Adjustment Amount. The Adjustment Amount (which may be a positive or negative number) will be calculated pursuant to the provisions of this Section 2.5. (a) At the Closing Date, the Company and Buyer shall value the Inventory based on the most recent invoices relating to the items thereof, and the Accounts Receivable (as defined herein) and the Accounts Payable based on the amounts recorded on the Company's general ledger. To the extent the value of the Cash, the Accounts Receivable, and the Inventory less the value of the Accounts Payable is greater than Five Hundred Thousand Dollars ($500,000), such excess shall be treated as an increase in the Purchase Price. To the extent such value is less than Five Hundred Thousand Dollars ($500,000), such deficit shall be treated as a reduction of the Purchase Price. (b) In addition to any adjustment made pursuant to subsection (a) above, the Purchase Price will be further decreased after the Closing dollar-for-dollar by the amount of any Accounts Receivable which have not been collected as of ninety (90) days after the Closing Date, by the amount of any Accounts Payable which have been paid by Buyer in excess of the amounts listed on Exhibit 2.1(b) and by the amount of Inventory deemed obsolete. For purposes of this provisions, obsolete Inventory shall mean and refer to any inventory that consist of a product or products that have been deleted from the Seller's product line, where the design is materially different from the current design and cannot be reworked into salable product, adjusted for any rework costs. Any decrease in the Purchase Price under this paragraph is referred to as the "Price Reduction". (c) On the Closing Date Buyer will deduct from the Initial Payment and hold in escrow an amount of Fifty Thousand Dollars ($50,000) (the "Price Adjustment Escrow Fund"), (d) On the one hundred twentieth (120th) day after the Closing Date (the "Settlement Date"), (i) Buyer will deliver to Seller, pro rata based on relative stock ownership, good funds representing the sum of (A) the Price Adjustment Escrow Fund minus (B) the amount of any Price Reduction; and (ii) Buyer will retain any funds deducted from the Price Adjustment Escrow Fund pursuant to clause (ii) (B) above. (e) To the extent that Buyer collects any Account Receivable after the ninetieth (90th) day Buyer shall retain the cash collected and not make any corresponding adjustment in the Purchase Price.
Appears in 1 contract
Adjustment Amount. The Adjustment Amount (which may be a positive or negative number) will be calculated pursuant to the provisions of this Section 2.5.
(a) At As soon as reasonably practicable following the Closing Date, and in any event within sixty (60) days thereof, Buyer shall prepare and deliver to the Holder Representative (i) an unaudited consolidated balance sheet of the Company and its Subsidiaries (the “Closing Balance Sheet”), (ii) a calculation of Net Working Capital (“Closing Date Net Working Capital”), (iii) a calculation of the aggregate amount of all Funded Debt of the Company (“Closing Date Funded Debt”), (iv) a calculation of Cash of the Company and its Subsidiaries (“Closing Date Cash”) and (v) a calculation of Unpaid Company Transaction Expenses (“Closing Date Unpaid Company Transaction Expenses”), in each case, (except as set forth in the proviso below) (x) calculated as of 11:59 p.m. Eastern time on the Closing Date in accordance with the Closing Balance Sheet Principles and (y) without giving effect to the consummation of the Merger, including any payments of cash in respect of the Merger Consideration, any repayment of Funded Debt of the Company after the Effective Time or any financing transactions in connection with the transactions contemplated hereby or, after the Effective Time, any other action or omission by Buyer, the Surviving Corporation or any of its Subsidiaries that is not in the ordinary course of business consistent with past practice; provided, however, that (I) the Closing Balance Sheet shall reflect no changes in reserves (regardless of whether any such reserve is recorded as an offset to a current asset’s carrying value or is included as an accrued liability in the Closing Balance Sheet) from amounts contained in the Reference Balance Sheet, other than changes therein attributable to changes in facts and circumstances occurring after the date of the Reference Balance Sheet, (II) the Tax assets and liabilities included in the Closing Balance Sheet and Closing Date Net Working Capital shall give effect to and take into account the consummation of the Merger and the other transactions contemplated by this Agreement, and (III) the Closing Balance Sheet shall not reflect any expense or liability for which Buyer is responsible under this Agreement. Following the Closing, Buyer shall value provide the Inventory based on Holder Representative and its representatives access to the most recent invoices records, properties, personnel and (subject to the execution of customary work paper access letters if requested) auditors of the Company and its Subsidiaries relating to the items thereof, and the Accounts Receivable (as defined herein) and the Accounts Payable based on the amounts recorded on the Company's general ledger. To the extent the value preparation of the Cash, Closing Balance Sheet and shall cause the Accounts Receivable, and the Inventory less the value personnel of the Accounts Payable is greater than Five Hundred Thousand Dollars ($500,000), such excess shall be treated as an increase Company and its Subsidiaries to cooperate with the Holder Representative in the Purchase Price. To the extent such value is less than Five Hundred Thousand Dollars ($500,000), such deficit shall be treated as a reduction connection with its review of the Purchase PriceClosing Balance Sheet.
