Common use of Closing Net Assets Statement Clause in Contracts

Closing Net Assets Statement. (i) Within 90 days after the Closing Date, Buyer will prepare and deliver to Seller a statement (the “Closing Net Assets Statement”) setting forth the amount of Assets and the amount of Assumed Liabilities which, in accordance with GAAP, would be set forth on a balance sheet of the Business operating on a stand-alone basis, in each case as of the Effective Time. The amounts set forth on the Closing Net Assets Statement will be determined utilizing the accounting principles, policies, practices and procedures set forth on Schedule 4.1(b)(i) and, with respect to matters not set forth on Schedule 4.1(b)(i), utilizing GAAP applied on a consistent basis with the Balance Sheet. The amount of Assets shown on the Closing Net Assets Statement minus the amount of Assumed Liabilities shown thereon is referred to herein as “Net Assets”. Anything contained herein to the contrary notwithstanding, the amounts set forth on the Closing Net Assets Statement will not reflect any purchase accounting adjustments as a result of the acquisition of the Assets or the assumption of the Assumed Liabilities by Buyer. No amount with respect to Taxes shall be treated as an Assumed Liability for purposes of determining Net Assets. Buyer will retain (at Buyer’s sole expense) Deloitte & Touche LLP (“D&T”) to audit the Closing Net Assets Statement and to render their report thereon stating that the Closing Net Assets Statement has been prepared in accordance with the terms of this Section 4.1(b)(i). Such report of D&T will be delivered to Seller together with the Closing Net Assets Statement. The date on which the Closing Net Assets Statement and the report thereon of D&T are delivered to Seller is referred to herein as the “Delivery Date”. Seller will cause its employees and the employees of Seller Subsidiary to provide reasonable assistance to Buyer and its Representatives in the preparation of the Closing Net Assets Statement and to provide reasonable assistance to D&T in connection with their audit of the Closing Net Assets Statement and their issuance of a report thereon, provided such assistance will not interfere with the normal work duties of such employees. Seller will cause Buyer, Buyer’s Representatives and D&T to be provided with reasonable access at all reasonable times, following reasonable notice, to the personnel, properties, books and records of Seller and Seller Subsidiary to the extent necessary for such purposes. Without limiting the generality of the foregoing, Seller will use commercially reasonable efforts to cause Seller’s Chief Executive Officer and Chief Financial Officer to execute and deliver customary representation letters in favor of D&T in connection with their audit of the Closing Net Assets Statement and their issuance of a report thereon. In addition, Seller will execute and deliver, and will cause Seller Subsidiary to execute and deliver, such customary documentation as D&T may reasonably request to evidence the waiver by Seller and its subsidiaries and Affiliates of any claim against D&T based upon D&T’s report on the Closing Net Assets Statement rendered pursuant to this Section 4.1(b)(i); provided that Seller and Seller Subsidiary shall not be obligated to execute a waiver that is more favorable to D&T than the waiver executed by Buyer. (ii) The Closing Net Assets Statement will be deemed to be the final, binding and conclusive Closing Net Assets Statement (the “Final Closing Net Assets Statement”) for all purposes on the forty-fifth day after the Delivery Date unless Seller delivers to Buyer written notice of its disagreement (a “Notice of Disagreement”) on or prior to such date specifying the nature of Seller’s objections to the Closing Net Assets Statement. Buyer will cause its employees to provide reasonable assistance to Seller and its Representatives (including any accounting firm retained by Seller) in the preparation of a Notice of Disagreement, provided such assistance will not interfere with the normal work duties of such employees. Buyer will cause Seller and Seller’s Representatives to be provided with reasonable access at all reasonable times, following reasonable notice, to the personnel, properties, books and records of Buyer and its subsidiaries to the extent necessary for such purposes. Buyer will provide that Seller will be afforded a reasonable opportunity to consult with D&T regarding the procedures undertaken by D&T in connection with the preparation of the Closing Net Assets Statement and will use commercially reasonable efforts to provide that Seller will have reasonable access to all readily available books, records and work papers prepared by D&T. To be assertable in a Notice of Disagreement, an objection by Seller with respect to any individual item on the Closing Net Assets Statement must assert that the Closing Net Assets Statement was not prepared in accordance with the terms of Section 4.1(b)(i) with respect to such item. Seller hereby waives the right to assert any objection to the Closing Net Assets Statement that is not asserted in a Notice of Disagreement delivered to Buyer within 45 days after the Delivery Date. If a Notice of Disagreement is delivered to Buyer within such 45 day period, then the Closing Net Assets Statement (as adjusted, if necessary) will be deemed to be the Final Closing Net Assets Statement for all purposes on the earlier of (x) the date Buyer and Seller resolve in writing all differences they have with respect to the Closing Net Assets Statement or (y) the date the disputed matters are resolved in writing by the Unaffiliated Firm. In the event that disputed matters are resolved by the