Purchase Price Adjustments. (a) Not more than seven (7) Business Days nor less than three (3) Business Days prior to the Closing Date, the Sellers shall deliver to the Buyers a statement (the “Estimated Closing Statement”) showing the Sellers’ good faith calculation of Estimated Working Capital and Estimated Closing Indebtedness including the calculation thereof in reasonable detail and with reasonable backup documentation regarding the calculation of such amounts, calculated in accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4, together with a calculation of the Closing Payment. The Buyers and their Representatives shall be entitled to reasonable access during normal business hours to the relevant records, personnel and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith to agree on the Closing Payment prior to the Closing; provided, however, that the failure to agree on such amount shall not delay or otherwise prevent the Closing and, to the extent of any remaining dispute, the Sellers’ calculation of the Closing Payment shall prevail. (b) Prior to the Closing on the Closing Date (at such time as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in any event within sixty (60) days after the Closing Date, the Buyers shall prepare (or cause to be prepared) and deliver to the Sellers a statement (the “Post-Closing Statement”) showing the Buyers’ calculation of Closing Working Capital (including, for the avoidance of doubt but subject to the last sentence of this Section 1.4(c), the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), and the amount of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the Purchase Price. The Buyers 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with such reasonable access to the books, records and personnel of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers shall endeavor in good faith to resolve all such disagreements within the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes of this Agreement. If the Buyers and the Sellers are unable to resolve any disagreements regarding the Post-Closing Statement and the calculations reflected thereon within the Negotiating Period, then within fifteen (15) days after the end of the Negotiating Period all such disputes shall be promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be instructed only to resolve all outstanding disagreements relating to the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures set forth in this Agreement and not by independent review) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyers. (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall pay to the Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing, an amount equal to such Actual Surplus, or (B) if the finally determined Purchase Price is less than the Closing Payment (such amount, the “Actual Deficiency”), then the Sellers shall pay to the Buyers an amount equal to such Actual Deficiency by wire transfer of immediately available funds to such account or accounts as may be designated by the Buyers to the Sellers in writing.

Appears in 1 contract

Samples: Equity Purchase Agreement (Twin River Worldwide Holdings, Inc.)

Purchase Price Adjustments. In the event that on or before the date which is 60 days after the Closing Date: (1) the counterparty to the San Xxxxxxxx Royalty Agreement or the La Palmilla Royalty Agreement validly exercises its right of first refusal under either such agreement; (2) any consent, approval, waiver or Authorization disclosed in Section 3.1(5) of the Vendor Disclosure Letter is not obtained and delivered to EMX; (3) any Assignment Agreement or other transfer document (including notification to any counterparty to any Royalty Document or Deferred Consideration Document of the assignment and transfer to the relevant Purchaser of such Royalty Document or Deferred Consideration Document, as applicable) prudent or necessary to give effect to the transactions contemplated herein which was not executed and delivered on the Closing Date is not executed and delivered by each of the parties thereto; or (4) such document listed in Section 3.1(7)(a) of the Vendor Disclosure Letter in a form reasonably satisfactory to EMX is not obtained and delivered to EMX, in each case, with the result that the Purchased Asset to which such right of first refusal, consent, approval, waiver, Authorization, amendment, Assignment Agreement or other transfer document relates is not duly and validly assigned and transferred to the Purchasers in accordance with this Agreement and all legal requirements applicable to such assignment and transfer, (a) ~~Not more than seven (7) Business Days nor less than three (3) Business Days~~ in the case of the valid exercise of a right of first refusal under the San Xxxxxxxx Royalty Agreement and/or the La Palmilla Royalty Agreement that occurs prior to the Closing Date, the ~~Sellers shall deliver~~ Purchase Price and the Share Consideration payable by the Purchasers to SSR (for on behalf of itself and the Buyers a statement (the “Estimated Closing Statement”) showing the Sellers’ good faith calculation of Estimated Working Capital and Estimated Closing Indebtedness including the calculation thereof in reasonable detail and with reasonable backup documentation regarding the calculation of such amounts, calculated other Vendors in accordance with ~~GAAP and using~~ the ~~same methodology as the calculation~~ allocation set forth on ~~Schedule 1.4, together with a calculation of the Closing Payment. The Buyers and their Representatives~~ Exhibit B) hereunder shall be ~~entitled to reasonable access during normal business hours~~ reduced by an amount equal to the ~~relevant records~~amount allocated to such Purchased Asset as set out on Exhibit B, ~~personnel~~ and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith to agree on the Closing Payment prior to the Closing; provided, however, that the failure to agree on such amount shall not delay or otherwise prevent the Closing and, to the extent of any remaining dispute, the Sellers’ calculation of the Closing Payment shall prevail. (b) Prior to the Closing on the Closing Date (at such time as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the ~~preparation~~ case of ~~Closing Working Capital that is contained~~ any failure to obtain any consent, approval, waiver, Authorization, amendment, Assignment Agreement or other transfer document contemplated in ~~the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute~~ Section 2.7(2) to Section 2.7(4) with respect to a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in any event Purchase Asset within ~~sixty (60)~~ 60 days after the Closing Date, the Buyers shall prepare (or cause to be prepared) and deliver to the Sellers a statement (the “Post-Closing Statement”) showing the Buyers’ calculation of Closing Working Capital (including, for the avoidance of doubt but subject to the last sentence of this Section 1.4(c), the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), Purchase Price and the ~~amount~~ Cash Consideration payable by the Purchasers to SSR (for and on behalf of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the Purchase Price. The Buyers shall promptly provide to the Sellers such backup or supporting data relating to the preparation of the Post-Closing Statement itself and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with such reasonable access to the books, records and personnel of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers shall endeavor in good faith to resolve all such disagreements within the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes of this Agreement. If the Buyers and the Sellers are unable to resolve any disagreements regarding the Post-Closing Statement and the calculations reflected thereon within the Negotiating Period, then within fifteen (15) days after the end of the Negotiating Period all such disputes shall be promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be instructed only to resolve all outstanding disagreements relating to the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and Vendors in accordance with the ~~guidelines and procedures~~ allocation set forth ~~in this Agreement and not by independent review~~on Exhibit B) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, hereunder shall be ~~the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne~~ reduced by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyers. (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall pay to the Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing, an amount equal to the amount allocated to such ~~Actual Surplus~~Purchased Asset as set out on Exhibit B, or and SSR (Bfor and on behalf of itself and the other Vendors, as applicable) if shall within five days thereafter, refund such amount to the ~~finally determined Purchase Price is less than~~ Purchasers in immediately available funds, as directed by EMX. In connection with the ~~Closing Payment (such amount~~foregoing, the ~~“Actual Deficiency”), then the Sellers~~ Purchasers shall ~~pay~~ execute all such documentation as SSR may reasonably require to ~~the Buyers an amount equal to such Actual Deficiency by wire~~ rescind any purported transfer of ~~immediately available funds to~~ such ~~account or accounts as may be designated by the Buyers to the Sellers~~ Purchased Asset which SSR has paid a full refund in ~~writing~~respect of.

Appears in 1 contract

Samples: Royalty Purchase Agreement (EMX Royalty Corp)

Purchase Price Adjustments. (a) ~~Not more than seven~~ Estimates. Seller shall, at least five (~~7) Business Days nor less than three (3~~5) Business Days prior to the Closing Date, cause to be prepared and delivered to Purchaser a statement, prepared in good faith, setting forth (i) a good faith, reasonable estimate of the ~~Sellers shall deliver~~ amount of Capital Contributions on the Closing Date but immediately prior to the ~~Buyers~~ Closing (the “Estimated Capital Contributions”), and (ii) a good faith, reasonable estimate of the Intercompany Loan Amount on the Closing Date but immediately prior to the Closing (the “Estimated Intercompany Loans” and such statement (with the statement of Estimated Capital Contributions, the “Estimated Closing Statement”). Purchaser shall have an opportunity to review with Seller and object to (but not determine) showing the Sellers’ good faith calculation of Estimated Working Capital and Estimated Closing Indebtedness including the calculation thereof in reasonable detail and with reasonable backup documentation regarding the calculation of such amounts, calculated in accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4, together with a calculation of the Closing Payment. The Buyers and their Representatives shall be entitled to reasonable access during normal business hours to the relevant records, personnel and working papers of the Sellers and the Companies to aid in their review all or any part of the Estimated Closing ~~Statement~~ Statement, such review to be reasonably prompt and any objection to be in good faith. In the ~~calculation~~ event that Purchaser shall object to any portion of ~~Estimated Working Capital and~~ the Estimated Closing ~~Indebtedness. The Sellers~~ Statement, Purchaser and ~~the Buyers~~ Seller shall ~~work together~~ discuss Purchaser's objections in good ~~faith to agree on the Closing Payment prior to the Closing;~~ faith, provided, however, that if Purchaser and Seller have not agreed-upon the ~~failure~~ Estimated Closing Statement prior to ~~agree on such amount shall not delay or otherwise prevent the Closing and~~Closing, to the extent of any remaining dispute, the Sellers’ calculation of the Closing Payment shall prevail. (b) Prior to the Closing on the Closing Date (at such time as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers it shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in any event within sixty (60) days after the Closing Date, the Buyers shall prepare (or cause to be prepared) and deliver to the Sellers a statement (the “Post-Closing Statement”) showing the Buyers’ calculation of Closing Working Capital (including, for the avoidance of doubt but subject to the last sentence of this Section 1.4(c), the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), and the amount of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on ~~such calculations, the Buyers’ calculation of the Purchase Price~~Seller's good faith estimate. The Buyers 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with such reasonable access to the books, records and personnel of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers shall endeavor in good faith to resolve all such disagreements within the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Estimated Closing Statement, as ~~modified to reflect such resolution~~the same may have been adjusted by Seller following the objections of Purchaser, shall be the ~~final Post-~~“Agreed Estimated Closing Statement”. The Agreed Estimated Closing Statement ~~and~~ shall be ~~binding on all parties for all purposes of this Agreement. If~~ used to adjust the ~~Buyers and~~ Closing Date Payments payable at the ~~Sellers are unable to resolve any disagreements regarding the Post-~~Closing Statement and the calculations reflected thereon within the Negotiating Period, then within fifteen (15) days after the end of the Negotiating Period all such disputes shall be promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be instructed only to resolve all outstanding disagreements relating to the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures set forth in this Agreement and not by independent review) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyers2.02 hereof. (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall pay to the Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing, an amount equal to such Actual Surplus, or (B) if the finally determined Purchase Price is less than the Closing Payment (such amount, the “Actual Deficiency”), then the Sellers shall pay to the Buyers an amount equal to such Actual Deficiency by wire transfer of immediately available funds to such account or accounts as may be designated by the Buyers to the Sellers in writing.

Appears in 1 contract

Samples: Stock Sale Agreement (Memc Electronic Materials Inc)

Purchase Price Adjustments. (a) ~~Not more~~ No later than ~~seven~~ five (~~7) Business Days nor less than three (3~~5) Business Days prior to the Closing Date, ~~the~~ Sellers shall deliver to ~~the Buyers~~ Buyer a closing statement (the “~~Estimated~~ Closing Statement”~~) showing the Sellers’~~ ), which shall include a good faith calculation of ~~Estimated Working Capital~~ (i) the Closing Date Payables Amount, (ii) the Closing Date Receivables Amount, (iii) the Closing Date Real Estate Prorations, and ~~Estimated Closing Indebtedness including~~ (iv) the ~~calculation thereof in reasonable detail and~~ Incomplete Tower Holdback Amount, if any, along with reasonable ~~backup~~ supporting documentation ~~regarding~~ used in the ~~calculation of such amounts, calculated in accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4, together with a calculation~~ preparation of the Closing Payment. The Buyers and their Representatives shall be entitled to reasonable access during normal business hours to the relevant records, personnel and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith to agree on the Closing Payment prior to the Closing; provided, however, that the failure to agree on such amount shall not delay or otherwise prevent the Closing and, to the extent of any remaining dispute, the Sellers’ calculation of the Closing Payment shall prevailStatement. (b) ~~Prior~~ In the event Buyer notifies Sellers of any objection to the Closing on Statement prior to the Closing, then Buyer and Sellers shall negotiate in good faith to resolve such objection(s) prior to the Closing Date (at such time as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chipsDate; provided, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count that if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of parties are unable to resolve such ~~Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3~~objection(s) ~~Business Days after~~ prior to the Closing Date, then the ~~Sellers~~ Closing Date Payables Amount, the Closing Date Receivables Amount, the Closing Date Real Estate Prorations and the Incomplete Tower Holdback Amount set forth in the Closing Statement shall ~~provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail~~ be used for the ~~Buyers~~ purpose of calculating of the Purchase Price as of the Closing pursuant to ~~determine~~ Section 2.2 (such Purchase Price as set forth in the ~~type~~Closing Statement or adjusted pursuant to this Section 2.6(b), ~~number~~ the “Closing Purchase Price”) and ~~denomination of each of Seller’s Chips~~such objection(s) shall be resolved as set forth in Section 2.6(c). (c) ~~As soon as reasonably practicable but in~~ If the parties were unable to resolve any ~~event~~ objection(s) to the Closing Statement prior to the Closing Date or, if within sixty (60) calendar days ~~after~~ following the Closing Date, ~~the Buyers shall prepare (or cause to be prepared) and deliver~~ Buyer objects to the ~~Sellers a statement (the “Post-~~Closing ~~Statement”) showing the Buyers’ calculation of Closing Working Capital (including, for the avoidance of doubt but subject~~ Statement by written notice to the ~~last sentence of this Section 1.4(c)~~Sellers, ~~the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals~~ which notice shall set forth ~~on Schedule 1.4),~~ Buyer’s objections and ~~the amount of Closing Indebtedness, including the calculation thereof~~ specify in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the Purchase Price. The Buyers 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with such reasonable access to the books, records and personnel of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any ~~disagreement~~ objections so asserted ~~including an estimate~~(the “Objections Statement”), ~~to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers~~ Buyer and ~~the~~ Sellers shall ~~endeavor~~ cooperate in good faith to resolve ~~all~~ any such ~~disagreements within the thirty (30)-day period (the “Negotiating Period”~~objection(s) following the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as ~~modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes of this Agreement~~promptly as possible. If ~~the Buyers~~ Buyer and ~~the~~ Sellers are unable to resolve any ~~disagreements regarding the Post-Closing Statement~~ such dispute within ninety (90) calendar days (or such longer period as Buyer and ~~the calculations reflected thereon within the Negotiating Period, then within fifteen (15~~Sellers shall mutually agree in writing) ~~days after the end~~ of the ~~Negotiating Period all~~ Closing Date, such ~~disputes~~ dispute and each party’s submissions related thereto shall be ~~promptly referred~~ submitted to ~~a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to~~ and resolved in accordance with this Section 2.6(c) by the ~~Buyers and the Sellers (the “~~Neutral Accounting Firm”). Buyer and Sellers shall use reasonable efforts to cause the Neutral Accounting Firm to render a written decision resolving the matters submitted to the Neutral Accounting Firm within 30 calendar days of the making of such submission. The Neutral Accounting Firm shall ~~be instructed~~ consider only ~~to resolve all outstanding disagreements relating to~~ those items and amounts which are identified in the ~~Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon, and~~ Objections Statement. The Neutral Accounting Firm’s decision 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 (it being understood that the amount of any reserves related to incurred but not reported claims based solely on written submissions and ~~other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices~~ presentations by Buyer and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective ~~Affiliates)~~representatives and not by independent review. The Neutral Accounting Firm shall ~~investigate~~ address only those items ~~that the Sellers~~ in dispute and ~~the Buyers have been unable to resolve and shall~~ may not assign a value ~~to any item that is (A)~~ greater than the greatest value for such item claimed by either ~~of the Buyers~~ party or ~~the Sellers or (B) lower~~ smaller than the ~~lowest~~ smallest value for such item claimed by either ~~of the Buyers or the Sellers~~party. ~~Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as~~ Judgment may be ~~reasonably requested by~~ entered upon the ~~Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance~~ determination of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in ~~accordance with this Section 1.4(e) and in accordance with~~ any court having jurisdiction over the ~~guidelines and procedures set forth in this Agreement and not by independent review) only those matters in dispute and~~ party against which such determination is to ~~render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon~~ be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statementenforced. The fees, costs and expenses of the Neutral Accounting Firm shall be ~~borne by~~ allocated among Buyer and Sellers in the ~~Sellers~~ same manner as set forth in Section 2.4(c)(ii). (d) The Closing Statement and the ~~Buyers based on~~ corresponding Closing Purchase Price (if Buyer does not provide an Objections Statement within sixty (60) days following the ~~inverse~~ Closing Date) or as adjusted to reflect the resolution of ~~the percentage that~~ Buyer’s objections (as agreed upon by Sellers or as determined by the Neutral Accounting Firm~~’s determination~~ ) (~~before such allocation~~the “Final Purchase Price”) ~~bears to the total amount~~ shall be final, conclusive and binding on all of the ~~total items~~ parties. (e) Until the date the Closing Statement becomes final, conclusive and binding, in ~~dispute as originally submitted to~~ the ~~Neutral Accounting Firm. For example~~event Buyer takes any actions, ~~should~~ or causes the ~~items in dispute total in amount to $1,000~~ Companies and the ~~Neutral Accounting Firm award $600 in favor~~ Company Subsidiaries to take any actions, with respect to any account books and records on which the Closing Statement is based that would reasonably be expected to change any component of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. The fees and expenses of the Sellers and their respective Representatives incurred in connection with the Post-Closing Statement ~~and any Dispute Notice~~ from what such component would have been absent such action, no action shall ~~be borne by~~ affect the ~~Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-~~Closing Statement ~~and any Dispute Notice shall be borne by~~ for purposes of this Section 2.6, unless such action is taken to correct a mistake in the ~~Buyers~~classification of an item as a receivable or payable in the Closing Statement. (f) ~~Any dispute with respect to~~ If, after taking into account the ~~Remaining Required CapEx Amount~~adjustments contemplated by Section 2.6(c), ~~if any, will be resolved using~~ the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Final Purchase Price ~~exceeds~~ is greater than the Closing ~~Payment~~ Purchase Price (such ~~amount~~excess, the “~~Actual Surplus~~Company Adjustment Amount”), then Parent and Buyer shall promptly (but in any event within five Business Days) deliver to Sellers, pro rata in accordance with the ~~Buyers shall pay~~ percentages set forth in Section C of the Company Disclosure Schedule (which percentages may be adjusted by Sellers pursuant to the ~~Sellers~~Sellers Letter Agreement), by wire transfer of immediately available funds to ~~such account or~~ accounts ~~as may be~~ designated by ~~the Sellers to the Buyers in writing~~Sellers, an amount equal to ~~such Actual Surplus~~the Company Adjustment Amount. (g) If, ~~or (B) if~~ after taking into account the ~~finally determined~~ adjustments contemplated by Section 2.6(c), the Final Purchase Price is less than the Closing ~~Payment~~ Purchase Price (such ~~amount~~shortfall, the “~~Actual Deficiency~~Buyer Adjustment Amount”), then the Sellers and Buyer shall ~~pay~~ instruct the Escrow Agent to promptly (but in any event within five Business Days following the ~~Buyers an amount equal~~ determination of the Final Purchase Price) deliver from the Purchase Price Escrow Account to ~~such Actual Deficiency~~ Buyer the Buyer Adjustment Amount by wire transfer of immediately available funds to ~~such account~~ one or more accounts as designated by Buyer in writing, and the balance of the Purchase Price Escrow Account to Sellers, pro rata in accordance with the percentages set forth in Section C of the Company Disclosure Schedule (which percentages may be ~~designated~~ adjusted by ~~the Buyers~~ Sellers pursuant to the Sellers Letter Agreement), by wire transfer of immediately available funds to one or more accounts designated by Sellers in writing. To the extent that the Buyer Adjustment Amount exceeds the Purchase Price Escrow Account, then Buyer shall be entitled to be reimbursed from the Indemnification Escrow Amount (in the case of Escrow Shares, based on the SBA Average Closing Price) without regard to the Basket Amount.

