Common use of Adjustments to Merger Consideration Clause in Contracts

Adjustments to Merger Consideration. The Exchange Ratio and the Cash Consideration shall be subject to reduction if (i) the "JV Termination Expenses" shall exceed the "Permitted Amount" (as such terms are defined in Section 6.17) (such excess amount being referred to herein as the "Excess Expenses"), and/or (ii) the Company shall borrow funds from Parent pursuant to the provisions of the "Loan and Security Agreement" described in Section 6.18. Each of the Exchange Ratio and the Cash Consideration shall be adjusted as described, and in the amounts determined, as follows: (i) The (A) Excess Expenses, if any, shall be added to (B) the aggregate principal amount of funds borrowed by the Company from Parent, plus any interest accrued thereon through the Adjustment Measurement Date (as such term is defined below) and any "Parent Loan Expenses" (but only to the extent unpaid at the Adjustment Measurement Date) as such term is described in the Loan and Security Agreement (but only to the extent that such aggregate amount shall exceed the lesser of (x) the JV Termination Expenses actually paid prior to the Adjustment Measurement Date, as such term is defined below, and (y) the Permitted Amount) through the third day immediately preceding the mailing of the Proxy Statement (as such term is defined in Section 3.04(b), with such date being referred to as the "Adjustment Measurement Date") to the Company's stockholders. The sum of the amounts in clauses (A) and (B) is defined as the "Aggregate Consideration Adjustment Amount". (ii) The Cash Consideration shall be reduced by the "Per Share Cash Adjustment Amount." The Per Share Cash Consideration Adjustment Amount shall be equal to the quotient determined by dividing (A) the Aggregate Consideration Adjustment Amount by (B) the Company Common Stock Capitalization Number, rounding up to the nearest whole cent. For purposes of this calculation, the Company Common Stock Capitalization Number shall mean the number of shares of Company Common Stock outstanding on the Adjustment Measurement Date as certified to Parent by the Company's transfer agent. (iii) The Exchange Ratio shall be recalculated and shall be equal to the amount determined as the product of (A) .1490 multiplied by (B) the quotient determined by dividing (x) the Cash Consideration as reduced pursuant to clause (ii) above by (y) $1.95.

Adjustments to Merger Consideration. The Exchange Ratio (a) At least ten Business Days before the Closing Date, each Company shall prepare and deliver to Verano a statement, certified by the Chief Financial Officer and Chief Executive Officer of such Company, setting forth in reasonable detail (1) the Working Capital Adjustment for such Company, (2) the amount of Closing Net Indebtedness for such Company, including the Persons to whom such amounts are payable, (3) the amount of Transaction Expenses for such Company, including the Persons to whom such amounts are payable; and (4) such Company’s calculation of the Cash Consideration and Share Consideration payable with respect to such Company’s Members (and in respect of the Broker Fees) resulting therefrom, which statement shall be subject contain an estimated balance sheet of such Company as of the Closing Date without giving effect to reduction if the transactions contemplated herein (each such statement, a “Merger Consideration Statement”). The Merger Consideration Statement shall contain the certification of the Chief Financial Officer and Chief Executive Officer of each such Company certifying that (i) the "JV Termination Expenses" shall exceed outside accountants of the "Permitted Amount" (as such terms are defined Company participated in Section 6.17) (such excess amount being referred to herein as the "Excess Expenses")preparation of, and/or and reviewed, the Merger Consideration Statement, and (ii) the Merger Consideration Statement was prepared in accordance with IFRS, applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the IFRS Financial Statements of such Company for the most recent fiscal year end as if such Merger Consideration Statement was being prepared as of a fiscal year end. (b) After receipt, Verano shall borrow funds from Parent pursuant review the Merger Consideration Statements and Verano and its accountants shall have full access to the provisions books and records of the "Loan Companies and Security Agreement" described the personnel of, and work papers prepared by, each Company or its accountants to the extent they relate to the Merger Consideration Statements and any historical information relating to such Merger Consideration Statements as Verano may reasonably request; provided that such access shall be in Section 6.18a manner that does not interfere with the normal business operations of such Company. Each Prior to four Business Days before the Closing Date, Verano may object to any Merger Consideration Statement by delivering to Member Representative a written statement setting forth its objections