Unaffiliated Firm (as set forth below in accordance with the terms hereof), the Final Closing Net Assets Statement will consist of the applicable amounts from the Closing Net Assets Statement (or amounts otherwise agreed to in writing by Buyer and Seller) as to items that have not been submitted for resolution to the Unaffiliated Firm, and the amounts determined by the Unaffiliated Firm as to items that were submitted for resolution by the Unaffiliated Firm. (iii) During the 30 day period following the delivery of a Notice of Disagreement, Buyer and Seller will seek in good faith to resolve any differences they may have with respect to matters specified in the Notice of Disagreement. If, at the end of such 30 day period, Buyer and Seller have not reached agreement on such matters, Buyer will have an additional 15 days to advise Seller in writing of Buyer’s position with respect to each of Seller’s proposed adjustments that are in dispute (“Buyer’s Letter”). Seller will cause Buyer, Buyer’s Representatives and D&T to be provided with access at all reasonable times to the personnel, properties, books and records of Seller and its subsidiaries and Affiliates (including Seller Subsidiary) to enable Buyer to prepare Buyer’s Letter. Buyer’s Letter shall only contain Buyer’s position with respect to each of Seller’s proposed adjustments that are in dispute. Buyer’s Letter shall not rely upon any information to which Seller in writing specifically requested access in accordance with Section 4.1 (b)(ii) in connection with the preparation of the Notice of Disagreement if and to the extent such access was not provided to Seller by Buyer. Promptly following the delivery to Seller of Buyer’s Letter, Buyer and Seller will jointly engage a single arbitrator, which arbitrator shall not have worked in any capacity on any matter for either Buyer or Seller, from the firm of Ernst & Young LLP (or, if a representative of such firm is unable or unwilling to act in such capacity, a single arbitrator, which arbitrator shall not have worked in any capacity on any matter for either Buyer or Seller, from the firm of PricewaterhouseCoopers LLP) (the “Unaffiliated Firm”) to resolve the matters which remain in dispute with respect to the Closing Net Assets Statement by arbitration in accordance with the procedures set forth in this Section 4.1(b). In connection with such engagement, each of Buyer and Seller agrees to execute, if requested by the Unaffiliated Firm, a reasonable joint engagement letter including customary indemnities. Promptly after such engagement of the Unaffiliated Firm, Buyer or Seller will provide the Unaffiliated Firm with a copy of this Agreement, the Closing Net Assets Statement, the Notice of Disagreement and Buyer’s Letter. The Unaffiliated Firm will have the authority to request in writing such additional written submissions from either Buyer or Seller as it deems appropriate, provided that a copy of any such submission will be provided to the other party at the same time as it is provided to the Unaffiliated Firm. Neither party will make (or permit any of its subsidiaries or Affiliates to make) any additional submission to the Unaffiliated Firm except pursuant to such a written request by the Unaffiliated Firm. Neither party will communicate (nor permit any of its subsidiaries or Affiliates to communicate) with the Unaffiliated Firm without providing the other party a reasonable opportunity to participate in such communication with the Unaffiliated Firm (other than with respect to written submissions in response to the written request of the Unaffiliated Firm). The Unaffiliated Firm will have 45 days to review the documents provided to it pursuant to this Section 4.1(b)(iii). Within such 45 day period, the Unaffiliated Firm will furnish simultaneously to both parties its written determination with respect to each of the adjustments in dispute submitted to it for resolution. The Unaffiliated Firm will resolve the differences regarding the Closing Net Assets Statement based solely on the information provided to the Unaffiliated Firm by Buyer and Seller pursuant to the terms of this Agreement (and not independent review). The Unaffiliated Firm’s authority will be limited to resolving disputes with respect to whether the Closing Net Assets Statement was prepared in accordance with Section 4.1(b)(i) with respect to the individual items on the Closing Net Assets Statement in dispute (it being understood that no adjustment will be made to the Purchase Price with respect to any adjustment made by the Unaffiliated Firm to any financial statements or amounts other than amounts set forth in the Closing Net Assets Statement that are in dispute). In resolving any disputed item, the Unaffiliated Firm may not assign a value to such item greater than the greatest value for such item asserted by either party or less than the smallest value for such item asserted by either party. (iv) The decision of the Unaffiliated Firm will be, for all purposes, conclusive, non appealable, final and binding upon Buyer and Seller. Such decision will be subject to specific performance pursuant to Section 15.17, and judgment may also be entered thereon as an arbitration award pursuant to the Federal Arbitration Act, 9 U.S.C. §§1-16, in any court of competent jurisdiction specified in Section 15.12. The fees of the Unaffiliated Firm will be borne by Buyer and Seller in the same proportion that the dollar amount of disputed items lost by a party bears to the total dollar amount in dispute resolved by the Unaffiliated Firm. Each party will bear the fees, costs and expenses of its own accountants and all of its other expenses in connection with matters contemplated by this Section 4.1(b).