(b) If the Holder Representative shall disagree with the calculation of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and/or Closing Date Unpaid Company Transaction Expenses, it shall notify Buyer of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement, within forty-five (45) days after its receipt of the Closing Balance Sheet. In addition the event that the Holder Representative does not provide such a notice of disagreement within such forty-five (45)-day period, the Holder Representative shall be deemed to have agreed to the Closing Balance Sheet and the calculation of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash, and Closing Date Unpaid Company Transaction Expenses delivered by Buyer, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Buyer and the Holder Representative shall use reasonable best efforts for a period of twenty (20) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculations of Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and/or the Closing Date Unpaid Company Transaction Expenses. If, at the end of such period, they are unable to resolve such disagreements, then any such remaining disagreements shall be resolved by KPMG US LLP (or such independent accounting or financial consulting firm of recognized national standing as may be mutually selected by Buyer and the Holder Representative) (such firm the “Auditor”). Each of Buyer and the Holder Representative shall promptly provide their assertions regarding the Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and/or Closing Date Unpaid Company Transaction Expenses and, to the extent relevant thereto, the Closing Balance Sheet in writing to the Auditor and to each other. The Auditor shall be instructed to render its determination with respect to such disagreements as soon as reasonably possible (which the parties hereto agree should not be later than twenty (20) days following the day on which the disagreement is referred to the Auditor). The Auditor shall base its determination solely on (i) the written submissions of the parties and shall not conduct an independent investigation and (ii) the extent (if any) to which Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and/or Closing Date Unpaid Company Transaction Expenses require adjustment made (only with respect to the remaining disagreements submitted to the Auditor) in order to be calculated in accordance with the Closing Balance Sheet Principles (and the definitions of the defined terms used in Section 3.4(a) and the Closing Balance Sheet Principles). The determination of the Auditor shall be final, conclusive and binding on the parties. The date on which Closing Date Net Working Capital, Closing Date Funded Debt, Closing Date Cash and Closing Date Unpaid Company Transaction Expenses are finally determined in accordance with this Section 3.4(b) is hereinafter referred to as the “Determination Date”. The fees and expenses of the Auditor shall be paid one-half by Buyer and one-half by the Holder Representative as a Holder Representative Expense.
(c) The “Adjustment Amount”, which may be positive or negative, shall mean (i) the Closing Date Net Working Capital Adjustment Amount (as finally determined pursuant to subsection Section 3.4(b)) plus (aii) aboveEstimated Closing Date Funded Debt, minus Closing Date Funded Debt (as finally determined in accordance with Section 3.4(b)), plus (iii) Closing Date Cash (as finally determined in accordance with Section 3.4(b)), minus Estimated Closing Date Cash, plus (iv) Estimated Unpaid Company Transaction Expenses, minus Closing Date Unpaid Company Transaction Expenses (as finally determined in accordance with Section 3.4(b)). If the Adjustment Amount is a positive number, then the Merger Consideration shall be increased by the Adjustment Amount, and if the Adjustment Amount is a negative number, the Purchase Price will Merger Consideration shall be further decreased after by the absolute value of the Adjustment Amount. The Adjustment Amount shall be paid in accordance with Section 3.4(d) or 3.4(e).
(d) If the Adjustment Amount is a positive number (such amount, the “Increase Amount”), then, promptly following the Determination Date, and in any event within three (3) Business Days of the Determination Date, (x) Buyer shall pay the Increase Amount to the Escrow Agent, and (y) the Escrow Agent shall pay to each Pre-Closing dollar-for-dollar Holder an amount in cash equal to (i) the Escrow Amount plus the Increase Amount, multiplied by (ii) such holder’s Escrow Percentage, less any applicable withholding; provided, however, that, in the case of clause (y) of this sentence, any payment with respect to In the Money Options shall be paid to the Surviving Corporation and the Surviving Corporation shall pay such amount (reduced by the amount of any Accounts Receivable Taxes required to be withheld under applicable Law with respect to such payments, which have not been collected as amounts, so withheld, shall be disbursed by the Surviving Corporation to the applicable taxing authority) to the Pre-Closing Holder thereof.
