Aggregate Consideration. (a) Subject to the terms and conditions of this Agreement, in reliance upon the representations, warranties, covenants and agreements of the Sellers, Company and Subsidiary set forth herein, and as consideration for the purchase and sale of the Shares, on and as of the Closing Date, the Purchaser agrees to pay and transfer to the Sellers the following consideration (collectively, the “Aggregate Consideration”): (i) Subject to Section 2.03(b), Twenty-Seven Million Dollars ($27,000,000) in cash by wire transfer of immediately available funds to the accounts designated by the Sellers, except for the portion of said payment to be paid by check to those Sellers identified on Schedule 2.03, which shall be paid by Purchaser’s check dated the Closing Date; (ii) Eighty-Seven Thousand Five Hundred (87,500) shares of Purchaser Common Stock to the Sellers indicated on Schedule 2.03; and (iii) the amount, if any, determined pursuant to Section 2.03(d) below within the time frame set forth therein. (b) On the Closing Date, One Million Five Hundred Thousand Dollars ($1,500,000) (the “Escrow Amount”), that would otherwise be delivered to the Sellers pursuant to Section 2.03(a), shall be transferred to a separate escrow account (the “Escrow Account”). The Escrow Amount shall be held in escrow until the end of the fifteen (15) month period following the Closing Date (or as otherwise set forth in the Escrow Agreement), as partial security for the indemnification obligations of the Sellers set forth in this Agreement. The Escrow Amount and the release thereof to the Purchaser and Sellers shall be governed by the terms and conditions of an Escrow Agreement among the Sellers’ Representative on behalf of the Sellers, the Purchaser and Manufacturers and Traders Trust Company (the “Escrow Agent”) in the form attached hereto as Exhibit A (the “Escrow Agreement”). On the Closing Date, Seventy Five Thousand Dollars ($75,000) (the “Holdback Amount”) that would otherwise be delivered to the Sellers pursuant to Section 2.03(a), shall be transferred to a separate account maintained by the Sellers’ Representative for use solely to pay professional fees and expenses and other costs incurred subsequent to the Closing Date to perform the obligations of Sellers and the Sellers’ Representative. (c) Within sixty (60) days after the Closing Date, the Purchaser shall have prepared and delivered to the Sellers’ Representative the calculation of Net Working Capital as of the Closing Date (the “Closing Date Net Working Capital”). The calculation of Closing Date Net Working Capital shall be in the form and use the methodology set forth on Exhibit B hereto. The calculation of the Closing Date Net Working Capital shall be final and binding on the parties unless, within thirty (30) days after delivery to the Sellers’ Representative, the Sellers’ Representative delivers to the Purchaser a notice of dispute (a “Dispute Notice”) specifying in reasonable detail the items in dispute. Such items in dispute shall be limited to claims of the Purchaser’s arithmetic error or use of accounting principles, policies, practices, classifications or methodologies other than those set forth in Exhibit B. After delivery of a Dispute Notice, the Sellers’ Representative and the Purchaser shall promptly negotiate in good faith with respect to the subject of the Dispute Notice, and if they are unable to reach an agreement within fifteen (15) days after delivery by the Sellers’ Representative of the Dispute Notice, the dispute shall be submitted to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, or such other independent public accounting firm as mutually agreed to by the Purchaser and the Sellers’ Representative (the “Independent Accounting Firm”). The Independent Accounting Firm shall be directed to issue a final and binding decision within thirty (30) days of submission of the Dispute Notice to the Independent Accounting Firm, as to the issues of disagreement referred to in the Dispute Notice and not resolved by the Purchaser and the Sellers’ Representative, provided that, (i) in resolving any disputed item, the Independent Accounting Firm may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party; and (ii) in no event shall Closing Date Working Capital as determined by the Independent Accounting Firm be less than Purchaser’s calculation of the Closing Date Working Capital nor more than the Sellers’ Representative’s calculation of Closing Date Working Capital set forth in the Dispute Notice. The decision of the Independent Accounting Firm shall be final, conclusive and binding on the parties. The fees and expenses of the Independent Accounting Firm shall be borne one-half by the Sellers and one-half by the Purchaser. (d) If the Closing Date Net Working Capital, as determined in accordance with Section 2.03(c) above, is less than Two Million Dollars ($2,000,000) (the “Company Net Working Capital”), the Aggregate Consideration shall be reduced