- 26 - of Stetson Guske & Koenes, P.L.L.C. (“SG&K”) to conduct an audit of the Company’s financial statements, which audit shall be completed on or before April 30, 1996. The results of the audit * * * shall be reviewed by KPMG Peat Marwick L.L.P. (“KPMG”) and, provided that KPMG provides to Purchaser a written report addressed to the Company stating that KPMG has no material disagreement with the balance sheet and income statement portions of the Audited Financial Statements, the Purchase Price shall be adjusted as set forth in Subsections 2.3.1, 2.3.2 or 2.3.3 below (as applicable). In connection with KPMG’s review of the Audited Financial Statements, KPMG shall be provided full access to: (i) all of SG&K’s working papers relating to the Audited Financial Statements; and (ii) all of the Company’s books and records. If KPMG disagrees with the Audited Financial Statements, then the firm of Price Waterhouse shall be retained to conduct an independent audit, and the results of that audit shall be the governing Audited Financial Statements and shall be binding upon the parties. All of KPMG’s fees and expenses shall be borne by Purchaser, and all of Price Waterhouse’s fees and expenses shall be borne 50% by Shareholders and 50% by Purchaser. Based on the results of the audit, the Purchase Price shall be adjusted as follows: 2.3.1 If the amount of the Company’s Net Liability, as reflected in the Audited Financial Statements, is $17,074,829 (i.e., $50,000 more than the Net Liability as reflected in the Balance Sheet) or more, then the Purchase Price shall be reduced by the amount by which the Net Liability, as reflected in the Audited Financial Statements, exceeds $17,024,829. As used in this Section 2.3, “Net Liability” means the amount equal to Total Long Term Debt (excluding Deferred Income Taxes) plus Total Current Liabilities minus Total Current Assets; provided, however, that if the Audited Financial Statements reflect any reserve for the class action litigation, Lane et al v. Birting Fisheries, Inc., which is presently being maintained against the Company in United States District Court under Cause No. C93-827D, then the amount of such reserve shall not be included in Total Current Liabilities in determining Net Liability. “Total Long Term Debt”, “Deferred Income Taxes”, “Total Current Liabilities”, and “Total Current Assets” shall be determined by reference to the balance sheet contained in the Audited Financial Statements. 2.3.2 If the amount of the Company’s Net Liability, as reflected in the Audited FinancialPage: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Next
Last modified: May 25, 2011