Closing Net Assets Statement. (ia) Within As promptly as practicable, but no later than 90 days after the Closing Date, Buyer will prepare and deliver to Seller a statement (the “Closing Net Assets Statement”) setting forth the amount of Assets and the amount of Assumed Liabilities which, in accordance with GAAP, would be set forth on a balance sheet of the Business operating on a stand-alone basis, in each case as of the Effective Time. The amounts set forth on the Closing Net Assets Statement will be determined utilizing the accounting principles, policies, practices and procedures set forth on Schedule 4.1(b)(i) and, with respect to matters not set forth on Schedule 4.1(b)(i), utilizing GAAP applied on a consistent basis with the Balance Sheet. The amount assistance of Assets shown on the Closing Net Assets Statement minus the amount of Assumed Liabilities shown thereon is referred to herein as “Net Assets”. Anything contained herein Seller to the contrary notwithstanding, the amounts set forth on the Closing Net Assets Statement will not reflect any purchase accounting adjustments as a result of the acquisition of the Assets or the assumption of the Assumed Liabilities extent requested by Buyer. No amount with respect ) will cause to Taxes shall be treated as an Assumed Liability for purposes of determining Net Assets. Buyer will retain (at Buyer’s sole expense) Deloitte & Touche LLP (“D&T”) to audit the Closing Net Assets Statement prepared and to render their report thereon stating that the Closing Net Assets Statement has been prepared in accordance with the terms of this Section 4.1(b)(i). Such report of D&T will be delivered to Seller together with the Closing Net Assets Statement, together with an unqualified report of KPMG PeatMarwick LLP thereon, and a certificate based on such Closing Net Assets Statement setting forth Buyer's calculation of Closing Net Assets. The Closing Statement of Net Assets (the "Closing Net Assets Statement") shall (x) present fairly, in all material respects, the Transferred Assets and the Assumed Liabilities, in each case determined as at the close of business on the Closing Date and in conformity with generally accepted accounting principles applied on a basis consistent with those generally accepted accounting principles used in connection with the determination of Opening Net Assets (with such exceptions to generally accepted accounting principles as were utilized in connection with the determination of Opening Net Assets) and (y) include line items substantially consistent with those in the Opening Net Assets Statement. Notwithstanding any provision of this Agreement to the contrary, (i) in no event shall Closing Net Assets be increased by more than $1,000,000 (as compared to the corresponding amount included in the calculation of Opening Net Assets) in respect of any capitalized data processing costs and (ii) for purposes of determining Closing Net Assets, accounts receivable with delayed payment terms arising after the date on of this Agreement shall be discounted to their present value. The excess of the amount of the Transferred Assets over the amount of the Assumed Liabilities, in each case determined in accordance with this Section 2.04, is referred to as "Closing Net Assets". (b) If Seller disagrees with Buyer's calculation of Closing Net Assets delivered pursuant to Section 2.04(a), Seller may, within 40 days after delivery of the documents referred to in Section 2.04(a), deliver a notice to Buyer disagreeing with Buyer's calculation of Closing Net Assets and setting forth Seller's calculation of Closing Net Assets. Any such notice of disagreement shall specify those items or amounts as to which Seller disagrees, and Seller shall be deemed to have agreed with all other items and amounts contained in the Closing Net Assets Statement and the report thereon calculations of D&T Closing Net Assets delivered pursuant to Section 2.04(a). (c) If a notice of disagreement shall be duly delivered pursuant to Section 2.04(b), Buyer and Seller shall, during the 30 days following such delivery, use their best efforts to reach agreement on the disputed items or amounts in order to determine Closing Net Assets. If, during such period, Buyer and Seller are delivered unable to Seller is referred reach such agreement, they shall promptly thereafter retain a nationally recognized accounting firm (the "Accounting Referee") other than KPMG Peat Marwick LLP or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP to herein as the “Delivery Date”. Seller will cause its employees promptly review this Agreement and the employees disputed items or amounts for the purpose of calculating Closing Net Assets. In making any such calculation, the Accounting Referee shall consider only those items or amounts in the Closing Net Assets Statements or Buyer's calculation of Closing Net Assets as to which Seller Subsidiary to provide reasonable assistance has disagreed. The Accounting Referee shall deliver to Buyer and its