Common use of Adjustment to Base Purchase Price Clause in Contracts

Adjustment to Base Purchase Price. (a) Not later than three (3) Business Days prior to the Closing, Parent shall deliver to Buyer a statement setting forth Parent’s good faith and reasonably detailed estimate of Net Current Assets (the “Estimated Net Current Assets”), Net Debt (“Estimated Net Debt”), and the Cash Balance based thereon (the “Estimated Cash Balance”). (b) Not later than forty-five (45) days following the Closing, Buyer shall deliver to Parent a statement (the “Closing Statement”) setting forth Buyer’s good faith and reasonably detailed calculation of Net Current Assets, Net Debt and the Cash Balance based thereon. If the Cash Balance, as finally determined by this Section 2.4, is less than the Estimated Cash Balance, the Base Purchase Price shall be adjusted downward by the absolute value of such difference (the “Shortfall”). If the Cash Balance, as finally determined by this Section 2.4, is greater than the Estimated Cash Balance, the Base Purchase Price shall be adjusted upward by the absolute value of such difference (the “Surplus”). (c) The Adjustment Escrow Amount shall be payable in accordance with the Closing Statement and Section 2.4(d) no later than forty-five (45) days after receipt by Parent of the Closing Statement (and Sellers and Buyer shall instruct the Escrow Agent accordingly) unless and to the extent Parent delivers a notice of disagreement in accordance with the following sentence, setting forth the basis for such disagreement and Parent’s calculation of Net Current Assets, Net Debt and the Cash Balance based thereon. During the forty five (45) day period referred to above, Buyer shall and shall cause the Acquired Subsidiaries to provide Parent and its representatives reasonable access to the relevant books, records, facilities and employees of the Acquired Business and the Acquired Subsidiaries to evaluate the calculation of Net Current Assets, Net Debt and the Cash Balance based thereon. In the event of any such disagreement, Parent shall so notify Buyer in writing prior to the end of the forty five (45) day period referred to above, and the Parties shall use their commercially reasonable efforts to resolve such disagreement. If the Parties are unable to resolve their disagreement through such consultation, the Parties shall refer the disagreement to the Accounting Firm to review promptly the Closing Statement and the disputed items or amounts. Promptly, but no later than twenty (20) days after acceptance of its appointment, the Accounting Firm shall determine (it being understood that in making such determination, the Accounting Firm shall be functioning as an expert and not as an arbitrator), based solely on written submissions by Buyer and Parent, and not by independent review, only those issues in dispute and shall render a written report as to the resolution of those issues in dispute and the resulting computation of Net Current Assets, Net Debt and the Cash Balance based thereon, as the case may be, which shall be conclusive and binding on the Parties. In resolving any disputed item, the Accounting Firm (x) shall be bound by the provisions of this Section 2.4 and (y) may not assign a value to any item greater than the greatest value for such items claimed by either Party or less than the smallest value for such items claimed by either Party or include in its computation any item not included in the computation provided by either Party. The Party (either Buyer, on the one hand, or Parent on behalf of Sellers, on the other hand) whose determination of the amount of the adjusted Cash Balance was farthest from the final determination of the adjusted Cash Balance by the Accounting Firm shall bear the fees and expenses of the Accounting Firm plus any out-of-pocket expenses (including attorneys’ and accountants’ fees) of the Party whose determination of the adjusted Cash Balance was closest to the final determination by the Accounting Firm. If the determination of the adjusted Cash Balance by the Accounting Firm is equidistant between the determinations of the parties, the fees of the Accounting Firm shall be borne equally by Buyer, on the one hand, and Sellers, on the other hand, and each of Buyer, on the one hand, and Sellers, on the other hand, shall bear the cost of their own out-of-pocket expenses. (d) Any Shortfall shall be paid to Buyer and satisfied solely from the Adjustment Escrow Amount and the remainder, if any, of the Adjustment Escrow Amount shall be promptly paid over to Sellers by wire transfer of immediately available funds into the account(s) designated in writing by Parent (and Sellers and Buyer shall instruct the Escrow Agent accordingly promptly upon final resolution of such Shortfall in accordance with Section 2.4(c)). Sellers shall have no liability for a Shortfall in excess of the Adjustment Escrow Amount. Any Surplus shall be satisfied by payment of the amount of the Surplus to Sellers from Buyer via wire transfer of immediately available funds to the account(s) designated in writing by Parent (and, in such case, the full Adjustment Escrow Amount shall be promptly paid over to Sellers by wire transfer of immediately available funds into the account(s) designated in writing by Parent, and Sellers and Buyer shall instruct the Escrow Agent accordingly promptly upon final resolution of such Surplus in accordance with Section 2.4(c)). Buyer shall have no liability for a Surplus in excess of the Adjustment Escrow Amount. (e) The Base Purchase Price less the Shortfall, if any, or plus the Surplus, if any, shall be the “Purchase Price”.