on a dollar-for-dollar basis by the amount by which the Company Net Working Capital exceeds the Closing Date Net Working Capital, and the Sellers’ Representative, on behalf of the Sellers, shall cause the Escrow Agent to pay to the Purchaser the dollar amount by which the Company Net Working Capital exceeds the Closing Date Net Working Capital (or, to the extent there are insufficient funds remaining in the Escrow Account at the time such payment is to be made, such payment shall be made directly from the Sellers to the Purchaser). If the Closing Date Net Working Capital is greater than the Company Net Working Capital, then the Aggregate Consideration shall be increased on a dollar-for-dollar basis by the amount the Closing Date Net Working Capital exceeds the Company Net Working Capital, and the Purchaser shall pay the Sellers the dollar amount by which the Closing Date Net Working Capital exceeds the Company Net Working Capital. Any such payment due under this Section 2.03(d) shall be made in cash or same day funds within five (5) Business Days after the final determination of the Closing Date Net Working Capital pursuant to Section 2.03(c). (e) Each Seller shall receive the portion of the Aggregate Consideration, and make any payments as may be required (or bear a reduction in the Escrow Amount) in accordance with this Section 2.03, as set forth next to such Seller’s name on Schedule 2.03, which sets forth that portion of the cash and/or Purchaser Common Stock each Seller shall receive hereunder, and identifies those Sellers who shall receive payment of their portion of the Closing Payment by check and the respective percentage of the Aggregate Consideration payable to each Seller hereunder under the column titled “Applicable Percentages” set forth opposite each Seller’s name (collectively the “Applicable Percentages” and individually “Applicable Percentage”).
Appears in 1 contract
Aggregate Consideration. (a) Subject to the terms and conditions of this Agreement, in reliance upon the representations, warranties, covenants and agreements of the SellersMembers, Contributor and the Company and Subsidiary set forth herein, and as consideration for the purchase and sale contribution of the SharesInterests, on and as of the Closing Date, the Purchaser KHC agrees to pay the Contributor an aggregate of (A) Twenty-Three Million Dollars ($23,000,000) in cash (the “Cash Consideration”), payable in the manner set forth below in Section 2.2(a)(i)(4), (B) (1) an unsecured subordinated promissory note in the principal amount of Eight Million Two Hundred Fifty-One Thousand Seventy-Six Dollars ($8,251,076), in the form attached hereto as Exhibit B-▇ (the “Consideration Note”) and transfer (2) an unsecured subordinated promissory note in the principal amount of Three Million Four Hundred Thousand Dollars ($3,400,000), in the form attached hereto as Exhibit B-2 (the “Escrow Note”, and collectively with the Consideration Note, the “Promissory Notes”), payable in the manner set forth below in Section 2.2(a)(ii), and (C) the right to the Sellers the following consideration receive up to Three Million (collectively3,000,000) KHC Shares, in accordance with Section 2.2(d) (collectively and as adjusted pursuant to Sections 2.2(c) and 2.2(d), the “Aggregate Consideration”):). Simultaneously with the execution and delivery of this Agreement, KHC will pay the Aggregate Consideration, as follows:
(i) Subject to Section 2.03(b), Twenty-Seven Million Dollars ($27,000,000) in cash The Cash Consideration by wire transfer of immediately available funds to the accounts recipients as designated in a flow of funds memorandum (with wire instructions for the below payments or instructions to pay certain amounts by check) prepared by the SellersMembers, except for Contributor and reasonably acceptable to KHC (the portion “Flow of said payment to Funds Memorandum”) containing the following:
(1) The amount of Indebtedness (if any) that will be paid by check to those Sellers identified on Schedule 2.03, which shall be paid by Purchaser’s check dated the Closing Dateat Closing;
(ii2) Eighty-Seven Thousand Five Hundred The amount of the expenses payable by the Members, Contributor and the Company in connection with the consummation of the transactions contemplated hereby (87,500e.g., payment to legal counsel, accountants and financial advisors) shares of Purchaser Common Stock to the Sellers indicated on Schedule 2.03extent remaining unpaid as of the Closing;
(3) The aggregate amount of cash payable at the Closing by Contributor to the DCU Participants pursuant to DCU Termination Agreements to be entered into prior to the Closing by and among each DCU Participant, Contributor and the Company and providing for the cancellation of the DCUs and consideration therefor (the “DCU Termination Agreements”); and
(iii4) The Cash Consideration (less the amount, if any, determined pursuant to Section 2.03(d) below within the time frame set forth therein.