Appears in 1 contract

Samples: Purchase and Sale Agreement (Sba Communications Corp)

Purchase Price Adjustments. (a) ~~Not more than seven (7) Business Days nor less than three (3) Business Days prior to~~ Promptly following the Closing Date, the Sellers shall deliver to the Buyers a statement (the “Estimated Closing Statement”) showing the Sellers’ good faith calculation of Estimated Working Capital and Estimated Closing Indebtedness including the calculation thereof in reasonable detail and with reasonable backup documentation regarding the calculation of such amounts, calculated in accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4, together with a calculation of the Closing Payment. The Buyers and their Representatives shall be entitled to reasonable access during normal business hours to the relevant records, personnel and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith to agree on the Closing Payment prior to the Closing; provided, however, that the failure to agree on such amount shall not delay or otherwise prevent the Closing and, to the extent of any remaining dispute, the Sellers’ calculation of the Closing Payment shall prevail. (b) Prior to the Closing on the Closing Date (at such time as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in ~~any~~ no event ~~within sixty (60)~~ later than 60 days after the Closing Date, Purchaser shall provide to Seller a certificate executed on behalf of Purchaser by the ~~Buyers shall prepare~~ President, Executive Vice President or any Senior Vice President of Purchaser, dated the date of its delivery, setting forth Purchaser's (~~or cause to be prepared~~i) proposed Adjusted Working Capital as of the Closing Date (the "Proposed Final Adjusted Working Capital") and ~~deliver to the Sellers a statement~~ (ii) Purchaser's reasonably detailed calculation thereof (the ~~“Post-~~"Closing Date Statement~~”) showing the Buyers’ calculation of Closing Working Capital (including, for the avoidance of doubt but subject to the last sentence of this Section 1.4(c~~"), the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), and the amount of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the Purchase Price. The ~~Buyers~~ Closing Date Statement shall ~~promptly provide to~~ be prepared in accordance with GAAP (except as noted on Exhibit A) and in a manner consistent with the ~~Sellers such backup or supporting data relating to~~ policies and principles used in connection with the preparation of the ~~Post-~~Reference Balance Sheet (provided, however, that in preparing the Closing Date Statement, the inclusions, exclusions, adjustments and terms set forth on Exhibit A shall be given effect). (b) Purchaser shall provide reasonable cooperation to, and shall cause the IPC Companies and their respective employees and agents to provide reasonable cooperation to, Seller and its employees and representatives in their review of the Closing Date Statement and ~~the calculation of Closing Working Capital, the amount of Closing Indebtedness~~ shall provide Seller and ~~the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers~~ its employees and ~~their Representatives with such~~ representatives reasonable access to the ~~books~~applicable personnel, properties, books and records of Purchaser and ~~personnel~~ the IPC Companies for such purpose. In the event Seller disputes the correctness of ~~each Company~~the Proposed Final Adjusted Working Capital proposed by Purchaser, ~~at reasonable times and upon reasonable notice, as~~ Seller shall notify Purchaser in writing of its objections within 30 days after receipt of the ~~Sellers may reasonably request for the purposes of evaluating the Post-~~Closing Date Statement and ~~the Buyers’ calculation of Closing Working Capital~~shall set forth, in writing and in reasonable detail, the ~~amount~~ reasons for Seller's objections. If Seller fails to deliver its notice of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as objections within 30 days after receipt of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Date Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon Seller shall be deemed to have ~~been~~ accepted ~~by the Sellers~~ Purchaser's calculation. Seller and shall be binding thereon for all purposes of this Agreement. If the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers Purchaser shall endeavor in good faith to resolve ~~all such disagreements~~ any disputed matters within ~~the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers~~ 15 days after receipt of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes Seller's notice of ~~this Agreement~~objections. If ~~the Buyers~~ Seller and ~~the Sellers~~ Purchaser are unable to resolve ~~any disagreements~~ the disputed matters, Seller and Purchaser shall promptly refer the disputed matters to the Accounting Firm. The Accounting Firm shall offer Seller and Purchaser (and their respective employees and representatives) the opportunity to provide written submissions regarding their positions on the ~~Post-Closing Statement and the calculations reflected thereon within the Negotiating Period~~disputed matters, ~~then within fifteen (15)~~ which opportunity shall not extend more than 15 days after the ~~end~~ submission of the ~~Negotiating Period~~ disputed matters to the Accounting Firm. The Accounting Firm shall deliver a written report resolving all disputed matters and setting forth the basis for such ~~disputes~~ resolution within 30 days after Seller and Purchaser have submitted in writing (or have had the opportunity to submit in writing but have not submitted) their positions as to the disputed items. The determination of the Accounting Firm in respect of the correctness of each matter remaining in dispute shall be ~~promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers~~ conclusive and ~~the Sellers (the “Neutral Accounting Firm”)~~binding on Seller and Purchaser. The ~~Neutral~~ determination of the Accounting Firm shall be ~~instructed only to resolve all outstanding disagreements relating to~~ based solely on the ~~Post-Closing Statement~~ written submissions by Seller and ~~the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon,~~ Purchaser and shall not 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 by independent review (it being understood that the ~~amount~~ Accounting Firm need not accept in its entirety the submission of ~~any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined~~ either one party or the other). The Adjusted Working Capital as of the ~~Effective Time applying methods~~ Closing Date, as finally determined pursuant to this Section 2.3(b) (~~including estimation methodologies~~whether by failure of Seller to deliver a timely notice of objection, by agreement of Seller and Purchaser or by de- termination of the Accounting Firm), ~~practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except~~ are referred to ~~the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve~~ herein as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures set forth in this Agreement and not by independent review) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyers"Final Adjusted Working Capital". (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall pay to the Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing, an amount equal to such Actual Surplus, or (B) if the finally determined Purchase Price is less than the Closing Payment (such amount, the “Actual Deficiency”), then the Sellers shall pay to the Buyers an amount equal to such Actual Deficiency by wire transfer of immediately available funds to such account or accounts as may be designated by the Buyers to the Sellers in writing.

Appears in 1 contract

Samples: Stock Purchase Agreement (Union Electric Co)

Purchase Price Adjustments. (a) ~~Not more~~ Seller shall deliver to Buyer no later than ~~seven~~ five (~~7) Business Days nor less than three (3~~5) Business Days prior to the Closing ~~Date, the Sellers shall deliver to the Buyers~~ Date a written statement (the “Estimated Closing Statement”) ~~showing~~ setting forth (i) Seller’s good faith estimate of (A) the ~~Sellers’~~ Adjustment Amount (the “Estimated Adjustment Amount”) and (B) the NPV of Waived Management Fee (the “Estimated NPV of Waived Management Fee”) and (ii) Seller’s good faith calculation of ~~Estimated Working Capital and Estimated~~ the Preliminary Closing ~~Indebtedness~~ Purchase Price, including ~~the calculation thereof in reasonable detail and with reasonable backup documentation regarding the~~ its calculation of ~~such amounts~~each of the components thereof, ~~calculated~~ in ~~accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4~~each case, together with ~~a calculation of~~ supporting documentation used by Seller in calculating such amounts. To the extent reasonably requested by Buyer, Seller shall provide to Buyer and its advisors prior to Closing ~~Payment. The Buyers and their Representatives shall be entitled to~~ reasonable access during normal business hours to financial records and work papers used in calculating the ~~relevant records, personnel and working papers of the Sellers~~ Estimated Closing Statement and the ~~Companies~~ components thereof and Seller will consider in good faith any comments provided by Buyer to ~~aid~~ the Estimated Closing Statement or any calculations or components thereof and may (but is not required to) update and revise the Estimated Closing Statement prior to the Closing following such consideration (and any such updated and revised Estimated Closing Statement shall be considered the Estimated Closing Statement for the purposes of this Agreement); provided that (A) in ~~their~~ no event shall any review of the Estimated Closing Statement ~~and~~ or the ~~calculation~~ components thereof by Buyer or any of ~~Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith to agree on the Closing Payment prior to the Closing; provided~~its advisors, ~~however~~or any dispute relating thereto, ~~that the failure to agree on such amount shall not~~ delay or ~~otherwise~~ prevent the Closing ~~and,~~ and (B) in no event shall such consultation or the delivery of the Estimated Closing Statement be deemed to constitute the ~~extent~~ agreement of Buyer to any ~~remaining dispute~~of the estimates or components therein (other than the Entire Business Value, the ~~Sellers’ calculation~~ Expansion Area Adjustment Amount and the Purchase Price, in each case, as previously determined by the Valuation Providers) or be construed as a waiver by Buyer of ~~the Closing Payment shall prevail~~its rights under this Section 2.5. (b) ~~Prior to the Closing on the Closing Date (at such time~~ As promptly as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chipspractical, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in ~~any~~ no event ~~within sixty~~ later than ninety (6090) days after the Closing Date, ~~the Buyers shall prepare (or cause to be prepared) and~~ Buyer will deliver to ~~the Sellers~~ Seller a written statement (the “~~Post-~~Closing Statement”) ~~showing the Buyers’~~ setting forth its calculation of Closing Working Capital (including, for the avoidance of doubt but subject to the last sentence of this Section 1.4(c), the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), and the amount of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the Purchase Price. The Buyers 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with such reasonable access to the books, records and personnel of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers shall endeavor in good faith to resolve all such disagreements within the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes of this Agreement. If the Buyers and the Sellers are unable to resolve any disagreements regarding the Post-Closing Statement and the calculations reflected thereon within the Negotiating Period, then within fifteen (15) days after the end of the Negotiating Period all such disputes shall be promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be instructed only to resolve all outstanding disagreements relating to the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting FirmAdjustment Amount, ~~the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and~~ (ii) the ~~format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy~~ NPV of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures set forth in this Agreement and not by independent review) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyers. (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall pay to the Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing, an amount equal to such Actual Surplus, or (B) if the finally determined Purchase Price is less than the Closing Payment (such amount, the “Actual Deficiency”), then the Sellers shall pay to the Buyers an amount equal to such Actual Deficiency by wire transfer of immediately available funds to such account or accounts as may be designated by the Buyers to the Sellers in writing.Waived Management Fee and

Appears in 1 contract

Samples: Asset Purchase Agreement (Shenandoah Telecommunications Co/Va/)

Purchase Price Adjustments. (a) ~~Not more than seven (7) Business Days nor less than three (3) Business Days prior to~~ The Adjustment Statement for the First Closing Date, the Sellers shall deliver to the Buyers a statement (the “Estimated Closing Statement”) showing the Sellers’ good faith calculation of Estimated Working Capital and Estimated Closing Indebtedness including the calculation thereof in reasonable detail and with reasonable backup documentation regarding the calculation of such amounts, calculated in accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4, together with a calculation of the Closing Payment. The Buyers and their Representatives shall be ~~entitled to reasonable access during normal business hours to the relevant records, personnel and working papers~~ as set out in Part 3 of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith to agree on the Closing Payment prior to the Closing; provided, however, that the failure to agree on such amount shall not delay or otherwise prevent the Closing and, to the extent of any remaining dispute, the Sellers’ calculation of the Closing Payment shall prevailExhibit 2. (b) ~~Prior~~ This Section 2.5(b) shall apply to the Second Closing ~~on the Closing Date (at such time as mutually agreed by the Buyers~~ and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”)Third Closing. A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that If it is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail no longer possible for the ~~Buyers~~ Second Closing or the Third Closing to ~~determine~~ occur, then Orca shall not be required to provide an Adjustment Statement for the ~~type, number and denomination of each of Seller’s Chips~~relevant Transaction under this Section 2.5(b). (ci) ~~As soon as reasonably practicable but in any event within sixty (60) days after~~ At least 15 Business Days prior to each of the Second Closing ~~Date, the Buyers~~ Date and Third Closing Date Orca shall prepare ~~(or cause to be prepared)~~ and ~~deliver to~~ provide Swala with an "Adjustment Statement" substantially in the ~~Sellers a statement (the “Post-Closing Statement”) showing the Buyers’ calculation~~ form of ~~Closing Working Capital (including, for the avoidance~~ Part 3 of ~~doubt but subject to the last sentence of this Section 1.4(c), the Buyers’ calculation~~ Exhibit 2 setting forth Orca's good faith determination of the ~~reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4),~~ relevant Purchase Price Adjustments and the amount of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the relevant Purchase Price~~. The Buyers shall promptly provide~~ , together with all documentation reasonably necessary to ~~the Sellers~~ support such backup or supporting data relating to the preparation of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with such reasonable access to the books, records and personnel of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAPdetermination. (dii) ~~The Sellers shall~~If Swala disagrees with any item in an Adjustment Statement, Swala must give notice thereof to Orca within ~~the forty-five (45)-day period (the “Acceptance Period”) following~~ 10 Business Days of receipt of ~~such Post-Closing~~ the Adjustment Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon Swala shall be deemed to have ~~been~~ irrevocably accepted by any item in an Adjustment Statement that is not the ~~Sellers and shall be binding thereon for all purposes~~ subject of ~~this Agreement~~a dispute notice delivered within such period. If the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do All amounts not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe disputed in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers shall endeavor in good faith to resolve all such disagreements within the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and time shall be binding on ~~all parties for all purposes~~ the Parties. Each of ~~this Agreement~~the Parties shall use its reasonable efforts and act in good faith in order to resolve any disagreements regarding Orca's determination of the relevant Purchase Price as set forth in the Adjustment Statement prior to the relevant Closing Date. If the ~~Buyers and the Sellers~~ Parties are unable to resolve any ~~disagreements regarding~~ such disagreement by the ~~Post-~~fifth Business Day prior to the relevant Closing ~~Statement and~~ Date, the ~~calculations reflected thereon within the Negotiating Period, then within fifteen (15) days after the end of the Negotiating Period all such disputes~~ relevant Purchase Price shall be ~~promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm~~ as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be instructed only to resolve all outstanding disagreements relating to the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the ~~Accountant Notice~~ Adjustment Statement (as subject to any agreed changes) and Closing for such Investment Shares will occur on the ~~same may be amended by~~ relevant Closing Date at such Purchase Price. Any unresolved disagreements respecting the ~~mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials~~ relevant Purchase Price shall be resolved as provided ~~to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but~~ in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures set forth in this Agreement and not by independent review) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyers2.6. (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall pay to the Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing, an amount equal to such Actual Surplus, or (B) if the finally determined Purchase Price is less than the Closing Payment (such amount, the “Actual Deficiency”), then the Sellers shall pay to the Buyers an amount equal to such Actual Deficiency by wire transfer of immediately available funds to such account or accounts as may be designated by the Buyers to the Sellers in writing.