Adjustment to Base Purchase Price. (a) Not later than three (3) Business Days prior to If, as of the two days before the date of Closing, Parent shall deliver to Buyer a statement setting forth Parent’s good faith and reasonably detailed estimate the book value of Net Current the Assets (the “Estimated Net Current Assets”), Net Debt (“Estimated Net Debt”), and the Cash Balance based thereon (the “Estimated Cash Balance”). (b) Not later than forty-five (45) days following the Closing, Buyer shall deliver to Parent a statement (the “Closing Statement”) setting forth Buyer’s good faith and reasonably detailed calculation of Net Current Assets, Net Debt and the Cash Balance based thereon. If the Cash Balance, as finally determined by this Section 2.4, is less than the Estimated Cash Balancebook value of the Assets as of March 31, 2002, then the Base Purchase Price shall be adjusted downward by the absolute value of such difference (the “Shortfall”). If the Cash Balance, as finally determined by this Section 2.4, is greater than the Estimated Cash Balance, subtracting from the Base Purchase Price the difference between the book value of the Assets at such date and the book value of the Assets as of March 31, 2002. (b) Purchaser and Seller shall act in good faith to agree on the book value of the Assets two days before the Scheduled Closing Time. If Purchaser and Seller do not reach such agreement by the Scheduled Closing Time: (i) The failure to reach such agreement shall not delay the Closing. (ii) The parties hereto shall continue in good faith for ten days following the Closing to reach agreement as to the book value of the Assets as of two days before the Closing and, if such agreement is not reached within 10 days following Closing, the parties shall promptly thereafter select an Accounting Referee and cause such Accounting Referee to review the parties' disputed calculations as to the book value of the Assets as of two days before the Closing. The Accounting Referee shall deliver as promptly as practicable a report setting forth the Accounting Referee's calculation of the book value of the Assets as of two days before the Closing, which report shall be adjusted upward final and binding upon the parties hereto and shall be used for the purpose of adjusting the Base Purchase Price pursuant to Section 1.4(a). The cost of such Accounting Referee's report shall be borne equally by the absolute value of such difference (Seller and the “Surplus”)Purchaser. (c) The Adjustment Escrow Amount Any adjustment made to the Base Purchase Price under this Section 1.4 shall, at the election of the Seller, be reflected in either the Purchase Shares or the Purchase Cash portion of the Base Purchase Price, provided, however, that in no event shall such an adjustment reduce the Purchase Cash to an amount less than the Assumed Pre-Closing Liabilities owed to the Purchaser by the Seller. If any such adjustment is reflected in the Purchase Shares portion of the Base Purchase Price, it shall be payable in accordance made with reference to the Closing Statement and Section 2.4(d) no later than forty-five (45) days after receipt by Parent average closing stock price of the Closing Statement (Purchaser's Common Stock on the Nasdaq National Market for the twenty consecutive trading days ending two trading days prior to Closing. The amount of any adjustment to the Base Purchase Price pursuant to this Section 1.4 shall be made to the Purchase Shares issuable, or the Purchase Cash payable, to the Seller at Closing, and Sellers and Buyer shall instruct not be taken out of the Escrow Agent accordingly) Fund of the Escrow Account unless the amount of such adjustment exceeds the number of Purchaser Shares issuable to the Seller at Closing, and then only to the extent Parent delivers a notice of disagreement in accordance with the following sentence, setting forth the basis for such disagreement and Parent’s calculation of Net Current Assets, Net Debt and the Cash Balance based