtedness Amount”) and the difference between the Estimated Indebtedness Payment and the Preliminary Indebtedness Amount (the “Preliminary Indebtedness Adjustment”); and
(iv) a written statement setting forth its detailed determination of the Net Working Capital as of the Effective Time (the “Preliminary Closing Date Working Capital”), (ii) and of the Closing Business Debt (adjustments to the “Estimated Closing Business Debt”), (iii) Net Working Capital based on changes to the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If Net Working Capital between the Estimated Closing Working Capital is greater than and the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Preliminary Closing Date Working Capital is less than derived from the Reference AmountClosing Date Balance Sheet, in each case calculated based on the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California sample formula and general methodology set forth on Exhibit E (the “▇▇▇▇▇▇▇ Hills DBFO AssetsPreliminary Working Capital Adjustment”) are sold back to the City ). For purposes of ▇▇▇▇▇▇▇ Hills prior to the Closingthis Section 2.5 and Exhibit E, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusalPreliminary Cash Adjustment, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 Preliminary Indebtedness Adjustment and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amountPreliminary Working Capital Adjustment, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled are referred to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, collectively as adjusted pursuant to this Section 2.6(b), is the “Closing PaymentPreliminary Adjustments.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) From the Closing Working Capital (including all Date until the determination of the components thereofPurchase Price Adjustment (as defined below), Seller and its Affiliates, including its and their Representatives, and the Independent Accountants, shall have reasonable access, during normal business hours and upon no less than one (1) prepared day advance notice to Buyer, to the Companies and their books, records and employees who are responsible for financial matters, in accordance order to assist in preparation of the Closing Date Balance Sheet and in evaluating any Disagreement Notice (as defined below). Buyer shall provide, and shall cause the Companies and Buyer’s accountants to provide, any assistance reasonably requested by Seller in connection with the Calculation Principlesforegoing. Notwithstanding the above, (ii) Buyer may limit access to the Closing Business Debt, (iii) extent it reasonably deems necessary to avoid unreasonable disruption of the Closing Transaction Expenses, (iv) business or of the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO ProceedsCompanies or to comply with Laws.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected In addition to, and not in limitation of, the access rights set forth in Section 2.5(c), on the Post-Closing StatementDate or on a mutually agreed upon date before or after the Closing Date, Buyer and Seller shall jointly conduct a physical inventory count to verify the quantity of the inventory of the Companies, including all stockpiled coal and spare parts. The physical inventory count shall be conducted pursuant to procedures reasonably satisfactory to Buyer and Seller and in a manner that ensures that the quantity of inventory can be accurately determined as of the Closing Date. The quantity of the inventory of the Companies as determined pursuant to such physical inventory count shall be set forth on a certificate of inventory signed by Buyer and Seller, which certificate of inventory shall be used by Seller in preparing the Closing Date Balance Sheet.
(e) If Buyer disagrees with the Closing Date Balance Sheet and/or any of the Preliminary Adjustments, it shall, within thirty (30) calendar days after Parent’s the receipt of such statement the Closing Date Balance Sheet and the Preliminary Adjustments, deliver a Notice to Seller (such 30-day period hereinafter referred to as the “Review PeriodDisagreement Notice”). Any such notice , setting forth its calculation of disagreement shall specifythe Closing Date Working Capital and each of the Preliminary Adjustments, with a reasonably detailed explanationand specifying, in reasonable detail, those items or amounts in the Closing Date Balance Sheet and/or any of the Preliminary Adjustments as to which Parent Buyer disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable)reasons for such disagreement. Parent Buyer shall be deemed to have agreed with all other items and amounts included contained in the PostClosing Date Balance Sheet and the Preliminary Adjustments other than those specified in a timely Disagreement Notice. If Buyer does not deliver a Disagreement Notice to Seller within such 30-day period, Buyer shall be deemed to have accepted the Closing Statement delivered pursuant to Section 2.6(c) Date Balance Sheet and Parent or Purchaser, as applicable, shall pay within five (5) Business Days each of the conclusion of Preliminary Adjustments, whereupon the Review Period Preliminary Cash Amount shall become the maximum amount“Final Cash Amount”, if any, which Purchaser the Preliminary Indebtedness Amount shall become the “Final Indebtedness Amount” and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Preliminary Closing Date Working Capital shall become the “Closing Date Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later If Buyer timely delivers a Disagreement Notice to Seller, the Parties shall use their good faith efforts to reach agreement on the disputed items or amounts in order to determine the Closing Date Working Capital, the Final Cash Amount or the Final Indebtedness Amount, which in no event shall be more favorable to Seller than five reflected in any of the Preliminary Adjustments, nor more favorable to Buyer than shown in the calculations delivered by Buyer pursuant to the Disagreement Notice. If the Parties do not resolve all disputed items or amounts within twenty (520) Business Days after delivery of the final resolution Disagreement Notice, this Agreement and the disputed items and amounts will be submitted to KPMG LLP, or another nationally recognized public accounting firm in the United States mutually agreeable to Buyer and Seller (the “Independent Accountants”), for determination of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with the appropriate Final Adjustment pursuant to this Section 2.62.5. The fees and expenses of the Independent Accountants shall be borne equally by Seller and Buyer. The written report of the Independent Accountants (the “Report”) shall be delivered to Seller and Buyer promptly, Purchaser or Parent, as applicable, shall make the following payments; provided that, but in no event later than 30 days after such payments shall only be made disputed items are submitted to the extent that Independent Accountants, and shall be final, conclusive, and binding upon the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to PurchaserParties.
(g) Any payment to be made as a result In the absence of an adjustment to fraud, the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer foregoing procedures for resolution of immediately available funds, together with interest thereon for the period commencing on disputes concerning calculation of the Closing Date through Balance Sheet and the date on which Preliminary Adjustments set forth in Sections 2.5(c) and 2.5(e) shall be final and the exclusive means of calculating and resolving the same. No Party shall challenge or be entitled to bring any Claim pertaining to such calculation or resolution; provided that if a Party fails to make the payment required within the time period set forth in Section 2.5(h), such procedures shall not preclude the Party to whom such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment owed from bring any necessary action to which it relates and shall be calculated daily on the basis of a year of 365 days collect such amount, and the actual number indemnification provisions of days elapsedArticle VIII shall not apply to such matter.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Arch Coal Inc)
Purchase Price Adjustments. (a) Not As soon as reasonably practicable, but in no event more than fifteen nineteen (1519) Business Days after the date of this Agreement, Buyer shall notify Seller of the list of Business Employees to whom it has not extended Comparable Offers and not the list of Business Employees to whom it has extended Comparable Offers and the terms of such Comparable Offers with respect to cash compensation, title and location of employment and confirmation that the Comparable Offer was made pursuant to an employment letter as described in Section 5.15(a). As soon as reasonably practicable, but in no event more than ten (10) Business Days after receipt of the foregoing notice from Buyer, Seller shall notify Buyer if it believes additional Business Employees should be included on the foregoing lists based on Seller’s analysis of whether Buyer has made Comparable Offers to such Business Employees. Not less than five two (52) Business Days prior to the Closing Date, Parent Seller shall prepare and deliver to Purchaser a statement Buyer Seller’s calculation of the Aggregate Severance Amount (the “Transaction StatementClosing Aggregate Severance Amount”). The Purchase Price shall be increased dollar for dollar by the amount of the Closing Aggregate Severance Amount. The adjustment to the Purchase Price in this Section 2.07(a) that contains Parent’s reasonable good faith estimates is subject to further adjustment in accordance with Sections 2.07(c) and 2.07(d) below.
(b) Not less than three (3) Business Days prior to the Closing Date, Seller shall prepare and deliver to Buyer an estimated calculation of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), with reasonable supporting detail as to such calculation. If the Working Capital Target exceeds the Estimated Closing Working Capital by more than the Collar Amount, then the Purchase Price shall be reduced dollar for dollar by the amount by which (i) the Working Capital Target exceeds (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) Working Capital plus the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) Collar Amount. If the Estimated Closing Working Capital is greater exceeds the Working Capital Target by more than the Reference Collar Amount, then the Base Purchase Price shall be increased dollar for dollar by such excess.
the amount by which (2i) If the Estimated Closing Working Capital is less than minus the Reference Amount, Collar Amount exceeds (ii) the Base Working Capital Target. The adjustments to the Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”this Section 2.07(b) are sold back subject to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed further adjustment in accordance with Sections 2.07(c) and all funds related thereto are transferred to Parent (whether directly or indirectly2.07(d) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transactionbelow.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five Buyer shall have thirty (7530) calendar days after following the Closing, Purchaser shall prepare and deliver to Parent a statement Closing Date (the “Post-Closing StatementExamination Period”) of to examine the Estimated Closing Working Capital and the Closing Aggregate Severance Amount calculations. If, at any time during the Examination Period, Buyer disputes (i) whether the Estimated Closing Working Capital accurately reflects the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, or (ii) the Closing Business DebtAggregate Severance Amount calculation, then Buyer may deliver to Seller a notice of dispute setting forth in reasonable detail the amount which Buyer believes to be the correct Closing Working Capital and/or the Aggregate Severance Amount and the items in the supporting documentation which form the basis for such dispute (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the a “Review PeriodPayment Dispute Notice”). Any such notice Upon the expiration of disagreement shall specifythe Examination Period, with a reasonably detailed explanationif no Payment Dispute Notice has been provided by Buyer during the Examination Period, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s if all provided Payment Dispute Notice(s) have been withdrawn by Buyer, then the calculation of the Closing Aggregate Severance Amount pursuant to Section 2.07(a) above and the calculation of the Estimated Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent Capital provided pursuant to Section 2.07(b) above shall be deemed to accepted by Buyer. However, if upon the expiration of the Examination Period, one or more Payment Dispute Notice(s) has or have agreed with all other items been delivered and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchasernot withdrawn, as applicablethen, shall pay within five for a period of twenty (520) Business Days following the end of the conclusion of the Review Examination Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed AmountsNegotiation Period”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser Buyer and Parent Seller shall negotiate in good faith to reconcile their differences and any resolution by them as attempt to any disputed amounts shall be final, binding and conclusive agree on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission calculation of the disputeAggregate Severance Amount and/or Closing Working Capital, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firmapplicable.