Representatives Seller, as promptly as practicable, a report setting forth each such calculation. Such report shall be final and binding upon Buyer and Seller. The cost of such review and report shall be borne equally by Buyer and Seller. (d) Buyer and Seller agree that they will, and agree to cause their respective independent accountants to, cooperate and assist in the preparation of the Closing Net Assets Statement and to provide reasonable assistance to D&T in connection with their audit the calculation of the Closing Net Assets Statement and their issuance in the conduct of a report thereonthe audits and reviews referred to in this Section 2.04(b), provided such assistance will not interfere with the normal work duties of such employees. Seller will cause Buyerincluding, Buyer’s Representatives and D&T to be provided with reasonable access at all reasonable timeswithout limitation, following reasonable notice, to the personnel, properties, books and records of Seller and Seller Subsidiary making available to the extent necessary for such purposes. Without limiting the generality of the foregoing, Seller will use commercially reasonable efforts to cause Seller’s Chief Executive Officer and Chief Financial Officer to execute and deliver customary representation letters in favor of D&T in connection with their audit of the Closing Net Assets Statement and their issuance of a report thereon. In addition, Seller will execute and deliver, and will cause Seller Subsidiary to execute and deliver, such customary documentation as D&T may reasonably request to evidence the waiver by Seller and its subsidiaries and Affiliates of any claim against D&T based upon D&T’s report on the Closing Net Assets Statement rendered pursuant to this Section 4.1(b)(i); provided that Seller and Seller Subsidiary shall not be obligated to execute a waiver that is more favorable to D&T than the waiver executed by Buyer. (ii) The Closing Net Assets Statement will be deemed to be the final, binding and conclusive Closing Net Assets Statement (the “Final Closing Net Assets Statement”) for all purposes on the forty-fifth day after the Delivery Date unless Seller delivers to Buyer written notice of its disagreement (a “Notice of Disagreement”) on or prior to such date specifying the nature of Seller’s objections to the Closing Net Assets Statement. Buyer will cause its employees to provide reasonable assistance to Seller and its Representatives (including any accounting firm retained by Seller) in the preparation of a Notice of Disagreement, provided such assistance will not interfere with the normal work duties of such employees. Buyer will cause Seller and Seller’s Representatives to be provided with reasonable access at all reasonable times, following reasonable notice, to the personnel, properties, books and records of Buyer and its subsidiaries to the extent necessary for such purposes. Buyer will provide that Seller will be afforded a reasonable opportunity to consult with D&T regarding the procedures undertaken by D&T in connection with the preparation of the Closing Net Assets Statement and will use commercially reasonable efforts to provide that Seller will have reasonable access to all readily available required books, records and records, work papers prepared by D&T. To be assertable in a Notice of Disagreement, an objection by Seller with respect to any individual item on the Closing Net Assets Statement must assert that the Closing Net Assets Statement was not prepared in accordance with the terms of Section 4.1(b)(i) with respect to such item. Seller hereby waives the right to assert any objection to the Closing Net Assets Statement that is not asserted in a Notice of Disagreement delivered to Buyer within 45 days after the Delivery Date. If a Notice of Disagreement is delivered to Buyer within such 45 day period, then the Closing Net Assets Statement (as adjusted, if necessary) will be deemed to be the Final Closing Net Assets Statement for all purposes on the earlier of (x) the date Buyer and Seller resolve in writing all differences they have with respect to the Closing Net Assets Statement or (y) the date the disputed matters are resolved in writing by the Unaffiliated Firm. In the event that disputed matters are resolved by the Unaffiliated Firm (as set forth below in accordance with the terms hereof), the Final Closing Net Assets Statement will consist of the applicable amounts from the Closing Net Assets Statement (or amounts otherwise agreed to in writing by Buyer and Seller) as to items that have not been submitted for resolution to the Unaffiliated Firm, and the amounts determined by the Unaffiliated Firm as to items that were submitted for resolution by the Unaffiliated Firmpersonnel. (iii) During the 30 day period following the delivery of a Notice of Disagreement, Buyer and Seller will seek in good faith to resolve any differences they may have with respect to matters specified in the Notice of Disagreement. If, at the end of such 30 day