thereon. During the forty five (45) day period referred to above, Buyer shall and shall cause the Acquired Subsidiaries to provide Parent and its representatives reasonable access to the relevant books, records, facilities and employees of the Acquired Business and the Acquired Subsidiaries to evaluate the calculation of Net Current Assets, Net Debt and the Cash Balance based thereon. In the event of any such disagreement, Parent shall so notify Buyer in writing prior to the end of the forty five (45) day period referred to above, and the Parties shall use their commercially reasonable efforts to resolve such disagreement. If the Parties are unable to resolve their disagreement through such consultation, the Parties shall refer the disagreement to the Accounting Firm to review promptly the Closing Statement and the disputed items or amounts. Promptly, but no later than twenty (20) days after acceptance of its appointment, the Accounting Firm shall determine (it being understood that in making such determination, the Accounting Firm shall be functioning as an expert and not as an arbitrator), based solely on written submissions by Buyer and Parent, and not by independent review, only those issues in dispute and shall render a written report as to the resolution of those issues in dispute and the resulting computation of Net Current Assets, Net Debt and the Cash Balance based thereon, as the case may be, which shall be conclusive and binding on the Parties. In resolving any disputed item, the Accounting Firm (x) shall be bound by the provisions of this Section 2.4 and (y) may not assign a value to any item greater than the greatest value for such items claimed by either Party or less than the smallest value for such items claimed by either Party or include in its computation any item not included in the computation provided by either Party. The Party (either Buyer, on the one hand, or Parent on behalf of Sellers, on the other hand) whose determination of the amount of the adjusted Cash Balance was farthest from the final determination of the adjusted Cash Balance by the Accounting Firm shall bear the fees and expenses of the Accounting Firm plus any out-of-pocket expenses (including attorneys’ and accountants’ fees) of the Party whose determination of the adjusted Cash Balance was closest to the final determination by the Accounting Firm. If the determination of the adjusted Cash Balance by the Accounting Firm is equidistant between the determinations of the parties, the fees of the Accounting Firm shall be borne equally by Buyer, on the one hand, and Sellers, on the other hand, and each of Buyer, on the one hand, and Sellers, on the other hand, shall bear the cost of their own out-of-pocket expenses. (d) Any Shortfall shall be paid to Buyer and satisfied solely from the Adjustment Escrow Amount and the remainder, if any, of the Adjustment Escrow Amount shall be promptly paid over to Sellers by wire transfer of immediately available funds into the account(s) designated in writing by Parent (and Sellers and Buyer shall instruct the Escrow Agent accordingly promptly upon final resolution of such Shortfall in accordance with Section 2.4(c)). Sellers shall have no liability for a Shortfall in excess of the Adjustment Escrow Amount. Any Surplus shall be satisfied by payment of the amount of the Surplus to Sellers from Buyer via wire transfer of immediately available funds to the account(s) designated in writing by Parent (and, in such case, the full Adjustment Escrow Amount shall be promptly paid over to Sellers by wire transfer of immediately available funds into the account(s) designated in writing by Parent, and Sellers and Buyer shall instruct the Escrow Agent accordingly promptly upon final resolution of such Surplus in accordance with Section 2.4(c)). Buyer shall have no liability for a Surplus in excess of the Adjustment Escrow Amountexcess. (e) The Base Purchase Price less the Shortfall, if any, or plus the Surplus, if any, shall be the “Purchase Price”.