(fd) No later than five To the extent a Payment Dispute Notice has been delivered and not withdrawn and no agreement pursuant to Section 2.07(c) is reached during the Negotiation Period, then either Buyer or Seller may, within ten (510) Business Days after the final resolution end of the Negotiation Period, as applicable, (i) refer any dispute as to the Aggregate Severance Amount to a single arbitrator selected by JAMS in accordance with Section 9.10 of this Agreement and/or (ii) engage the Independent Expert to consider the matters remaining in dispute with respect to the calculation of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 . Such arbitrator and/or Independent Expert shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment directed to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.deliver
Appears in 1 contract
Sources: Asset Purchase Agreement (Activant Solutions Inc /De/)
Purchase Price Adjustments. (a) Not more than fifteen Three (15) and not less than five (53) Business Days prior to the anticipated Closing Date, Parent the Company shall deliver finalize an Estimated Working Capital Statement, which shall be subject to Purchaser a statement (the “Transaction approval of the Buyer, such approval not to be unreasonably withheld, conditioned or delayed. The Closing Payment to be paid at the Closing shall be reduced by the following amounts, if any, as set forth on the Estimated Working Capital Statement”) that contains Parent’s reasonable good faith estimates of : (i) the Closing Working Capital (including all amount of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), any Indebtedness for Borrowed Money and (ii) the amount of any Transaction Costs. The Closing Business Debt (the “Estimated Payment to be paid at Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall also be reduced by the amount of the Estimated Closing Business DebtWorking Capital Deficit, if any.
(4) The Base Purchase Price shall be reduced , or increased by the amount of the Estimated Closing Transaction ExpensesWorking Capital Surplus, if any. Such adjustments shall be referred to herein collectively as the “Estimated Adjustment.” The Estimated Adjustment shall be determined without regard to the limitations set forth in Section 9.3 hereof.
(5b) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
At least two (62) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills Business Days prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the anticipated Closing Date, Parent the Parties shall agree upon a flow of funds memorandum which shall set forth all payments required to be entitled to receive (directly made by or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount on behalf of all Permitted Proceeds Parent is entitled to receive between September 28Parties at the Closing, 2007 including for each such payment an identification of the payor, the payee, the amount and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Paymentwire transfer information.”
(c) Within seventy-five one hundred twenty (75120) calendar days after following the ClosingClosing Date, Purchaser the Buyer shall prepare and deliver to Parent furnish the Sellers’ Representative with a statement (that shall set forth the “Post-Closing Statement”) of (i) Indebtedness for Borrowed Money, the Transaction Costs and the Closing Working Capital (including all the “Closing Working Capital Statement”), and a schedule based upon the Closing Working Capital Statement setting forth any adjustments to the Estimated Adjustment based on variances as between the Estimated Working Capital and the Closing Working Capital (collectively, the “Closing Adjustment”). The Sellers’ Representative shall assist the Buyer in the preparation of the components thereof) prepared in accordance with Closing Working Capital Statement if reasonably requested by the Calculation Principles, (ii) Buyer and the Buyer shall promptly respond to any reasonable requests for information from the Sellers’ Representative regarding the preparation of the Closing Business DebtWorking Capital Statement. The Parties acknowledge that the sole purpose of the determination of Closing Working Capital is to adjust the Purchase Price so as to reflect the difference, (iii) if any, between the Estimated Adjustment and the Closing Transaction Expenses, (iv) the Change Adjustment for purposes of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceedsthis Section 1.4.
(d) Parent The Sellers’ Representative shall have a period of thirty (30) days after receipt of the Closing Working Capital Statement and Closing Adjustment to notify Purchaser the Buyer of its acceptance election to accept or dispute reject the Closing Working Capital Statement and/or the Closing Adjustment. In the case of any amounts reflected a rejection, such notice must contain the reasons for such rejection in reasonable detail and must set forth the amount of the requested adjustment. In the event no notice is received by the Buyer during such thirty (30) day period, the Closing Working Capital Statement and the Closing Adjustment shall be deemed accepted by the Sellers’ Representative and final and binding on the Post-Parties hereto for purposes of this Section 1.4. In the event that the Sellers’ Representative shall timely reject the Closing StatementWorking Capital Statement and/or the Closing Adjustment, the Buyer and the Sellers’ Representative shall promptly (and in any event within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred following the date upon which the Sellers’ Representative shall reject the Closing Working Capital Statement and/or Closing Adjustment), attempt to as the “Review Period”). Any such notice of disagreement shall specify, with make a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation joint determination of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds Adjustment and Other DBFO Proceeds, as applicable). Parent such determination and any required adjustments resulting therefrom shall be deemed to have agreed with all other items final and amounts included in binding on the Post-Closing Statement delivered pursuant to Parties hereto for purposes of this Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”)1.4.
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser Sellers’ Representative and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts the Buyer shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach agree upon a resolution to such effect joint determination of the Closing Adjustment within thirty one hundred eighty (30180) calendar days after Purchaser’s receipt of Parent’s written notice of disagreementfrom the Closing Date, Purchaser then within one hundred ninety (190) days from the Closing Date, the Buyer and Parent the Sellers’ Representative shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or Accounting Firm. The Buyer and the Sellers’ Representative shall furnish to the Accounting Firm such work papers and other independent accountant firm of international reputation as is mutually agreed documents and information related to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to the disputed issues as the “Accounting Firm may request and are available to that Party (or its independent accountant), and each Party shall be afforded the opportunity to present to the Accounting Firm any materials related to such issues and to discuss the same with the Accounting Firm”). The Buyer and the Sellers’ Representative shall request that the Accounting Firm render its determination prior to the expiration of two hundred forty (240) days from the Closing Date and such determination and any required adjustments resulting therefrom shall be final and binding on all the Parties hereto for purposes of this Section 1.4. The obligation to pay the fees and expenses of the Accounting Firm shall be directed toallocated between the Buyer, within thirty (30) calendar days after submission on the one hand, and/or the Sellers, on the other hand, based upon the percentage which the portion of the dispute, determine and report contested amount not awarded to each party bears to the parties upon amount actually contested by such remaining disputed amounts with respect to the Post-Closing Statementparty, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm. The Accounting Firm may consider only those items and amounts comprising the Closing Adjustment that are in dispute, and shall make no other determination.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital Adjustment as finally determined in accordance with the provisions of this Section 2.6 1.4 is less than in the Estimated Closing Working CapitalBuyer’s favor, Parent the Buyer and the Sellers’ Representative shall pay the amount of such shortfall to Purchaser.
within two (2) Business Days after such determination execute joint written instructions to the Escrow Agent instructing the Escrow Agent to disburse the amount thereof, together with interest accrued thereon from the Closing Date to the date of payment at an annual rate equal to the Prime Rate, to the Buyer in accordance with the Escrow Agreement. If the Closing Working Capital Adjustment as finally determined in accordance with the provisions of this Section 2.6 1.4 is greater than in the Estimated Closing Working CapitalSellers’ favor, Purchaser shall pay the amount of such excess to Parent.
(3) If thereof shall be paid, together with interest accrued thereon from the Closing Business Debt Date to the date of payment at an annual rate equal to the Prime Rate, as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant by the Buyer to this Section 2.6 shall be paid the Sellers by wire transfer of immediately available fundsfunds within seven (7) days after such determination.
(g) Notwithstanding any other provision of this Agreement to the contrary and except for disputes based upon claims of fraud, together this Section 1.4 shall constitute the sole remedy of the Parties with interest thereon for respect to any dispute regarding the period commencing on computation of the Closing Date through Working Capital Statement, the date on which such payment is made calculated at Purchase Price adjustments or the Prime Rateamounts thereof. Such interest For purposes of clarification, subject to Section 9.3(j), the limitation set forth in the preceding sentence shall be payable at in no way restrict the same time as Buyer’s ability to obtain a remedy for any breach of any of the payment to which it relates representations and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedwarranties set forth in Article III.
Appears in 1 contract
Sources: Stock Purchase Agreement (Mantech International Corp)
Purchase Price Adjustments. (a) Not more than fifteen At least two (15) and not less than five (52) Business Days prior to the Closing Date, Parent the Company shall deliver to the Purchaser a statement (the “Transaction Statement”) that contains Parent’s reasonable good faith estimates of (i) the Closing a good faith estimate of Net Working Capital (including all the "Estimated Net Working Capital"), Cash on Hand (the "Estimated Cash on Hand"), Indebtedness (the "Estimated Indebtedness") and Seller Transaction Expenses (the "Estimated Seller Transaction Expenses") and the resulting calculation of the components thereofEstimated Cash Purchase Price as set forth in Section 1.02 and (ii) a schedule setting forth the number of Parent Shares to be issued to each Seller as the Stock Consideration. The Estimated Cash Purchase Price shall be prepared in accordance with the Calculation Principles (definitions set forth in this Agreement and using the “accounting principles, practices and procedures, with consistent classifications, judgments and estimation methodology, as were used in preparation of the Latest Balance Sheet, to the extent consistent with GAAP. If the Estimated Closing Working Capital”)Cash Purchase Price is a negative number, (ii) the Closing Business Debt (Stock Consideration shall be reduced by the “extent to which the Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)Cash Purchase Price is negative.