(e) If the Adjustment Amount is a negative number (the absolute value of ninety (90) days after such amount, the Closing “Deficit Amount”), then, promptly following the Determination Date, and in any event within three (3) Business Days of the Determination Date, (x) the Escrow Agent shall pay, from the Escrow Amount, to Buyer an amount equal to the Deficit Amount, and (y) if any of the Escrow Amount remain after such payment to Buyer, the Escrow Agent shall pay to each Pre-Closing Holder an amount in cash equal to (i) the balance of the Escrow Amount, multiplied by (ii) such holder’s Escrow Percentage, less any applicable withholding; provided, however, that, in the case of clause (y) of this sentence, any payment with respect to In the Money Options shall be paid to the Company and the Company shall pay such amount (reduced by the amount of any Accounts Payable Taxes required to be withheld under applicable Law with respect to such payments, which amounts, so withheld, shall be disbursed by the Company to the applicable taxing authority) to the Pre-Closing Holder thereof. Upon determination of the Adjustment Amount pursuant to Section 3.4(b) and Section 3.4(c), each of Buyer and the Holder Representative shall execute joint written instructions to the Escrow Agent instructing the Escrow Agent to disburse the Escrow Amount in accordance with this Section 3.4(e). For the avoidance of doubt, any distributions to the Pre-Closing Holders in respect of In the Money Options pursuant to this Section 3.4(e) shall be net of the amount of any Taxes required to be withheld from such distributions under applicable Law, and the amounts so withheld shall be paid over to the Company for payment by the Company to the applicable Governmental Authority as required by Law. In no event shall the Holder Representative or any Pre-Closing Holder have been paid by any liability under this Section 3.4 in excess of such holder’s allocable share of the Escrow Amount. In no event shall Buyer be entitled to payment pursuant to this Section 3.4(e) of any amount in excess of the amounts listed on Exhibit 2.1(b) and by the amount of Inventory deemed obsolete. For purposes of this provisions, obsolete Inventory shall mean and refer to any inventory that consist of a product or products that have been deleted from the Seller's product line, where the design is materially different from the current design and cannot be reworked into salable product, adjusted for any rework costs. Any decrease in the Purchase Price under this paragraph is referred to as the "Price Reduction"Escrow Amount.
(c) On the Closing Date Buyer will deduct from the Initial Payment and hold in escrow an amount of Fifty Thousand Dollars ($50,000) (the "Price Adjustment Escrow Fund"),
(d) On the one hundred twentieth (120th) day after the Closing Date (the "Settlement Date"),
(i) Buyer will deliver to Seller, pro rata based on relative stock ownership, good funds representing the sum of
(A) the Price Adjustment Escrow Fund minus
(B) the amount of any Price Reduction; and
(ii) Buyer will retain any funds deducted from the Price Adjustment Escrow Fund pursuant to clause (ii) (B) above.
(e) To the extent that Buyer collects any Account Receivable after the ninetieth (90th) day Buyer shall retain the cash collected and not make any corresponding adjustment in the Purchase Price.
Appears in 1 contract
Adjustment Amount. (a) The "Adjustment Amount Amount" (which may be a positive or negative number) will be calculated pursuant to the provisions of this Section 2.5.equal to:
(ai) At the Closing Date, combined stockholders' equity of the Company and Buyer shall value Realty One Companies as of the Inventory based Effective Time determined in accordance with GAAP
(ii) the sum of: (1) $3,702,407 (calculated as shown on the most recent invoices relating to the items thereof, Projected Closing Combined Balance Sheet attached as Exhibit 2.5(a)); and the Accounts Receivable (2) all amounts held as defined herein) and the Accounts Payable based on the amounts recorded on the Company's general ledger. To the extent the value of the CashEffective Time (whether in cash, cash equivalents or immediately available funds) in trust accounts or for the Accounts Receivable, and the Inventory less the value benefit of the Accounts Payable is greater than Five Hundred Thousand Dollars ($500,000), such excess shall be treated as an increase in the Purchase Price. To the extent such value is less than Five Hundred Thousand Dollars ($500,000), such deficit shall be treated as a reduction of the Purchase Pricethird parties or payments or deposits for future work or services.