Appears in 1 contract

Samples: Investment Agreement

Purchase Price Adjustments. (a) Not ~~more than seven (7) Business Days nor~~ less than ~~three~~ five (35) ~~Business Days~~ days prior to the Closing Date, ~~the Sellers~~ Seller shall deliver to ~~the Buyers~~ Buyer a statement (the “~~Estimated~~ Closing ~~Statement~~Date Certificate”~~) showing the Sellers’~~ ), which sets forth Seller’s reasonable, good faith estimate of the Estimated Outstanding Accounts Payable and the Estimated Marketing Commitments, including a reasonably detailed supporting calculation thereof. The Closing Date Certificate shall be based upon the books and records of ~~Estimated Working Capital~~ Seller and ~~Estimated Closing Indebtedness including the calculation thereof in reasonable detail and with reasonable backup documentation regarding the calculation of such amounts, calculated~~ shall be prepared in accordance with ~~GAAP~~ the accounting principles, methods and ~~using~~ practices utilized in preparing the ~~same methodology as~~ audited Financial Statements, applied on a consistent basis. The Seller shall consult with the ~~calculation set forth on Schedule 1.4~~Buyer in the preparation of such Closing Date Certificate, shall provide the Buyer with a draft thereof (together with a calculation of the Closing Payment. The Buyers and their Representatives shall be entitled to reasonable access during normal business hours to the relevant records, personnel and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall any supporting work ~~together in good faith to agree on the Closing Payment~~ papers) prior to the ~~Closing; provided, however, that~~ Closing Date and shall take into account the ~~failure to agree on such amount shall not delay or otherwise prevent the Closing and, to the extent of any remaining dispute, the Sellers’ calculation~~ reasonable comments of the Buyer prior to preparing the final Closing ~~Payment shall prevail~~Date Certificate to be delivered pursuant to this Section 2.5(a). (b) Prior to the Closing on the Closing Date (at such time as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in any event within sixty (60) 60 days after the Closing Date, the ~~Buyers~~ Buyer shall in good faith prepare ~~(or cause to be prepared)~~ and deliver to the ~~Sellers~~ Seller a statement of the Accounts Payable and the Marketing Commitments outstanding as of the Effective Time (the “Post-Closing Statement”), including a reasonably detailed supporting calculation thereof. The Post-Closing Statement shall (a) ~~showing~~ be based upon the ~~Buyers’ calculation~~ books and records of ~~Closing Working Capital~~ the Seller, (~~including~~b) shall be prepared in accordance with the accounting principles, methods and practices utilized in preparing the audited Financial Statements, applied on a consistent basis, and (c) shall not include amounts for Marketing Commitments that were not included in the ~~avoidance of doubt but subject~~ Estimated Marketing Commitments and to the ~~last sentence of this Section 1.4(c),~~ extent the ~~Buyers’ calculation~~ applicable marketing department of the ~~reserves related~~ distributor provided evidence, prior to ~~incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4)~~the Closing, ~~and~~ of the ~~amount~~ satisfaction of ~~Closing Indebtedness, including the calculation thereof in reasonable detail calculated~~ such Marketing Commitment pursuant to Section 5.1(b)(viii). (c) The Post-Closing Statement shall be final and binding on the ~~terms of this Agreement using~~ parties unless the ~~same methodology as~~ Seller, within 45 days following the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the Purchase Price. The Buyers shall promptly provide to the Sellers such backup or supporting data relating to the preparation delivery of the Post-Closing ~~Statement and the calculation of Closing Working Capital~~Statement, the amount of Closing Indebtedness and the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with such reasonable access delivers to the ~~books, records and personnel~~ Buyer written notice of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent disagreement with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, ~~notify~~ which notice shall (i) describe in detail the ~~Buyers~~ nature of ~~their acceptance~~ any such disagreement, (ii) identify the specific items involved and the dollar amount of such disagreement and (iii) only include good faith disagreements based on (A) components not being calculated in accordance with the accounting principles, methods and practices utilized in preparing the audited Financial Statements, applied on a consistent basis or ~~non~~(B) mathematical errors. If the Seller delivers a written notice of disagreement within the aforesaid 45-~~acceptance~~ day period, then the Seller and the Buyer shall seek in good faith to resolve in writing the disputed matters set forth in such notice of disagreement within 30 days of receipt by the Buyer of a written notice of disagreement from the Seller, or such longer period as may be agreed by the Buyer and the Seller. If the Seller and the Buyer are unable to resolve all disagreements within such 30-day period, then the Seller and the Buyer (each, a “Disputing Party” and together the “Disputing Parties”) shall submit such remaining disagreements to the Miami office of Ernst & Young LLP or such other nationally-recognized accounting, valuation or consulting firm as is acceptable to the ~~case may be~~Disputing Parties (the “Independent Accounting Firm”) for arbitration, in accordance with the standards set forth in this Section 2.5. Each of the parties represents and warrants that neither it nor any of its Affiliates has a material relationship with the Independent Accounting Firm. The Independent Accounting Firm so selected will consider only those items and amounts set forth in the Post-Closing Statement ~~and~~ as to which the ~~calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers~~ Disputing Parties have disagreed within the ~~Acceptance Period,~~ time periods and on the ~~Post-Closing Statement~~ terms specified above and must resolve the ~~calculation of Closing Working Capital,~~ matter in accordance with the ~~amount of Closing Indebtedness~~ terms and ~~the Purchase Price reflected thereon shall be deemed to have been accepted by the Sellers and shall be binding thereon for all purposes~~ provisions of this Agreement. If Each Disputing Party may furnish to the ~~Post-Closing Statement~~ Independent Accounting Firm such information and documents as it deems relevant, with copies of such submission and all such documents and information being concurrently given to the other Disputing Party. Neither Disputing Party shall have or conduct any communication, either written or oral, with the Independent Accounting Firm without the other Disputing Party either being present or receiving a concurrent copy of any written communication. The Independent Accounting Firm may conduct a conference concerning the disagreements between the Disputing Parties, at which conference each Disputing Party shall have the right to (i) present its documents, materials and other evidence (previously provided to the Independent Accounting Firm and the ~~calculation of Closing Working Capital~~other Disputing Party) and (ii) have present its or their advisors, ~~the amount of Closing Indebtedness~~ accountants, counsel and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputedother representatives. The Buyers and the Sellers shall endeavor in good faith to resolve all such disagreements within the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes of this Agreement. If the Buyers and the Sellers are unable to resolve any disagreements regarding the Post-Closing Statement and the calculations reflected thereon within the Negotiating Period, then within fifteen (15) days after the end of the Negotiating Period all such disputes shall be promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Independent Accounting Firm shall ~~be instructed only to~~ resolve ~~all outstanding disagreements relating to~~ each item of disagreement based solely on the ~~Post-Closing Statement~~ presentations and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated supporting material provided by the ~~American Arbitration Association in New York, New York (which shall~~ Disputing Parties and not ~~be the~~ pursuant to any independent ~~auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers~~ review and ~~the Buyers have been unable to resolve and shall~~ may not assign a value to any particular item ~~that is (A)~~ greater than the greatest value for such item claimed by either ~~of the Buyers~~ Disputing Party or ~~the Sellers or (B) lower~~ less than the lowest value for such item claimed by either of Disputing Party, in each case as presented to the ~~Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral~~ Independent Accounting Firm. The ~~Sellers and the Buyers shall instruct the Neutral~~ Independent Accounting Firm ~~that, within five (5) Business Days following its acceptance of its appointment as~~ shall issue a detailed written report that sets forth the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy resolution of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures set forth in this Agreement and not by independent review) only those matters items in dispute and ~~to render~~ that contains a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statement. ~~The fees, costs and expenses of the Neutral Accounting Firm~~ Such report shall be ~~borne by~~ final and binding upon the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the SellersDisputing Parties. The fees and expenses of the ~~Sellers~~ Independent Accounting Firm shall initially be borne equally between the Seller, on the one hand, and ~~their respective Representatives incurred~~ the Buyer, on the other hand; provided, that such fees and expenses shall ultimately be allocated in ~~connection~~ accordance with Section 2.5(e). The Disputing Parties shall cooperate fully with the Independent Accounting Firm and respond on a timely basis to all requests for information or access to documents or personnel made by the Independent Accounting Firm or by the Disputing Parties, all with the intent to fairly and in good faith resolve all disputes relating to the Post-Closing Statement and any Dispute Notice shall be borne by the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyersas promptly as reasonably practicable. (fd) ~~Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than~~ Within five (5) Business Days following the ~~Post-Closing Statement becoming~~ final determination of the Accounts Payable and the Marketing Commitments outstanding as of the Effective Time in accordance with ~~this~~ Section ~~1.4~~2.5(c), ~~(A)~~ if ~~the finally determined~~ there is a Purchase Price ~~exceeds the Closing Payment (such amount, the “Actual Surplus”)~~Deficit, then the ~~Buyers~~ Seller shall pay to the ~~Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing,~~ Buyer an amount equal to such Actual Surplus, or (B) if the finally determined Purchase Price is less than the Closing Payment (such amount, the “Actual Deficiency”), then the Sellers shall pay to the Buyers an amount equal to such Actual Deficiency by wire transfer of immediately available funds to such account or accounts as may be designated by the Buyers to the Sellers in writing.excess. If there is

Appears in 1 contract

Samples: Asset Purchase Agreement (Hemisphere Media Group, Inc.)

Purchase Price Adjustments. (a) ~~Not more than seven~~ Within twenty (720) ~~Business Days nor less than three (3) Business Days prior to~~ business days following the end of the calendar month in which the Closing ~~Date~~occurs, ~~the Sellers~~ Seller shall deliver to ~~the Buyers~~ Purchaser a statement (~~the~~ “~~Estimated Closing~~ Seller’s Statement”) showing a balance sheet for the ~~Sellers’ good faith calculation~~ Business as of the Closing Date (“Closing Balance Sheet”) and the actual Net Asset Value as of the Closing Date (the “Actual Closing Net Asset Value”) along with the computation of such value and the recalculation of final Purchase Price using the Actual Closing Net Asset Value in lieu of Estimated ~~Working Capital~~ Net Asset Value and in the determination of the Additional Amount and any necessary resulting adjustment (“Adjustment”) to the Purchase Price amount paid at Closing. The Closing Balance Sheet and the preparation of the Actual Closing Net Asset Value shall be prepared on a basis consistent with the preparation of the Estimated Net Asset Value as set forth in Section 1.01(b). Purchaser shall cooperate with Seller and its representatives in preparing such statement including providing reasonable access to the Records and the assistance of Purchaser’s employees. Such statement shall become final and binding on the parties except to the extent Purchaser notifies Seller on or before the tenth business day after delivery of Seller’s Statement of Purchaser’s disagreement with such statement along with Purchaser’s computation of the Actual Closing ~~Indebtedness including the calculation thereof~~ Net Asset Value and final Purchase Price in reasonable detail ~~and with~~ (“Disagreement Notice”); provided that Purchaser shall not notify Seller of any dispute unless there is a reasonable ~~backup documentation regarding~~ basis for all such disputes to result in an Adjustment in the ~~calculation~~ aggregate in excess of ~~such amounts~~$50,000 (excluding interest) from the Adjustment shown in Seller’s Statement. If Purchaser so notifies Seller, ~~calculated in accordance with GAAP and using~~ the ~~same methodology as the calculation set forth on Schedule 1.4, together with a calculation of the Closing Payment. The Buyers and their Representatives~~ parties shall be entitled to reasonable access during normal business hours to the relevant records, personnel and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together negotiate in good faith regarding such disagreement with the computation of the Actual Closing Net Asset Value and final Purchase Price. If the parties fail to agree on the Actual Closing ~~Payment prior to~~ Net Asset Value and final Purchase Price within 30 days of receipt by Seller of the ~~Closing; provided, however, that the failure to agree on such amount shall not delay or otherwise prevent the Closing and, to the extent of any remaining dispute~~Disagreement Notice, the ~~Sellers’ calculation of the Closing Payment~~ parties shall ~~prevail~~go to arbitration on their disagreement as provided in Section 1.05(b). (b) ~~Prior~~ As called for by Section 1.05(a), the parties shall submit the dispute(s) set forth in the Disagreement Notice regarding the determination of the Actual Closing Net Asset Value and computation of the final Purchase Price to final and binding arbitration by PricewaterhouseCoopers LLP or such other independent “Big Five” accounting firm as may be mutually agreeable to the ~~Closing on~~ parties. In the ~~Closing Date (at such time as mutually agreed by the Buyers and the Sellers~~ event PricewaterhouseCoopers LLP is unable or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“unwilling to review Seller’s ~~Chips~~Statement and in the event Purchaser and Seller are unable to mutually agree on a replacement accounting firm, a “Big Five” accounting firm will be selected by lot after eliminating one firm designated as objectionable by each of Purchaser and Seller (any accounting firm so selected or agreed upon shall be referred to herein as the “Independent Accountant”). ~~A Representative~~ Each Purchaser and Seller shall use its reasonable best efforts to cause the Independent Accountant to make a decision regarding the Actual Closing Net Asset Value and final Purchase Price as soon as practicable, but in any event such Independent Accountant shall make a decision within 120 days after the delivery of the ~~Buyers shall~~ Disagreement Notice to Seller. The costs and expenses associated with the Independent Accountant’s arbitration will be ~~provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count~~ divided evenly between Purchaser and Seller~~’s Chips liability count if the Buyers so elect. Such cash count~~, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that ~~the aggregate value of all outstanding Seller’s Chips~~ each party hereto shall ~~constitute a current liability of such Company~~ bear its own accountants’ and attorneys’ fees and expenses in connection with the ~~calculation of~~ arbitration. (c) The final Purchase Price resulting from the adjustment shall be the “Adjusted Purchase Price.” If the Actual Closing ~~Working Capital~~ Net Asset Value matter goes to arbitration as ~~of the Effective Time~~set forth in Section 1.05(b)~~. Within three (3) Business Days after the Closing Date~~, the ~~Sellers~~ amount determined in the arbitration shall ~~provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers~~ be used to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in any event within sixty (60) days after the Closing Date, the Buyers shall prepare (or cause to be prepared) and deliver to the Sellers a statement (the “Post-Closing Statement”) showing the Buyers’ calculation of Closing Working Capital (including, for the avoidance of doubt but subject to the last sentence of this Section 1.4(c), the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), and the amount of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the Purchase Price. The Buyers 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, the amount of Closing Indebtedness and the Adjusted Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with such reasonable access to the books, records and personnel of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers shall endeavor in good faith to resolve all such disagreements within the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes of this Agreement. If the Buyers and the Sellers are unable to resolve any disagreements regarding the Post-Closing Statement and the calculations reflected thereon within the Negotiating Period, then within fifteen (15) days after the end of the Negotiating Period all such disputes shall be promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be instructed only to resolve all outstanding disagreements relating to the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures set forth in this Agreement and not by independent review) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyers. (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall pay to the Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing, an amount equal to such Actual Surplus, or (B) if the finally determined Purchase Price is less than the Closing Payment (such amount, the “Actual Deficiency”), then the Sellers shall pay to the Buyers an amount equal to such Actual Deficiency by wire transfer of immediately available funds to such account or accounts as may be designated by the Buyers to the Sellers in writing.

Appears in 1 contract

Samples: Asset Purchase Agreement (SCP Pool Corp)

Purchase Price Adjustments. (a) ~~Not more than seven~~ [Reserved]. (7b) ~~Business Days nor~~ No less than ~~three~~ two (32) Business Days prior to the ~~Closing Date~~Closing, ~~the Sellers~~ Parent shall deliver to Buyer a certificate (the ~~Buyers a statement~~ “Seller’s Pre-Closing Certificate”) setting forth Parent’s best estimate of Closing Working Capital (the “Estimated Closing ~~Statement~~Working Capital”~~) showing the Sellers’ good faith calculation of Estimated Working Capital and Estimated Closing Indebtedness including the calculation thereof in reasonable detail and~~ ). Buyer shall review such figures with reasonable backup documentation regarding the calculation of such amounts, calculated in accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4, together with a calculation of Parent prior to the Closing ~~Payment. The Buyers~~ and ~~their Representatives~~ Parent shall be entitled to reasonable access during normal business hours to the relevant records, personnel and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith ~~to agree on~~ consider and make any appropriate changes that may be requested by Buyer through and including the Closing Payment prior to the Closing; provided, however, that the failure to agree on such amount shall not delay or otherwise prevent the Closing and, to the extent of any remaining dispute, the Sellers’ calculation of the Closing Payment shall prevail. (b) Prior to the Closing on the Closing Date (at such time as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after day before the Closing Date, . The amount of the ~~Sellers~~ Purchase Price paid at the Closing shall ~~provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers~~ be adjusted based on such figures agreed to ~~determine the type, number~~ by Parent and ~~denomination of each of Seller’s Chips~~Buyer. (c) ~~As soon as reasonably practicable but in any event within sixty~~ No later than seventy-five (6075) days ~~after~~ following the ~~Closing Date~~Closing, ~~the Buyers~~ Buyer shall ~~prepare (or~~ cause to be ~~prepared)~~ prepared and ~~deliver~~ delivered to ~~the Sellers~~ Parent a statement (the “Post-Closing Statement”) ~~showing the Buyers’~~ setting forth Buyer’s good faith calculation of 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, for~~ and the ~~avoidance~~ 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 ~~doubt but subject to~~ the ~~last sentence of this Section 1.4(c), the Buyers’~~ calculation of the ~~reserves related to incurred but not reported claims and other reserves related to insurance accruals~~ Closing Working Capital or any component thereof set forth ~~on Schedule 1.4)~~in the Post-Closing Statement, ~~and the amount of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant~~ Parent shall provide written notice to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the Purchase Price. The Buyers shall promptly provide to the Sellers such backup or supporting data relating to the preparation Buyer no later than 30 days following receipt of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with such reasonable access to the books, records and personnel of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”~~) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital~~), ~~the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe~~ setting forth in reasonable detail ~~in such Dispute Notice~~ those items that Parent disputes, the ~~nature~~ amounts of any ~~disagreement so asserted including an estimate,~~ adjustments that are necessary in Parent’s judgment for the computation of the Closing Working Capital or the components thereof to conform to the ~~extent then reasonably ascertainable~~requirements of this Agreement, ~~of the amount in dispute of any items then being disputed. The Buyers~~ and the ~~Sellers shall endeavor~~ basis for its suggested adjustments. During the 30-day period following delivery of a Dispute Notice, Buyer and Parent will negotiate in good faith with a view to ~~resolve all such~~ resolving their disagreements ~~within~~ over the ~~thirty (30)-day period (the “Negotiating Period”) following~~ disputed items. From and after the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes of this Agreement. If the Buyers and the Sellers are unable to resolve any disagreements regarding the Post-Closing Statement and the calculations reflected thereon within the Negotiating Period, then within fifteen (15) days after the end of the Negotiating Period all such disputes shall be promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be instructed only to resolve all outstanding disagreements relating to the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures set forth in this Agreement and not by independent review) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyers. (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall pay to the Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing, an amount equal to such Actual Surplus, or (B) if the finally determined Purchase Price is less than the Closing Payment (such amount, the “Actual Deficiency”), then the Sellers shall pay to the Buyers an amount equal to such Actual Deficiency by wire transfer of immediately available funds to such account or accounts as may be designated by the Buyers to the Sellers in writing.of

Appears in 1 contract

Samples: Asset Purchase Agreement (Vertex Energy Inc.)