(b) The Base Purchase Price shall be subject to adjustment at the Closing As promptly as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreementpossible, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or in any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within event within seventy-five (75) calendar days after the ClosingClosing Date, the Purchaser shall prepare and will deliver to Parent a statement (the “Post-Closing Statement”) of Sellers Representative (i) a consolidated balance sheet of the Company and its Subsidiaries (the "Closing Balance Sheet") and (ii) a statement showing the Purchaser's calculation of Net Working Capital, Cash on Hand, Indebtedness and Seller Transaction Expenses, and the resulting calculation of the Final Cash Purchase Price (together with the Closing Working Capital (including all of Balance Sheet, the components thereof) "Preliminary Closing Statement"). The Closing Balance Sheet shall be prepared in accordance with the Calculation Principlesdefinitions set forth in this Agreement and using the accounting principles, practices and procedures, with consistent classifications, judgments and estimation methodology, as were used in preparation of the Latest Balance Sheet, to the extent consistent with GAAP. During the thirty (ii30) days after delivery of the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Preliminary Closing Statement, the Purchaser shall give the Sellers Representative and its accountants reasonable access to review the Company's and its Subsidiaries' books and records and work papers related to the preparation of the Preliminary Closing Statement (and, solely to the extent relevant thereto, to the Purchaser's books and records and work papers) for purposes of the Sellers Representative's review of the Preliminary Closing Statement. The Sellers Representative and its accountants may make inquiries of the Purchaser and its Subsidiaries and their respective accountants regarding questions concerning or disagreements with the Preliminary Closing Statement arising in the course of its review thereof, and the Purchaser shall use its, and shall cause its Subsidiaries to use their, commercially reasonable efforts to cause any such accountants to provide reasonable cooperation with and reasonably promptly respond to such inquiries; provided, however, that the independent accountants of Purchaser shall not be obligated to make any working papers available to Sellers Representative unless Sellers Representative has signed a customary confidentiality and hold harmless agreement relating to such access to working papers in form and substance reasonably acceptable to such independent accountants. If the Sellers Representative has any objections to the Preliminary Closing Statement, the Sellers Representative shall deliver to the Purchaser a statement setting forth in reasonable detail its objections thereto and the basis for such objections (an "Objections Statement"). If an Objections Statement is not delivered to the Purchaser within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation delivery of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Preliminary Closing Statement, the Preliminary Closing Statement shall be final, binding and non-appealable by the parties hereto. The Sellers Representative and the Purchaser and Parent shall negotiate in good faith to reconcile resolve any such objections, but if they do not reach a final resolution within fifteen (15) Business Days after the delivery of the Objections Statement, the Sellers Representative and the Purchaser shall submit such dispute to KPMG LLP or such other mutually acceptable dispute resolution firm (other than Ernst & Young LLP and BKD LLP) (the "Dispute Resolution Firm"). The Dispute Resolution Firm shall consider only those items and amounts which are identified in the Objections Statement as being items which the Sellers Representative and the Purchaser are unable to resolve. The Dispute Resolution Firm's determination will be based solely on the definitions of Net Working Capital, Cash on Hand, Indebtedness and Seller Transaction Expenses, as applicable, contained in this Agreement. The Sellers Representative and the Purchaser shall use their differences commercially reasonable efforts to cause the Dispute Resolution Firm (who shall be acting as an expert and not as an arbitrator) to resolve all disagreements as soon as practicable and in any event within thirty (30) days after the submission of any dispute. Further, the Dispute Resolution Firm's determination shall be based solely on the submissions by the Purchaser and the Sellers Representative which are in accordance with the terms and procedures set forth in this Agreement (i.e., not on the basis of an independent review). Purchaser and the Sellers Representative will cooperate in good faith with the Dispute Resolution Firm during the term of its engagement. The resolution of the dispute by them as to any disputed amounts the Dispute Resolution Firm shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Postnon-Closing Statement, and such report shall be final, binding and conclusive appealable on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereoftheir Affiliates. The Accounting costs and expenses of the Dispute Resolution Firm shall address only those items in dispute. Purchaser shall bear and pay a be allocated based upon the percentage which the portion of the fees contested amount not awarded to each party bears to the amount actually contested by such party in the presentation to the Dispute Resolution Firm. For example, if the Sellers Representative submits an Objections Statement for $1,000, and disbursements if the Purchaser contests only $500 of the Accounting amount claimed by the Sellers Representative, and if the Dispute Resolution Firm that is equal ultimately resolves the dispute by awarding the Sellers Representative $300 of the $500 contested, then the costs and expenses of the Dispute Resolution Firm will be allocated 60% (i.e. 300/500) to the percentage Purchaser and 40% (i.e., 200/500) to the Sellers Representative (on behalf of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, Sellers in accordance with this Section 2.6their respective Allocation Percentages). For purposes hereof, Purchaser or Parent"Final Cash Purchase Price" (which, as applicablefor the avoidance of doubt, shall make does not include the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1Stock Consideration) If the Closing Working Capital means an aggregate amount as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital1.05(b) equal to (i) $75,000,000, Parent shall pay the amount of such shortfall to Purchaser.
plus (2ii) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which Net Working Capital exceeds Target Working Capital (or minus the Base Purchase Price was reduced pursuant to Section 2.6(b)(11amount by which Target Working Capital exceeds Net Working Capital), if any.
plus (16iii) If the Other DBFO Proceeds total amount of Cash on Hand, minus (iv) the outstanding amount of Indebtedness, minus (v) the unpaid Seller Transaction Expenses, in each case, as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds1.05(b), together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedapplicable.
Appears in 1 contract
Sources: Membership Unit Purchase Agreement (U.S. Silica Holdings, Inc.)
Purchase Price Adjustments. (a) Not more than fifteen At least ten (15) and not less than five (510) Business Days prior to the Closing Date, Parent Sellers shall deliver to Purchaser a statement an unaudited consolidated balance sheet of the Bank as of the close of business on the Business Day that is the last Business Day of the calendar month immediately preceding the calendar month in which the Closing is scheduled to occur (such date, the “Transaction StatementDetermination Date”) that contains Parent’s reasonable good faith estimates of (i) , and the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (balance sheet, the “Estimated Closing Working CapitalDetermination Date Balance Sheet”), (ii) along with Sellers’ calculation of the Determination Date Equity, prepared on a basis consistent with the accounting practices and policies used in the preparation of the Bank Financial Statements. Sellers shall afford Purchaser and its Representatives the opportunity to review all work papers and documentation used by Sellers in preparing the Determination Date Balance Sheet and Sellers’ calculation of the Determination Date Equity. The parties acknowledge and agree that the Closing Business Debt (the “Estimated Closing Business Debt”)Date Purchase Price, (iii) which will be paid by Purchaser at the Closing Transaction Expenses (pursuant to Section 2.03, shall be based on the “Estimated Closing Transaction Expenses”), (iv) Determination Date Balance Sheet and Seller’s calculation of the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)Determination Date Equity.
(b) As promptly as practicable, but no later than sixty (60) days after the Closing Date, Purchaser shall cause to be prepared and delivered to Shareholder a proposed final consolidated balance sheet of the Company as of the close of business on the Closing Date (the “Closing Date Balance Sheet”) and a certificate based on the Closing Date Balance Sheet setting forth Purchaser’s calculation of the Closing Date Equity and any adjustments to the Determination Date Balance Sheet and Determination Date Equity that Purchaser deems necessary (such certificate and the Closing Date Balance Sheet, the “True-Up Statement”). The Base Purchase Price True-Up Statement shall be subject prepared on a basis consistent with the accounting practices and policies used in the preparation of the Bank Financial Statements. Purchaser shall afford Shareholder and its Representatives the opportunity to adjustment at review all work papers and documentation used by Purchaser in preparing the True-Up Statement.
(c) Except as otherwise expressly provided herein, the True-Up Statement shall be final and binding on the parties hereto, unless, within fifteen (15) days after receipt by Shareholder of the True-Up Statement, Shareholder shall notify Purchaser in writing of its disagreement with any amount included therein or omitted therefrom (each dispute, an “Objection”), in which case, if the parties are unable to resolve the Objections within fifteen (15) Business Days of the receipt by Purchaser of such notice, such unresolved Objections shall be determined by a regionally recognized independent accounting firm selected by mutual agreement between Shareholder and Purchaser (the “Accounting Referee”). The Accounting Referee shall be instructed to resolve the Objections within ten (10) Business Days of engagement, to the extent reasonably practicable. The determination of the Accounting Referee shall be final and binding on the parties hereto. The fees and costs of the Accounting Referee shall be payable fifty percent (50%) by Shareholder and fifty percent by Purchaser.
(d) Not later than the close of business on the second (2nd) Business Day following the final determination of the True-Up Statement pursuant to Section 2.04(c) (the “Adjustment Payment Date”), Shareholder and Purchaser shall effect the transfer of cash as may be necessary to reflect the difference, positive or negative, of (x) the Closing Date Equity Adjustment Amount (based on the Closing Date Equity), MINUS (y) the Determination Date Equity Adjustment Amount (based on the Determination Date Equity, as followsadjusted by Purchaser pursuant to Section 2.04(b)), as set forth on the True-Up Statement, as finally determined. If Purchaser is due cash pursuant to this Section 2.04(d), then Shareholder and Purchaser shall execute and deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to release the amount of such cash from the Indemnification Escrow Account to Purchaser. If Shareholder is due cash pursuant to this Section 2.04(d), Purchaser shall pay Shareholder the amount of cash due Shareholder.