(b) On the Closing Date, One Million Five Hundred Thousand Dollars ($1,500,000) (the “Escrow Amount”), that would otherwise be delivered to the Sellers pursuant to Section 2.03(a), shall be transferred to a separate escrow account (the “Escrow Account”). The Escrow Amount shall be held in escrow until the end of the fifteen (15) month period following the Closing Date (or as otherwise amounts set forth in the Escrow Agreementclauses (1), as partial security for the indemnification obligations (2) and (3) above) to Contributor. After receipt of the Sellers Cash Consideration set forth in this Agreement. The Escrow Amount and the release thereof to the Purchaser and Sellers shall be governed by the terms and conditions of an Escrow Agreement among the Sellers’ Representative on behalf of the Sellers, the Purchaser and Manufacturers and Traders Trust Company clause (the “Escrow Agent”) in the form attached hereto as Exhibit A (the “Escrow Agreement”). On the Closing Date, Seventy Five Thousand Dollars ($75,000) (the “Holdback Amount”) that would otherwise be delivered to the Sellers pursuant to Section 2.03(a), shall be transferred to a separate account maintained by the Sellers’ Representative for use solely to pay professional fees and expenses and other costs incurred subsequent to the Closing Date to perform the obligations of Sellers and the Sellers’ Representative.
(c) Within sixty (60) days after the Closing Date, the Purchaser shall have prepared and delivered to the Sellers’ Representative the calculation of Net Working Capital as of the Closing Date (the “Closing Date Net Working Capital”). The calculation of Closing Date Net Working Capital shall be in the form and use the methodology set forth on Exhibit B hereto. The calculation of the Closing Date Net Working Capital shall be final and binding on the parties unless, within thirty (30) days after delivery to the Sellers’ Representative, the Sellers’ Representative delivers to the Purchaser a notice of dispute (a “Dispute Notice”) specifying in reasonable detail the items in dispute. Such items in dispute shall be limited to claims of the Purchaser’s arithmetic error or use of accounting principles, policies, practices, classifications or methodologies other than those set forth in Exhibit B. After delivery of a Dispute Notice, the Sellers’ Representative and the Purchaser shall promptly negotiate in good faith with respect to the subject of the Dispute Notice, and if they are unable to reach an agreement within fifteen (15) days after delivery by the Sellers’ Representative of the Dispute Notice, the dispute shall be submitted to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, or such other independent public accounting firm as mutually agreed to by the Purchaser and the Sellers’ Representative (the “Independent Accounting Firm”). The Independent Accounting Firm shall be directed to issue a final and binding decision within thirty (30) days of submission of the Dispute Notice to the Independent Accounting Firm, as to the issues of disagreement referred to in the Dispute Notice and not resolved by the Purchaser and the Sellers’ Representative, provided that, (i) in resolving any disputed item, the Independent Accounting Firm may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party; and (ii) in no event shall Closing Date Working Capital as determined by the Independent Accounting Firm be less than Purchaser’s calculation of the Closing Date Working Capital nor more than the Sellers’ Representative’s calculation of Closing Date Working Capital set forth in the Dispute Notice. The decision of the Independent Accounting Firm shall be final, conclusive and binding on the parties. The fees and expenses of the Independent Accounting Firm shall be borne one-half by the Sellers and one-half by the Purchaser.