Purchase Price Adjustments. (a) Not ~~more~~ later than ~~seven~~ ten (~~7) Business Days nor less than three (3~~10) Business Days prior to the Designated Interest Closing Date, Seller shall, with the ~~Sellers shall deliver~~ cooperation of the Company, prepare and furnish to ~~the Buyers~~ Purchaser a statement of its good faith best estimate (including the work papers used to prepare such estimate) of the amount (the “Estimated ~~Closing Statement~~Cash Purchase Price”) ~~showing~~ consisting of (i) the ~~Sellers’ good faith calculation~~ Purchase Price, (ii) decreased by $1,000,000,000 plus the estimated Accrued Dividends as of ~~Estimated Working Capital~~ the Designated Interest Closing Date, (iii) decreased by one-half of the estimated Indebtedness of the Company and ~~Estimated~~ its Subsidiaries as of the Designated Interest Closing Date in an amount not to exceed the Indebtedness ~~including~~ Cap, (iv) increased by one-half of the ~~calculation thereof in reasonable detail~~ estimated amount of Cash and ~~with reasonable backup documentation regarding~~ Cash Equivalents of the ~~calculation~~ Company and its Subsidiaries as of ~~such amounts~~the Designated Interest Closing Date, ~~calculated in accordance with GAAP~~ and (v) decreased by the estimated Bridge Facility Repayment Amount, if any. The statement shall be prepared using the same ~~methodology~~ accounting principles, policies and methods as the calculation set forth on Schedule 1.4, together with a calculation of the Closing Payment. The Buyers and their Representatives shall be entitled to reasonable access during normal business hours to the relevant records, personnel and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith to agree on the Closing Payment prior to the Closing; provided, however, that the failure to agree on such amount shall not delay or otherwise prevent the Closing and, to the extent of any remaining dispute, the Sellers’ calculation of the Closing Payment shall prevail. (b) Prior to the Closing on the Closing Date (at such time as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be Seller has historically used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company in connection with the calculation of the ~~Closing Working Capital as~~ items reflected on such statement; provided, that in no event shall any amount included within any single adjustment be included within any other adjustment in order to ensure that there is no double-counting of ~~the Effective Time)~~any amount. Within ~~three~~ five (35) Business Days after the ~~Closing Date~~delivery of such statement by Seller to Purchaser, Purchaser may object in good faith to any portion of the Estimated Cash Purchase Price in writing. If Purchaser so objects, the ~~Sellers~~ Parties shall ~~provide~~ attempt to resolve their differences by negotiation, and the ~~Buyers a list~~ Estimated Purchase Price shall be adjusted solely by the amount of ~~all outstanding Seller’s Chips~~ any adjustments agreed by the Parties. Any disputed portion that has not been agreed by the Parties shall be resolved in ~~sufficient detail~~ accordance with the provisions of Section 1.4(b) and paid as part of any post-Designated Interest Closing adjustment to the extent required by Section 1.4(c). The final version of the statement provided for pursuant to this Section 1.4(a) is referred to herein as the ~~Buyers to determine the type, number and denomination of each of Seller’s Chips~~“Estimated Cash Purchase Price Statement.” (cb) As ~~soon~~ promptly as ~~reasonably practicable~~ practical, but in ~~any~~ no event ~~within~~ more than sixty (60) days after the Designated Interest Closing, Purchaser shall, with the cooperation of the Company, prepare and deliver to Seller a draft of a statement prepared in good faith setting forth its calculation of the Final Cash Purchase Price (the “Proposed Final Cash Purchase Price Statement”) which shall show, as of the Designated Interest Closing Date, the Buyers shall prepare (or cause to be prepared) and deliver to the Sellers a statement (the “Post-Closing Statement”) showing the Buyers’ calculation of Closing Working Capital (including, for the avoidance of doubt but subject to the last sentence of this Section 1.4(c)actual Accrued Dividends, the ~~Buyers’~~ actual Indebtedness of the Company and its Subsidiaries as of the Designated Interest Closing Date but not to exceed the Indebtedness Cap, the actual Cash and Cash Equivalents of the Company and its Subsidiaries, and the actual Bridge Facility Repayment Amount, if any. The Proposed Final Cash Purchase Price Statement shall be prepared using the same accounting principles, policies and methods as Seller has historically used in connection with the calculation of the ~~reserves related to incurred but not reported claims~~ items reflected on such statement and ~~other reserves related to insurance accruals set forth on Schedule 1.4)~~as were used in preparing the Estimated Cash Purchase Price Statement. During the thirty (30) day period following the delivery by Purchaser of the Proposed Final Cash Purchase Price Statement, Seller and its auditors may review such statement and the ~~amount~~ working papers of ~~Closing Indebtedness, including~~ the ~~calculation thereof in reasonable detail calculated pursuant~~ Company’s auditors relating to the ~~terms of this Agreement using~~ Proposed Final Purchase Price Statement and shall have such access to Purchaser’s and the ~~same methodology~~ Company’s personnel as may be reasonably necessary to permit Seller and its auditors to review in detail the ~~calculation set forth on Schedule 1.4 and~~manner in which the Proposed Final Purchase Price Statement was prepared. Purchaser and Seller shall and shall cause the Company, ~~based on such calculations~~as well as their respective advisors, ~~the Buyers’ calculation of the Purchase Price. The Buyers shall promptly provide~~ to ~~the Sellers such backup or supporting data relating to~~ cooperate with one another in facilitating the preparation of the ~~Post-Closing~~ Proposed Final Cash Purchase Price Statement and its review. Upon completion of such review, Seller shall give any comments or objections it has with respect to the ~~calculation of Closing Working Capital, the amount of Closing Indebtedness and the~~ Proposed Final Cash Purchase Price ~~reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with~~ Statement to Purchaser in writing within such reasonable access to the books, records and personnel of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods thirty (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d30) ~~The Sellers shall, within the forty-five (45)-day~~ day period (the “~~Acceptance Period~~Objection Letter”) following receipt of such Post-Closing Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers Purchaser and Seller shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers shall endeavor attempt in good faith to resolve ~~all such disagreements within~~ any differences and issues as set forth in the ~~thirty (30)-day period~~ Objection Letter. If no Objection Letter is delivered or the matters set forth in the Objection Letter are so resolved, then the Proposed Final Cash Purchase Price Statement, as adjusted for any changes as are agreed upon by Seller and Purchaser, shall be final and binding upon Seller and Purchaser and shall constitute the final cash purchase price (the “~~Negotiating Period~~Final Cash Purchase Price”) following the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes of this Agreement). If the ~~Buyers~~ matters raised by Seller in the Objection Letter cannot be resolved between Purchaser and ~~the Sellers are unable to resolve any disagreements regarding the Post-Closing Statement and the calculations reflected thereon~~ Seller within ~~the Negotiating Period, then within fifteen~~ ten (1510) days ~~after the end~~ of the ~~Negotiating Period all such disputes~~ date of the Objection Letter, the question or questions in dispute shall then be promptly ~~referred~~ submitted to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be instructed only to resolve all outstanding disagreements relating to the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of ~~national standing,~~ recognized standing mutually agreeable to Seller and Purchaser (other than ~~a “Big 4” firm~~Seller’s auditors and Purchaser’s auditors), ~~designated by~~ the ~~American Arbitration Association~~ decision of which as to such question or questions in ~~New York, New York (which~~ dispute shall ~~not~~ be final and binding upon Seller and Purchaser and the determination of the purchase price pursuant thereto shall be considered to be the ~~independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates)~~Final Cash Purchase Price. The ~~Neutral Accounting Firm~~ accounting firm shall ~~investigate only those items that the Sellers and the Buyers have been unable~~ be instructed to resolve solely the question or questions in dispute within thirty (30) days of submission. Each of Purchaser and Seller shall ~~not assign a value~~ cooperate with and assist any independent accounting firm to ~~any item that~~ determine the Final Cash Purchase Price, including by making available and granting reasonable access to records and employees. (c) In the event the Final Cash Purchase Price is ~~(A)~~ greater than the ~~greatest value for such item claimed~~ Estimated Cash Purchase Price paid by ~~either of~~ Purchaser at the ~~Buyers or the Sellers or~~ Designated Interest Closing, Purchaser shall promptly (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days ~~following its acceptance~~ of ~~its appointment as~~ the ~~Neutral Accounting Firm, it shall deliver~~ determination of the Final Cash Purchase Price) pay to Seller an amount equal to the ~~Sellers~~ difference between the Final Cash Purchase Price and the ~~Buyers a written notice (~~Estimated Cash Purchase Price. In the ~~“Accountant Notice”) setting forth (i)~~ event the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later Final Cash Purchase Price is less than the ~~deadline set forth in~~ Estimated Cash Purchase Price paid by Purchaser at the ~~Accountant Notice~~ Designated Interest Closing, Seller shall promptly (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures set forth in this Agreement and not by independent review) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyers. (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than within five (5) Business Days ~~following~~ of the ~~Post-Closing Statement becoming final in accordance with this Section 1.4, (A~~determination of the Final Cash Purchase Price) ~~if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall~~ pay to ~~the Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing,~~ Purchaser an amount equal to ~~such Actual Surplus, or (B) if~~ the ~~finally determined~~ difference between the Estimated Cash Purchase Price ~~is less than~~ and the ~~Closing Payment~~ Final Cash Purchase Price. (~~such amount~~d) The fees of Purchaser’s and the Company’s auditors incurred in connection with the preparation of the Proposed Final Cash Purchase Price Statement shall be borne by Purchaser, and the ~~“Actual Deficiency”), then~~ fees of Seller’s and the ~~Sellers~~ Company’s auditors incurred in connection with their review of the Proposed Final Cash Purchase Price Statement shall ~~pay~~ be borne by Seller. The fees of any independent accounting firm appointed pursuant to this Section 1.4(d) shall be borne by Seller and Purchaser in proportion to the ~~Buyers an amount equal to such Actual Deficiency~~ amounts by ~~wire transfer of immediately available funds to such account or accounts as may be designated by~~ which their proposals differed from the ~~Buyers to the Sellers in writing~~independent accounting firm’s final determination.

Appears in 1 contract

Samples: Master Put Option and Membership Interest Purchase Agreement (Constellation Energy Group Inc)

Purchase Price Adjustments. (a) ~~Not more than seven (7) Business Days nor less than three (3) Business Days prior to the Closing Date~~As promptly as possible, the Sellers shall deliver to the Buyers a statement (the “Estimated Closing Statement”) showing the Sellers’ good faith calculation of Estimated Working Capital and Estimated Closing Indebtedness including the calculation thereof in reasonable detail and with reasonable backup documentation regarding the calculation of such amounts, calculated in accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4, together with a calculation of the Closing Payment. The Buyers and their Representatives shall be entitled to reasonable access during normal business hours to the relevant records, personnel and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith to agree on the Closing Payment prior to the Closing; provided, however, that the failure to agree on such amount shall not delay or otherwise prevent the Closing and, to the extent of any remaining dispute, the Sellers’ calculation of the Closing Payment shall prevail. (b) Prior to the Closing on the Closing Date (at such time as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in any event within ~~sixty (60)~~ 120 days after the Closing Date, Purchaser will deliver to Seller a statement setting forth in reasonable detail the ~~Buyers shall prepare~~ calculation of (~~or cause to be prepared~~i) the Closing Net Working Capital, Closing Cash, Closing Indebtedness, Botanist Transaction Expenses (that were not included in the Botanist Cash Amount) and ~~deliver to~~ Closing Transaction Expenses and a calculation of the ~~Sellers a statement~~ Purchase Price (the “~~Post-~~Preliminary Closing Statement”) ~~showing~~ and (ii) Existing Customer TTM Revenue (the ~~Buyers’ calculation of~~ “Preliminary Customer TTM Revenue Statement”). The Closing Net Working ~~Capital (including~~Capital, ~~for the avoidance of doubt but subject to the last sentence of this Section 1.4(c)~~Closing Cash, ~~the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), and the amount of~~ Closing Indebtedness, ~~including~~ Botanist Transaction Expenses (that were not included in the ~~calculation thereof~~ Botanist Cash Amount) and Closing Transaction Expenses shall each be determined on a consolidated basis in ~~reasonable detail calculated pursuant to~~ accordance with the ~~terms of~~ definitions set forth in this Agreement ~~using~~ and the ~~same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation~~ Agreed Accounting Principles. After delivery of the ~~Purchase Price. The Buyers~~ Preliminary Closing Statement and Preliminary Customer TTM Revenue Statement, Purchaser shall ~~promptly provide~~ give Seller and its representatives reasonable access, during normal business hours, to review the ~~Sellers such backup or supporting data relating~~ Company’s and its Subsidiaries’ material books and records and work papers related to the preparation of the ~~Post-~~Preliminary Closing Statement and Preliminary Customer TTM Revenue Statement for the purpose of assisting Seller in its review thereof. The Seller and its representatives may make reasonable inquiries of the Company and its Subsidiaries and their respective accountants regarding questions concerning or disagreements with the Preliminary Closing Statement and Preliminary Customer TTM Revenue Statement arising in the course of its review thereof, and the Company and its Subsidiaries shall 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 or the Preliminary Customer TTM Revenue Statement, Seller shall deliver to Purchaser a written statement setting forth its objections thereto (an “Objections Statement”). If an Objections Statement is not 33067829.14 delivered to Purchaser within 45 days after delivery of the Preliminary Closing Statement and the ~~calculation of Closing Working Capital~~Preliminary Customer TTM Revenue Statement, the amount of Closing Indebtedness and the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with such reasonable access to the books, records and personnel of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Preliminary Closing Statement and the ~~Buyers’ calculation~~ Preliminary Customer TTM Revenue Statement shall be final, binding and non-appealable; provided that, in the event the Company or any of ~~Closing Working Capital~~its Subsidiaries does not provide any papers or documents reasonably requested by Seller or any of its representatives within five (5) Business Days of request therefor, such 45-day period will be extended by one (1) day for each additional day required for Purchaser, the ~~amount~~ Company or any of ~~Closing Indebtedness and the Purchase Price~~its Subsidiaries to fully respond to such request. The ~~amount of any reserves related to incurred but not reported claims~~ Seller and ~~other reserves related to insurance accruals set forth on Schedule 1.4~~ Purchaser shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers shall endeavor negotiate in good faith to resolve ~~all~~ any such ~~disagreements~~ objections, but if they do not reach a final resolution within 30 days after the ~~thirty (30)-day period~~ delivery of the Objections Statement, Seller and Purchaser shall submit such dispute to Deloitte or such other mutually acceptable dispute resolution firm (the “~~Negotiating Period”) following the delivery by the Sellers of such~~ Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes of this Agreement. If the Buyers and the Sellers are unable to resolve any disagreements regarding the Post-Closing Statement and the calculations reflected thereon within the Negotiating Period, then within fifteen (15) days after the end of the Negotiating Period all such disputes shall be promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Resolution Firm”). Any submissions to the Dispute Resolution Firm must be written and delivered to each party to the dispute. The ~~Neutral Accounting~~ Dispute Resolution Firm shall ~~be instructed~~ consider only ~~to resolve all outstanding disagreements relating to~~ those items and amounts which are identified in the ~~Post-Closing~~ Objections Statement as being items which Seller and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers Purchaser are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates)resolve. The ~~Neutral Accounting~~ Dispute Resolution Firm ~~shall investigate only those items that the Sellers and the Buyers have been unable to resolve and~~ shall not assign a value to any item ~~that is (A)~~ greater than the greatest value for such ~~item claimed by either of the Buyers~~ item, or ~~the Sellers or (B)~~ lower than the lowest value ~~for~~ of such ~~item~~ item, claimed ~~by either~~ in any notice of disagreement presented to the ~~Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm~~Dispute Resolution Firm pursuant hereto. The ~~Sellers and~~ Dispute Resolution Firm’s determination will be based solely on the ~~Buyers shall instruct the Neutral Accounting Firm that~~definitions of Closing Net Working Capital, ~~within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm~~Closing Cash, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting FirmClosing Indebtedness, Closing Transaction Expenses, Botanist Transaction Expenses, the ~~Sellers~~ Purchase Price and ~~the Buyers) and no later than forty-five~~ Existing Customer TTM Revenue (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm as finally determined pursuant to ~~the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers~~this Section 1.5), as applicable, ~~no later than~~ contained herein. The Seller and Purchaser shall use their commercially reasonable efforts to cause the ~~deadline set forth~~ Dispute Resolution Firm to resolve all disagreements as soon as practicable and in any event within 30 days after the ~~Accountant Notice (as the same may be amended by the mutual written consent~~ submission of ~~the Neutral Accounting Firm~~any dispute. Further, the ~~Sellers and the Buyers), and a copy of such materials~~ Dispute Resolution Firm’s determination shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the ~~written~~ presentations ~~of the Sellers~~ by Purchaser and ~~the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and~~ Seller which are in accordance with the ~~guidelines~~ terms and procedures set forth in this Agreement ~~and~~ (i.e., not by on the basis of an independent review~~) only those matters in dispute and to render a written report as to the calculations~~ ). The resolution of the ~~disputed amounts~~dispute by the Dispute Resolution Firm shall be final, ~~which report, absent manifest error, shall thereupon be conclusive~~ binding and ~~binding upon~~ non-appealable on the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statementhereto. The ~~fees,~~ costs and expenses of the ~~Neutral Accounting~~ Dispute Resolution Firm shall be ~~borne by~~ allocated between Purchaser and Seller based upon the ~~Sellers and~~ percentage which the ~~Buyers based on the inverse~~ portion of the ~~percentage that the Neutral Accounting Firm’s determination (before such allocation)~~ contested amount not awarded to each party bears to the ~~total~~ amount of actually contested by such party in the ~~total items in dispute as originally submitted~~ presentation to the ~~Neutral Accounting~~ Dispute Resolution Firm. For example, ~~should the items in dispute total in amount to~~ if Seller submits an Objections Statement for $~~1,000~~ 1,000, and ~~the Neutral Accounting Firm award~~ if Purchaser contests only $~~600 in favor~~ 500 of the ~~Sellers’ position~~amount claimed by Seller, ~~60%~~ and if the Dispute Resolution Firm ultimately resolves the dispute by awarding Seller $300 of the ~~costs of its review would be borne by the Buyers and 40% of~~ $500 contested, then the costs ~~would be borne by the Sellers. The fees~~ and expenses of the ~~Sellers~~ Dispute Resolution Firm will be allocated 60% (i.e., 300/500) to Purchaser and ~~their respective Representatives incurred in connection with the Post-~~40% (i.e., 200/500) to Seller. The Preliminary Closing Statement and ~~any Dispute Notice~~ the Preliminary Customer TTM Revenue Statement shall be ~~borne by~~ revised as appropriate to reflect the ~~Sellers~~resolution of any objections thereto pursuant to this Section 1.5, ~~and the fees and expenses of the Buyers and their Representatives in connection with the Post-~~and, as so revised, such Preliminary Closing Statement and ~~any Dispute Notice~~ Preliminary Customer TTM Revenue Statement, as applicable, shall be ~~borne by the Buyers. (f) Any dispute with respect~~ deemed to ~~the Remaining Required CapEx Amount, if any, will be resolved using the procedures~~ set forth ~~above~~ the Closing Net Working Capital, Closing Cash, Closing Indebtedness, Botanist Transaction Expenses (that were not included in the Botanist Cash Amount), Closing Transaction Expenses, the Purchase Price and Existing Customer TTM Revenue (as finally determined pursuant to this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”1.5), ~~then the Buyers shall pay to the Sellers~~in each case, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing, an amount equal to such Actual Surplus, or (B) if the finally determined Purchase Price is less than the Closing Payment (such amount, the “Actual Deficiency”), then the Sellers shall pay to the Buyers an amount equal to such Actual Deficiency by wire transfer of immediately available funds to such account or accounts as may be designated by the Buyers to the Sellers in writingfor all purposes hereunder.

Appears in 1 contract

Samples: Stock Purchase Agreement (R1 RCM Inc.)