(e) Any adjustments provided for in this Section 2.04 shall be deemed, for purposes of Taxes, to be adjustments to the Purchase Price.
(f) For clarity, the Determination Date Balance Sheet and the Closing Date Balance Sheet shall reflect the Bank’s payment or accrual of (i) all fees and expenses incurred (or estimated to be incurred) in connection with the consummation of the transactions contemplated by this Agreement, (including all fees payable to the Bank’s financial advisor, legal counsel, and accountants), and (ii) all vendor or funding termination or breakage penalties, management change-in-control or retention payments, employee severance costs, and any payments or distributions under any Bank Plan due as a result of this Agreement or the transactions contemplated by this Agreement.”
6. Amendment to Article III. Article III is hereby amended by adding the following sentence after the last sentence in Article III: “The Closing shall be effective at 5 p.m. (Central Time) on the Closing Date.”
7. Amendments to Section 6.10(a)(i). Section 6.10(a)(i) of the Agreement is hereby deleted in its entirety and replaced with the following:
(1i) If the Estimated Closing Working Capital is greater than the Reference Amountterminate, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills effective immediately prior to the Closing, the Base Purchase Price shall Bank’s participation in and liability for benefits under such plans which will not be reduced retained by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided Purchaser, except that such transaction is closed and all funds related thereto are transferred the Bank will continue to Parent (whether directly or indirectly) prior to participate, with the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any employer portion of the Target Shares pursuant to a contractual right of first refusal, premiums at the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of ParentBank’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successfulexpense, in each case as determined by Shareholder’s group medical plan and flexible benefits plan through December 31, 2018, at which time the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, Bank’s participation in accordance with this Section 2.6, Purchaser or Parent, as applicable, such benefit plans shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.terminate,”
Appears in 1 contract
Sources: Stock Purchase Agreement (Citizens Community Bancorp Inc.)
Purchase Price Adjustments. (a1) Not more than fifteen (15) and not The Base Purchase Price shall be increased or reduced, respectively, by the dollar amount by which the Working Capital as of the time that is immediately before the Time of Closing exceeds or is less than five the Target Working Capital (5the “Working Capital Adjustment”). The Working Capital at the Time of Closing shall be calculated based upon the same accounting principles as those that are applicable as of the date hereof.
(2) At least three Business Days prior to the Closing Date, Parent Vendor shall deliver to Purchaser a statement purchase price certificate of an officer of Vendor addressed to Purchaser, dated no more than five Business Days prior to the Closing Date and prepared by Vendor in good faith and on a reasonable basis (the “Transaction StatementPurchase Price Certificate”). The Purchase Price Certificate shall set forth the preliminary Working Capital Adjustment (the “Preliminary Working Capital Adjustment”) that contains Parent’s reasonable good faith estimates of (i) and the Closing Working Capital (including all of the components thereof) prepared Base Purchase Price adjusted in accordance with the Calculation Principles Preliminary Working Capital Adjustment (the “Estimated Closing Working CapitalDate Purchase Price”). The Purchase Price Certificate shall set out in reasonable detail, (ii) to the satisfaction of Purchaser acting reasonably, the basis of such determination and the Purchase Price Certificate shall be prepared in a manner consistent with the form in Schedule 2.3(2). The Purchaser shall have two Business Days to review the Purchase Price Certificate and the Vendor agrees to discuss any comments with the Purchaser in good faith prior to the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficitDate.
(3) The Base Purchase Price Within 90 days following the Closing Date, Purchaser shall be reduced by prepare a statement in the form set out in Schedule 1.1(wwww) detailing the amount of the Estimated Working Capital Adjustment as of the time that is immediately before the Time of Closing Business Debtand the amount of the final adjustment, if any, required to be made to the Closing Date Purchase Price in respect of the Working Capital Adjustment. Vendor shall co-operate with Purchaser in connection with Purchaser’s preparation of such statement and shall grant to Purchaser reasonable access during normal business hours to all relevant records of the Vendor for the purposes of preparing such statement and Vendor shall ensure reasonable access to and cooperation during normal business hours from senior management and accounting personnel of the Vendor to assist Purchaser in preparing such statement.
(4) The Base Purchase Price Following delivery of the statement referred to in Section 2.3(3), Vendor shall be reduced by have a period of 15 Business Days to review and comment on such statement. On or prior to the expiry of such 15 Business Day review period, Vendor shall notify Purchaser if there is any disagreement with the amounts set forth in such statement, which notice shall specify the nature of such disagreement in reasonable detail and shall state the opinion of Vendor as to the correct amount. If Vendor does not notify Purchaser of any disagreement on or prior to the expiry of such 15 Business Day review period, the amount of the Estimated Working Capital Adjustment as of the Closing Transaction ExpensesDate and the amount of the final adjustment, if any, required to be made to the Closing Date Purchase Price in respect of the Working Capital Adjustment set out in the statement referred to in Section 2.3(3) shall be deemed to be final.
(5) Any dispute concerning any disagreement raised in accordance with Section 2.3(4) will be first referred in written form to appropriate representatives of senior management of Purchaser and Vendor. Such reference to representatives of senior management may be initiated at any time by either Vendor or Purchaser on notice of not less than five Business Days to the other Party. Each of Vendor and Purchaser will be afforded an opportunity to present all relevant information regarding its position to each other Party’s senior management representatives. If the senior management representatives of Purchaser and Vendor have not resolved the dispute to the satisfaction of Purchaser and Vendor within 10 Business Days of initiation of the review by Purchaser or Vendor, the dispute may be submitted in writing by either Purchaser or Vendor to a senior audit partner of Ernst & Young LLP, or if such firm is determined not to be independent of Vendor and Purchaser, such other independent nationally-recognized accounting firm as is agreeable to both Purchaser and Vendor (the “Independent Accountant”). Upon written notice to the other Party and the Independent Accountant, each of Vendor and Purchaser shall be entitled to make written submissions to the Independent Accountant, with copies thereof to the other Party, within 10 Business Days following submission of the dispute to the Independent Accountant, but not thereafter. Any clarification requested by the Independent Accountant shall be submitted in writing to Vendor and Purchaser and any responses thereto shall be made in writing with copies thereof to the other Party. In determining a resolution to the dispute, the Independent Accountant shall be limited to selecting between the submissions of the Parties in respect of any item in dispute. The Base Independent Accountant shall determine a resolution to the dispute and the resultant amount of any final adjustment to the Closing Date Purchase Price payable under Section 2.3(6) and shall summarize such determination in a written report. The written report of the Independent Accountant shall be reduced delivered to the Parties promptly, but in any event no later than 30 Business Days after the dispute is submitted to the Independent Accountant, shall be final, conclusive and binding upon the Parties, and shall not be subject to appeal by any Party. The fees and expenses of the Independent Accountant shall be borne by the amount Party losing the majority of the Estimated Closing Change items at issue in terms of Control Payments, if anyvalue in dispute.
(6) If the Business’s land improvements relating to the DBFO project in the City The amount of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior any final adjustment to the Closing then (B) the Base Date Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000as determined under Section 2.3(3) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) shall be paid to Purchaser or Vendor, as the case may be, within five Business Days of the conclusion date on which the period referred to in Section 2.3(4) expires, assuming there is no dispute with the amount set forth in the statement of Purchaser delivered under Section 2.3(3), and if there is any dispute with the amounts set forth in such statement, within five Business Days of the Review Period the maximum amount, if any, date upon which Purchaser and Parent agree would otherwise be owed any determination is made pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”2.3(5).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
Appears in 1 contract
Purchase Price Adjustments. (a) Not more than fifteen (15) and not less than At least five (5) Business Days prior to the Closing DateClosing, Parent the Company shall prepare and deliver to Purchaser a statement (the “Transaction Buyer, and the Company and the Buyer shall finalize, an Estimated Closing Statement”) that contains Parent’s reasonable . If the Parties are unable to agree on an Estimated Closing Statement, and the Parties’ respective good faith estimates of (i) the Estimated Closing Working Capital (including all are less than $500,000 apart then solely for the purposes of Closing and without affecting the remaining terms of this Section 1.4, the Parties shall agree that for the purposes of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”)Statement, (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased the average of the figures submitted by such excess.
(2) the Buyer and the Company. If the amount of the Estimated Closing Working Capital is less than shown on the Reference AmountEstimated Closing Statement does not equal the Target Working Capital, then the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business DebtWorking Capital Deficit, if any.
(4) The Base Purchase Price shall be reduced , or increased by the amount of the Estimated Closing Transaction ExpensesWorking Capital Surplus, if any.
(5) The Base . Such adjustments to the Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is 1.4(a) shall be referred to herein collectively as the “Estimated Closing PaymentAdjustment.”” The Estimated Closing Adjustment shall be determined without regard to the limitations set forth in Section 9.4 and Section 9.5 hereof.
(cb) Within seventy-five (75) calendar days after following the ClosingClosing Date, Purchaser the Buyer shall cause the Company to prepare and deliver to Parent the Member a statement (the “Post-Closing Statement”) of (i) , which shall set forth the Closing Balance Sheet and the Closing Working Capital (including all the “Closing Statement”), and a schedule based upon the Closing Statement setting forth any adjustments to the Estimated Closing Adjustment (the aggregate amount of such adjustments, collectively, the “Closing Adjustment”). The Member shall assist the Buyer in the preparation of the components thereofClosing Statement if requested by the Buyer.