(d) If the Closing Date Net Working Capital, as determined in accordance with Section 2.03(c3) above, is less than Two Million Dollars Contributor will immediately pay thereafter the DCU Payments to the DCU Participants ($2,000,000) (the “Company Net Working Capital”), the Aggregate Consideration shall be reduced on a dollar-for-dollar basis by the amount by which the Company Net Working Capital exceeds the Closing Date Net Working Capital, and the Sellers’ Representative, on behalf except Contributor’s payment of the Sellers, shall cause the Escrow Agent to pay DCU Payments to the Purchaser DCU Participants will be net of applicable withholding Taxes). All applicable withholding Taxes withheld from the dollar amount DCU Payments will be paid by which the Company Net Working Capital exceeds the Closing Date Net Working Capital (or, Contributor to the extent there are insufficient funds remaining in the Escrow Account at the time such payment is to be made, such payment shall be made directly from the Sellers to the Purchaser). If the Closing Date Net Working Capital is greater than the Company Net Working Capital, then the Aggregate Consideration shall be increased on a dollar-for-dollar basis by the amount the Closing Date Net Working Capital exceeds the Company Net Working Capital, and the Purchaser shall pay the Sellers the dollar amount by which the Closing Date Net Working Capital exceeds the Company Net Working Capital. Any such payment due under this Section 2.03(d) shall be made in cash or same day funds within five (5) Business Days after the final determination of the Closing Date Net Working Capital pursuant to Section 2.03(c).
(e) Each Seller shall receive the portion of the Aggregate Consideration, and make any payments as may be required (or bear a reduction in the Escrow Amount) in accordance with this Section 2.03, as set forth next to such Seller’s name on Schedule 2.03, which sets forth that portion of the cash and/or Purchaser Common Stock each Seller shall receive hereunder, and identifies those Sellers who shall receive payment of their portion of the Closing Payment by check and the respective percentage of the Aggregate Consideration payable to each Seller hereunder under the column titled “Applicable Percentages” set forth opposite each Seller’s name (collectively the “Applicable Percentages” and individually “Applicable Percentage”).applicable Tax authority when due; and
Appears in 1 contract
Aggregate Consideration. (a) Subject to the terms and conditions of this Agreement, in reliance upon the representations, warranties, covenants and agreements of the Sellers, Sellers and Company and Subsidiary set forth herein, and as consideration for the purchase and sale of the Shares, on and as of the Closing Date, the Purchaser agrees to pay and transfer, and/or cause its Parent to pay and transfer on its behalf hereunder, to the Sellers in the proportions set forth on Schedule 2.03(e), the following consideration (collectively, the “Aggregate Consideration”):
(i) Subject to Section 2.03(b(A) A cash payment (the “Closing Cash Payment”), Twenty-Seven payable in the manner set forth in Section 2.03(f) below, equal to One Hundred Million Dollars ($27,000,000100,000,000), minus the amount, if any, by which Estimated Closing Date Net Working Capital is less than Two Million Dollars ($2,000,000) in cash (the “Target Net Working Capital”), OR plus fifty percent (50%) of the amount, if any, by wire transfer which the Estimated Closing Date Net Working Capital exceeds the Target Net Working Capital, with the remaining fifty percent (50%) of immediately available funds to such amount (the accounts designated “Excess Estimated Working Capital Holdback”) held by the SellersPurchaser until determination of the Final Closing Date Net Working Capital pursuant to Section 2.03(c), except for the portion of said payment to be paid by check to those Sellers identified on Schedule 2.03, at which time it shall be paid by Purchaser’s check dated or retained as provided in Section 2.03(d); and (B) Sixteen Million Dollars ($16,000,000) to the Closing DateIndemnity Escrow Account as set forth in Section 2.03(g) below;
(ii) Eighty-Seven Thousand Five Hundred (87,500) That number of shares of Purchaser Parent Common Stock determined by dividing Ten Million Dollars ($10,000,000) by the average closing market price of Parent’s registered common stock as reported on the NASDAQ Global Market over the last ten (10) trading days ending three (3) calendar days prior to the Closing Date (the “Closing Price”), to be issued to the Sellers by Parent as indicated on Schedule 2.032.03(a)(ii); and
(iii) the The amount, if any, determined pursuant to Section Sections 2.03(d) and (e) below within the time frame set forth therein.
(b) On the Closing Date, One Million Five Hundred Thousand Dollars ($1,500,000) (the “Escrow Amount”), that would otherwise be delivered No later than one day prior to the Sellers pursuant to Section 2.03(a), shall be transferred to a separate escrow account (the “Escrow Account”). The Escrow Amount shall be held in escrow until the end of the fifteen (15) month period following the Closing Date (or as otherwise set forth in the Escrow Agreement), as partial security for the indemnification obligations of the Sellers set forth in this Agreement. The Escrow Amount and the release thereof to the Purchaser and Sellers shall be governed by the terms and conditions of an Escrow Agreement among the Sellers’ Representative on behalf of the Sellers, the Purchaser and Manufacturers and Traders Trust Company (the “Escrow Agent”) in the form attached hereto as Exhibit A (the “Escrow Agreement”). On the Closing Date, Seventy Five Thousand Dollars ($75,000) (the “Holdback Amount”) that would otherwise be delivered to the Sellers pursuant to Section 2.03(a), shall be transferred to a separate account maintained by the Sellers’ Representative for use solely to pay professional fees and expenses and other costs incurred subsequent to the Closing Date to perform the obligations of Sellers and the Sellers’ Representative.