Purchase Price Adjustments. (a) ~~Not more than seven (7) Business Days nor less than three (3) Business Days prior to~~ Promptly following the Closing Date, the Sellers shall deliver to the Buyers a statement (the “Estimated Closing Statement”) showing the Sellers’ good faith calculation of Estimated Working Capital and Estimated Closing Indebtedness including the calculation thereof in reasonable detail and with reasonable backup documentation regarding the calculation of such amounts, calculated in accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4, together with a calculation of the Closing Payment. The Buyers and their Representatives shall be entitled to reasonable access during normal business hours to the relevant records, personnel and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith to agree on the Closing Payment prior to the Closing; provided, however, that the failure to agree on such amount shall not delay or otherwise prevent the Closing and, to the extent of any remaining dispute, the Sellers’ calculation of the Closing Payment shall prevail. (b) Prior to the Closing on the Closing Date (at such time as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in ~~any~~ no event ~~within sixty (60)~~ later than 30 days after the Closing Date, Purchaser shall provide to Sellers a certificate executed on behalf of Purchaser by the ~~Buyers shall prepare~~ President or any Senior Vice President of Purchaser, dated the date of its delivery, setting forth Purchaser's (~~or cause to be prepared~~i) proposed Adjusted Working Capital as of the Closing Date (the "Proposed Final Adjusted Working Capital") and ~~deliver to the Sellers a statement~~ (ii) Purchaser's reasonably detailed calculation thereof (the ~~“Post-~~"Closing Date Statement~~”) showing the Buyers’ calculation of Closing Working Capital (including, for the avoidance of doubt but subject to the last sentence of this Section 1.4(c~~"), the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), and the amount of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the Purchase Price. The ~~Buyers~~ Closing Date Statement shall ~~promptly provide to~~ be prepared in accordance with GAAP (except as noted on Exhibit A) and in a manner consistent with the ~~Sellers such backup or supporting data relating to~~ policies and principles used in connection with the preparation of the ~~Post-~~Reference Balance Sheet (provided, however, that in preparing the Closing ~~Statement and the calculation of Closing Working Capital~~Date Statement, the ~~amount of Closing Indebtedness~~ inclusions, exclusions, adjustments and terms set forth on Exhibit A shall be given effect). (b) Purchaser shall provide reasonable cooperation to, and shall cause the ~~Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also~~ Purchased Subsidiaries and their respective employees and agents to provide ~~the~~ reasonable cooperation to, Sellers and their ~~Representatives with such~~ employees and representatives in their review of the Closing Date Statement and shall provide Sellers and their employees and representatives reasonable access to the ~~books~~applicable personnel, properties, books and records of Purchaser and ~~personnel~~ the Purchased Entities for such purpose. In the event Sellers dispute the correctness of ~~each Company~~the Proposed Final Adjusted Working Capital proposed by Purchaser, ~~at reasonable times and upon reasonable notice, as~~ Sellers shall notify Purchaser in writing of its objections within 30 days after receipt of the ~~Sellers may reasonably request for the purposes of evaluating the Post-~~Closing Date Statement and ~~the Buyers’ calculation of Closing Working Capital~~shall set forth, in writing and in reasonable detail, the ~~amount~~ reasons for Sellers' objections. If Sellers fail to deliver their notice of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as objections within 30 days after receipt of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Date Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers ~~within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon~~ shall be deemed to have ~~been~~ accepted ~~by the~~ Purchaser's calculation. Sellers and shall be binding thereon for all purposes of this Agreement. If the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers Purchaser shall endeavor in good faith to resolve ~~all such disagreements~~ any disputed matters within ~~the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers~~ 15 days after receipt of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes Sellers' notice of ~~this Agreement~~objections. If ~~the Buyers~~ Sellers and ~~the Sellers~~ Purchaser are unable to resolve ~~any disagreements~~ the disputed matters, Sellers and Purchaser shall promptly refer the disputed matters to the Accounting Firm. The Accounting Firm shall offer Sellers and Purchaser (and their respective employees and representatives) the opportunity to provide written submissions regarding their positions on the ~~Post-Closing Statement and the calculations reflected thereon within the Negotiating Period~~disputed matters, ~~then within fifteen (15)~~ which opportunity shall not extend more than 15 days after the ~~end~~ submission of the ~~Negotiating Period~~ disputed matters to the Accounting Firm. The Accounting Firm shall deliver a written report resolving all disputed matters and setting forth the basis for such ~~disputes~~ resolution within 30 days after Sellers and Purchaser have submitted in writing (or have had the opportunity to submit in writing but have not submitted) their positions as to the disputed items. The determination of the Accounting Firm in respect of the correctness of each matter remaining in dispute shall be ~~promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers~~ conclusive and ~~the~~ binding on Sellers ~~(the “Neutral Accounting Firm”)~~and Purchaser. The ~~Neutral~~ determination of the Accounting Firm shall be ~~instructed only to resolve all outstanding disagreements relating to~~ based solely on the ~~Post-Closing Statement~~ written submissions by Sellers and ~~the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon,~~ Purchaser and shall not 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 by independent review (it being understood that the ~~amount~~ Accounting Firm need not accept in its entirety the submission of ~~any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined~~ either one party or the other). The Adjusted Working Capital as of the ~~Effective Time applying methods~~ Closing Date, as finally determined pursuant to this Section 2.6(b) (~~including estimation methodologies~~whether by failure of Sellers to deliver a timely notice of objection, by agreement of Sellers and Purchaser or by determination of the Accounting Firm), ~~practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except~~ are referred to ~~the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve~~ herein as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures set forth in this Agreement and not by independent review) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyers"Final Adjusted Working Capital". (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall pay to the Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing, an amount equal to such Actual Surplus, or (B) if the finally determined Purchase Price is less than the Closing Payment (such amount, the “Actual Deficiency”), then the Sellers shall pay to the Buyers an amount equal to such Actual Deficiency by wire transfer of immediately available funds to such account or accounts as may be designated by the Buyers to the Sellers in writing.

Appears in 1 contract

Samples: Purchase Agreement (Dynegy Inc /Il/)

Purchase Price Adjustments. (a) ~~Not more~~ Seller shall deliver to Buyer no later than ~~seven~~ five (~~7) Business Days nor less than three (3~~5) Business Days prior to the Closing ~~Date, the Sellers shall deliver to the Buyers~~ Date a written statement (the “Estimated Closing Statement”) ~~showing~~ setting forth (i) Seller’s good faith estimate of (A) the ~~Sellers’~~ Adjustment Amount (the “Estimated Adjustment Amount”) and (B) the NPV of Waived Management Fee (the “Estimated NPV of Waived Management Fee”) and (ii) Seller’s good faith calculation of ~~Estimated Working Capital and Estimated~~ the Preliminary Closing ~~Indebtedness~~ Purchase Price, including ~~the calculation thereof in reasonable detail and with reasonable backup documentation regarding the~~ its calculation of ~~such amounts~~each of the components thereof, ~~calculated~~ in ~~accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4~~each case, together with supporting documentation used by Seller in calculating such amounts. To the extent reasonably requested by Buyer, Seller shall provide to Buyer and its advisors prior to Closing reasonable access during normal business hours to financial records and work papers used in calculating the Estimated Closing Statement and the components thereof and Seller will consider in good faith any comments provided by Buyer to the Estimated Closing Statement or any calculations or components thereof and may (but is not required to) update and revise the Estimated Closing Statement prior to the Closing following such consideration (and any such updated and revised Estimated Closing Statement shall be considered the Estimated Closing Statement for the purposes of this Agreement); provided that (A) in no event shall any review of the Estimated Closing Statement or the components thereof by Buyer or any of its advisors, or any dispute relating thereto, delay or prevent the Closing and (B) in no event shall such consultation or the delivery of the Estimated Closing Statement be deemed to constitute the agreement of Buyer to any of the estimates or components therein (other than the Entire Business Value, the Expansion Area Adjustment Amount and the Purchase Price, in each case, as previously determined by the Valuation Providers) or be construed as a waiver by Buyer of its rights under this Section 2.5. (b) As promptly as practical, but in no event later than ninety (90) days after the Closing Date, Buyer will deliver to Seller a written statement (the “Closing Statement”) setting forth its calculation of (i) the Adjustment Amount, (ii) the NPV of Waived Management Fee and (iii) the Final Closing ~~Payment~~Purchase Price, including its calculation of each of the components thereof (other than the Entire Business Value, the Expansion Area Adjustment Amount and the Purchase Price, in each case, previously determined by the Valuation Providers). ~~The Buyers~~ From and ~~their~~ after the Closing, Buyer shall, and shall cause its Affiliates to, on reasonable prior notice to Buyer, (i) provide Seller and its Representatives ~~shall be entitled to~~ with reasonable access during normal business hours to the ~~relevant records~~facilities, ~~personnel~~ books, records and ~~working~~ work papers of Buyer and its Affiliates and (ii) cooperate with and assist Seller and its Representatives, in each case in connection with the ~~Sellers~~ review of such materials, including by making available their employees and other personnel to the ~~Companies to aid~~ extent reasonably requested, in ~~their~~ each case, in connection with Seller’s review of the ~~Estimated~~ Closing Statement. (c) The Closing Statement shall become final and binding upon the Parties on the date that is sixty (60) days after receipt of the Closing Statement by Seller (the “Final Settlement Date”), in each case, unless Seller gives written notice of its disagreement (“Notice of Disagreement”) to Buyer prior to such date. Any Notice of Disagreement shall specify in reasonable detail the dollar amount, nature and basis of any such disagreement. If a Notice of Disagreement is received by Buyer, then the Closing Statement (as revised in accordance with Section 2.5(d), if applicable) shall become final and binding on the Parties on, and the Final Settlement Date shall be, the earlier of (i) the date upon which Seller and Buyer agree in writing with respect to all matters specified in the Closing Statement and (ii) the ~~calculation~~ date upon which the Final Closing Statement is issued by the Independent Accounting Firm (defined below). (d) During the first twenty (20) days after the date upon which Buyer receives a Notice of ~~Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and~~ Disagreement, the ~~Buyers~~ Parties shall ~~work together~~ attempt in good faith to ~~agree on~~ resolve in writing any differences that they may have with respect to all matters specified in the ~~Closing Payment prior~~ Notice of Disagreement (and all such discussions and negotiations related thereto shall, unless otherwise previously agreed in writing by Buyer and Seller, be governed by Rule 408 of the Federal Rules of Evidence (and any applicable similar state rule)). If at the end of such twenty (20)-day period (or earlier by mutual written agreement) the Parties have not reached agreement with respect to all matters specified in the ~~Closing~~Notice of Disagreement, the matters that remain in dispute (and only such matters) shall be submitted to Xxxxx Xxxxxxxx LLP (or, if Xxxxx Xxxxxxxx LLP is unwilling or unable to serve, such other independent accounting firm of recognized national standing in the United States mutually selected by Buyer and Seller, which shall be mutually selected not later than ten (10) days following the end of such twenty (20)-day period) (such accounting firm, the “Independent Accounting Firm”) by the Parties for review and resolution; provided, however, that ~~the failure to agree on such amount shall not delay~~ any materials provided by either Party or ~~otherwise prevent the Closing and,~~ its respective Representatives to the ~~extent of any remaining dispute, the Sellers’ calculation of the Closing Payment~~ Independent Accounting Firm shall ~~prevail. (b) Prior~~ also simultaneously be made available to the Closing on the Closing Date (at such time as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”)other Party. A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in any event within sixty (60) days after the Closing Date, the Buyers shall prepare (or cause to be prepared) and deliver Any item not specifically submitted to the ~~Sellers a statement (the “Post-Closing Statement”) showing the Buyers’ calculation of Closing Working Capital (including,~~ Independent Accounting Firm for the avoidance of doubt but subject to the last sentence of this Section 1.4(c), the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), and the amount of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the Purchase Price. The Buyers 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with such reasonable access to the books, records and personnel of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon evaluation shall be deemed ~~to have been accepted by the Sellers~~ final and ~~shall be~~ binding thereon for all purposes of this Agreement. If the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the ~~Post-~~Parties (as set forth in the Estimated Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers shall endeavor in good faith to resolve all such disagreements within the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, ~~as modified to reflect such resolution, shall be~~ the final Post-Closing Statement and shall be binding on all parties for all purposes of this Agreement. If the Buyers and the Sellers are unable to resolve any disagreements regarding the Post-Closing Statement and the calculations reflected thereon within the Negotiating Period, then within fifteen (15) days after the end of the Negotiating Period all such disputes shall be promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be instructed only to resolve all outstanding disagreements relating to the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures set forth in this Agreement and not by independent review) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyers. (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall pay to the Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing, an amount equal to such Actual Surplus, or (B) if the finally determined Purchase Price is less than the Closing Payment (such amount, the “Actual Deficiency”), then the Sellers shall pay to the Buyers an amount equal to such Actual Deficiency by wire transfer of immediately available funds to such account or accounts as may be designated by the Buyers to the Sellers in writing.of

Appears in 1 contract

Samples: Asset Purchase Agreement (T-Mobile US, Inc.)