(c) prepared in accordance with the Calculation Principles, The Member shall have a period of thirty (ii30) days after receipt of the Closing Business Debt, (iii) Statement to notify the Buyer of the Member’s election to accept or reject the Closing Transaction ExpensesStatement. During such period, the Buyer shall provide the Member (ivand the Member’s Representatives) with reasonable access during normal business hours to the Change books, records other information relied upon by the Buyer in preparing the Closing Statement, and other information reasonably requested by Member with respect to its review. In the event the Member rejects the Closing Statement as prepared by the Buyer, such rejection notice must contain the reasons for such rejection in reasonable detail and must set forth the amount of Control Paymentsthe requested adjustment. In the event no rejection notice is received by the Buyer during such thirty (30)-day period (which period may be tolled due to and to the extent of any delays by the Buyer), the Closing Statement and any required adjustments resulting therefrom shall be deemed accepted by the Member and final and binding on the Parties hereto. In the event that the Member shall timely reject the Closing Statement, the Buyer and the Member shall promptly (vand in any event within thirty (30) days following the Project Contributionsdate upon which the Buyer received notice from the Member rejecting the Closing Statement), (vi) attempt to make a joint determination of the Chinese DBFO Proceeds, (vii) Closing Adjustment and such determination and any required adjustments resulting therefrom shall be final and binding on the Dalriada DBFO Proceeds and (viii) the Other DBFO ProceedsParties hereto.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser Member and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent Buyer are unable to reach a resolution to such effect agree upon the Closing Adjustment within thirty one hundred fifty (30150) calendar days after Purchaser’s receipt of Parent’s written notice of disagreementfrom the Closing Date (as tolled, Purchaser if applicable), then within one hundred sixty (160) days from the Closing Date (as tolled, if applicable), the Buyer and Parent the Member shall submit the amounts remaining in such dispute for resolution to the New YorkAccounting Firm specifying in reasonable detail all disputed items and the basis therefor. Each Party agrees to execute, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed if requested by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”), a reasonable engagement letter with respect to the determination to be made by the Accounting Firm. The Buyer and the Member shall request that the Accounting Firm render its determination of the Closing Adjustment within forty-five (45) days of the date it is engaged, and such determination and any required adjustments resulting therefrom shall be final and binding on all the Parties hereto. The fees and expenses of the Accounting Firm shall be directed toallocated between and paid by the Buyer and/or the Member, within thirty (30) calendar days after submission respectively, based upon the percentage which the portion of the dispute, determine and report contested amount not awarded to each Party bears to the parties upon amount actually contested by such remaining disputed amounts with respect to the Post-Closing StatementParty, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm. The Accounting Firm shall determine only those issues specified in the dispute notices delivered by the Parties, and the Accounting Firm’s determination shall be based upon and consistent with the terms and conditions of this Agreement and with the undisputed portions of the Closing Statement. The determination by the Accounting Firm shall be based solely on presentations with respect to such disputed items by Purchaser and Seller Parties to the Accounting Firm and not on the Accounting Firm’s independent review. The Buyer and the Member will provide copies to one another of all written submissions to the Accounting Firm and shall be permitted to attend (and shall receive reasonable advance written notice of) any meeting with or presentations to the Accounting Firm. The Buyer and the Member shall use their commercially reasonable efforts to make their respective presentations as promptly as practicable following submission to the Accounting Firm of the disputed items (but in no event later than twenty (20) days after engagement of the Accounting Firm), and each such Party shall be entitled, as part of its presentation, to respond to the presentation of the other Party and any questions and requests of the Accounting Firm. In deciding any matter, the Accounting Firm (i) shall be bound by the provisions of this Section 1.2(d) and (ii) may not assign a value to any item greater than the greatest value for such item claimed by either the Buyer or the Seller Parties or less than the smallest value for such item claimed by the Buyer or the Seller Parties. The Accounting Firm’s determination shall be made within 45 days after its engagement, or as soon thereafter as possible, shall be set forth in a written statement delivered to the Seller Parties and the Buyer and shall be final, conclusive, non-appealable and binding for all purposes hereunder, absent manifest error. The determination of the Accounting Firm shall not be deemed an award subject to review under the Federal Arbitration Act or any other similar statute.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1e) If the Closing Working Capital Adjustment as finally determined in accordance with the provisions of this Section 2.6 1.4 is less than in the Estimated Closing Working CapitalBuyer’s favor, Parent shall pay the amount of thereof shall be paid as an adjustment to the Purchase Price by the Member to the Buyer by wire transfer in immediately available funds within seven (7) days after such shortfall to Purchaser.
(2) determination. If the Closing Working Capital Adjustment as finally determined in accordance with the provisions of this Section 2.6 1.4 is greater than in the Estimated Closing Working CapitalMember’s favor, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt thereof shall be paid as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant by the Buyer to the Member by wire transfer in immediately available funds within seven (7) days after such determination. If the Member does not so pay to the Buyer by the due date any amounts due under this Section 2.6 1.4, such amounts will accrue interest at a rate of nine percent (9%) per annum as of such due date shall be paid in full without regard to the limitations set forth in Section 9.4 and Section 9.5 hereof. If the Buyer does not pay any amount owed to the Member under this Section 1.4 by wire transfer the due date, then such amount will begin to accrue interest at a rate of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which nine percent (9%) per annum as of such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapseddue date.
Appears in 1 contract
Sources: Purchase Agreement (Global Defense Technology & Systems, Inc.)
Purchase Price Adjustments. (a) 4.3.1. Not more than fifteen (15) and not less than five (5) Business Days days prior to the Closing, the Company shall have prepared and delivered to the Purchaser (i) a good faith estimate of the Net Working Capital as of the close of business on the Closing Date, Parent shall deliver to Purchaser prepared in accordance with GAAP for the Balance Sheet, except for the absence of footnotes (such statement, the “Initial Closing Statement”), and (ii) a statement certificate of the Company, (A) certifying that the Initial Closing Statement was prepared on the basis described in clause (i) above and (B) containing the Company’s estimate of the Net Working Capital as of the Closing Date (the “Transaction StatementEstimated Net Working Capital”). Commencing with Seller’s delivery of the Estimated Net Working Capital to Purchaser, Purchaser shall have reasonable access to the books and records and personnel of Seller and the opportunity to consult with Seller for purposes of confirming or disputing the Estimated Net Working Capital. If Purchaser shall disagree, in good faith, with any item set forth in the Estimated Net Working Capital or used to determine the Estimated Net Working Capital, then Purchaser and Seller shall work, in good faith, to reach agreement on such disputed items and the amounts as agreed to by Purchaser and Seller shall constitute the Estimated Net Working Capital. Notwithstanding the foregoing, Purchaser’s agreement with the Estimated Net Working Capital (or any item set forth therein or used to determine the Estimated Net Working Capital) that contains Parent’s reasonable good faith estimates shall not foreclose, prevent, limit or preclude any rights or remedy of Purchaser or Seller set forth in this Agreement.
4.3.2. If (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Working Capital”), (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Net Working Capital is less than the Reference AmountTarget Net Working Capital, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price Cash Amount shall be reduced by an amount equal to such deficiency or (ii) the dollar amount allocated to such Estimated Net Working Capital is greater than the Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreementNet Working Capital, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price Cash Amount shall be increased by an amount equal to such excess. Such adjustment shall be calculated based on the Estimated Project ContributionsInitial Closing Statement and the certificate delivered pursuant to Section 4.3.1 above. The adjustment made at Closing pursuant to this Section 4.3.2 shall be subject to subsequent adjustment as provided in Sections 4.3.3., if any4.3.4 and 4.3.5.
4.3.3. Within one hundred twenty (9120) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and days after the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare cause its accountants to prepare, at Purchaser’s expense, and deliver to Parent the Company a statement of the Net Working Capital as of the close of business on the Closing Date prepared in the manner described in Section 4.3.1 (the “Post-Final Closing Statement”) ). The Purchaser’s accountants shall permit the Company’s accountants, subject to the execution by the Company and/or the Company’s accountants of any customary release or indemnification agreement required by the Purchaser’s accountants, at the earliest practicable date to review and make copies of all work papers, schedules and calculations used in the preparation thereof.