(b) In addition to Notwithstanding any adjustment made pursuant to subsection (a) aboveother provision of this Agreement, solely for purposes of calculating the Purchase Price will be further decreased after combined stockholders' equity of the Closing dollar-for-dollar by the amount of any Accounts Receivable which have not been collected Realty One Companies as of ninety the Effective Time (90) days after which calculation shall be made in a manner consistent with the Projected Closing DateCombined Balance Sheet attached as Exhibit 2.5(a), by the amount of any Accounts Payable which have been paid by Buyer in excess of the amounts listed on Exhibit 2.1(b) and by the amount of Inventory deemed obsolete. For purposes of this provisions, obsolete Inventory shall mean and refer to any inventory that consist of a product or products that have been deleted from the Seller's product line, where the design is materially different from the current design and cannot be reworked into salable product, adjusted for any rework costs. Any decrease in the Purchase Price under this paragraph is referred to except as the "Price Reduction".
(c) On the Closing Date Buyer will deduct from the Initial Payment and hold in escrow an amount of Fifty Thousand Dollars ($50,000) (the "Price Adjustment Escrow Fund"),
(d) On the one hundred twentieth (120th) day after the Closing Date (the "Settlement Date"),otherwise provided below):
(i) Buyer will deliver to Seller, pro rata based on relative stock ownership, good funds representing the sum ofamount of the following assets and liabilities of the Realty One Companies as of the Effective Time shall be determined as follows:
(A) the Price Adjustment Escrow Fund minusliabilities set out below shall not be accrued as a liability of the Realty One Companies for purposes of calculating the combined stockholders' equity:
(1) accrued vacation pay, sick leave and personal leave;
(2) United States federal and Ohio state income Taxes;
(3) accrued real property lease expense, including any adjustment to real property rental payments or lease expense on a straight line basis, up to an amount of $225,000;
(B) deposits up to an amount of $25,000 in connection with capital leases shall be deemed to be applied as a payment against such obligations and shall also be included as an asset on the balance sheet;
(C) Commissions Receivable and Commissions Payable shall be recognized as of the date of execution by all parties of a Contract giving rise to such receivable;
(D) the Allowance for Cancellations with respect to the Gross Commissions Receivable shall not be less than twenty-one percent of the Gross Commissions Receivables and a corresponding allowance with respect to Commissions Payable shall be maintained;
(E) the amount of any Price Reduction; andthe Litigation Reserve shall not be less than $150,000;
(iiF) Buyer will retain any funds deducted from the Price Adjustment Escrow Fund pursuant to clause (ii) (B) aboveamount of the Commercial Brokerage Division Allowance for Uncollectibles shall not be less than 26.10% of the Commercial Brokerage Division Gross Receivables.
(eG) To the extent that Buyer collects any Account Receivable after $30,000 investment by R-ONE in Realty Relocation Services shall be listed as an asset of R-ONE;
(H) gain or loss on sale of the ninetieth Shares for GAAP purposes shall not be treated as an asset sale as of the Effective Time (90th) day Buyer i.e. no gain or loss in connection with the Contemplated Transactions shall retain be reflected on the cash collected and not make any corresponding adjustment in the Purchase Price.Closing Date Statement)
Appears in 1 contract
Sources: Stock Purchase Agreement (Insignia Financial Group Inc)
Adjustment Amount. The Adjustment Amount (which may be a positive or negative number) will be calculated pursuant to the provisions of this Section 2.5.
(a) At Prior to the Closing, the Company shall engage KPMG LLP ("KPMG"), with the expense shared equally between the Sellers and the Buyer, to perform an audit of the Company's balance sheet prepared by the Company as of September 30, 2002. In order to complete such an audit, the Sellers, Buyer and the Company shall cooperate with each other, including, without limitation, making available and providing reasonable access to the premises, books and records and employees of the Company. Following the completion of such audit, which the parties thereto shall cause the Company to use its Best Efforts to complete within forty-five (45) calendar days after the Closing Date, the Company and Buyer shall value the Inventory based on the most recent invoices relating deliver to the items thereofSellers and the Buyer (i) a true and complete copy of the balance sheet as of September 30, 2002 and reflecting all audit adjustments which KPMG deems appropriate to present the financial condition of the Company in accordance with GAAP as of September 30, 2002 (the "Closing Balance Sheet"), and (ii) a schedule computing the Accounts Receivable Adjustment Amount (as defined hereinin Section 2.5(b)) based upon the Closing Balance Sheet. The Company shall permit the Sellers and the Accounts Payable Buyer to review all work papers and computations used by KPMG in auditing the Closing Balance Sheet and preparing the schedule computing the Adjustment Amount. Within fifteen (15) calendar days following the date of delivery of such Closing Balance Sheet to the Sellers and the Buyer, the Sellers and the Buyer shall either accept the Closing Balance Sheet and the Adjustment Amount based thereon (which acceptance shall effect a "Final Determination", as hereinafter defined) or propose adjustments thereto. In the event the Buyer and the Sellers fail to agree on the amounts recorded on the Company's general ledger. To the extent the value all of the Cashadjustments proposed within ten (10) Business Days thereafter, the Accounts Receivableparties shall request Ernst & Young LLP or, in the event that such firm is unavailable to accept this assignment, such other recognized firm of auditors as the parties mutually agree (the "Final Auditor") to prepare and deliver to the Buyer and the Inventory less the value Sellers a final determination of the Accounts Payable is greater than Five Hundred Thousand Dollars Adjustment Amount ($500,000)the "Final Determination") adjusting only items in dispute between the Buyer and the Sellers, such excess which Final Determination shall be treated as an increase in binding upon the Purchase PriceBuyer and the Sellers. To The services of the extent such value is less than Five Hundred Thousand Dollars ($500,000), such deficit Final Auditor shall be treated as a reduction paid for equally by the Buyer and the Sellers unless the Final Auditor resolves all disputed items in favor of one party, in which case all fees and expenses of the Purchase PriceFinal Auditor shall be paid by the other party.