Purchase Price Adjustments. (a) Not ~~more than seven (7) Business Days nor less~~ later than three (3) Business Days prior to the Closing Date, ~~the Sellers~~ Seller shall deliver to ~~the Buyers~~ Buyer a statement (the “Estimated Closing Statement”) ~~showing the Sellers’~~ setting forth in reasonable detail, with reasonable supporting documentation, Seller’s good faith ~~calculation~~ estimate of (i) the Cash of the Target Companies as of the Calculation Time (the “Estimated Closing Cash”), (ii) the Indebtedness of the Target Companies as of the Calculation Time (the “Estimated Closing Indebtedness”), (iii) the Company Transaction Expenses as of immediately prior to the Closing (the “Estimated Company Transaction Expenses”), (iv) the Net Working Capital ~~and~~ of the Target Companies as of the Calculation Time (the “Estimated Closing Indebtedness including the calculation thereof in reasonable detail and with reasonable backup documentation regarding the calculation of such amounts, calculated in accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4Net Working Capital” and, together with the Estimated Closing Cash, the Estimated Company Transaction Expenses, and the Estimated Closing Indebtedness, the “Estimated Amounts”) and (v) a calculation of the Closing ~~Payment~~Purchase Price derived therefrom, expressed in Dollars in accordance with Section 2.05. ~~The Buyers~~ Seller shall provide Buyer and ~~their~~ its Representatives ~~shall be entitled to~~ with reasonable access to appropriate employees, advisors, relevant books and records of the Target Companies during normal business hours and upon reasonable notice (subject to execution of any customary work paper access letter required by Seller’s or the Company’s accountants or other advisors) to the ~~relevant records, personnel and working papers~~ extent reasonably necessary to verify the information contained in the Estimated Closing Statement; provided that such access does not unreasonably disrupt the normal business operations of Seller or the Target Companies. In the event that Xxxxx notifies Seller prior to the Closing that Buyer in good faith disputes Seller’s calculation of the ~~Sellers~~ Estimated Amounts set forth on the Estimated Closing Statement, then Buyer and ~~the Companies~~ Seller shall cooperate in good faith to ~~aid in their review of~~ resolve any such dispute as promptly as practicable and, if so resolved, modify the Estimated Closing Statement and the ~~calculation~~ Closing Purchase Price, as appropriate, to reflect any agreed adjustments to the Estimated Amounts; provided, that in case of any disagreement between the parties with respect to the Estimated ~~Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith to agree on the Closing Payment~~ Amounts that is not resolved prior to the Closing~~; provided~~, ~~however, that the failure to agree on~~ in no case shall such ~~amount shall not~~ disagreement delay ~~or otherwise prevent~~ the Closing ~~and, to~~ and the ~~extent of any remaining dispute, the Sellers’ calculation~~ Estimated Amounts of the Company set forth in the Estimated Closing ~~Payment~~ Statement shall ~~prevail~~control. (b) ~~Prior to the Closing on~~ No later than ninety (90) days following the Closing Date (the “Delivery Period”), Buyer shall, at ~~such time~~ its expense, prepare and deliver, or cause to be prepared and delivered, to Seller, a statement prepared in good faith in form substantially similar to the Estimated Closing Statement (the “Proposed Closing Statement”) setting forth, in reasonable detail, with reasonable supporting documentation, Buyer’s good faith calculation of (i) the Cash of the Target Companies as ~~mutually agreed by~~ of the ~~Buyers~~ Calculation Time (the “Proposed Closing Cash”), (ii) the Indebtedness of the Target Companies as of the Calculation Time (the “Proposed Closing Indebtedness”), (iii) the Company Transaction Expenses as of immediately prior to the Closing (the “Proposed Company Transaction Expenses”), (iv) the Net Working Capital of the Target Companies as of the Calculation Time (the “Proposed Closing Net Working Capital” and, together with the Proposed Closing Cash, the Proposed Closing Indebtedness and the ~~Sellers~~ Proposed Company Transaction Expenses, the “Proposed Amounts”), and (v) Buyer’s proposed calculation of the Final Adjusted Purchase Price derived therefrom, expressed in Dollars in accordance with Section 2.05. If Xxxxx does not deliver a Proposed Closing Statement to Seller during the Delivery Period (provided that any Proposed Closing Statement delivered by Buyer within such Delivery Period will be deemed timely delivered, regardless of any objections (successful or ~~as otherwise directed by applicable Gaming Authorities~~otherwise) Seller may make that such Proposed Closing Statement was not prepared in accordance with this Agreement), then Seller shall have the ~~Sellers shall conduct~~ right (but not an obligation) to prepare and deliver to Buyer a ~~cash count~~ Proposed Closing Statement no later than sixty (60) days following the last day upon which Xxxxx’s Proposed Closing Statement was required to be delivered to Seller in accordance with this Section 2.05(b), and the ~~drop~~ provisions of ~~each Company~~this Section 2.05(b) shall apply to Seller’s ~~gaming device “hoppers” as well as a count~~ Proposed Closing Statement, reversing the use of ~~each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (~~“Seller~~’s Chips”~~” and “Buyer” in Section 2.05(e) and Section 2.05(f)~~. A Representative of~~ ; provided, that the ~~Buyers~~ Delivery Period shall be ~~provided~~ extended by a ~~reasonable opportunity~~ number of calendar days equal to ~~be present~~ the period during which any information reasonably requested by Buyer from Seller and its Representatives and reasonably necessary to ~~observe such cash count, hxxxxx drop count and Seller’s Chips liability count if~~ verify the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is information contained in the ~~Post-~~Estimated Closing Statement ~~(it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company~~ in connection with preparing the ~~calculation~~ Proposed Closing Statement has not been received by Buyer if such information (i) is requested by Buyer to Seller in writing and (ii) Seller has failed to use commercially reasonable efforts to provide Buyer with such information. For the avoidance of doubt, if Xxxxxx does not elect to deliver a Proposed Closing Statement in accordance with the foregoing sentence (following the expiration of the ~~Closing Working Capital as of the Effective Time~~Delivery Period and any extension thereof)~~. Within three (3) Business Days after the Closing Date~~, the ~~Sellers~~ Estimated Closing Statement shall ~~provide~~ constitute the ~~Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips~~Final Closing Statement. (c) As soon as reasonably practicable but in any event within sixty (60) days after the Closing Date, the Buyers shall prepare (or cause to be prepared) and deliver to the Sellers a statement (the “Post-Closing Statement”) showing the Buyers’ calculation of Closing Working Capital (including, for the avoidance of doubt but subject to the last sentence of this Section 1.4(c), the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), and the amount of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the Purchase Price. The ~~Buyers shall promptly provide to the Sellers such backup or supporting data relating to the preparation of the Post-~~Estimated Closing Statement and the ~~calculation of~~ Proposed Closing ~~Working Capital~~Statement shall be prepared, and the Estimated Amounts, the ~~amount of Closing Indebtedness~~ Proposed Amounts and the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with such reasonable access to the books, records and personnel of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 Final Amounts shall be ~~determined as~~ calculated, in accordance with the applicable terms and definitions of this Agreement, including the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAPAccounting Principles. (d) ~~The Sellers shall, within~~ Following the ~~forty-five (45)-day period (~~delivery of the ~~“Acceptance Period”) following receipt of such Post-~~Proposed Closing Statement, ~~notify~~ Buyer shall provide Seller and its Representatives and, if applicable, the ~~Buyers~~ Independent Firm, access, upon advance written notice and during normal business hours, to relevant books, records, documents and work papers (subject to execution of ~~their acceptance~~ any customary work paper access letter required by Xxxxx’s or ~~non-acceptance~~ the Company’s accountants or other advisors) requested by Seller and its Representatives to the extent reasonably necessary in connection with Seller’s review (~~as the case may be~~or preparation, if applicable) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Proposed Closing Statement, the ~~Sellers shall describe in reasonable detail in such Dispute Notice the nature~~ Proposed Amounts or any resolution of any ~~disagreement so asserted including an estimate, to~~ dispute with respect thereto; provided that such access does not unreasonably disrupt the ~~extent then reasonably ascertainable,~~ normal business operations of Buyer or the amount in dispute of any items then being disputed. The Buyers and the Sellers shall endeavor in good faith to resolve all such disagreements within the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers of such Dispute NoticeTarget Companies. (e) If Within ninety (90) days following Buyer’s delivery of the ~~parties are able~~ Proposed Closing Statement to ~~resolve all disputed amounts or other disputes identified in the Dispute Notice~~Seller, ~~the Post-Closing Statement~~Seller shall deliver a Notice of Disagreement; provided, ~~as modified to reflect~~ that such ~~resolution,~~ ninety (90)-day period shall be ~~the final Post-Closing Statement~~ tolled for any period during which Buyer shall fail to make available to Seller all relevant books, records, documents and ~~shall~~ work papers required to be ~~binding on all parties for all purposes of this Agreement. If the Buyers and the Sellers are unable~~ made available to ~~resolve any disagreements regarding the Post-Closing Statement and the calculations reflected thereon within the Negotiating Period, then within fifteen (15~~Seller under Section 2.05(d) days after the end of the Negotiating Period all such disputes shall be promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be instructed but only to resolve all outstanding disagreements relating to the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent ~~inconsistent with GAAP. If the Sellers~~ that such access or information (x) exists and ~~the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen~~ (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that y) is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed Seller in writing ~~among the Neutral Accounting Firm, the Sellers and the Buyers) and~~ no ~~later~~ more than forty-five (45) days following ~~the date of~~ Buyer’s delivery (or deemed delivery in accordance with Section 2.05(b)) of the ~~Accountant Notice~~Proposed Closing Statement and (z) Buyer has failed to provide Seller with such access or information in accordance with the terms of Section 2.05(d). If Seller accepts the Proposed Amounts, or if Seller does not deliver a Notice of Disagreement to Buyer notifying Buyer of a dispute with respect to the Proposed Amounts in accordance with Section 2.05(f) within such ninety (90)-day period (subject to the proviso in the immediately foregoing sentence), then the Proposed Closing Statement and the Proposed Amounts set forth therein, in each case, shall be deemed final, conclusive and binding on the Parties in all respects and used for purposes of calculating the Final Adjusted Purchase Price in accordance with Section 2.05(h) and Section 2.05(i). (iif) If Seller disputes the ~~format~~ accuracy of the Proposed Closing Statement or of any of the Proposed Amounts or of the Final Adjusted Purchase Price derived therefrom, then Seller shall provide written notice of its disagreement (such notice, a “Notice of Disagreement”) and specifying the Proposed Amounts that Seller disputes, including the specific line items and amounts in ~~which~~ dispute, with all matters in dispute in a single subaccount arising out of the ~~Sellers~~ same or similar facts constituting a “Disputed Item” and, collectively, the “Disputed Items”. (g) If a Notice of Disagreement is duly and timely delivered pursuant to Section 2.05(f), Seller and Buyer shall, during the ~~Buyers are~~ thirty (30)-day period (or such longer period as Buyer and Seller mutually agree) following such delivery, negotiate in good faith to ~~submit their written presentations (which format~~ resolve the Disputed Items. If, at the conclusion of such resolution period, Seller and Buyer have not resolved all Disputed Items, then all Disputed Items remaining in dispute shall be ~~reasonably acceptable~~ submitted by Seller and Buyer for definitive resolution to Xxxxx Xxxxxxx or such other independent firm of international standing as Seller and Buyer may agree (the ~~Sellers and the Buyers~~“Independent Firm”). ~~A copy of all materials submitted to the Neutral Accounting~~ The Independent Firm ~~pursuant to the immediately preceding sentence~~ shall be ~~provided to the Neutral Accounting Firm~~ engaged by ~~the Sellers~~ Xxxxxx and ~~the Buyers, as applicable,~~ Xxxxx no later than ten (10) Business Days (or such longer period as Buyer and Seller mutually agree) following the ~~deadline set forth in the Accountant Notice (as the same may be amended~~ conclusion of such resolution period. Each of Xxxxxx and Xxxxx agrees to promptly execute, if requested by the ~~mutual written consent of the Neutral Accounting~~ Independent Firm, ~~the Sellers and the Buyers), and~~ a ~~copy of such materials shall be provided~~ reasonable engagement letter with respect to the ~~other party hereto concurrently~~ determination to be made by the Independent Firm with ~~the submission thereof~~ respect to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm such dispute in accordance with this Section ~~1.4(e~~2.05(g). Promptly after joint engagement of the Independent Firm, the Parties shall provide the Independent Firm with a copy of this Agreement, the Accounting Principles, Xxxxx’s Proposed Closing Statement and Seller’s Notice of Disagreement. Each of Seller and Buyer shall deliver to the Independent Firm and to the other Party simultaneously a written submission of its final position (the “Final Position”) ~~and~~ with respect to each of the Disputed Items that remain in ~~accordance with~~ dispute (which Final Position may be different than the ~~guidelines and procedures~~ position set forth in ~~this Agreement~~ the Proposed Closing Statement and the Notice of Disagreement, as the case may be, but may not ~~by independent review~~be outside of the range of the positions set forth in the Proposed Closing Statement and Notice of Disagreement) ~~only those matters in dispute~~ within fifteen (15) days of the engagement of such Independent Firm. Each Party shall thereafter be entitled to submit a rebuttal to the other’s submission and such rebuttal shall be delivered to the Independent Firm and to ~~render a written report as~~ the other Party simultaneously within thirty (30) days of the delivery of the Parties’ initial submissions to the ~~calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive~~ Independent Firm and ~~binding upon the parties hereto for all purposes hereunder~~to each other. ~~Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted~~ The Independent Firm may request additional information from either Party solely to the extent necessary to ~~reflect~~ resolve the ~~Neutral Accounting~~ Disputed Items still in dispute from either Party, but absent such a request neither Party may make (nor permit any of its Affiliates or Representatives to make) any additional submission to the Independent Firm or otherwise communicate with the Independent Firm. Without limiting the foregoing, to the extent the Independent Firm requests additional information in accordance with the immediately preceding sentence, in no event shall either Party (i) communicate (or permit any of its Affiliates or Representatives to communicate) with the Independent Firm without providing the other Party a reasonable opportunity to participate in such communication or (ii) make (or permit any of its Affiliates or Representatives to make) a written submission to the Independent Firm unless a copy of such submission is simultaneously provided to the other Party. The Independent Firm’s ~~decision,~~ determination shall be based upon and consistent with the ~~final Post-Closing Statement~~terms and conditions of this Agreement. The determination by the Independent Firm shall be based on the written submissions (and any subsequent oral presentations made in accordance with the terms of this Section 2.05(g)) by Seller and Buyer with respect to the Disputed Items that remain in dispute and not on the Independent Firm’s independent review. In deciding any matter, the Independent Firm (i) shall be bound by the terms and conditions of this Agreement, including the definition of Cash, Indebtedness, Company Transaction Expenses and Net Working Capital and the Accounting Principles and (ii) shall choose, with respect to each Disputed Item still in dispute, the Final Position proposed by Seller or Buyer in their written submissions. The scope of the disputes to be resolved by the Independent Firm shall be limited to fixing mathematical errors and determining whether the Disputed Items were determined in accordance with this Agreement and the Independent Firm is not to make any other determination. All negotiations pursuant to this Section 2.05(g) shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence. The Parties acknowledge and agree that the Independent Firm shall be functioning solely as an expert and not as an arbitrator. Seller and Buyer shall use commercially reasonable efforts to cause the Independent Firm to render its determination within thirty (30) days after submission of the Parties’ rebuttals, or as soon thereafter as possible, which determination shall be set forth in a written statement delivered to Seller and Buyer and shall be final, conclusive, non-appealable and binding for all purposes hereunder, absent manifest error by the Independent Firm. The fees and expenses of the Independent Firm shall be paid by Seller and Buyer in proportion to the allocation of the dollar value of the amounts in dispute between Seller and Buyer resolved by the Independent Firm, such that the Party prevailing on the greatest dollar value of such disputes pays the lesser proportion of such fees and expenses. For example, if Seller claims that the appropriate adjustments are One Thousand Dollars ($1,000) greater than the amount determined by Buyer and if the Independent Firm ultimately resolves the dispute by awarding to Seller Three Hundred Dollars ($300) of the One Thousand Dollars ($1,000) contested, then the fees, costs and expenses of the ~~Neutral Accounting~~ Independent Firm shall be ~~borne~~ allocated thirty percent (30%) (i.e., 300 divided by ~~the Sellers~~ 1,000) to Buyer and ~~the Buyers based on the inverse~~ seventy percent (70%) (i.e., 700 divided by 1,000) to Seller. (h) The final Cash of the ~~percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount~~ Target Companies as of the ~~total items in dispute as originally submitted to~~ Calculation Time, the ~~Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor~~ final Indebtedness of the ~~Sellers’ position, 60%~~ Target Companies as of the ~~costs~~ Calculation Time, the Final Company Transaction Expenses as of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellersimmediately prior to Closing, and the ~~fees and expenses~~ final Net Working Capital of the ~~Buyers~~ Target Companies as of the Calculation Time, as finally determined pursuant to this Section 2.05(h) (whether by agreement of Buyer and ~~their Representatives in connection with~~ Seller or determination by the ~~Post-~~Independent Firm), are referred to herein respectively as the “Final Closing ~~Statement~~ Cash”, the “Final Closing Indebtedness”, the “Final Company Transaction Expenses” and ~~any Dispute Notice~~ the “Final Closing Net Working Capital” (and, collectively, the “Final Amounts”). The final closing statement reflecting the Final Amounts shall be ~~borne by~~ the ~~Buyers~~“Final Closing Statement”. (fi) ~~Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using~~ Following the procedures set forth ~~above~~ in this Section ~~1.4.~~2.05, ~~(g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4,~~ (A) if the ~~finally determined~~ Final Adjusted Purchase Price ~~exceeds~~ is greater than the Closing ~~Payment~~ Purchase Price (such ~~amount~~difference, the “~~Actual Surplus~~Excess Amount”), then within three (3) Business Days after the ~~Buyers~~ determination of the Final Amounts, Buyer shall pay to Seller an amount in Dollars equal to the ~~Sellers~~Excess Amount; and (B) if the Final Adjusted Purchase Price is less than the Closing Purchase Price (such difference, the “Shortfall Amount”), then within three (3) Business Days after the determination of the Final Amounts, Seller shall pay to Buyer an amount in Dollars equal to the Shortfall Amount. Any amount to be paid by Buyer or Seller pursuant to this Section 2.05(i) shall be paid by wire transfer of immediately available funds to ~~such~~ an account designated in writing by Seller or ~~accounts~~ Buyer, as the case may ~~be designated by the Sellers~~ be. Seller and Buyer agree to treat any payments made under Section 2.05(i) as an adjustment to the ~~Buyers in writing, an amount equal to such Actual Surplus, or (B) if the finally determined~~ Closing Purchase Price ~~is less than the Closing Payment~~ for all purposes, including Tax purposes (~~such amount, the “Actual Deficiency”), then the Sellers shall pay~~ to the ~~Buyers an amount equal to such Actual Deficiency~~ extent permitted by ~~wire transfer of immediately available funds to such account or accounts as may be designated by the Buyers to the Sellers in writing~~Applicable Law).

Appears in 1 contract

Samples: Sale and Purchase Agreement (Advance Auto Parts Inc)

Purchase Price Adjustments. Ernst & Young, LLP shall within seventy- five (a75) ~~Not more than seven~~ days of the Closing Date conduct an audit of the Company to ensure that the Company has collected accounts receivable and paid accounts payable in the ordinary course of business during the ninety (790) ~~Business Days nor less than three (3) Business Days~~ day period prior to the Closing Date. In the event that the audit reveals that the Company has (a) collected accounts receivable at an accelerated rate during such period, or (b) paid accounts payable at a reduced or delayed rate during such period, Vision 21 shall seek an adjustment to the Purchase Price. In the event that the proposed adjustment materially impacts the goodwill which may be created by the transaction, the ~~Sellers~~ proposed adjustment shall ~~deliver to~~ take into account the ~~Buyers a statement (~~related impact upon net income created by the ~~“Estimated Closing Statement”) showing the Sellers’ good faith calculation of Estimated Working Capital and Estimated Closing Indebtedness including the calculation thereof~~ change in ~~reasonable detail and with reasonable backup documentation regarding the calculation~~ amortization of such ~~amounts, calculated~~ goodwill. Vision 21 shall notify the Shareholder in ~~accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4, together with a calculation~~ writing within seventy-five (75) days of the Closing ~~Payment. The Buyers and their Representatives shall be entitled~~ Date of its decision to reasonable access during normal business hours to the relevant records, personnel and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith to agree on the Closing Payment prior to the Closing; provided, however, that the failure to agree on such amount shall not delay or otherwise prevent the Closing and, to the extent of any remaining dispute, the Sellers’ calculation of the Closing Payment shall prevail. (b) Prior to the Closing on the Closing Date (at such time as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in any event within sixty (60) days after the Closing Date, the Buyers shall prepare (or cause to be prepared) and deliver to the Sellers a statement (the “Post-Closing Statement”) showing the Buyers’ calculation of Closing Working Capital (including, for the avoidance of doubt but subject to the last sentence of this Section 1.4(c), the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), and the amount of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation seek an adjustment of the Purchase Price~~. The Buyers 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~~, the amount of ~~Closing Indebtedness~~ the proposed adjustment and its reasons for such decision. If the Shareholder does not notify Vision 21 within ten (10) days of the Shareholder's receipt of such notice that the Shareholder objects to the proposed adjustment, then the proposed adjustment shall take place and shall be final. If the Shareholder notifies Vision 21 within the above-described ten (10) day period that the Shareholder objects to the proposed adjustment, then Vision 21 and the Shareholder shall in good faith negotiate an appropriate amount of the adjustment, if any, which should be made. During all time periods following Vision 21's notice that it intends to adjust the Purchase Price ~~reflected thereon as~~ until the ~~Sellers may reasonably request. The Buyers~~ adjustment is finalized, Vision 21 shall ~~also~~ provide ~~the Sellers~~ to Shareholder and ~~their Representatives with such reasonable~~ his accountants full access to ~~the~~ all relevant books, records and ~~personnel of each Company, at reasonable times and upon reasonable notice, as~~ work papers utilized in preparing the ~~Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the~~ proposed Purchase ~~Price~~Price adjustment. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers shall endeavor in good faith to resolve all such disagreements within the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes of this Agreement. If the Buyers and the Sellers are unable to resolve any disagreements regarding the Post-Closing Statement and the calculations reflected thereon within the Negotiating Period, then within fifteen (15) days after the end of the Negotiating Period all such disputes shall be promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be instructed only to resolve all outstanding disagreements relating to the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as adjustment may be ~~reasonably requested by~~ settled in cash or Vision 21 Common Stock at the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures set forth in this Agreement and not by independent review) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the BuyersShareholder's option. (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall pay to the Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing, an amount equal to such Actual Surplus, or (B) if the finally determined Purchase Price is less than the Closing Payment (such amount, the “Actual Deficiency”), then the Sellers shall pay to the Buyers an amount equal to such Actual Deficiency by wire transfer of immediately available funds to such account or accounts as may be designated by the Buyers to the Sellers in writing.

