Common use of Effective Date Balance Sheet Clause in Contracts

Effective Date Balance Sheet. (a) As promptly as practicable, but no later than 60 days after the Closing Date, Seller will cause to be prepared and delivered to Buyer the Effective Date Balance Sheet and a certificate based on such Effective Date Balance Sheet setting forth Seller’s good faith calculation of the Effective Date Net Working Capital Amount. The Effective Date Balance Sheet (the “Effective Date Balance Sheet”) shall (x) fairly present the consolidated financial position of the Company and the Subsidiaries as of the Effective Date (taking into account the distribution of the Distributed Assets as contemplated by Section 9.02(c)) in accordance with GAAP applied on a basis consistent with those used in the preparation of the Balance Sheet, (y) include line items substantially consistent with those in the Balance Sheet and (z) be prepared in accordance with accounting policies and practices consistent with those used in the preparation of the Balance Sheet. (b) If Buyer disagrees with Seller’s calculation of the Effective Date Net Working Capital Amount delivered pursuant to Section 2.03(a), Buyer may, within 20 days after delivery of the documents referred to in Section 2.03(a), deliver a notice to Seller disagreeing with such calculation which specifies Buyer’s calculation of such amount and, in reasonable detail, Buyer’s grounds for such disagreement. Any such notice of disagreement shall specify those items or amounts as to which Buyer disagrees, and Buyer shall be deemed to have agreed with all other items and amounts contained in the Effective Date Balance Sheet and the calculation of the Effective Date Net Working Capital Amount delivered pursuant to Section 2.03(a). (c) If a notice of disagreement shall be duly delivered pursuant to Section 2.03(b), Buyer and Seller shall, during the 15 days following such delivery, use commercially reasonable efforts to reach agreement on the disputed items or amounts in order to determine, as may be required, the amount of the Effective Date Net Working Capital Amount, which amount shall not be more than the amount thereof shown in Seller’s calculation delivered pursuant to Section 2.03(a) nor less than the amount thereof shown in Buyer’s calculation delivered pursuant to Section 2.03(b). If, during such period, Buyer and Seller are unable to reach such agreement, they shall promptly thereafter cause independent accountants of nationally recognized standing reasonably satisfactory to Buyer and Seller (who shall not have any material relationship with Buyer or Seller) (the “Accounting Referee”), promptly to review this Agreement and the disputed items or amounts for the purpose of calculating the Effective Date Net Working Capital Amount. Each party shall set forth in writing its estimate of the Effective Date Net Working Capital Amount referred to the Accounting Referee for resolution, and the Accounting Referee shall, as promptly as practicable, be required to select the position of either one party or the other with respect to the Effective Date Net Working Capital Amount and to communicate such selection to both parties. The costs of the Accounting Referee shall be borne entirely by the party which does not have its position selected by the Accounting Referee. The determination of the Accounting Referee shall be final, conclusive and binding on the parties and shall be enforceable in any court having jurisdiction. (d) Buyer and Seller agree that they will, and agree to cause their respective independent accountants and the Company and each Subsidiary to, cooperate and assist in the preparation of the Effective Date Balance Sheet and the calculation of the Effective Date Net Working Capital Amount and in the conduct of the reviews referred to in this Section 2.03, including the making available to the extent necessary of books, records, work papers and personnel.