(b) In addition to any adjustment made pursuant to subsection (a) aboveUpon a Final Determination, the Preliminary Purchase Price will shall be further decreased after reduced dollar for dollar by an amount equal to the Adjustment Amount. To determine the Adjustment Amount, the Closing dollar-for-dollar by Balance Sheet shall be adjusted to give effect to the accounting methodologies, practices and adjustments set forth in Part 2.5(b) of the Disclosure Letter. The "Adjustment Amount" means the amount of any Accounts Receivable by which have not been collected as of ninety (90) days after $15,500,000 exceeds the net shareholders' equity reflected in the Closing DateBalance Sheet as adjusted to give effect to the accounting methodologies, by the amount of any Accounts Payable which have been paid by Buyer practices and adjustments set forth in excess Part 2.5(b) of the amounts listed on Exhibit 2.1(b) and by the amount of Inventory deemed obsolete. For purposes of this provisionsDisclosure Letter, obsolete Inventory shall mean and refer to any inventory that consist of upon a product Final Determination or products that have been deleted from the Seller's product linezero, where the design whichever is materially different from the current design and cannot be reworked into salable product, adjusted for any rework costs. Any decrease in the Purchase Price under this paragraph is referred to as the "Price Reduction"greater.
(c) On the Closing Date Buyer will deduct from the Initial Payment and hold in escrow an amount of Fifty Thousand Dollars ($50,000) (the "Price Adjustment Escrow Fund"),
(d) On the one hundred twentieth (120th) day after the Closing Date (the "Settlement Date"),
(i) Buyer will deliver to Seller, pro rata based on relative stock ownership, good funds representing the sum of
(A) the Price Adjustment Escrow Fund minus
(B) the amount of any Price Reduction; and
(ii) Buyer will retain any funds deducted from the Price Adjustment Escrow Fund pursuant to clause (ii) (B) above.
(e) To the extent that Buyer collects any Account Receivable after the ninetieth (90th) day Buyer shall retain the cash collected and not make any corresponding adjustment in the Purchase Price.
Appears in 1 contract
Adjustment Amount. The Adjustment Amount (which may be a positive or negative number) will be calculated pursuant to the provisions of this Section 2.5.
(a) At the Closing Date, the Company and Buyer shall value the Inventory based on the most recent invoices relating to the items thereof, and the Accounts Receivable (as defined herein) and the Accounts Payable based on the amounts recorded on the Company's general ledger. To the extent the value of the Cash, the Accounts Receivable, and the Inventory less the value of the Accounts Payable is greater than Five Hundred Thousand Dollars ($500,000), such excess shall be treated as an increase in the Purchase Price. To the extent such value is less than Five Hundred Thousand Dollars ($500,000), such deficit shall be treated as a reduction of the Purchase Price.
(b) In addition to any adjustment made pursuant to subsection (a) above, the Purchase Price will be further decreased after the Closing dollar-for-dollar by the amount of any Accounts Receivable which have not been collected as of ninety (90) days after the Closing Date, by the amount of any Accounts Payable which have been paid by Buyer in excess of the amounts listed on Exhibit 2.1(b) and by the amount of Inventory deemed obsolete. For purposes of this provisionsAgreement, obsolete Inventory "Adjustment Amount" shall mean the amount, if any, by which (i) the difference of (x) $266,451.07 minus (y) the product of (A) $22,500 times (B) the number of days, inclusive, between January 31, 2001 and refer to any inventory that consist of a product or products that have been deleted from the Seller's product line, where the design is materially different from the current design and cannot be reworked into salable product, adjusted for any rework costs. Any decrease in the Purchase Price under this paragraph is referred to as the "Price Reduction".