Appears in 1 contract

Samples: Optical Asset Purchase Agreement (Vision Twenty One Inc)

Purchase Price Adjustments. Ernst & Young, LLP shall within seventy-five (a75) ~~Not more than seven~~ days of the Closing Date conduct an audit of the Company to ensure that the Company has collected accounts receivable and paid accounts payable in the ordinary course of business during the ninety (790) ~~Business Days nor less than three (3) Business Days~~ day period prior to the Closing Date. In the event that the audit reveals that the Company has (a) collected accounts receivable at an accelerated rate during such period, or (b) paid accounts payable at a reduced or delayed rate during such period, Vision 21 shall seek an adjustment to the Purchase Price. In the event that the proposed adjustment materially impacts the goodwill which may be created by the transaction, the ~~Sellers~~ proposed adjustment shall ~~deliver to~~ take into account the ~~Buyers a statement (~~related impact upon net income created by the ~~“Estimated Closing Statement”) showing the Sellers’ good faith calculation of Estimated Working Capital and Estimated Closing Indebtedness including the calculation thereof~~ change in ~~reasonable detail and with reasonable backup documentation regarding the calculation~~ amortization of such ~~amounts, calculated~~ goodwill. Vision 21 shall notify the Shareholder in ~~accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4, together with a calculation~~ writing within seventy-five (75) days of the Closing ~~Payment. The Buyers and their Representatives shall be entitled~~ Date of its decision to reasonable access during normal business hours to the relevant records, personnel and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith to agree on the Closing Payment prior to the Closing; provided, however, that the failure to agree on such amount shall not delay or otherwise prevent the Closing and, to the extent of any remaining dispute, the Sellers’ calculation of the Closing Payment shall prevail. (b) Prior to the Closing on the Closing Date (at such time as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in any event within sixty (60) days after the Closing Date, the Buyers shall prepare (or cause to be prepared) and deliver to the Sellers a statement (the “Post-Closing Statement”) showing the Buyers’ calculation of Closing Working Capital (including, for the avoidance of doubt but subject to the last sentence of this Section 1.4(c), the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), and the amount of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation seek an adjustment of the Purchase Price~~. The Buyers 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~~, the amount of ~~Closing Indebtedness~~ the proposed adjustment and its reasons for such decision. If the Shareholder does not notify Vision 21 within ten (10) days of the Shareholder's receipt of such notice that the Shareholder objects to the proposed adjustment, then the proposed adjustment shall take place and shall be final. If the Shareholder notifies Vision 21 within the above-described ten (10) day period that the Shareholder objects to the proposed adjustment, then Vision 21 and the Shareholder shall in good faith negotiate an appropriate amount of the adjustment, if any, which should be made. During all time periods following Vision 21's notice that it intends to adjust the Purchase Price ~~reflected thereon as~~ until the ~~Sellers may reasonably request. The Buyers~~ adjustment is finalized, Vision 21 shall ~~also~~ provide ~~the Sellers~~ to Shareholder and ~~their Representatives with such reasonable~~ his accountants full access to ~~the~~ all relevant books, records and ~~personnel of each Company, at reasonable times and upon reasonable notice, as~~ work papers utilized in preparing the ~~Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the~~ proposed Purchase ~~Price~~Price adjustment. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers shall endeavor in good faith to resolve all such disagreements within the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes of this Agreement. If the Buyers and the Sellers are unable to resolve any disagreements regarding the Post-Closing Statement and the calculations reflected thereon within the Negotiating Period, then within fifteen (15) days after the end of the Negotiating Period all such disputes shall be promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be instructed only to resolve all outstanding disagreements relating to the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as adjustment may be ~~reasonably requested by~~ settled in cash or Vision 21 Common Stock at the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures set forth in this Agreement and not by independent review) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the BuyersShareholder's option. (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall pay to the Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing, an amount equal to such Actual Surplus, or (B) if the finally determined Purchase Price is less than the Closing Payment (such amount, the “Actual Deficiency”), then the Sellers shall pay to the Buyers an amount equal to such Actual Deficiency by wire transfer of immediately available funds to such account or accounts as may be designated by the Buyers to the Sellers in writing.

Appears in 1 contract

Samples: Managed Care Organization Asset Purchase Agreement (Vision Twenty One Inc)

Purchase Price Adjustments. (a) Not ~~more~~ later than ~~seven (7) Business Days nor less than three (3)~~ two Business Days prior to the expected Second Closing Date, ~~the Sellers~~ Buyer shall deliver to the Buyers a statement (the “Estimated Closing Statement”) showing the Sellers’ good faith calculation of Estimated Working Capital and Estimated Closing Indebtedness including the calculation thereof in reasonable detail and with reasonable backup documentation regarding the calculation of such amounts, calculated in accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4, together with a calculation of the Closing Payment. The Buyers and their Representatives shall be entitled to reasonable access during normal business hours to the relevant records, personnel and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith ~~to agree on~~ determine the ~~Closing Payment prior~~ CapEx Estimate, and shall provide ASC with written notice of such determination, along with reasonable supporting information and calculations. The existence of any dispute with respect to the ~~Closing; provided, however, that the failure to agree on such amount~~ CapEx Estimate shall not delay or otherwise ~~prevent~~ affect the Second Closing. Within 30 days after the Second Closing ~~and~~Date, to Buyer shall determine the ~~extent~~ Actual CapEx Amount and shall provide ASC with written notice of ~~any remaining dispute~~such determination, ~~the Sellers’ calculation of the Closing Payment shall prevail~~along with reasonable supporting information and calculations (“Buyer’s Determination”). (b) ~~Prior~~ If ASC object to Buyer’s Determination, then it shall provide Buyer with written notice thereof within 30 days after the Second Closing and shall include reasonable detail regarding such specific objections together with supporting documentation. If Buyer and ASC fail to agree on ~~the Closing Date~~ such disputed items contained in Buyer’s Determination within 30 days from delivery by ASC to Buyer of ASC’s objection notice, then either Party may refer such dispute to PricewaterhouseCoopers LLP (at or, if that firm declines to act as provided in this Section 3.5(b), another firm of independent public accountants, mutually acceptable to Buyer and ASC), which such ~~time as mutually agreed~~ firm shall be directed by the ~~Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct~~ Parties to make a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive final and binding ~~upon the Sellers~~ determination as to all matters in dispute (and ~~the Buyers, absent manifest error,~~ only such matters) on a timely basis (and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in any event within ~~sixty (60)~~ 60 days after ~~the Closing Date, the Buyers shall prepare (or cause to be prepared~~its engagement) and ~~deliver~~ to the Sellers a statement (the “Post-Closing Statement”) showing the Buyers’ calculation of Closing Working Capital (including, for the avoidance of doubt but subject to the last sentence of this Section 1.4(c), the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), and the amount of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the Purchase Price. The Buyers 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with such reasonable access to the books, records and personnel of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, notify the ~~Buyers~~ Parties in writing of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period its resolution; provided that the ~~Sellers do~~ Parties shall not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in permit such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers shall endeavor in good faith to resolve all such disagreements within the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes of this Agreement. If the Buyers and the Sellers are unable to resolve any disagreements regarding the Post-Closing Statement and the calculations reflected thereon within the Negotiating Period, then within fifteen (15) days after the end of the Negotiating Period all such disputes shall be promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be instructed only to resolve all outstanding disagreements relating to the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any particular item ~~that is (A)~~ greater than the greatest value for such item claimed by ~~either of the Buyers~~ any Party or ~~the Sellers or (B) lower~~ less than the lowest value for such item claimed by ~~either~~ any Party. Such accounting firm handling the dispute resolution shall not have the power to modify or amend any term or provision of this Agreement. Buyer and ASC shall each bear and pay one-half of the ~~Buyers or~~ fees and other costs charged by such accounting firm. If ASC does not object to Buyer’s Determination within the ~~Sellers. Each of~~ time period and in the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline manner set forth in the ~~Accountant Notice (as the same may be amended by the mutual written consent~~ first sentence of ~~the Neutral Accounting Firm~~this Section 3.5(b) or if ASC accepts Buyer’s Determination, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures Actual CapEx Amount as set forth in ~~this Agreement and not by independent review) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error,~~ Buyer’s Determination shall ~~thereupon be conclusive~~ become final and binding upon the ~~parties hereto~~ Parties for all purposes hereunder. ~~Upon~~ If ASC does object to Buyer’s Determination within the ~~decision~~ time period and in the manner set forth in the first sentence of ~~the Neutral Accounting Firm~~this Section 3.5(b), ~~the Post-Closing Statement~~then Buyer’s Determination shall become final and binding for all purposes hereunder except with respect to, ~~as adjusted~~ and only to the extent ~~necessary~~ of, those matters expressly objected to ~~reflect~~ by ASC in such objection; provided, that where any matter to which ASC expressly objects would, if decided in ASC’s favor, warrant an adjustment to any other amount set forth in Buyer’s Determination, then notwithstanding the ~~Neutral Accounting Firm’s decision~~foregoing, such other amount shall be become final and binding only after the ~~final Post-Closing Statement. The fees, costs~~ matter to which ASC expressly objects has been resolved and expenses of the Neutral Accounting Firm shall be borne by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyersall applicable adjustments necessarily stemming therefrom have been made. (fc) ~~Any dispute with respect~~ If the Actual CapEx Amount (as agreed between Buyer and ASC or as determined by the above-referenced accounting firm) is (i) greater than the CapEx Estimate provided by Buyer pursuant to ~~the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this~~ Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”3.5(a), then ~~the Buyers~~ Buyer shall pay to ~~the Sellers~~ASC within five Business Days after such amount is so agreed or determined, by wire transfer of immediately available funds to ~~such~~ an account or accounts ~~as may be~~ designated by ASC, the ~~Sellers to the Buyers in writing,~~ product of (1) an amount equal to ~~such~~ the Actual ~~Surplus, or~~ CapEx Amount minus the CapEx Estimate and (B2) ~~if the finally determined Purchase Price is~~ 0.005 and (ii) less than the ~~Closing Payment (such amount, the “Actual Deficiency”~~CapEx Estimate provided by Buyer pursuant to Section 3.5(a), then ~~the Sellers~~ ASC shall pay to ~~the Buyers an~~ Buyer within five Business Days after such amount ~~equal to such Actual Deficiency~~ is so agreed or determined, by wire transfer of immediately available funds to ~~such~~ an account or accounts ~~as may be~~ designated by Buyer, the ~~Buyers~~ product of (1) an amount equal to the ~~Sellers in writing~~CapEx Estimate minus the Actual CapEx Amount and (2) 0.005. (d) Where, pursuant to Article II, the amount paid by Buyer to ASC as consideration for the Retained Interest is equal to the Call FMV Price or the Put FMV Price, as applicable, the foregoing provisions of this Section 3.5 shall be disregarded for all purposes.

Appears in 1 contract

Samples: Option Agreement (Black Hills Corp /Sd/)

Purchase Price Adjustments. (a) ~~Not more than seven (7) Business Days nor less than three (3) Business Days prior to~~ Promptly following the Closing Date, the Sellers shall deliver to the Buyers a statement (the “Estimated Closing Statement”) showing the Sellers’ good faith calculation of Estimated Working Capital and Estimated Closing Indebtedness including the calculation thereof in reasonable detail and with reasonable backup documentation regarding the calculation of such amounts, calculated in accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4, together with a calculation of the Closing Payment. The Buyers and their Representatives shall be entitled to reasonable access during normal business hours to the relevant records, personnel and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith to agree on the Closing Payment prior to the Closing; provided, however, that the failure to agree on such amount shall not delay or otherwise prevent the Closing and, to the extent of any remaining dispute, the Sellers’ calculation of the Closing Payment shall prevail. (b) Prior to the Closing on the Closing Date (at such time as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in ~~any~~ no event ~~within sixty (60)~~ later than 60 days after the Closing Date, Purchaser shall provide to Seller a certificate executed on behalf of Purchaser by the ~~Buyers shall prepare~~ President, Executive Vice President or any Senior Vice President of Purchaser, dated the date of its delivery, setting forth Purchaser’s (~~or cause to be prepared~~i) ~~and deliver to~~ proposed Adjusted Working Capital as of the ~~Sellers a statement~~ Closing Date (the “~~Post-~~Proposed Final Adjusted Working Capital”) and (ii) Purchaser’s reasonably detailed calculation thereof (the “Closing Date Statement”~~) showing the Buyers’ calculation of Closing Working Capital (including, for the avoidance of doubt but subject to the last sentence of this Section 1.4(c~~), the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), and the amount of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the Purchase Price. The ~~Buyers~~ Closing Date Statement shall ~~promptly provide to~~ be prepared in accordance with GAAP (except as noted on Exhibit A) and in a manner consistent with the ~~Sellers such backup or supporting data relating to~~ policies and principles used in connection with the preparation of the ~~Post-~~Reference Balance Sheet (provided, however, that in preparing the Closing Date Statement, the inclusions, exclusions, adjustments and terms set forth on Exhibit A shall be given effect). (b) Purchaser shall provide reasonable cooperation to, and shall cause the IPC Companies and their respective employees and agents to provide reasonable cooperation to, Seller and its employees and representatives in their review of the Closing Date Statement and ~~the calculation of Closing Working Capital, the amount of Closing Indebtedness~~ shall provide Seller and ~~the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers~~ its employees and ~~their Representatives with such~~ representatives reasonable access to the ~~books~~applicable personnel, properties, books and records of Purchaser and ~~personnel~~ the IPC Companies for such purpose. In the event Seller disputes the correctness of ~~each Company~~the Proposed Final Adjusted Working Capital proposed by Purchaser, ~~at reasonable times and upon reasonable notice, as~~ Seller shall notify Purchaser in writing of its objections within 30 days after receipt of the ~~Sellers may reasonably request for the purposes of evaluating the Post-~~Closing Date Statement and ~~the Buyers’ calculation of Closing Working Capital~~shall set forth, in writing and in reasonable detail, the ~~amount~~ reasons for Seller’s objections. If Seller fails to deliver its notice of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as objections within 30 days after receipt of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Date Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon Seller shall be deemed to have ~~been~~ accepted ~~by the Sellers~~ Purchaser’s calculation. Seller and shall be binding thereon for all purposes of this Agreement. If the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers Purchaser shall endeavor in good faith to resolve ~~all such disagreements~~ any disputed matters within ~~the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers~~ 15 days after receipt of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes Seller’s notice of ~~this Agreement~~objections. If ~~the Buyers~~ Seller and ~~the Sellers~~ Purchaser are unable to resolve ~~any disagreements~~ the disputed matters, Seller and Purchaser shall promptly refer the disputed matters to the Accounting Firm. The Accounting Firm shall offer Seller and Purchaser (and their respective employees and representatives) the opportunity to provide written submissions regarding their positions on the ~~Post-Closing Statement and the calculations reflected thereon within the Negotiating Period~~disputed matters, ~~then within fifteen (15)~~ which opportunity shall not extend more than 15 days after the ~~end~~ submission of the ~~Negotiating Period~~ disputed matters to the Accounting Firm. The Accounting Firm shall deliver a written report resolving all disputed matters and setting forth the basis for such ~~disputes~~ resolution within 30 days after Seller and Purchaser have submitted in writing (or have had the opportunity to submit in writing but have not submitted) their positions as to the disputed items. The determination of the Accounting Firm in respect of the correctness of each matter remaining in dispute shall be ~~promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers~~ conclusive and ~~the Sellers (the “Neutral Accounting Firm”)~~binding on Seller and Purchaser. The ~~Neutral~~ determination of the Accounting Firm shall be ~~instructed only to resolve all outstanding disagreements relating to~~ based solely on the ~~Post-Closing Statement~~ written submissions by Seller and ~~the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon,~~ Purchaser and shall not 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 by independent review (it being understood that the ~~amount~~ Accounting Firm need not accept in its entirety the submission of ~~any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined~~ either one party or the other). The Adjusted Working Capital as of the ~~Effective Time applying methods~~ Closing Date, as finally determined pursuant to this Section 2.3(b) (~~including estimation methodologies~~whether by failure of Seller to deliver a timely notice of objection, by agreement of Seller and Purchaser or by termination of the Accounting Firm), ~~practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except~~ are referred to ~~the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve~~ herein as the ~~Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a~~ “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant NoticeFinal Adjusted Working Capital”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures set forth in this Agreement and not by independent review) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyers. (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall pay to the Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing, an amount equal to such Actual Surplus, or (B) if the finally determined Purchase Price is less than the Closing Payment (such amount, the “Actual Deficiency”), then the Sellers shall pay to the Buyers an amount equal to such Actual Deficiency by wire transfer of immediately available funds to such account or accounts as may be designated by the Buyers to the Sellers in writing.

Appears in 1 contract

Samples: Stock Purchase Agreement (Dynegy Inc /Il/)