(c) Within sixty (60) days after the Closing Date, the Company shall deliver to Purchaser shall have prepared and delivered to the Sellers’ Representative the calculation of Net Working Capital as a good faith estimate of the Closing Date Net Working Capital and attach the estimate to this Agreement as Schedule 2.03(b) (the “Estimated Closing Date Net Working Capital”). The calculation of Estimated Closing Date Net Working Capital shall be in the form and use the methodology set forth on in Exhibit B heretohereto (“Sample Working Capital Calculation”). The calculation of Closing Cash Payment shall be adjusted based on the Estimated Closing Date Net Working Capital shall be final and binding on the parties unless, within thirty (30) days after delivery to the Sellers’ Representative, the Sellers’ Representative delivers to the Purchaser a notice of dispute (a “Dispute Notice”) specifying in reasonable detail the items in dispute. Such items in dispute shall be limited to claims of the Purchaser’s arithmetic error or use of accounting principles, policies, practices, classifications or methodologies other than those as set forth in Exhibit B. After delivery of a Dispute Notice, the Sellers’ Representative and the Purchaser shall promptly negotiate in good faith with respect to the subject of the Dispute Notice, and if they are unable to reach an agreement within fifteen (15) days after delivery by the Sellers’ Representative of the Dispute Notice, the dispute shall be submitted to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, or such other independent public accounting firm as mutually agreed to by the Purchaser and the Sellers’ Representative (the “Independent Accounting Firm”). The Independent Accounting Firm shall be directed to issue a final and binding decision within thirty (30) days of submission of the Dispute Notice to the Independent Accounting Firm, as to the issues of disagreement referred to in the Dispute Notice and not resolved by the Purchaser and the Sellers’ Representative, provided that, (i) in resolving any disputed item, the Independent Accounting Firm may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party; and (ii) in no event shall Closing Date Working Capital as determined by the Independent Accounting Firm be less than Purchaser’s calculation of the Closing Date Working Capital nor more than the Sellers’ Representative’s calculation of Closing Date Working Capital set forth in the Dispute Notice. The decision of the Independent Accounting Firm shall be final, conclusive and binding on the parties. The fees and expenses of the Independent Accounting Firm shall be borne one-half by the Sellers and one-half by the Purchaser.
(d) If the Closing Date Net Working Capital, as determined in accordance with Section 2.03(c2.03(a)(i)(A) above, is less than Two Million Dollars ($2,000,000) (the “Company Net Working Capital”), the Aggregate Consideration shall be reduced on a dollar-for-dollar basis by the amount by which the Company Net Working Capital exceeds the Closing Date Net Working Capital, and the Sellers’ Representative, on behalf of the Sellers, shall cause the Escrow Agent to pay to the Purchaser the dollar amount by which the Company Net Working Capital exceeds the Closing Date Net Working Capital (or, to the extent there are insufficient funds remaining in the Escrow Account at the time such payment is to be made, such payment shall be made directly from the Sellers to the Purchaser). If the Closing Date Net Working Capital is greater than the Company Net Working Capital, then the Aggregate Consideration shall be increased on a dollar-for-dollar basis by the amount the Closing Date Net Working Capital exceeds the Company Net Working Capital, and the Purchaser shall pay the Sellers the dollar amount by which the Closing Date Net Working Capital exceeds the Company Net Working Capital. Any such payment due under this Section 2.03(d) shall be made in cash or same day funds within five (5) Business Days after the final determination of the Closing Date Net Working Capital pursuant to Section 2.03(c).