in reasonable detail, indicating each disputed item or amount and the basis for its disagreement therewith. If Verano timely delivers such an objection, Verano and Member Representative shall negotiate in good faith to resolve such objections prior to the Closing Date. If Verano and Member Representative fail to reach an agreement with respect to all of the Exchange Ratio and the Cash Consideration shall be adjusted as described, and matters set forth in the Merger Consideration Statements before the scheduled Closing Date, then the Closing Date may be delayed by either Verano or Member Representative until such time as the amounts determinedremaining in dispute are resolved. If not objected to and accepted by Verano or when any disputed items therein are resolved, such Merger Consideration Statements, with such changes as follows: (i) The (A) Excess Expenses, if anymay have been previously agreed in writing by Verano and Member Representative, shall be added to (B) the aggregate principal amount of funds borrowed by the Company from Parent, plus any interest accrued thereon through the Adjustment Measurement Date (as such term is defined below) final and any "Parent Loan Expenses" (but only to the extent unpaid at the Adjustment Measurement Date) as such term is described in the Loan and Security Agreement (but only to the extent that such aggregate amount shall exceed the lesser of (x) the JV Termination Expenses actually paid prior to the Adjustment Measurement Date, as such term is defined below, and (y) the Permitted Amount) through the third day immediately preceding the mailing of the Proxy Statement (as such term is defined in Section 3.04(b), with such date being referred to as the "Adjustment Measurement Date") to the Company's stockholders. The sum of the amounts in clauses (A) and (B) is defined as the "Aggregate Consideration Adjustment Amount". (ii) The Cash Consideration shall be reduced by the "Per Share Cash Adjustment Amount." The Per Share Cash Consideration Adjustment Amount shall be equal to the quotient determined by dividing (A) the Aggregate Consideration Adjustment Amount by (B) the Company Common Stock Capitalization Number, rounding up to the nearest whole cent. For purposes of this calculation, the Company Common Stock Capitalization Number shall mean the number of shares of Company Common Stock outstanding binding on the Adjustment Measurement Date as certified to Parent by the Company's transfer agent. (iii) The Exchange Ratio shall be recalculated parties hereto and shall be equal to used in determining the amount determined as the product of (A) .1490 multiplied by (B) the quotient determined by dividing (x) the Cash Consideration as reduced pursuant to clause (ii) above by (y) $1.95Share Consideration.

Adjustments to Merger Consideration. The Exchange Ratio and (A) In the Cash Consideration event the ----------------------------------- product obtained by multiplying (x) 3,500,000 by (y) the Per-Share Placement Amount (the "Adjusted Placement Amount") shall be subject to reduction if less than $20,000,000 (i) the "JV Termination Expenses" shall exceed the "Permitted Amount" (as such terms are defined in Section 6.17) (such excess amount being referred to herein as the "Excess ExpensesInitial Placement Floor"), and/or the aggregate amount of the Merger Consideration, as adjusted, to be paid under this Agreement shall be decreased by 50% of the difference between the Adjusted Placement Amount and $20,000,000 (iithe "Initial Placement Floor Adjustment"). In the event the Adjusted Placement Amount shall exceed $30,000,000 (the "Initial Placement Ceiling") then the Company aggregate amount of the Merger Consideration, as adjusted, to be paid under this Agreement shall borrow funds from Parent pursuant be increased by 50% of the difference between the Adjusted Placement Amount and $30,000,000 (the "Initial Placement Ceiling Adjustment"). Notwithstanding the foregoing, in the event any Additional Shares are sold in the Initial Placement, then the Initial Placement Floor and the Initial Placement Ceiling shall be increased, respectively, by an amount equal to the provisions of the "Loan and Security Agreement" described percentage increase in Section 6.18. Each of the Exchange Ratio and the Cash Consideration shall be adjusted as described, and in the amounts determined, as follows:Additional Shares over Initial Shares. (i) The (A) Excess Expenses, if any, shall be added to (B) the The aggregate principal amount of funds borrowed by the Company from Parent, plus any interest accrued thereon through the Adjustment Measurement Date (as such term is defined belowMerger Consideration to be delivered pursuant to subsection 2.1(b) and any "Parent Loan Expenses" (but only to the extent unpaid at the Adjustment Measurement Date) as such term is described in the Loan and Security Agreement (but only above shall also be reduced on a dollar-for-dollar basis to the extent that such the amount of the Company's cash and cash equivalents plus working capital (exclusive