Effective Date Balance Sheet. (a) As promptly as practicable, but no later than 60 Within sixty (60) days after the Closing Date, Purchaser will prepare and deliver to Seller a balance sheet of Company as of the Effective Time (the "Effective Date Balance Sheet"). The Effective Date Balance Sheet will cause to be prepared utilizing United States generally accepted accounting principles ("GAAP") consistent with past practices, accounting principles and delivered the policies and procedures specified on Schedule 1 hereto (the "Procedures"). Purchaser will ---------- retain KPMG LLP (the "Auditing Firm") to Buyer audit the Effective Date Balance Sheet and a certificate based on such to render its report thereon, as addressed to Purchaser and Seller, stating that the Effective Date Balance Sheet has been prepared in accordance with the terms of this Section 1.6(a) and setting forth Seller’s good faith calculation Working Capital Shortfall (as defined in Section 1.6(e)) and the Excess Debt Amount (as defined in Section 1.6(e)), if any. Such report of the Auditing Firm will be delivered by Purchaser to Seller together with the Effective Date Balance Sheet. The date on which the Effective Date Balance Sheet, and the report thereon of the Auditing Firm is received by Seller is referred to herein as the "First Delivery Date." Purchaser shall be responsible for all fees of Auditing Firm relating to the preparation of the Effective Date Net Working Capital Amount. The Effective Date Balance Sheet (the “Effective Date Balance Sheet”) shall (x) fairly present the consolidated financial position of the Company and the Subsidiaries as of the Effective Date (taking into account the distribution of the Distributed Assets as contemplated by Section 9.02(c)) in accordance with GAAP applied on a basis consistent with those used in the preparation of the Balance Sheet, (y) include line items substantially consistent with those in the Balance Sheet and (z) be prepared in accordance with accounting policies and practices consistent with those used in the preparation of the Balance Sheet. (b) If Buyer disagrees The Effective Date Balance Sheet will be deemed to be the final, binding and conclusive Effective Date Balance Sheet (the "Final Effective Date Balance Sheet") for all purposes on the thirtieth (30th) day after the First Delivery Date unless Seller delivers to Purchaser written notice of its disagreement (a "Notice of Disagreement") on or prior to such date specifying in reasonable detail the nature of Seller's objections to the Effective Date Balance Sheet. Within such thirty (30) day period, Purchaser and the Company shall provide Seller and its auditors with Seller’s reasonable access during normal business hours to the accounts and records of the operations of Company relating to the Effective Date Balance Sheet. Seller shall not make any objection in the Notice of Disagreement concerning any individual item on the Effective Date Balance Sheet, unless Seller asserts that the Effective Date Balance Sheet was not prepared in accordance with the terms of Section 1.6(a) with respect to such item and that as a result thereof the Effective Date Balance Sheet does not accurately set forth the calculation of the Working Capital Shortfall or Excess Debt Amount; provided, however, that no Notice of -------- ------- Disagreement may be delivered unless the objections concerning individual items exceed an aggregate of $25,000. Seller hereby waives the right to assert any objection with respect to the Effective Date Net Working Capital Amount Balance Sheet that is not asserted in a Notice of Disagreement delivered pursuant to Section 2.03(a), Buyer may, Purchaser by Seller within 20 thirty (30) days after delivery the First Delivery Date. If a Notice of Disagreement is delivered to Purchaser by Seller within such 30-day period, then the documents referred to in Section 2.03(a)Effective Date Balance Sheet (as adjusted, deliver a notice to Seller disagreeing with such calculation which specifies Buyer’s calculation of such amount and, in reasonable detail, Buyer’s grounds for such disagreement. Any such notice of disagreement shall specify those items or amounts as to which Buyer disagrees, and Buyer shall if necessary) will be deemed to be the Final Effective Date Balance Sheet for all purposes on the earlier of (i) the date Purchaser and Seller resolve in writing all differences they have with respect to the Effective Date Balance Sheet or (ii) the date the disputed matters are resolved in writing by the Unaffiliated Firm (as defined below). In the event that disputed matters are resolved by the Unaffiliated Firm, the Final Effective Date Balance Sheet will consist of the applicable amounts from the Effective Date Balance Sheet (or amounts otherwise agreed to in writing by Purchaser 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. (c) During the 30-day period following the delivery of a Notice of Disagreement, Purchaser and Seller will seek in good faith to resolve any differences they may have with all respect to matters specified in the Notice of Disagreement. If, at the end of such 30-day period, Purchaser and Seller have not reached agreement on such matters, Purchaser and Seller will have an additional fifteen (15) days to advise each other in