(c) On the Closing Date Buyer will deduct from exceeds (ii) the Initial Payment and hold in escrow an amount sum of Fifty Thousand Dollars ($50,000v) (the "Price Adjustment Escrow Fund"),
(d) On the one hundred twentieth (120th) day after innoCOMM's Working Capital on the Closing Date plus (the "Settlement Date"),
x) any Excess Transaction Costs appearing as current liabilities in accordance with GAAP plus (i) Buyer will deliver to Seller, pro rata based on relative stock ownership, good funds representing the sum of
(A) the Price Adjustment Escrow Fund minus
(By) the amount of any Price Reduction; and
current liabilities (determined in accordance with GAAP) as of the Closing Date associated with the offer to pay holders of innoCOMM Options the amounts contemplated by Section 3.4 in return for the cancellation of such innoCOMM Options plus (z) the amount of any current liabilities (determined in accordance with GAAP) as of the Closing Date associated with the incentive bonus program to be adopted by innoCOMM pursuant to Section 7.6(b) hereof. "Working Capital" shall mean the amount by which innoCOMM's current assets determined in accordance with GAAP exceed innoCOMM's current liabilities determined in accordance with GAAP. The above calculation of the Adjustment Amount assumes that innoCOMM's Working Capital on the Closing Date reflects either the payment by innoCOMM or the accrual by innoCOMM of (i) up to $120,000 for the actual, reasonable fees and expenses of legal counsel, accountants and any other advisors, representatives or consultants incurred by innoCOMM in connection with the negotiation, preparation, execution and performance of this Agreement and the transactions contemplated hereby, excluding any fees or expenses payable to Sterling, and (ii) Buyer will retain up to $1,000,000 for fifty percent (50%) of the fees and expenses payable to Sterling in connection with the services rendered to innoCOMM in connection with the negotiation, preparation, execution and performance of this Agreement and the transactions contemplated hereby. As contemplated by Section 3.2(c), the Adjustment Amount may be a negative number. At least five business days prior to the Closing, innoCOMM shall estimate the Adjustment Amount (which estimated amount is referred to herein as the "Estimated Adjustment Amount"). The Adjusted Consideration shall be based on the Estimated Adjustment Amount as determined above. Within 90 days after the Effective Time, National shall prepare and deliver to the Shareholder Representative a determination (the "Determination") of the actual amount of the Adjustment Amount as of the Closing Date (which actual amount is referred to herein as the "Actual Adjustment Amount") including the basis for such Determination. If, within 30 days after the date on which a Determination is delivered to the Shareholder Representative, the Shareholder Representative shall not have given written notice to National setting forth in detail any funds deducted objections to such Determination, then such Determination shall be final and binding on the parties hereto. In the event the Shareholder Representative gives written notice of any objection to such Determination within such 30-day period, National and the Shareholder Representative shall use all reasonable efforts to resolve the dispute within 30 days following the receipt by National of the written notice from the Price Shareholder Representative. If the parties are unable to reach an agreement within such 30-day period, the matter shall be submitted to a nationally-recognized accounting firm mutually agreeable to the parties (other than KPMG LLP) or chosen by lot among the remaining "big five" (or such lesser number, if applicable) nationally-recognized firms if the parties are unable to so mutually agree for determination of the Actual Adjustment Escrow Fund Amount which shall be final and binding upon National and the Shareholder Representative. National and the Employee Shareholders shall each contribute 50% of all fees and costs charged by the accounting firm in connection with the resolution of any such dispute. To effect any such contribution required to be made by the Employee Shareholders pursuant to clause (iithe foregoing sentence, the parties shall reduce the Actual Adjustment Amount by an amount equal to the required contribution. National will provide the Shareholder Representative and his advisors with reasonable access to the books and records of innoCOMM for the purposes of evaluating the Determination and determining the Actual Adjustment Amount. If the Actual Adjustment Amount is greater than the Estimated Adjustment Amount, the aggregate payments remaining to be made by National to the Employee Shareholders pursuant to Section 3.3(b) (B) aboveshall be reduced by an amount equal to the difference between the Actual Adjustment Amount and the Estimated Adjustment Amount, with such reduction allocated on a pro rata basis among the Employee Shareholders based upon the number of shares of innoCOMM Common Stock held by each such Employee Shareholder or subject to innoCOMM Options held by such Employee Shareholder immediately prior to the Effective Time. If the Actual Adjustment Amount is less than the Estimated Adjustment Amount, National will promptly pay to the Shareholders and holders of innoCOMM Options pro rata based upon the number of shares of innoCOMM Common Stock held by each such Shareholder or subject to innoCOMM Options held by such Shareholder immediately prior to the Effective Time cash in an amount equal to the amount of the difference between the Estimated Adjustment Amount and the Actual Adjustment Amount.