Adjustment to Base Purchase Price. (a) Not later than three (3) Business Days prior to The Base Purchase Price is based on the Closingunderstanding that on the Closing Date, Parent shall deliver to Buyer a statement setting forth Parent’s good faith HGC Holdings and reasonably detailed estimate the Company have Consolidated Working Capital of Net Current Assets $0.00 (the “Estimated Net Current AssetsTarget Working Capital Amount”), Net Debt (“Estimated Net Debt”), and the Cash Balance based thereon (the “Estimated Cash Balance”). (b) Not later than forty-five (45) days following the Closing, Buyer shall deliver to Parent a statement (the “Closing Statement”) setting forth Buyer’s good faith and reasonably detailed calculation of Net Current Assets, Net Debt and the Cash Balance based thereon. If the Cash Balance, as finally determined by this Section 2.4, Consolidated Working Capital is less than not equal to the Estimated Cash BalanceTarget Working Capital Amount on the Closing Date, the Base Purchase Price shall be adjusted downward upwards by the absolute value of such difference (amount by which the “Shortfall”)Consolidated Working Capital exceeds the Target Working Capital Amount or downwards by the amount by which the Target Working Capital Amount exceeds the Consolidated Working Capital. The Base Purchase Price is also based on the understanding that the indebtedness described on Schedule 6.12 shall be paid in full prior to the Closing. If the Cash Balancepursuant to Section 6.12, as finally determined by this Section 2.4, is greater than the Estimated Cash BalanceBuyer elects to leave such indebtedness in place, the Base Purchase Price shall be adjusted upward downwards by an amount equal to the absolute value sum of the outstanding principal amount of such difference indebtedness, accrued and unpaid interest thereon through the Closing Date, and the amount of any premium or penalty that would have been payable by HGC Holdings or the Company had such indebtedness been paid in full on the Closing Date. (b) At least ten (10), but no more than thirty (30) days prior to the Closing Date, Seller shall prepare in good faith and deliver to Buyer an estimated closing statement (the “SurplusEstimated Closing Statement”) that shall set forth Seller’s best estimate of the adjustments to the Base Purchase Price required by Section 3.3(a) (the “Estimated Adjustment”). . Within five (c5) The Adjustment Escrow Amount shall be payable in accordance with Business Days following the delivery of an Estimated Closing Statement and Section 2.4(d) no later than forty-five (45) days after receipt by Parent of the to Buyer, Buyer may object in good faith to such Estimated Closing Statement (and Sellers and Buyer shall instruct the Escrow Agent accordingly) unless and to the extent Parent delivers a notice of disagreement in accordance with the following sentence, setting forth the basis for such disagreement and Parent’s calculation of Net Current Assets, Net Debt and the Cash Balance based thereon. During the forty five (45) day period referred to above, Buyer shall and shall cause the Acquired Subsidiaries to provide Parent and its representatives reasonable access to the relevant books, records, facilities and employees of the Acquired Business and the Acquired Subsidiaries to evaluate the calculation of Net Current Assets, Net Debt and the Cash Balance based thereonwriting. In the event of any such disagreementobjection, Parent shall so notify Buyer in writing prior to the end of the forty five (45) day period referred to above, and the Parties shall use their commercially reasonable efforts attempt to resolve such disagreementtheir differences by negotiation. If the Parties are unable to resolve their disagreement through such consultation, the Parties shall refer the disagreement do so before three (3) days prior to the Accounting Firm to review promptly Closing Date, then (i) the Closing Statement and the disputed items or amounts. Promptly, but no later than twenty (20) days after acceptance of its appointment, the Accounting Firm shall determine (it being understood that in making such determination, the Accounting Firm shall be functioning as an expert and not as an arbitrator), based solely on written submissions by Buyer and Parent, and not by independent review, only those issues in dispute and shall render a written report as to the resolution of those issues in dispute and the resulting computation of Net Current Assets, Net Debt and the Cash Balance based thereon, as the case may be, which shall be conclusive and binding on the Parties. In resolving any disputed item, the Accounting Firm (x) shall be bound by the provisions of this Section 2.4 and (y) may not assign a value to any item greater than the greatest value for such items claimed by either Party or less than the smallest value for such items claimed by either Party or include in its computation any item not included in the computation provided by either Party. The Party (either Buyer, on the one hand, or Parent on behalf of Sellers, on the other hand) whose determination of the full amount of the adjusted Cash Balance