(e) Each Seller shall receive the portion of the Aggregate Consideration, and make any payments as may be required (or bear a reduction in the Escrow Amount) in accordance with this Section 2.03, as set forth next to such Seller’s name on Schedule 2.03, which sets forth that portion of the cash and/or Purchaser Common Stock each Seller shall receive hereunder, and identifies those Sellers who shall receive payment of their portion of the Closing Payment by check and the respective percentage of the Aggregate Consideration payable to each Seller hereunder under the column titled “Applicable Percentages” set forth opposite each Seller’s name (collectively the “Applicable Percentages” and individually “Applicable Percentage”).
Appears in 1 contract
Aggregate Consideration. (a) Subject to the terms and conditions of this Agreement, in reliance upon the representations, warranties, covenants and agreements of Seller, the Sellers, Seller Related Parties and Company and Subsidiary set forth herein, and as consideration for the purchase and sale of the Shares, on and as of the Closing Date, the Purchaser agrees to pay and transfer to the Sellers Seller the following consideration (collectively, the “Aggregate Consideration”):
): (iA) Subject Twenty Eight Million Dollars ($28,000,000), as adjusted pursuant to Section 2.03(e) and reduced by the amounts described in Sections 2.03(a)(i) and 2.03(a)(ii) below (the “Cash Consideration” ), payable in the manner set forth below; (B) subject to Section 2.03(b), Twenty-Seven Million Dollars ($27,000,000) in cash by wire transfer that number of immediately available funds to the accounts designated by the Sellers, except for the portion of said payment to be paid by check to those Sellers identified on Schedule 2.03, which shall be paid by Purchaser’s check dated the Closing Date;
(ii) Eighty-Seven Thousand Five Hundred (87,500) shares of Purchaser Common Stock determined by dividing Two Million Dollars ($2,000,000) by the average market price at which shares of Purchaser’s registered common stock traded on the NASDAQ Global Market over the last ten (10) trading days immediately prior to the Sellers indicated on Schedule 2.03Closing Date (the “Closing Price”); and
(iiiC) the amount, if any, determined pursuant to Section 2.03(d) below within the time frame set forth therein; and (D) the amounts, if any, determined pursuant to Section 6.05(f) and Section 6.05(k) below within the time frames set forth therein. On and as of the Closing Date, Purchaser will pay the Cash Consideration by wire transfer of immediately available funds to the recipients as designated in a flow of funds memorandum (with wire instructions for the below payments or instructions to pay certain amounts by check) prepared by the Seller and Company and reasonably acceptable to Purchaser (the “Flow of Funds Memorandum”) and containing the following:
(i) The amount of any Indebtedness (if any) that will be paid at Closing;
(ii) The amount of expenses payable by the Seller and the Company in connection with the consummation of the transactions contemplated hereby (e.g., payment to legal counsel, accountants and financial advisors) to the extent remaining unpaid as of the Closing; and
(iii) The Cash Consideration (less the amounts set forth in clauses (i) and (ii) above) to Seller.
(b) On the Closing Date, One Million Five Hundred Thousand Dollars ($1,500,000all of the shares of Purchaser Common Stock to be issued pursuant to Section 2.03(a)(B) above (the “Escrow AmountHoldback Shares”), that would otherwise be delivered to the Sellers pursuant to Section 2.03(a), ) shall be transferred held by Purchaser subject to a separate escrow account holdback agreement between the Seller Representative, Seller and Purchaser in the form attached hereto as Exhibit A (the “Escrow AccountHoldback Agreement”). The Escrow Amount shall be held in escrow ) until the end of the fifteen (15) month period following the Closing Date (or as otherwise set forth in the Escrow Holdback Agreement, the “Holdback Period”), as partial security for the indemnification obligations of the Sellers Seller and Seller Related Parties set forth in this Agreement. The Escrow Amount In calculating the value of the Holdback Shares for purposes of satisfying any indemnity claim of Purchaser under this Agreement, each Holdback Share shall be valued at the Closing Price, and indemnity claims which are paid under the release thereof Holdback Agreement shall be satisfied by cancelling the number of Holdback Shares that are equal to the Purchaser and Sellers shall be governed by claim amount based on the terms and conditions Closing Price of an Escrow Agreement among the Sellers’ Representative on behalf such shares. Upon termination of the SellersHoldback Period, the Purchaser and Manufacturers and Traders Trust Company (the “Escrow Agent”) in the form attached hereto as Exhibit A (the “Escrow Agreement”). On the Closing Dateremaining Holdback Shares, Seventy Five Thousand Dollars ($75,000) (the “Holdback Amount”) that would otherwise be delivered to the Sellers pursuant to Section 2.03(a)if any, shall be transferred to a separate account maintained by the Sellers’ Representative for use solely to pay professional fees and expenses and other costs incurred subsequent distributed to the Closing Date to perform Seller (the obligations date of Sellers and distribution, the Sellers’ Representative“Distribution Date”).