4.3.4. When the Purchaser delivers the Final Closing Statement, the Purchaser shall also deliver to the Company a certificate (i) certifying that the Final Closing Working Capital (including all of the components thereof) Statement was prepared in accordance with the Calculation Principlesprocedures set forth in Section 4.3.3 above, and (ii) containing the Purchaser’s calculations, based on the Final Closing Statement (the “Purchaser’s Proposed Calculations”), of the Net Working Capital as of the Closing Business DebtDate (the “Closing Date Net Working Capital”). Within sixty (60) days after receipt of the Final Closing Statement and the accompanying certificate, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent Company shall notify the Purchaser of its acceptance agreement or dispute disagreement, as the case may be, with the Final Closing Statement and the accuracy of any amounts reflected on of the Post-Purchaser’s Proposed Calculations. If the Company disputes any aspect of the Final Closing Statement or the amount of any of the Purchaser’s Proposed Calculations, then the Company shall have the right to direct its independent accountants, at the Company’s expense, to review and test the Final Closing Statement. The Company’s accountants shall complete their review and test of the Final Closing Statement within thirty (30) days after the date the Company disputes any of the Purchaser’s Proposed Calculations. If the Company and its independent accountants, after such review and test, still disagree with the Purchaser’s Proposed Calculations, the Company shall submit its proposed alternative calculations (the “Company’s Proposed Calculations”) of Closing Date Net Working Capital to the Purchaser in writing within forty-five (45) days after the date upon which the Company shall have first notified the Purchaser that it disputes any of the Purchaser’s Proposed Calculations. If the Purchaser does not accept the Company’s Proposed Calculations within fifteen (15) days after its receipt thereof, then within fifteen (15) days after the Purchaser’s rejection of (or failure to timely accept) the Company’s Proposed Calculations, the Company and the Purchaser shall select a mutually acceptable and nationally recognized independent accounting firm, other than the Company’s independent accountants and the Purchaser’s independent accountants (such firm, the “Independent Accounting Firm”), to resolve the remaining disputed items (the “Remaining Disputed Items”), within thirty (30) calendar days after Parentthe date of the Purchaser’s receipt rejection of such statement (such 30-day period hereinafter referred or failure to timely accept) the Company’s Proposed Calculations of the Remaining Disputed Items, by conducting its own review and test of the Final Closing Statement and thereafter selecting either the Purchaser’s Proposed Calculations of the Remaining Disputed Items or the Company’s Proposed Calculations of the Remaining Disputed Items or an amount in between the two. Prior to the selection of the Independent Accounting Firm, each of the parties shall disclose to the other party any and all affiliations or significant relationship it may have with any accounting firm that is proposed as the Independent Accounting Firm hereunder. The Purchaser and the Company agree that they shall be bound by the determination of the Remaining Disputed Items by the Independent Accounting Firm. The fees and expenses of the Independent Accounting Firm shall be paid jointly, one-half by the Purchaser and one-half by the Company; provided that, if the difference between the Final Adjustment and the Final Adjustment that would have resulted from the use of the proposed calculations of one of the parties hereto (the “Review PeriodErroneous Party”). Any such notice ) is more than twice as great as the difference between the Final Adjustment and the Final Adjustment that would have resulted from the use of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parentthe other party’s proposed changes calculations, the Erroneous Party shall pay all of the fees and expenses of the Independent Accounting Firm.
4.3.5. Upon the determination pursuant to Purchaser’s calculation Section 4.3.4 of the Final Closing Statement and the Closing Date Net Working Capital, the Closing Cash Amount shall be recalculated (the “Final Adjustment”) in accordance with Section 4.3.4 using the amount of the Closing Date Net Working Capital, . If the Closing Business Debt, Change of Control Payments, Cash Amount as so calculated is less than the Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered Cash Amount initially determined pursuant to Section 2.6(c) and Parent 4.3.1, the Sellers shall promptly pay to the Purchaser an aggregate amount equal to such difference by wire transfer or Purchaser, as applicable, shall pay delivery of other immediately available US funds within five (5) Business Days of business days after the conclusion of date on which the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed Final Closing Statement is finally determined pursuant to Section 2.6(f)4.3.4. If the Closing Cash Amount as so calculated is more than the Closing Cash Amount initially determined pursuant to Section 4.3.1, as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect Purchaser shall pay to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution Company an amount equal to such effect excess by wire transfer or delivery of other immediately available US funds within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days business days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment the Final Closing Statement is made calculated at finally determined pursuant to Section 4.3.4.
4.3.6. The Purchaser and the Prime Rate. Such interest Company shall make good faith efforts to comply with the timing and response requirement set forth in this Section 4.3, but, in the absence of bad faith, neither party shall be payable at the same time as the payment deemed to which it relates and shall be calculated daily in breach of this Agreement, or to have waived its rights under this Section 4.3, on the basis of a year technical violations of 365 days and the actual number of days elapsedtiming or response requirements.
Appears in 1 contract
Purchase Price Adjustments. (a) The Purchase Price shall be subject to adjustment in accordance with the terms and conditions of this Section 1.05 and the Post-Closing Adjustment Schedule. For illustrative purposes, appended as Annex A to the Post-Closing Adjustment Schedule is a calculation of the Adjustment Amount (as such term is defined in the Post-Closing Adjustment Schedule) based on the accompanying unaudited financial statements of each Relevant Entity as of December 31, 2005 (said calculation being referred to herein as the "December Determination; said accompanying financial statements being referred to herein as the December Determination Financial Statements").
(b) Not more than fifteen (15) and not less later than five (5) Business Days prior to the Closing Date, Parent Seller shall prepare and deliver to Purchaser a statement unaudited financial statements as of the last day of the calendar month immediately preceding the calendar month in which the Closing Date takes place for each Relevant Entity of the types comprising the December Determination Financial Statements (the “Transaction Statement”"Pre-Closing Financial Statements") that contains Parent’s reasonable good faith estimates of and a written determination (ithe "Pre-Closing Determination") the Closing Working Capital (including all of the components thereof) Adjustment Amount based on the Pre-Closing Financial Statements (the "Pre-Closing Adjustment Amount"), in each case expressed in Dollars. The Pre-Closing Determination and Pre-Closing Financial Statements shall be prepared in accordance with the Calculation Principles (same accounting principles, practices, methodologies and policies used in the “Estimated Closing Working Capital”)preparation of the December Determination and December Determination Financial Statements, (ii) the Closing Business Debt (the “Estimated Closing Business Debt”), (iii) the Closing Transaction Expenses (the “Estimated Closing Transaction Expenses”), (iv) the Change of Control Payments (the “Estimated Closing Change of Control Payments”), (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”)respectively.
(bc) Within sixty (60) days after the Closing Date, Seller shall prepare and deliver to Purchaser unaudited financial statements as of the Effective Time for each Relevant Entity of the types comprising the December Determination Financial Statements (the "Closing Financial Statements") and a written determination (the "Closing Determination") of the Adjustment Amount based on the Closing Financial Statements (the "Preliminary Adjustment Amount"), in each case expressed in Dollars. The Base Purchase Price Closing Determination and Closing Financial Statements shall be prepared in accordance with the same accounting principles, practices, methodologies and policies used in the preparation of the December Determination and December Determination Financial Statements, respectively. After the Closing Date, at Seller's request, Purchaser shall assist Seller and its Representatives in the preparation of the Closing Financial Statements and the Closing Determination. Purchaser shall provide Seller and its Representatives any information reasonably requested and shall provide them full access at all reasonable times to the properties, books, records and other materials of each Relevant Entity and the personnel of, and work papers prepared by or for Purchaser, the Relevant Entities or their respective accountants, including, without limitation, to such historical financial information relating to the Relevant Entities as Seller may reasonably request in connection with Seller's preparation and delivery of the Closing Determination in accordance with this Section 1.05.
(d) Upon receipt of the Closing Determination, Purchaser shall have sixty (60) days (the "Review Period") to review such Closing Determination and related Closing Financial Statements. If Purchaser has accepted such Closing Determination and related Closing Financial Statements in writing or has not given written notice to Seller setting forth in reasonable detail any objection of Purchaser to such Closing Determination and related Closing Financial Statements (a "Statement of Objections") prior to the expiration of the Review Period, then such Closing Determination and Closing Financial Statements shall be final and binding upon the Parties, and the Preliminary Adjustment Amount shall be deemed the Adjustment Amount as of the Effective Time (the "Final Adjustment Amount"). In the event that Purchaser delivers a Statement of Objections during the Review Period, the Parties shall use their reasonable efforts to agree on the Adjustment Amount within thirty (30) days following the receipt by Seller of the Statement of Objections. If the Parties are unable to reach an agreement as to such amount within such thirty (30) day period, then the matter shall be submitted to PricewaterhouseCoopers LLP, or such other "Big 4" accountant as shall be mutually agreed between the Parties (such accountant, the "Settlement Accountant"), who, acting as an expert and not as an arbitrator, shall resolve the matters still in dispute, but only such matters, and shall adjust the Closing Determination and related Closing Financial Statements in accordance with this Section 1.05 to reflect such resolution and establish the Final Adjustment Amount. The Settlement Accountant shall make such determination within forty (40) days following the engagement of the Settlement Accountant, and such determination shall be final and binding upon the Parties. Either Party may seek to enforce the Settlement Accountant's determination in a court of competent jurisdiction and any disputes with respect to the matters relating to this Section 1.05 shall not be subject to adjustment arbitration under Section 9.12. Each Party will bear fifty percent (50%) of the fees, charges and expenses of the Settlement Accountant, unless the Final Adjustment Amount is within (10%) of the Preliminary Adjustment Amount, in which event one hundred percent (100%) of the fees, charges and expenses of the Settlement Accountant shall be borne (x) by Seller if the Adjustment Amount is positive, or (y) by Purchaser if the Adjustment Amount is negative.
(e) The scope of any dispute to be resolved by the Settlement Accountant shall be limited to whether the amounts set forth on the Closing Determination and related Closing Financial Statements were prepared in a manner consistent with the December Determination and the December Determination Financial Statements (i.e., in accordance with the consistent application of the same accounting principles, practices, methodologies and policies used in the preparation of the December Determination and the December Determination Financial Statements), and whether there were mathematical errors in the Closing Determination or the Closing Financial Statements. The Parties acknowledge that the sole purpose of the Closing Determination is to adjust the Purchase Price pursuant to the methodology set forth on the Post-Closing Adjustment Schedule as of the Effective Time and such purpose can only be fulfilled if the calculation of the Closing Determination and the preparation of the related Closing Financial Statements is done using the same accounting principles, practices, methodologies and policies as were used in the calculation of the December Determination and the preparation of the December Determination Financial Statements. In resolving a dispute relating to the Adjustment Amount or any particular item in the Closing Determination or Closing Financial Statements, the Settlement Accountant may not assign a value to the Adjustment Amount or any such particular item greater than the greatest value for the Adjustment Amount or such item claimed by either Party or less than the smallest value for the Adjustment Amount or such item claimed by either Party, in each case as presented to the Settlement Accountant. Within ten (10) days after the engagement of the Settlement Accountant, each of the Parties shall present to the Settlement Accountant, with a copy to the other Party, their respective positions with respect to the items set forth in the Statement of Objections in the form of a written binder of supporting materials (the "Supporting Binder") and no ex parte conferences, oral examinations, testimony, depositions, discovery or other form of evidence gathering or hearings shall be conducted or allowed by any Party (or any of its Representatives) and the Settlement Accountant; provided, that, at the Closing Settlement Accountant's request, or as follows:mutually agreed by the Parties, the Parties may meet with the Settlement Accountant so long as Representatives of both the Parties are present.
