asset acquisitions - Jackson Walker LLP

and financial condition are set forth in the Seller’s pre-closing covenants contained in Article5.The parties may also choose to place limits on the amount of the purchase priceadjustment. Depending on the relative bargaining position of the parties, the acquisitionagreement may provide an upper limit (a “cap” or “ceiling”) to any adjustment amount thebuyer will be obligated to pay the seller. As an alternative, the parties may agree upon anupper limit to any adjustment amount the seller will be obligated to pay or give back to thebuyer after the closing, the effect of which is to reduce the final purchase price paid by thebuyer to a specified “floor.” The acquisition agreement may further provide for both a cap orceiling and a floor (when used in such combination, a “collar”) on the adjustment amount.The purchase price adjustment provision can also contain a de minimis “window” - i.e., arange within which neither party pays a purchase price adjustment amount.2.9 ADJUSTMENT PROCEDURE(a) “Working Capital” as of a given date shall mean the amount calculated bysubtracting the current liabilities of Seller included in the Assumed Liabilities as of that datefrom the current assets of Seller included in the Assets as of that date. The Working Capitalof Seller as of the date of the Balance Sheet (the “Initial Working Capital”) was_______________ Dollars ($_______).(b) Buyer shall prepare financial statements (“Closing Financial Statements”) of Selleras of the Effective Time and for the period from the date of the Balance Sheet through theEffective Time on the same basis and applying the same accounting principles, policies andpractices that were used in preparing the Balance Sheet, including the principles, policies andpractices set forth on Exhibit 2.9. Buyer shall then determine the Working Capital as of theEffective Time minus accruals in accordance with GAAP in respect of liabilities to beincurred by Buyer after the Effective Time (the “Closing Working Capital”) based on theClosing Financial Statements and using the same methodology as was used to calculate theInitial Working Capital. Buyer shall deliver the Closing Financial Statements and itsdetermination of the Closing Working Capital to Seller within sixty (60) days following theClosing Date.(c) If within thirty (30) days following delivery of the Closing Financial Statements andthe Closing Working Capital calculation, Seller has not given Buyer written notice of itsobjection to the Closing Working Capital calculation (which notice shall state the basis ofSeller’s objection), then the Closing Working Capital calculated by Buyer shall be bindingand conclusive on the parties and be used in computing the Adjustment Amount.(d) If Seller duly gives Buyer such notice of objection, and if Seller and Buyer fail toresolve the issues outstanding with respect to the Closing Financial Statements and thecalculation of the Closing Working Capital within thirty (30) days of Buyer’s receipt ofSeller’s objection notice, Seller and Buyer shall submit the issues remaining in dispute to________________________, independent public accountants (the “IndependentAccountants”) for resolution applying the principles, policies and practices referred to inSection 2.9(b). If issues are submitted to the Independent Accountants for resolution, (i)Seller and Buyer shall furnish or cause to be furnished to the Independent Accountants such3148166v1- 61 -