(c) Within sixty (60) days after the Closing Date, the Purchaser shall have prepared prepare and delivered deliver to the Sellers’ Seller Representative the calculation of Net Working Capital as of 11:59 p.m. of the Closing Date (the “Closing Date Net Working Capital”)) , which calculation shall contain reasonable details and statements as to the assumptions, means and other inputs by which such calculation was determined. The calculation of the Closing Date Net Working Capital shall will be in prepared by applying the form and use the methodology set forth on Exhibit B heretodefinition of Net Working Capital herein. The Purchaser’s calculation of the Closing Date Net Working Capital shall be final and binding on the parties Parties unless, within thirty (30) days after delivery thereof to the Sellers’ Seller Representative, the Sellers’ Seller Representative delivers to the Purchaser a notice of dispute (a “Dispute Notice”) specifying in reasonable detail the items in dispute. During such 30-day review period, the Purchaser will provide the Seller Representative and its Representatives with reasonable access during normal business hours to the books and records of the Company and all work papers and back up materials relating to the determination of Closing Date Net Working Capital. Such items in dispute shall be limited to claims of the Purchaser’s arithmetic error or use of accounting principles, policies, practices, classifications or methodologies other than those set forth the Company used in Exhibit B. preparation of the Balance Sheet. After delivery of a Dispute Notice, the Sellers’ Seller Representative and the Purchaser shall promptly negotiate in good faith with respect to the subject of the Dispute Notice, and if they are unable to reach an agreement within fifteen (15) days after delivery by the Sellers’ Seller Representative of the Dispute Notice, the dispute shall be submitted (no later than five (5) Business Days at the end of such 15-day resolution period) to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, or such other independent public accounting firm as mutually agreed to by the Purchaser and the Sellers’ Seller Representative (the “Independent Accounting Firm”). Each Party agrees to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter with respect to the work to be performed by the Independent Accounting Firm. The Independent Accounting Firm shall be directed by the Purchaser and the Seller Representative to issue a final and binding decision within thirty (30) days of submission of the Dispute Notice to the Independent Accounting Firm, as to the issues of disagreement referred to in the Dispute Notice and not resolved by the Purchaser and the Sellers’ Seller Representative. The Independent Accounting Firm shall determine only those items still in dispute by the parties and the Independent Accounting Firm’s determination will be based upon and consistent with the terms and conditions of this Agreement. The determination by the Independent Accounting Firm will be based solely on presentations with respect to such disputed items by the Purchaser and the Seller Representative to the Independent Accounting Firm and not on the Independent Accounting Firm’s independent review. the Purchaser and the Seller Representative will use their reasonable best efforts to make their respective presentations as promptly as practicable following submission to the Independent Accounting Firm of the disputed items, provided thatand each party shall be entitled, (i) in resolving a part of its presentation, to respond to the presentation of the other party and any disputed itemquestions and requests of the Independent Accounting Firm. In deciding any matter, the Independent Accounting Firm (i) will be bound by the provisions of this Section 2.03(c) and (ii) may not assign a value to any item greater than the greatest value for such item claimed by either party the Purchaser or the Seller Representative or less than the smallest value for such item claimed by either party; and (ii) in no event the Purchaser or the Seller Representative. Each of the Parties agrees that it shall Closing Date Working Capital as determined be bound by the Independent Accounting Firm be less than Purchaser’s calculation of the Closing Date Working Capital nor more than the Sellers’ Representative’s calculation of Closing Date Working Capital set forth in the Dispute Notice. The decision determination of the Independent Accounting Firm shall and such determination may only be finalreviewed, conclusive and binding on corrected or set aside by a court of competent jurisdiction only upon a finding by such court that the partiesIndependent Accounting Firm committed fraud or manifest error with respect to its determination. The determination of the Independent Accounting Firm will not be deemed an award subject to review under the Federal Arbitration Act or any other statute. The fees and expenses of the Independent Accounting Firm shall be borne one-half by the Sellers non-prevailing party to the decision of the Independent Accounting Firm if one party prevails on all disputed items; if neither the Purchaser or the Seller Representative were correct with respect to all of the disputed items, then the Purchaser, on the one hand, and one-the Seller Representative, on the other hand, will each pay half of the Independent Auditor’s fees. Except as provided in the preceding sentences, all other costs and expenses incurred by the PurchaserParties in connection with resolving any dispute hereunder before the Independent Accounting Firm will be borne by the party incurring such cost and expense.