(1f) If Each of the Estimated Parties shall make readily available to the Settlement Accountant, with a copy to the other Party, all available relevant work papers and books and records relating to the Relevant Entities as are reasonably requested by the Settlement Accountant and shall use reasonable efforts to cooperate with, and do all things reasonably practicable to assist, the Settlement Accountant in resolving any disputed matters. Following the Effective Time, any action the Purchaser may take, or cause to be taken, with respect to the accounting books and records of the Relevant Entities on which the Closing Working Capital Determination and the related Closing Financial Statements are to be based that is not consistent with the accounting principles, practices, methodologies and policies of the Relevant Entities shall not be effective for the purpose of determining the Final Adjustment Amount. Without limiting the generality of the foregoing, no change made, or caused to be made, by Purchaser in any reserve or other account existing as of the date of the December Determination Financial Statements that is not a result of events occurring after the date of the December Determination Financial Statements and made in a manner consistent with the accounting principles, practices, methodologies and policies of the Relevant Entities used in connection with the preparation of the December Determination Financial Statements shall be effective for the purpose of determining the Final Adjustment Amount.
(g) In the event that the Final Adjustment Amount is greater than the Reference Pre-Closing Adjustment Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amountby, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills prior to the Closing, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusal, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver pay to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation PrinciplesSeller, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, (iv) the Change of Control Payments, (v) the Project Contributions, (vi) the Chinese DBFO Proceeds, (vii) the Dalriada DBFO Proceeds and (viii) the Other DBFO Proceeds.
(d) Parent shall notify Purchaser of its acceptance or dispute of any amounts reflected on the Post-Closing Statement, within thirty (30) calendar days after Parent’s receipt of such statement (such 30-day period hereinafter referred to as the “Review Period”). Any such notice of disagreement shall specify, with a reasonably detailed explanation, those items or amounts as to which Parent disagrees (and shall include Parent’s proposed changes to Purchaser’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days following the determination of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed Final Adjustment Amount pursuant to Section 2.6(f1.05(d), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If Purchaser and Parent are unable to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution to the New York, New York office of KPMG LLP or such other independent accountant firm of international reputation as is mutually agreed to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to as the “Accounting Firm”). The Accounting Firm shall be directed to, within thirty (30) calendar days after submission of the dispute, determine and report to the parties upon such remaining disputed amounts with respect to the Post-Closing Statement, and such report shall be final, binding and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of the Accounting Firm that is amount equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds or Other DBFO Proceeds, as applicable, in accordance with this Section 2.6, Purchaser or Parent, as applicable, shall make the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Working Capital, Parent shall pay the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Working Capital, Purchaser shall pay the amount of such excess to Parent.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which Final Adjustment Amount over the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Pre-Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available fundsAdjustment Amount, together with interest thereon for the period commencing on from the Closing Date through to (and including) the date on which such payment is made calculated of payment, at the "Prime Rate. Such interest " quoted in the "Money Rates" section of The Wall Street Journal (the "Applicable Rate"), by wire transfer of immediately available Dollar funds to one or more accounts designated by Seller.
(h) In the event that the Final Adjustment Amount is less than the Pre-Closing Adjustment Amount, the Purchase Price shall be payable reduced by, and Seller shall pay to Purchaser, within five (5) Business Days following the determination of the Final Adjustment Amount pursuant to Section 1.05(d), an amount equal to the excess of the Pre-Closing Adjustment Amount over the Final Adjustment Amount, together with interest thereon for the period from the Closing Date to (and including) the date of payment, at the same time as the payment Applicable Rate, by wire transfer of immediately available Dollar funds to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsedone or more accounts designated by Purchaser.
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Purchase Price Adjustments. 2.3.1 At least two (a) Not more than fifteen (15) and not less than five (52) Business Days prior to the Closing DateClosing, Parent Seller shall deliver have prepared and delivered to Purchaser a statement the Investors an officer’s certificate of Seller (the “Transaction Estimated Closing Statement”) that contains Parent’s reasonable a good faith estimates and reasonable best estimate of (i) the Closing Net Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles (the “Estimated Closing Net Working Capital”), (ii) the amount of Company Indebtedness calculated through and including the Closing Business Debt that will be unpaid immediately prior to the Closing (including final bills and wire transfer instructions as applicable) (the “Estimated Closing Business DebtCompany Indebtedness”), (iii) the Closing Transaction Expenses calculated through and including the Closing that will be unpaid immediately prior to the Closing, plus the aggregate amount of the Transaction Expenses that will become payable after the Closing, to the extent calculable (the “Estimated Transaction Expenses”), and (iv) the Cash on Hand as of the Closing (the “Estimated Cash on Hand”). If the Estimated Net Working Capital exceeds the Target Net Working Capital, then the Closing Payment payable to Seller at the Closing pursuant to Section 2.2.1(i) shall be increased by such excess amount. If the Estimated Net Working Capital is less than the Target Net Working Capital, then the Closing Payment payable to Seller at the Closing pursuant to Section 2.2.1(i) shall be decreased by such shortfall amount.
2.3.2 Within ninety (90) calendar days after the Closing Date, the Investors shall prepare and deliver to Seller a statement (the “Closing Statement”) setting forth the Investors’ calculation of (i) the Net Working Capital (the “Net Working Capital Calculation”), (ii) the amount of Company Indebtedness calculated through and including the Closing and unpaid immediately prior to the Closing (including final bills and wire transfer instructions as applicable) (the “Closing Company Indebtedness”), and (iii) the Transaction Expenses calculated through and including the Closing and unpaid immediately prior to the Closing, plus the aggregate amount of the Transaction Expenses paid or payable after the Closing, to the extent calculable (the “Closing Transaction Expenses”), (iv) the Change Cash on Hand as of Control Payments the Closing (the “Estimated Closing Change of Control PaymentsCash on Hand”), ) and (v) the Project Contributions (the “Estimated Project Contributions”), (vi) the Chinese DBFO Proceeds (the “Estimated Chinese DBFO Proceeds”), (vii) the Dalriada DBFO Proceeds (the “Estimated Dalriada DBFO Proceeds”) and (viii) the Other DBFO Proceeds (the “Estimated Other DBFO Proceeds”).
(b) The Base Purchase Price shall be subject to adjustment at the Closing as follows:
(1) If the Estimated Closing Working Capital is greater than the Reference Amount, the Base Purchase Price shall be increased by such excess.
(2) If the Estimated Closing Working Capital is less than the Reference Amount, the Base Purchase Price shall be reduced by such deficit.
(3) The Base Purchase Price shall be reduced by the amount Investors’ proposed calculation of the Estimated Closing Business Debt, if any.
(4) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Transaction Expenses, if any.
(5) The Base Purchase Price shall be reduced by the amount of the Estimated Closing Change of Control Payments, if any.
(6) If the Business’s land improvements relating to the DBFO project in the City of Beverly Hills, California (the “▇▇▇▇▇▇▇ Hills DBFO Assets”) are sold back to the City of ▇▇▇▇▇▇▇ Hills Adjustment Calculation. On or prior to the Closingforty fifth (45th) calendar day following the Investors’ delivery of the Closing Statement, the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000); provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreementNet Working Capital Calculation, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by Eighteen Million Four Hundred Thousand Dollars ($18,400,000) unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(7) If any DBFO joint venture partner exercises its right to purchase any of the Target Shares pursuant to a contractual right of first refusalIndebtedness, the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7; provided that such transaction is closed and all funds related thereto are transferred to Parent (whether directly or indirectly) prior to the Closing; provided further that if (A) there is a fully executed definitive purchase agreement, but such transaction has not closed prior to the Closing then (B) the Base Purchase Price shall be reduced by an amount equal to the dollar amount allocated to such Target Shares (on a pro-rata basis) on Schedule 2.7 unless Purchaser or any Purchased Company shall be irrevocably entitled to receive the proceeds from the transaction.
(8) The Base Purchase Price shall be increased by an amount equal to the Estimated Project Contributions, if any.
(9) The Base Purchase Price shall be reduced by an amount equal to the Estimated Chinese DBFO Proceeds, if any.
(10) The Base Purchase Price shall be reduced by an amount equal to the Estimated Dalriada DBFO Proceeds, if any.
(11) With respect to each of Parent’s fiscal quarters occurring between September 28, 2007 and the Closing Date, Parent shall be entitled to receive (directly or indirectly) Other DBFO Proceeds in an amount equal to the Permitted Proceeds. The Base Purchase Price shall be reduced by the amount, if any, that the Estimated Other DBFO Proceeds exceeds the aggregate amount of all Permitted Proceeds Parent is entitled to receive between September 28, 2007 and the Closing Date. The Base Purchase Price, as adjusted pursuant to this Section 2.6(b), is the “Closing Payment.”