Purchase Price Adjustments. (a) ~~Not more~~ Within sixty (60) days following the Closing, Buyer shall prepare and deliver to Seller a financial certificate (the “Final Closing Financial Certificate”) setting forth the unaudited balance sheet of the Company as of immediately prior to the Closing (the “Final Closing Balance Sheet”), along with the calculation of the final Adjustment Amount (“Final Adjustment Amount”), final Cash of the Company (“Final Closing Cash”) and final Indebtedness of the Company (“Final Closing Indebtedness”). The Final Closing Balance Sheet shall be prepared in accordance with the principles and methodologies set forth in Section 2.1 of the Seller Disclosure Schedule (which such principles and methodologies are in accordance with GAAP (as in effect on the date of this Agreement) applied on a basis consistent with the preparation of the Company Financial Statements), and the Final Adjustment Amount, Final Closing Cash and Final Closing Indebtedness derived therefrom shall be prepared in accordance with the illustrative calculations thereof set forth in Section 2.1 of the Seller Disclosure Schedule. Buyer shall, in a timely manner, provide Seller such data and information as Seller may reasonably request in writing in connection with the preparation and review of the Final Closing Financial Certificate; provided, that such information right shall not include any access to documents to the extent prepared in defense of an Action concerning the Final Closing Financial Statement or the calculation of the Final Overall Cash Purchase Price Adjustment. (b) The Final Closing Financial Certificate shall become final and binding upon the Parties on the date (the “Final Settlement Date”) that is thirty (30) days following receipt thereof by Seller unless Seller gives written notice of its disagreement (“Notice of Disagreement”) to Buyer prior to such date; provided, that all such items that are not disputed shall be final and binding upon the Parties. In order to be effective, a Notice of Disagreement must specify in reasonable detail the dollar amount, nature and basis of any disagreement so asserted. If a Notice of Disagreement is received by Buyer in a timely manner, then the Final Closing Financial Certificate (as revised in accordance with paragraph (d) below, if applicable) shall become final and binding on the Parties on, and the Final Settlement Date shall be, the earlier of (i) the date upon which Seller and Buyer agree in writing with respect to all matters specified in the Notice of Disagreement and (ii) the date upon which the Final Closing Financial Certificate is issued by the Neutral Arbitrator. (c) During the first twenty (20) days following the date upon which Buyer receives a Notice of Disagreement, Seller and Buyer shall attempt in good faith to resolve in writing any differences that they may have with respect to all matters specified in the Notice of Disagreement. If at the end of such twenty (20) day period (or earlier by mutual agreement to arbitrate) Buyer and Seller have not reached agreement on such matters, the matters that remain in dispute shall be submitted to the Neutral Arbitrator by the Parties for review and resolution. The terms of appointment and engagement of the Neutral Arbitrator shall be as agreed upon in good faith between the Parties and any associated engagement fees shall initially be borne 50% by Seller and 50% by Buyer; provided, that such fees shall ultimately be allocated in accordance with the fee sharing provisions set forth below in this Section 2.2(c). The hearing date will be scheduled by the Neutral Arbitrator as soon as reasonably practicable, and shall be conducted on a confidential basis. Each Party shall, not later than seven (7) ~~Business Days nor less than three~~ days prior to the hearing date set by the Neutral Arbitrator, submit a brief (3to include such Party’s calculations with regard to amounts in dispute on the Closing Statement) for settlement of any amounts set forth in the Notice of Disagreement that remain in dispute. The Neutral Arbitrator shall render a decision resolving the matters in dispute on the basis of the standards set forth in this Section 2.2 (which decision shall include a written statement of findings and conclusions) within ten (10) Business Days ~~prior to~~ after the Closing Date, the Sellers shall deliver to the Buyers a statement (the “Estimated Closing Statement”) showing the Sellers’ good faith calculation of Estimated Working Capital and Estimated Closing Indebtedness including the calculation thereof in reasonable detail and with reasonable backup documentation regarding the calculation of such amounts, calculated in accordance with GAAP and using the same methodology as the calculation set forth on Schedule 1.4, together with a calculation conclusion of the ~~Closing Payment. The Buyers~~ hearing, unless the Parties reach agreement prior thereto and ~~their Representatives shall be entitled to reasonable access during normal business hours to~~ withdraw the relevant records, personnel and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith to agree on the Closing Payment prior to the Closingdispute from arbitration; provided, ~~however,~~ that the ~~failure to agree on such amount~~ Neutral Arbitrator shall not ~~delay~~ assign a value to any disputed item greater than the greatest value for such item assigned to it by Buyer or ~~otherwise prevent~~ Seller, as the ~~Closing and~~case may be, or less than the smallest value for such item assigned to it by Buyer or Seller, as the case may be. The Neutral Arbitrator shall provide to the ~~extent~~ Parties explanations in writing of ~~any remaining dispute~~the reasons for its decisions regarding the Final Adjustment Amount, Final Closing Cash and Final Closing Indebtedness and shall issue the Final Closing Financial Certificate reflecting such decisions. The decision of the Neutral Arbitrator shall be final and binding on the Parties. If the Neutral Arbitrator resolves all disputes presented to it entirely in the manner proposed by either Seller or Buyer, as the case may be, the ~~Sellers’ calculation~~ fees and expenses of the ~~Closing Payment~~ Neutral Arbitrator shall ~~prevail. (b) Prior~~ be borne by the non-prevailing Party. In all other events, the fees and expenses of the Neutral Arbitrator shall be shared based on the difference between Seller’s position, on the one hand, and Buyer’s position, on the other hand, initially presented to the ~~Closing~~ Neutral Arbitrator (based on the ~~Closing Date (at such time~~ aggregate of all differences taken as ~~mutually agreed~~ a whole) and the final resolution as determined by the ~~Buyers and~~ Neutral Arbitrator in proportion to the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“total difference between Seller’s ~~Chips”)~~and Buyer’s initial positions. ~~A Representative~~ The fees and disbursements of ~~the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller~~Buyer’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the preparation of Closing Working Capital that is contained in the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute a current liability of such Company independent public accountants incurred in connection with the ~~calculation~~ procedures performed with respect to the Final Closing Financial Certificate shall be borne by Buyer and the fees and disbursements of Seller’s independent public accountants incurred in connection with their preparation of the Notice of Disagreement shall be borne by Seller. (d) (i) If the Final Overall Cash Purchase Price Adjustment as derived from the Final Closing ~~Working Capital as~~ Financial Certificate is less than the Estimated Overall Cash Purchase Price Adjustment, the Closing Purchase Price shall be decreased by an amount equal to such excess of the ~~Effective Time~~Estimated Overall Cash Purchase Price Adjustment over the Final Overall Cash Purchase Price Adjustment as derived from the Final Closing Financial Certificate (“Shortfall Reduction”) and (ii) if the Final Overall Cash Purchase Price Adjustment as derived from the Final Closing Financial Certificate is greater than the Estimated Overall Cash Purchase Price Adjustment, the Closing Purchase Price shall be increased by an amount equal to such excess of the Final Overall Cash Purchase Price Adjustment as derived from the Final Closing Financial Certificate over the Estimated Overall Cash Purchase Price Adjustment (“Excess Payment”)~~. Within~~ . (e) Any Shortfall Reduction or Excess Payment described in clause (i) or (ii) in Section 2.2(d) shall be paid to Buyer or Seller, as the case may be, not later than three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in any event within sixty (60) days after the Closing Date, the Buyers shall prepare (or cause to be prepared) and deliver to the Sellers a statement (the “Post-Closing Statement”) showing the Buyers’ calculation of Closing Working Capital (including, for the avoidance of doubt but subject to the last sentence of this Section 1.4(c), the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), and the amount of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the Purchase Price. The Buyers 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with such reasonable access to the books, records and personnel of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers shall endeavor in good faith to resolve all such disagreements within the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes of this Agreement. If the Buyers and the Sellers are unable to resolve any disagreements regarding the Post-Closing Statement and the calculations reflected thereon within the Negotiating Period, then within fifteen (15) days after the end of the Negotiating Period all such disputes shall be promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be instructed only to resolve all outstanding disagreements relating to the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and in accordance with the guidelines and procedures set forth in this Agreement and not by independent review) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, shall be the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyers. (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall pay to the Sellers, Final Settlement Date by wire transfer of immediately available funds to ~~such~~ an account or accounts specified by Buyer or Seller, as ~~may~~ applicable, and shall be ~~designated by the Sellers~~ considered an adjustment to the ~~Buyers in writing~~Closing Purchase Price. The amount of any Shortfall Reduction or Excess Payment to be made after the Closing Date pursuant to this Section 2.2(e) shall bear interest from and including the Closing Date to but excluding the date of payment to Buyer or Seller, ~~an amount~~ as the case may be, at a rate per annum equal to ~~such Actual Surplus~~the prime rate as published in the Wall Street Journal, ~~or (B) if the finally determined Purchase Price is less than~~ Eastern Edition, in effect on the Closing ~~Payment (such amount,~~ Date. Such interest shall be payable at the ~~“Actual Deficiency”), then~~ same time as the ~~Sellers~~ payment to which it relates and shall ~~pay to~~ be calculated daily on the ~~Buyers an amount equal to such Actual Deficiency by wire transfer~~ basis of ~~immediately available funds to such account or accounts as may be designated by~~ a year of 365 days and the ~~Buyers to the Sellers in writing~~actual number of days elapsed.

Appears in 1 contract

Samples: Stock Purchase Agreement (Thoratec Corp)

Purchase Price Adjustments. In the event that on or before the date which is 60 days after the Closing Date: (1) the counterparty to the San Xxxxxxxx Royalty Agreement or the La Palmilla Royalty Agreement validly exercises its right of first refusal under either such agreement; (2) any consent, approval, waiver or Authorization disclosed in Section 3.1(5) of the Vendor Disclosure Letter is not obtained and delivered to the Purchaser; (3) any Assignment Agreement or other transfer document (including notification to any counterparty to any Royalty Document or Deferred Consideration Document of the assignment and transfer to the Purchaser of such Royalty Document or Deferred Consideration Document, as applicable) prudent or necessary to give effect to the transactions contemplated herein which was not executed and delivered on the Closing Date is not executed and delivered by each of the parties thereto; or (4) such document listed in Section 3.1(7)(a) of the Vendor Disclosure Letter in a form reasonably satisfactory to the Purchaser is not obtained and delivered to the Purchaser, in each case, with the result that the Purchased Asset to which such right of first refusal, consent, approval, waiver, Authorization, amendment, Assignment Agreement or other transfer document relates is not duly and validly assigned and transferred to the Purchaser in accordance with this Agreement and all legal requirements applicable to such assignment and transfer, (a) ~~Not more than seven (7) Business Days nor less than three (3) Business Days~~ in the case of the valid exercise of a right of first refusal under the San Xxxxxxxx Royalty Agreement and/or the La Palmilla Royalty Agreement that occurs prior to the Closing Date, the ~~Sellers shall deliver~~ Purchase Price and the Share Consideration payable by the Purchaser to SSR (for on behalf of itself and the Buyers a statement (the “Estimated Closing Statement”) showing the Sellers’ good faith calculation of Estimated Working Capital and Estimated Closing Indebtedness including the calculation thereof in reasonable detail and with reasonable backup documentation regarding the calculation of such amounts, calculated other Vendors in accordance with ~~GAAP and using~~ the ~~same methodology as the calculation~~ allocation set forth on ~~Schedule 1.4, together with a calculation of the Closing Payment. The Buyers and their Representatives~~ Exhibit B) hereunder shall be ~~entitled to reasonable access during normal business hours~~ reduced by an amount equal to the ~~relevant records~~amount allocated to such Purchased Asset as set out on Exhibit B, ~~personnel~~ and working papers of the Sellers and the Companies to aid in their review of the Estimated Closing Statement and the calculation of Estimated Working Capital and Estimated Closing Indebtedness. The Sellers and the Buyers shall work together in good faith to agree on the Closing Payment prior to the Closing; provided, however, that the failure to agree on such amount shall not delay or otherwise prevent the Closing and, to the extent of any remaining dispute, the Sellers’ calculation of the Closing Payment shall prevail. (b) Prior to the Closing on the Closing Date (at such time as mutually agreed by the Buyers and the Sellers or as otherwise directed by applicable Gaming Authorities) the Sellers shall conduct a cash count and the drop of each Company’s gaming device “hoppers” as well as a count of each Company’s liability for all outstanding chips, tokens, tickets and similar cash equivalents (“Seller’s Chips”). A Representative of the Buyers shall be provided a reasonable opportunity to be present to observe such cash count, hxxxxx drop count and Seller’s Chips liability count if the Buyers so elect. Such cash count, hxxxxx drop and Seller’s Chips count shall be conclusive and binding upon the Sellers and the Buyers, absent manifest error, and shall be used in the ~~preparation~~ case of ~~Closing Working Capital that is contained~~ any failure to obtain any consent, approval, waiver, Authorization, amendment, Assignment Agreement or other transfer document contemplated in ~~the Post-Closing Statement (it being understood that the aggregate value of all outstanding Seller’s Chips shall constitute~~ Section 2.7(2) to Section 2.7(4) with respect to a current liability of such Company in connection with the calculation of the Closing Working Capital as of the Effective Time). Within three (3) Business Days after the Closing Date, the Sellers shall provide the Buyers a list of all outstanding Seller’s Chips in sufficient detail for the Buyers to determine the type, number and denomination of each of Seller’s Chips. (c) As soon as reasonably practicable but in any event Purchase Asset within ~~sixty (60)~~ 60 days after the Closing Date, the Buyers shall prepare (or cause to be prepared) and deliver to the Sellers a statement (the “Post-Closing Statement”) showing the Buyers’ calculation of Closing Working Capital (including, for the avoidance of doubt but subject to the last sentence of this Section 1.4(c), the Buyers’ calculation of the reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4), Purchase Price and the ~~amount~~ Cash Consideration payable by the Purchaser to SSR (for and on behalf of Closing Indebtedness, including the calculation thereof in reasonable detail calculated pursuant to the terms of this Agreement using the same methodology as the calculation set forth on Schedule 1.4 and, based on such calculations, the Buyers’ calculation of the Purchase Price. The Buyers shall promptly provide to the Sellers such backup or supporting data relating to the preparation of the Post-Closing Statement itself and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon as the Sellers may reasonably request. The Buyers shall also provide the Sellers and their Representatives with such reasonable access to the books, records and personnel of each Company, at reasonable times and upon reasonable notice, as the Sellers may reasonably request for the purposes of evaluating the Post-Closing Statement and the Buyers’ calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price. The amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019, except to the extent inconsistent with GAAP. (d) The Sellers shall, within the forty-five (45)-day period (the “Acceptance Period”) following receipt of such Post-Closing Statement, notify the Buyers of their acceptance or non-acceptance (as the case may be) of the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price reflected thereon. If no such notice is delivered to the Buyers by the Sellers within the Acceptance Period, the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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, the amount of Closing Indebtedness and the Purchase Price reflected thereon are accepted or deemed to have been accepted by the Sellers, then payment of any related amounts, as contemplated by this Section 1.4(d), shall be made pursuant to Section 1.4(g). If the Sellers give notice (a “Dispute Notice”) to the Buyers within the Acceptance Period that the Sellers do not agree with or otherwise do not accept the calculation of Closing Working Capital, the amount of Closing Indebtedness or the Purchase Price reflected on the Post-Closing Statement, the Sellers shall describe in reasonable detail in such Dispute Notice the nature of any disagreement so asserted including an estimate, to the extent then reasonably ascertainable, of the amount in dispute of any items then being disputed. The Buyers and the Sellers shall endeavor in good faith to resolve all such disagreements within the thirty (30)-day period (the “Negotiating Period”) following the delivery by the Sellers of such Dispute Notice. (e) If the parties are able to resolve all disputed amounts or other disputes identified in the Dispute Notice, the Post-Closing Statement, as modified to reflect such resolution, shall be the final Post-Closing Statement and shall be binding on all parties for all purposes of this Agreement. If the Buyers and the Sellers are unable to resolve any disagreements regarding the Post-Closing Statement and the calculations reflected thereon within the Negotiating Period, then within fifteen (15) days after the end of the Negotiating Period all such disputes shall be promptly referred to a nationally recognized independent accounting firm other than a “Big 4” firm as is mutually acceptable to the Buyers and the Sellers (the “Neutral Accounting Firm”). The Neutral Accounting Firm shall be instructed only to resolve all outstanding disagreements relating to the Post-Closing Statement and the calculation of Closing Working Capital, the amount of Closing Indebtedness and the Purchase Price 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 (it being understood that the amount of any reserves related to incurred but not reported claims and other reserves related to insurance accruals set forth on Schedule 1.4 shall be determined as of the Effective Time applying methods (including estimation methodologies), practices and policies consistent with those used in determining the reserves or valuation accounts included in Parent’s audited financial statements for the year ended December 31, 2019), except to the extent inconsistent with GAAP. If the Sellers and the Buyers are unable to agree upon an accounting firm to serve as the Neutral Accounting Firm within such fifteen (15)-day period, then the Neutral Accounting Firm shall be an accountant employed by an accounting firm of national standing, other than a “Big 4” firm, designated by the American Arbitration Association in New York, New York (which shall not be the independent auditor of either the Buyers or the Sellers, Caesars or their respective Affiliates). The Neutral Accounting Firm shall investigate only those items that the Sellers and the Buyers have been unable to resolve and shall not assign a value to any item that is (A) greater than the greatest value for such item claimed by either of the Buyers or the Sellers or (B) lower than the lowest value for such item claimed by either of the Buyers or the Sellers. Each of the Sellers and the Buyers shall execute and deliver a customary engagement letter as may be reasonably requested by the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm that, within five (5) Business Days following its acceptance of its appointment as the Neutral Accounting Firm, it shall deliver to the Sellers and the Buyers a written notice (the “Accountant Notice”) setting forth (i) the deadline for the Sellers’ and the Buyers’ submission of the written presentations setting forth their respective positions with respect to the disputed amounts (which deadline shall in all events be (A) the same for the Sellers and the Buyers and (B) no sooner than thirty (30) days following the date of delivery of the Accountant Notice (unless otherwise mutually agreed in writing among the Neutral Accounting Firm, the Sellers and the Buyers) and no later than forty-five (45) days following the date of delivery of the Accountant Notice) and (ii) the format in which the Sellers and the Buyers are to submit their written presentations (which format shall be reasonably acceptable to the Sellers and the Buyers). A copy of all materials submitted to the Neutral Accounting Firm pursuant to the immediately preceding sentence shall be provided to the Neutral Accounting Firm by the Sellers and the Buyers, as applicable, no later than the deadline set forth in the Accountant Notice (as the same may be amended by the mutual written consent of the Neutral Accounting Firm, the Sellers and the Buyers), and a copy of such materials shall be provided to the other party hereto concurrently with the submission thereof to the Neutral Accounting Firm. The Sellers and the Buyers shall instruct the Neutral Accounting Firm to promptly, but in no event later than sixty (60) days after its appointment, determine (based solely on the written presentations of the Sellers and the Buyers timely delivered to the Neutral Accounting Firm in accordance with this Section 1.4(e) and Vendors in accordance with the ~~guidelines and procedures~~ allocation set forth ~~in this Agreement and not by independent review~~on Exhibit B) only those matters in dispute and to render a written report as to the calculations of the disputed amounts, which report, absent manifest error, shall thereupon be conclusive and binding upon the parties hereto for all purposes hereunder. Upon the decision of the Neutral Accounting Firm, the Post-Closing Statement, as adjusted to the extent necessary to reflect the Neutral Accounting Firm’s decision, hereunder shall be ~~the final Post-Closing Statement. The fees, costs and expenses of the Neutral Accounting Firm shall be borne~~ reduced by the Sellers and the Buyers based on the inverse of the percentage that the Neutral Accounting Firm’s determination (before such allocation) bears to the total amount of the total items in dispute as originally submitted to the Neutral Accounting Firm. For example, should the items in dispute total in amount to $1,000 and the Neutral Accounting Firm award $600 in favor of the Sellers’ position, 60% of the costs of its review would be borne by the Buyers and 40% of the costs would be borne by the Sellers. 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 the Sellers, and the fees and expenses of the Buyers and their Representatives in connection with the Post-Closing Statement and any Dispute Notice shall be borne by the Buyers. (f) Any dispute with respect to the Remaining Required CapEx Amount, if any, will be resolved using the procedures set forth above in this Section 1.4. (g) No more than five (5) Business Days following the Post-Closing Statement becoming final in accordance with this Section 1.4, (A) if the finally determined Purchase Price exceeds the Closing Payment (such amount, the “Actual Surplus”), then the Buyers shall pay to the Sellers, by wire transfer of immediately available funds to such account or accounts as may be designated by the Sellers to the Buyers in writing, an amount equal to the amount allocated to such ~~Actual Surplus~~Purchased Asset as set out on Exhibit B, or and SSR (Bfor and on behalf of itself and the other Vendors, as applicable) if shall within five days thereafter, refund such amount to the ~~finally determined Purchase Price is less than~~ Purchaser in immediately available funds, as directed by the ~~Closing Payment (such amount~~Purchaser. In connection with the foregoing, the ~~“Actual Deficiency”), then the Sellers~~ Purchaser shall ~~pay~~ execute all such documentation as SSR may reasonably require to ~~the Buyers an amount equal to such Actual Deficiency by wire~~ rescind any purported transfer of ~~immediately available funds to~~ such ~~account or accounts as may be designated by the Buyers to the Sellers~~ Purchased Asset which SSR has paid a full refund in ~~writing~~respect of.

Appears in 1 contract

Samples: Royalty Purchase Agreement (EMX Royalty Corp)

Common use of Purchase Price Adjustments Clause in Contracts