(e) To the extent that Buyer collects any Account Receivable after the ninetieth (90th) day Buyer shall retain the cash collected and not make any corresponding adjustment in the Purchase Price.
Appears in 1 contract
Adjustment Amount. (a) The “Adjustment Amount Amount” (which may only be a positive or negative number) will be calculated pursuant the amount equal to the provisions product of this Section 2.5.
(ai) At two and (ii) the Closing DateAdjustment EBITDA less $24,000,000; provided that such amount may not exceed $5,000,000, and if such amount is a negative number, the Company and Buyer shall value the Inventory based on the most recent invoices relating to the items thereof, and the Accounts Receivable (as defined herein) and the Accounts Payable based on the amounts recorded on the Company's general ledger. To the extent the value of the Cash, the Accounts Receivable, and the Inventory less the value of the Accounts Payable is greater than Five Hundred Thousand Dollars ($500,000), such excess Adjustment Amount shall be treated as an increase in the Purchase Price. To the extent such value is less than Five Hundred Thousand Dollars ($500,000), such deficit shall be treated as a reduction of the Purchase Pricezero.
(b) In addition to As promptly as practicable, but in any adjustment made pursuant to subsection event within sixty (a60) above, the Purchase Price will be further decreased after the Closing dollar-for-dollar by the amount of any Accounts Receivable which have not been collected as of ninety (90) calendar days after following the Closing Date, Purchaser shall deliver to Sellers the Audited Balance Sheet, together with a certificate of Purchaser containing a calculation of the Adjustment Amount on the same basis and applying the same accounting principles, including GAAP, that were used to prepare the Reference Balance Sheet. If within thirty (30) days following delivery of the Audited Balance Sheet, none of Crompton, the BCCM Agent or the Management Members’ Agent have given Purchaser notice of an objection to the Audited Balance Sheet (including a statement of the basis of such objection), then the Audited Balance Sheet will be determinative in computing the Adjustment Amount, based on the formula set forth in Section 3.6(a) hereof. If any of Crompton, the BCCM Agent or the Management Members’ Agent gives such notice of objection, Crompton, the BCCM Agent, the Management Members’ Agent and Purchaser shall attempt a good faith resolution of the dispute. If no such resolution is reached within a period of twenty (20) days from such objection, then the issues in dispute will be submitted to the Accountants for resolution. If issues in dispute are submitted to the Accountants for resolution, (i) each party will furnish to the Accountants such workpapers and other documents and information relating to the disputed issues as the Accountants may request and are available to that party or its subsidiaries (or its independent public accountants), and will be afforded the opportunity to present to the Accountants any material relating to the determination and to discuss the determination with the Accountants; (ii) the determination by the amount Accountants, as set forth in a notice delivered to both parties by the Accountants as soon as practicable following submission of any Accounts Payable which have been paid by Buyer in excess such dispute to the Accountants, will be binding and conclusive on the parties; and (iii) Sellers on the one hand and Purchaser on the other hand will each bear fifty percent (50%) of the amounts listed on Exhibit 2.1(b) and by fees of the amount of Inventory deemed obsolete. For purposes of this provisions, obsolete Inventory shall mean and refer to any inventory that consist of a product or products that have been deleted from the Seller's product line, where the design is materially different from the current design and cannot be reworked into salable product, adjusted Accountants for any rework costs. Any decrease in the Purchase Price under this paragraph is referred to as the "Price Reduction"such determination.
(c) On the Closing Date Buyer will deduct from the Initial Payment and hold in escrow an amount of Fifty Thousand Dollars ($50,000) (the "Price any Adjustment Escrow Fund"),
(d) On the one hundred twentieth (120th) day after the Closing Date (the "Settlement Date"),
(i) Buyer will deliver Amount that is owed by Purchaser to SellerSellers pursuant to this Section 3.6 shall be made by Purchaser to Sellers, pro rata based on relative stock ownershiptheir Adjustment Percentage as follows: (i) 50% of the Adjustment Amount shall be paid to the Sellers on the twelve (12) month anniversary of the Closing Date, good funds representing the sum of
(A) the Price Adjustment Escrow Fund minus
(B) the amount of any Price Reduction; and
and (ii) Buyer 50% of the Adjustment Amount shall be paid to the Sellers on the eighteen (18) month anniversary of the Closing Date; provided that if a Holdback Acceleration Event occurs, the full amount of the Adjustment Amount shall be paid to the Sellers on the twelve (12) month anniversary of the Closing Date (or at the completion of any calendar month thereafter during which the Holdback Acceleration Event occurs as set forth in Section 12.5(b) below). The Adjustment Amount will retain any funds deducted accrue interest at the rate of ten percent (10%) per annum from the Price Closing Date. The Adjustment Escrow Fund pursuant Amount, including any accrued interest, will not be made part of the Holdback Amount, nor will it be subject to clause (ii) (B) aboveany indemnification or other claims by Purchaser or any Purchaser Indemnitees, except as provided in Section 3.8(b).