(d) If the Closing Date Net Working Capital, as determined in accordance with Section 2.03(c) above, is less than Two One Million Five Hundred Thousand Dollars ($2,000,0001,500,000) (the “Company Target Net Working Capital”), the Aggregate Consideration shall be reduced on a dollar-for-dollar basis by the amount by which the Company Target Net Working Capital exceeds the Closing Date Net Working Capital, and the Sellers’ Representative, on behalf of the Sellers, Seller shall cause the Escrow Agent to pay to the Purchaser the dollar amount by which the Company Target Net Working Capital exceeds the Closing Date Net Working Capital (orfirst by offset of the NWC Holdback, to the extent there are insufficient funds remaining in the Escrow Account at the time such payment is to be made, such payment shall be made directly from the Sellers to the Purchaser). If the Closing Date Net Working Capital is greater than the Company Net Working Capital, then the Aggregate Consideration shall be increased on a dollar-for-dollar basis by the amount the Closing Date Net Working Capital exceeds the Company Net Working Capitalif any, and the Purchaser shall pay the Sellers the dollar amount by which the Closing Date Net Working Capital exceeds the Company Net Working Capital. Any such payment due under this Section 2.03(d) shall be made remainder, if any, in cash or same day funds within five (5) Business Days after the final determination of the Closing Date Net Working Capital pursuant to Section 2.03(c). Seller shall be liable for the amount of any deficit in the Target Net Working Capital pursuant to this Section 2.03(d), and such liability shall be in addition to, and independent of, any and all limitations, thresholds and exclusivity provisions set forth in Article VII of this Agreement. Notwithstanding the foregoing, if the Closing Date Net Working Capital is greater than the Target Net Working Capital, then the Cash Consideration shall be increased on a dollar-for-dollar basis by the amount by which the Closing Date Net Working Capital exceeds the Target Net Working Capital, and the Purchaser shall pay the Seller the dollar amount by which the Closing Date Net Working Capital exceeds the Target Net Working Capital in cash within five (5) Business Days after the final determination of the Closing Date Net Working Capital pursuant to Section 2.03(c). Any amount of the NWC Holdback not offset by Purchaser pursuant to this Section 2.03(c) shall be paid by the Purchaser to the Seller within five (5) Business Days after the final determination of Closing Date Net Working Capital pursuant to Section 2.03(c).
(e) Each No later than one day prior to the Closing Date, Seller Representative shall receive deliver to Purchaser a good faith estimate of the Closing Date Net Working Capital and attach the estimate to this Agreement as Schedule 2.03(e) (“Estimated Closing Date Net Working Capital”). If the Estimated Closing Date Net Working Capital is less than the Target Net Working Capital, Purchaser shall hold the difference between the Estimated Closing Date Net Working Capital and the Target Net Working Capital back from the portion of the Aggregate Consideration, and make any payments as may be required Cash Consideration paid pursuant to Section 2.03(a)(iii) (or bear a reduction in the Escrow Amount) in accordance with this Section 2.03, as set forth next to such Seller’s name on Schedule 2.03, which sets forth that portion of the cash and/or Purchaser Common Stock each Seller shall receive hereunder, and identifies those Sellers who shall receive payment of their portion of the Closing Payment by check and the respective percentage of the Aggregate Consideration payable to each Seller hereunder under the column titled “Applicable Percentages” set forth opposite each Seller’s name (collectively the “Applicable Percentages” and individually “Applicable PercentageNWC Holdback”) until five (5) Business Days after the final determination of Closing Date Net Working Capital pursuant to Section 2.03(c), at which time it will be paid to the Purchaser or the Seller as required by Section 2.03(d).
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