(c) Within seventy-five (75) calendar days after the Closing, Purchaser shall prepare and deliver to Parent a statement (the “Post-Closing Statement”) of (i) the Closing Working Capital (including all of the components thereof) prepared in accordance with the Calculation Principles, (ii) the Closing Business Debt, (iii) the Closing Transaction Expenses, the Closing Cash on Hand and the Adjustment Calculation as determined by the Investors, Seller may give the Investors a written notice stating in reasonable detail any and all of Seller’s non-duplicative objections (ivan “Objection Notice”) to the Change Closing Statement or the determination of Control Paymentsthe Net Working Capital Calculation, the Closing Company Indebtedness, the Closing Transaction Expenses, the Closing Cash on Hand or the Adjustment Calculation as determined by the Investors, including the amount, nature and basis of each objection (vand necessary supporting documentation). During such forty fifth (45) calendar day period, the Project ContributionsInvestors shall provide Seller, with access, at reasonable times and upon reasonable prior notice, to the Company’s Books and Records and the Company’s personnel and accountants reasonably related to the Closing Statement. Any determination set forth on the Closing Statement to which Seller does not specifically object in the Objection Notice shall be deemed acceptable and shall be final and binding upon the Parties upon delivery of the Objection Notice. The failure by Seller to deliver an Objection Notice within such forty five (vi45) day period shall constitute Seller’s acceptance of all items set forth in the Chinese DBFO ProceedsClosing Statement, (vii) the Dalriada DBFO Proceeds which shall be final and (viii) the Other DBFO Proceedsbinding on Seller for all purposes of this Agreement.
(d) Parent shall notify Purchaser of its acceptance or dispute 2.3.3 Following the Investors’ receipt of any amounts reflected Objection Notice, Seller and the Investors shall attempt to negotiate in good faith to resolve such dispute. In the event that the Parties fail to agree on any of Seller’s proposed adjustments set forth in the Post-Closing StatementObjection Notice, within thirty (30) calendar days after Parent’s receipt of such statement the Investors receive the Objection Notice, the Parties agree that an Accounting Arbitrator shall make the final, binding determination, absent fraud or manifest error, regarding the proposed adjustments set forth in the Objection Notice that are not resolved by the Parties (such 30-day period hereinafter referred to as the “Review PeriodAdjustment Calculation Disputed Items”). Any such notice The Investors, on the one hand, and Seller, on the other hand, each shall provide the Accounting Arbitrator with their respective determinations of disagreement the Adjustment Calculation Disputed Items. The Accounting Arbitrator shall specifymake its determination of the Adjustment Calculation Disputed Items and the resultant Final Net Working Capital Calculation (defined below), with a reasonably detailed explanationFinal Company Indebtedness (defined below), those items or amounts as to Final Transaction Expenses (defined below), Final Cash on Hand (defined below) and Final Adjustment Calculation which Parent disagrees (determination shall be final and binding on the Parties. The determination of any of the Adjustment Calculation Disputed Items by the Accounting Arbitrator shall include Parent’s proposed changes to Purchaserbe within, and limited by, the range comprised of the respective determination of each of the Investors’ and Seller’s calculation of the Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable). Parent shall be deemed to have agreed with all other items and amounts included in the Post-Closing Statement delivered pursuant to Section 2.6(c) and Parent or Purchaser, as applicable, shall pay within five (5) Business Days of the conclusion of the Review Period the maximum amount, if any, which Purchaser and Parent agree would otherwise be owed pursuant to Section 2.6(f), as applicable, upon the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds and Other DBFO Proceeds, as applicable (the “Undisputed Amounts”).
(e) In the event of a dispute with respect to such Adjustment Calculation Disputed Items. The determination of the Post-Closing Statement, Purchaser and Parent shall negotiate in good faith to reconcile their differences and any resolution Adjustment Calculation Disputed Items by them as to any disputed amounts the Accounting Arbitrator shall be finalbased on whether such Adjustment Calculation Disputed Items have been calculated in accordance with this Agreement, binding including the applicable definitions contained therein, and conclusive on the partiesAccounting Arbitrator is not to make any other determination. If Purchaser The Investors and Parent are unable Seller shall promptly furnish or cause to reach a resolution to such effect within thirty (30) calendar days after Purchaser’s receipt of Parent’s written notice of disagreement, Purchaser and Parent shall submit the amounts remaining in dispute for resolution be furnished to the New York, New York office of KPMG LLP or Accounting Arbitrator such work papers and other independent accountant firm of international reputation as is mutually agreed documents and information relating to and appointed by Purchaser and Parent (such independent accounting firm being herein referred to the Adjustment Calculation Disputed Items as the Accounting Arbitrator may reasonably request and that are available to the Investors (collectively, the “Accounting FirmRequested Information”). The Accounting Firm Arbitrator shall make its determination based solely on presentations and supporting material provided by the Parties and the Requested Information, and not pursuant to any independent review. The Parties shall instruct the Accounting Arbitrator to provide its determination in writing to each of them within sixty (60) days after the matter is referred to the Accounting Arbitrator. The fees, costs and expenses of the Accounting Arbitrator shall be directed topaid pro rata by the Investors, within thirty (30) calendar days after submission on the one hand, and Seller, on the other hand, in relation to the proportional difference between the Accounting Arbitrator’s determination of the dispute, determine Final Adjustment Calculation and report to the parties upon such remaining disputed amounts Investors’ and Seller’s respective determination of the Adjustment Calculation. Any of the Parties may require that the Accounting Arbitrator enter into a customary form of confidentiality agreement with respect to the Post-Closing Statement, work papers and such report shall be final, binding other documents and conclusive on the parties hereto and shall constitute an arbitral award upon which a judgment may be entered in any court having jurisdiction thereof. The Accounting Firm shall address only those items in dispute. Purchaser shall bear and pay a percentage of the fees and disbursements of information provided to the Accounting Firm that is equal to Arbitrator under this Section 2.3.3. As used herein, “Final Net Working Capital Calculation” means the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are successful, and Parent shall bear and pay a percentage of the fees an disbursements of the Accounting Firm that is equal to the percentage of the total dollar amount of changes proposed to the Post-Closing Statement by Parent that are not successful, Net Working Capital Calculation as ultimately determined in each case as determined by the Accounting Firm.
(f) No later than five (5) Business Days after the final resolution of Closing Working Capital, Closing Business Debt, Change of Control Payments, Closing Transaction Expenses, Project Contributions, Chinese DBFO Proceeds, Dalriada DBFO Proceeds accordance with Section 2.3.2 or Other DBFO Proceedsthis Section 2.3.3, as applicable, “Final Company Indebtedness” means the amount of Closing Company Indebtedness as ultimately determined in accordance with Section 2.3.2 or this Section 2.6, Purchaser or Parent2.3.3, as applicable, shall make and “Final Transaction Expenses” means the following payments; provided that, such payments shall only be made to the extent that the amounts owed have not otherwise been satisfied by a prior payment, if any, amount of the Undisputed Amounts pursuant to Section 2.6(d):
(1) If the Closing Working Capital Transaction Expenses as finally ultimately determined in accordance with Section 2.3.2 or this Section 2.6 is less than the Estimated Closing Working Capital2.3.3, Parent shall pay as applicable. “Final Cash on Hand” means the amount of such shortfall to Purchaser.
(2) If the Closing Working Capital Cash on Hand as finally ultimately determined in accordance with Section 2.3.2 or this Section 2.6 is greater than the Estimated Closing Working Capital2.3.3, Purchaser shall pay the amount of such excess to Parentas applicable.
(3) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is less than the Estimated Closing Business Debt, Purchaser shall pay the amount of such shortfall to Parent.
(4) If the Closing Business Debt as finally determined in accordance with this Section 2.6 is greater than the Estimated Closing Business Debt, Parent shall pay the amount of such excess to Purchaser.
(5) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Transaction Expenses, Purchaser shall pay the amount of such shortfall to Parent.
(6) If the Closing Transaction Expenses as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Transaction Expenses, Parent shall pay the amount of such excess to Purchaser.
(7) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are less than the Estimated Closing Change of Control Payments, Purchaser shall pay the amount of such shortfall to Parent.
(8) If the Change of Control Payments as finally determined in accordance with this Section 2.6 are greater than the Estimated Closing Change of Control Payments, Parent shall pay the amount of such excess to Purchaser.
(9) If the Project Contributions as finally determined in accordance with this Section 2.6 are less than the Estimated Project Contributions, Parent shall pay the amount of such shortfall to Purchaser.
(10) If the Project Contributions as finally determined in accordance with this Section 2.6 are greater than the Estimated Project Contributions, Purchaser shall pay the amount of such excess to Parent.
(11) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Chinese DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(12) If the Chinese DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Chinese DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(13) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Dalriada DBFO Proceeds, Purchaser shall pay the amount of such shortfall to Parent.
(14) If the Dalriada DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Dalriada DBFO Proceeds, Parent shall pay the amount of such excess to Purchaser.
(15) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are less than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds was greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Purchaser shall pay the amount of such shortfall to Parent; provided, however that Purchaser shall not be obligated to pay Parent any amount in excess of the amount by which the Base Purchase Price was reduced pursuant to Section 2.6(b)(11), if any.
(16) If the Other DBFO Proceeds as finally determined in accordance with this Section 2.6 are greater than the Estimated Other DBFO Proceeds (and the Estimated Other DBFO Proceeds were greater than the aggregate amount of all Permitted Proceeds Parent is entitled to receive between the Effective Date and the Closing Date), Parent shall pay the amount of such excess to Purchaser.
(g) Any payment to be made as a result of an adjustment to the Base Purchase Price pursuant to this Section 2.6 shall be paid by wire transfer of immediately available funds, together with interest thereon for the period commencing on the Closing Date through the date on which such payment is made calculated at the Prime Rate. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.
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