period, Buyer and Seller have not reached agreement on such matters, Buyer will have an additional 15 days to advise Seller in writing of Buyer’s position with respect to each of Seller’s proposed adjustments that are in dispute (“Buyer’s Letter”). Seller will cause Buyer, Buyer’s Representatives and D&T to be provided with access at all reasonable times to the personnel, properties, books and records of Seller and its subsidiaries and Affiliates (including Seller Subsidiary) to enable Buyer to prepare Buyer’s Letter. Buyer’s Letter shall only contain Buyer’s position with respect to each of Seller’s proposed adjustments that are in dispute. Buyer’s Letter shall not rely upon any information to which Seller in writing specifically requested access in accordance with Section 4.1 (b)(ii) in connection with the preparation of the Notice of Disagreement if and to the extent such access was not provided to Seller by Buyer. Promptly following the delivery to Seller of Buyer’s Letter, Buyer and Seller will jointly engage a single arbitrator, which arbitrator shall not have worked in any capacity on any matter for either Buyer or Seller, from the firm of Ernst & Young LLP (or, if a representative of such firm is unable or unwilling to act in such capacity, a single arbitrator, which arbitrator shall not have worked in any capacity on any matter for either Buyer or Seller, from the firm of PricewaterhouseCoopers LLP) (the “Unaffiliated Firm”) to resolve the matters which remain in dispute with respect to the Closing Net Assets Statement by arbitration in accordance with the procedures set forth in this Section 4.1(b). In connection with such engagement, each of Buyer and Seller agrees to execute, if requested by the Unaffiliated Firm, a reasonable joint engagement letter including customary indemnities. Promptly after such engagement of the Unaffiliated Firm, Buyer or Seller will provide the Unaffiliated Firm with a copy of this Agreement, the Closing Net Assets Statement, the Notice of Disagreement and Buyer’s Letter. The Unaffiliated Firm will have the authority to request in writing such additional written submissions from either Buyer or Seller as it deems appropriate, provided that a copy of any such submission will be provided to the other party at the same time as it is provided to the Unaffiliated Firm. Neither party will make (or permit any of its subsidiaries or Affiliates to make) any additional submission to the Unaffiliated Firm except pursuant to such a written request by the Unaffiliated Firm. Neither party will communicate (nor permit any of its subsidiaries or Affiliates to communicate) with the Unaffiliated Firm without providing the other party a reasonable opportunity to participate in such communication with the Unaffiliated Firm (other than with respect to written submissions in response to the written request of the Unaffiliated Firm). The Unaffiliated Firm will have 45 days to review the documents provided to it pursuant to this Section 4.1(b)(iii). Within such 45 day period, the Unaffiliated Firm will furnish simultaneously to both parties its written determination with respect to each of the adjustments in dispute submitted to it for resolution. The Unaffiliated Firm will resolve the differences regarding the Closing Net Assets Statement based solely on the information provided to the Unaffiliated Firm by Buyer and Seller pursuant to the terms of this Agreement (and not independent review). The Unaffiliated Firm’s authority will be limited to resolving disputes with respect to whether the Closing Net Assets Statement was prepared in accordance with Section 4.1(b)(i) with respect to the individual items on the Closing Net Assets Statement in dispute (it being understood that no adjustment will be made to the Purchase Price with respect to any adjustment made by the Unaffiliated Firm to any financial statements or amounts other than amounts set forth in the Closing Net Assets Statement that are in dispute). In resolving any disputed item, the Unaffiliated Firm may not assign a value to such item greater than the greatest value for such item asserted by either party or less than the smallest value for such item asserted by either party. (iv) The decision of the Unaffiliated Firm will be, for all purposes, conclusive, non appealable, final and binding upon Buyer and Seller. Such decision will be subject to specific performance pursuant to Section 15.17, and judgment may also be entered thereon as an arbitration award pursuant to the Federal Arbitration Act, 9 U.S.C. §§1-16, in any court of competent jurisdiction specified in Section 15.12. The fees of the Unaffiliated Firm will be borne by Buyer and Seller in the same proportion that the dollar amount of disputed items lost by a party bears to the total dollar amount in dispute resolved by the Unaffiliated Firm. Each party will bear the fees, costs and expenses of its own accountants and all of its other expenses in connection with matters contemplated by this Section 4.1(b).