(e) To the extent that Buyer collects any Account Receivable after the ninetieth (90th) day Buyer shall retain the cash collected and not make any corresponding adjustment in the Purchase Price.
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Adjustment Amount. The Adjustment Amount (which may be a positive or negative number) will be calculated pursuant to the provisions of this Section 2.5.
(a) At No less than two business days prior to the Closing, Seller shall deliver to Purchaser a good faith estimate (the “Estimated Adjustment Amount”) as of the Closing Date, the Company and Buyer shall value the Inventory based on the most recent invoices relating to the items thereof, and the Accounts Receivable (as defined herein) and the Accounts Payable based on the amounts recorded on the Company's general ledger. To the extent the value Date of the Cash, sum of (x) the Accounts Receivable, and Pre-Closing Operational Liabilities plus (y) the Inventory less the value Operating Cash Shortfall. Seller shall also provide Purchaser with its best estimate of the Accounts Payable is greater than Five Hundred Thousand Dollars ($500,000)Termination Obligation, such excess shall including a schedule of any additional contributions to be treated as an increase in the Purchase Price. To the extent such value is less than Five Hundred Thousand Dollars ($500,000), such deficit shall be treated as a reduction of the Purchase Price.
(b) In addition to any adjustment made pursuant to subsection (a) above, the Purchase Price will be further decreased after the Closing dollar-for-dollar by the amount of any Accounts Receivable which have not been collected as of ninety (90) days after the Closing Date, by the amount of any Accounts Payable which have been paid by Buyer in excess of the amounts listed on Exhibit 2.1(bSection 7.8(a) and by the amount of Inventory deemed obsoletedistributions in connection therewith. For purposes of this provisionsAgreement, obsolete Inventory shall mean and refer to any inventory that consist of a product or products that have been deleted from the Seller's product line, where the design is materially different from the current design and cannot be reworked into salable product, adjusted for any rework costs. Any decrease in the Purchase Price under this paragraph is referred to as the "Price Reduction".
(c) On the Closing Date Buyer will deduct from the Initial Payment and hold in escrow an amount of Fifty Thousand Dollars ($50,000) (the "Price Adjustment Escrow Fund"),
(d) On the one hundred twentieth (120th) day after the Closing Date (the "Settlement Date"),
(i) Buyer will deliver to Seller, pro rata based on relative stock ownership, good funds representing the sum of
(A) the Price Adjustment Escrow Fund minus
“Pre-Closing Operational Liabilities” shall mean the operational liabilities of the Heath Group Companies arising on or prior to the Closing Date, including, but not be limited to, (i) accrued payroll, (ii) accounts payable, (iii) accrued expenses and (iv) other normal recurring expenses, including all general and administrative expenses and in each case not satisfied as of the Closing Date and (B) “Operating Cash Shortfall” means $200,000 minus cash held in accounts of the amount Companies as of any Price Reductionthe Closing (all of which cash shall remain with the Companies following the Closing Date); and
(ii) Buyer will retain any funds deducted from provided that the Price Adjustment Escrow Fund Operating Cash Shortfall shall be $0 if the cash held in the accounts of the Companies exceeds $200,000. Purchaser shall be entitled to reasonably dispute the deliveries provided pursuant to clause (iithis Section 2.5(a) (B) aboveincluding the Estimated Adjustment Amount), in which case the parties shall use reasonable efforts to resolve any such dispute prior to proceeding with the Closing. Any amended estimate of the Estimated Adjustment Amount based on such resolution shall be deemed the Estimated Adjustment Amount for purposes of determining the Closing Consideration.
(e) To the extent that Buyer collects any Account Receivable after the ninetieth (90th) day Buyer shall retain the cash collected and not make any corresponding adjustment in the Purchase Price.
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Sources: Purchase Agreement (Hallmark Financial Services Inc)