writing of their respective positions with respect to each of Seller's proposed adjustments that are in dispute. Promptly following this 15-day period, Purchaser and Seller will jointly engage PricewaterhouseCoopers LLP (or, if PricewaterhouseCoopers LLP is unable or unwilling to act in such capacity, Deloitte & Touche LLP) (the "Unaffiliated Firm") to resolve the matters which remain in dispute with respect to the Effective Date Balance Sheet by arbitration in accordance with the procedures set forth in this Section 1.6. In connection with such engagement, Purchaser and Seller agree to execute, if requested by the Unaffiliated Firm, a reasonable engagement letter including customary indemnities. Promptly after such engagement of the Unaffiliated Firm, Purchaser or Seller will provide the Unaffiliated Firm with a copy of this Agreement, the Effective Date Balance Sheet, the Notice of Disagreement and any previously delivered written positions. The Unaffiliated Firm will have the authority to request in writing such additional written submissions from either Purchaser 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 Purchaser nor Seller (nor any of their respective affiliates) will make any additional submission to the Unaffiliated Firm except pursuant to such a written request by the Unaffiliated Firm. Neither Purchaser nor Seller will communicate (nor permit any of its affiliates to communicate) with the Unaffiliated Firm without providing the other 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 forty-five (45) days to review the documents provided to it pursuant to this Section 1.6(c). Within such 45-day period, the Unaffiliated Firm will furnish simultaneously to Purchaser and Seller 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 Effective Date Balance Sheet based solely on the information provided to the Unaffiliated Firm by Purchaser 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 individual items and on the Effective Date Balance Sheet in dispute was prepared in accordance with the terms of Section 1.6(a) (it being understood that the Unaffiliated Firm will have no authority to make any adjustments to any financial statements or amounts contained in other than the Effective Date Balance Sheet and the calculation of the Effective Date Net Working Capital Amount delivered pursuant to Section 2.03(aamounts set forth therein respectively that are in dispute). (c) If a notice of disagreement shall be duly delivered pursuant to Section 2.03(b), Buyer and Seller shall, during the 15 days following such delivery, use commercially reasonable efforts to reach agreement on the . In resolving any disputed items or amounts in order to determine, as may be requireditem, the amount of the Effective Date Net Working Capital Amount, which amount shall Unaffiliated Firm may not be more assign a value to such item greater than the amount thereof shown in Seller’s calculation delivered pursuant to Section 2.03(a) nor greatest value for such item asserted by either Purchaser or Seller or less than the amount thereof shown in Buyer’s calculation delivered pursuant to Section 2.03(b). If, during smallest value for such period, Buyer and Seller are unable to reach such agreement, they shall promptly thereafter cause independent accountants of nationally recognized standing reasonably satisfactory to Buyer and Seller (who shall not have any material relationship with Buyer item asserted by either Purchaser or Seller) (the “Accounting Referee”), promptly to review this Agreement and the disputed items or amounts for the purpose of calculating the Effective Date Net Working Capital Amount. Each party shall set forth in writing its estimate of the Effective Date Net Working Capital Amount referred to the Accounting Referee for resolution, and the Accounting Referee shall, as promptly as practicable, be required to select the position of either one party or the other with respect to the Effective Date Net Working Capital Amount and to communicate such selection to both parties. The costs of the Accounting Referee shall be borne entirely by the party which does not have its position selected by the Accounting Referee. The determination of the Accounting Referee shall be final, conclusive and binding on the parties and shall be enforceable in any court having jurisdiction. (d) Buyer The decision of the Unaffiliated Firm will be, for all purposes, conclusive, non-appealable, final and binding upon Purchaser and Seller. The fees of the Unaffiliated Firm will be borne by Purchaser and Seller agree in the same proportion that they willthe dollar amount of disputed items lost by Purchaser or Seller (as applicable) bears to the total dollar amount in dispute resolved by the Unaffiliated Firm. Each of Purchaser and Seller will bear the fees, costs and agree to cause their respective independent expenses of its own accountants and the Company and each Subsidiary to, cooperate and assist all of its other expenses in the preparation of the Effective Date Balance Sheet and the calculation of the Effective Date Net Working Capital Amount and in the conduct of the reviews referred to in connection with matters contemplated by this Section 2.03, including the making available to the extent necessary of books, records, work papers and personnel1.6.