was farthest from Estimated Adjustment shall be used to adjust the Base Purchase Price at the Closing if the amount in dispute is less than $500,000 or (ii) the undisputed portion of the Estimated Adjustment shall be used to adjust the Base Purchase Price at the Closing if the amount in dispute is $500,000 or more. The disputed portions shall be paid as a Post-Closing Adjustment if and to the extent required by Section 3.3(d). (c) Within sixty (60) days following the Closing Date, Buyer shall cause HGC Holdings to prepare and deliver to Seller a final closing statement setting forth the final determination adjustments to the Base Purchase Price required by Section 3.3(a) (the “Proposed Post-Closing Adjustment”). All calculations of the adjusted Cash Balance by Proposed Post-Closing Adjustments shall be prepared using the Accounting Firm shall bear same accounting principles, policies and methods as HGC Holdings and the fees and expenses Company have historically used in connection with the calculation of the Accounting Firm plus any outitems reflected on such Proposed Post-of-pocket expenses (including attorneys’ and accountants’ fees) of the Party whose determination of the adjusted Cash Balance was closest to the final determination by the Accounting Firm. If the determination of the adjusted Cash Balance by the Accounting Firm is equidistant between the determinations of the parties, the fees of the Accounting Firm shall be borne equally by Buyer, on the one hand, and Sellers, on the other hand, and each of Buyer, on the one hand, and Sellers, on the other hand, shall bear the cost of their own out-of-pocket expensesClosing Adjustments. (d) Any Shortfall Within thirty (30) days following the delivery of a Proposed Post-Closing Adjustment to Seller, Seller may object to such Proposed Post-Closing Adjustment in writing. Buyer agrees to cooperate with Seller to provide Seller and Seller’s Representatives information used to prepare the Proposed Post-Closing Adjustments and information relating thereto. If Seller objects to a Proposed Post-Closing Adjustment, the Parties shall attempt to resolve such dispute by negotiation. If such Parties are unable to resolve such dispute within thirty (30) days of any such objection by Seller, the Parties shall appoint an Independent Accounting Firm. The fees and expenses of such Independent Accounting Firm shall be paid to allocated between Buyer and satisfied solely from Seller so that Seller’s share of such fees and expenses shall be in the same proportion that the aggregate amount of such remaining disputed amounts so submitted to such auditor that is successfully disputed by Seller (as finally determined by such auditor) bears to the total amount of such remaining disputed amounts so submitted to such auditor. The Independent Accounting Firm shall review such Proposed Post-Closing Adjustment Escrow Amount and Seller’s written objection thereto and determine the remainderappropriate adjustment to the Base Purchase Price, if any, within thirty (30) days of such appointment. The Parties agree to cooperate with the Independent Accounting Firm and provide it with such information as it reasonably requests to enable it to make such determination. The finding of such Independent Accounting Firm shall be binding on the Parties hereto. Upon determination by agreement of the Parties or by binding determination of the Independent Accounting Firm of the appropriate adjustment to the Base Purchase Price (in either case, the “Post-Closing Adjustment”), if such Post-Closing Adjustment Escrow Amount results in a change to the Base Purchase Price, as previously adjusted pursuant to Section 3.3(b), the Party owing the difference shall be promptly paid over deliver such difference to Sellers by wire transfer the Party owed such amount no later than two (2) Business Days after the determination of such Post Closing Adjustment, in immediately available funds into or in any other manner as reasonably requested by the account(sParty owed such amount, plus interest at 6.0% per annum on such determined amount from the Closing Date to (but not including) designated in writing by Parent (and Sellers and Buyer shall instruct the Escrow Agent accordingly promptly upon final resolution date of such Shortfall in accordance with Section 2.4(c)). Sellers shall have no liability for a Shortfall in excess of the Adjustment Escrow Amount. Any Surplus shall be satisfied by payment of the amount of the Surplus to Sellers from Buyer via wire transfer of immediately available funds to the account(s) designated in writing by Parent (and, in such case, the full Adjustment Escrow Amount shall be promptly paid over to Sellers by wire transfer of immediately available funds into the account(s) designated in writing by Parent, and Sellers and Buyer shall instruct the Escrow Agent accordingly promptly upon final resolution of such Surplus in accordance with Section 2.4(c)). Buyer shall have no liability for a Surplus in excess of the Adjustment Escrow Amountpayment. (e) The Base Purchase Price less the Shortfall, if any, or plus the Surplus, if any, shall be the “Purchase Price”.