Effective Date Balance Sheet. (a) As promptly as practicable, but no later than 60 days after If the Closing Date, Seller will cause to be prepared and delivered to Buyer Shareholders disagree with the Effective Date Balance Sheet and a certificate based on such Effective Date Balance Sheet setting forth Seller’s good faith calculation of the Effective Date Net Working Capital Amount. The Effective Date Balance Sheet (the “Effective Date Balance Sheet”) shall (x) fairly present the consolidated financial position of the Company and the Subsidiaries as of the Effective Date (taking into account the distribution of the Distributed Assets as contemplated by Section 9.02(c)) in accordance with GAAP applied on a basis consistent with those used in the preparation of the Balance Sheet, (y) include line items substantially consistent with those in the Balance Sheet and (z) be prepared in accordance with accounting policies and practices consistent with those used in the preparation of the Balance Sheet. (b) If Buyer disagrees with Seller’s calculation of the Effective Date Net Working Capital Amount delivered pursuant to Section 2.03(a), Buyer may, within 20 days after delivery of the documents referred to in Section 2.03(a), deliver a notice to Seller disagreeing with such calculation which specifies Buyer’s calculation of such amount and, in reasonable detail, Buyer’s grounds for such disagreement. Any such notice of disagreement shall specify those items or amounts as to which Buyer disagrees, and Buyer shall be deemed to have agreed with all other items and amounts contained in the Post-Effective Date Balance Sheet and the calculation of Working Capital set forth therein, they shall notify Buyer of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement (the “Seller Dispute Notice”), within 30 days of its receipt of the Post-Effective Date Net Balance Sheet. In the event that the Shareholders do not provide a Seller Dispute Notice within such 30 day period, the Shareholders shall be deemed to have accepted the Post-Effective Date Balance Sheet and the calculation of Working Capital Amount delivered pursuant to Section 2.03(a). (c) If a therein by Buyer, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement shall be duly delivered pursuant to Section 2.03(b)is timely provided, Buyer and Seller shall, during the 15 Shareholders shall negotiate in good faith for a period of 30 days following (or such delivery, use commercially reasonable efforts longer period as they may mutually agree) to reach agreement on the disputed items or amounts in order resolve any disagreements with respect to determine, as may be required, the amount of the Effective Date Net Working Capital Amount, which amount shall not be more than the amount thereof shown in Seller’s calculation delivered pursuant to Section 2.03(a) nor less than the amount thereof shown in Buyer’s calculation delivered pursuant to Section 2.03(b)of the Working Capital. If, during at the end of such period, Buyer and Seller they are unable to reach resolve any such agreementdisagreements, they then the firm of Cabinet Mazars located in Annecy shall promptly thereafter cause be engaged to resolve any remaining disagreement; provided, however, that Cabinet Mazars has not provided services to the Shareholders or any prior shareholders of the Company during the three years prior to Closing. If Cabinet Mazars does not meet such requirements, then an independent accountants accounting firm of nationally recognized global standing reasonably satisfactory to shall be mutually selected by Buyer and Seller (who shall not have any material relationship with Buyer or Seller) the Shareholders (the “Accounting RefereeAuditor”), promptly ) to review this Agreement and the disputed items or amounts for the purpose of calculating the Effective Date Net Working Capital Amountresolve any remaining disagreements. Each party The Auditor shall set forth in writing its estimate of the Effective Date Net Working Capital Amount referred to the Accounting Referee for resolution, and the Accounting Referee shall, determine as promptly as practicable, be required to select but in any event within 30 days of the position of either one party or the other with respect date on which such dispute is referred to the Effective Date Net Auditor, whether and to what extent (if any) Buyer’s calculation of Working Capital Amount and to communicate such selection to both partiesrequires adjustment. The costs fees and expenses of the Accounting Referee Auditor shall be borne entirely paid by Buyer and the Shareholders in inverse proportion as they may prevail on the matters resolved by the party which does not have its position selected Auditor, as determined by the Accounting RefereeAuditor. The determination determinations of the Accounting Referee Auditor shall be final, conclusive and binding on the parties and shall be enforceable in any court having jurisdiction. (d) parties. In the event that a Seller Dispute Notice is delivered to Buyer, Buyer and Seller agree that they will, and agree to cause their respective independent accountants and the Company shall provide (at no cost) to the Shareholders and each Subsidiary toits representatives (including its legal, cooperate accounting and assist in other advisors) all records, materials and information and access to the preparation employees of the Effective Date Balance Sheet and Company relevant to the calculation subject matter of the Effective Date Net Working Capital Amount and in the conduct of the reviews referred to in this Section 2.03, including the making available to the extent necessary of books, records, work papers and personnelSeller Dispute Notice.