of cash and cash equivalents and any Contingent ---- Payments) and the amount by which the Merger Consideration is reduced pursuant to subsection 2.1(b)(iv)(C) (unless paid by Parent), less (1) long-term ---- liabilities as set forth on the unaudited balance sheet for the month immediately preceding the Closing Date, (2) expenses projected to be incurred in the ordinary course of business between the Closing Date and December 31, 1997, and (3) all severance obligations not previously accrued as of Closing Date, plus (1) all revenues projected to be received by the Company between the ---- Closing Date and December 31, 1997, (2) the $750,000 Eisai milestone payment, expected in early 1998, less any costs and expenses associated with the receipt of said payment after December 31, 1997, and (3) the aggregate amount of the Contingent Payments (net of the liability for income taxes attributable to the Contingent Payments, including the receipt of the Convertible Note, as determined under Section 4.15(b) (the "Tax Liability") and legal and other expenses related thereto) received by the Company after the Closing Date is less than $33 million (the "Contingent Payment Adjustment"), provided, however, that there shall exceed be a credit against any such Contingent Payment Adjustment in an amount equal to any Initial Placement Floor Adjustment made pursuant to subsection 2.1(b)(iii)(A) above resulting from the sale of Initial Shares below the Initial Placement Floor. On or before the Closing Date, Parent and the Company will use their best good faith efforts to agree upon the projected income and expenses of the Company for the period between the Closing Date and December 31, 1997. (C) The aggregate amount of the Merger Consideration to be determined pursuant to subsection 2.1(b) above shall also be reduced, on a dollar-for- dollar basis, in an amount equal to the lesser of (x) one-half ( 1/2) of the JV Termination Expenses actually amount of any fee paid prior by the Company to any investment banking firm or financial advisor engaged by the Adjustment Measurement Date, as such term is defined below, Company in connection with the Merger and the transactions contemplated by this Agreement or (y) $100,000. For the Permitted Amount) through purposes of this Agreement, the third day immediately preceding the mailing "Fair Market Value" of the Proxy Statement (as such term is defined in Section 3.04(b), with such date being referred to as the "Adjustment Measurement Date") to the Company's stockholders. The sum of the amounts in clauses (A) and (B) is defined as the "Aggregate Consideration Adjustment Amount". (ii) The Cash Consideration shall be reduced by the "Per Share Cash Adjustment Amount." The Per Share Cash Consideration Adjustment Amount Parent Common Shares shall be equal to the quotient determined by dividing average closing sales prices of the Parent Common Shares as reported on The Nasdaq National Market for the ten (A10) trading days immediately preceding the Aggregate Consideration Adjustment Amount by date which is five (B5) the Company Common Stock Capitalization Number, rounding up trading days prior to the nearest whole cent. For purposes of this calculation, the Company Common Stock Capitalization Number shall mean the number of shares of Company Common Stock outstanding on the Adjustment Measurement Date as certified date such Fair Market Value is to Parent by the Company's transfer agentbe determined. (iii) The Exchange Ratio shall be recalculated and shall be equal to the amount determined as the product of (A) .1490 multiplied by (B) the quotient determined by dividing (x) the Cash Consideration as reduced pursuant to clause (ii) above by (y) $1.95.

Adjustments to Merger Consideration. The Exchange Ratio and the Cash Consideration shall be subject to reduction if (i) the "JV Termination Expenses" shall exceed the "Permitted Amount" (as such terms are defined in Section 6.17) (such excess amount being referred to herein as the "Excess Expenses"), and/or (ii) the Company shall borrow funds from Parent pursuant to the provisions of the "Loan and Security Agreement" described in Section 6.18. Each of the Exchange Ratio and the Cash Consideration shall be adjusted as described, and in the amounts determined, as follows: (i) The (Aparties hereby acknowledge that the Merger Consideration set forth in Section 1.4(a) Excess Expenses, if any, shall above will be added to (B) the aggregate principal amount of funds borrowed by the Company from Parent, plus any interest accrued thereon through the Adjustment Measurement Date (as such term is defined below) and any "Parent Loan Expenses" (but only to the extent unpaid computed at the Adjustment Measurement Date) Closing Date by estimating the Seller Bank Book Value based upon Seller Bank's stockholders' equity as such term is described in of the Loan and Security Agreement (but only to close of business on the extent that such aggregate amount shall exceed the lesser of (x) the JV Termination Expenses actually paid prior to the Adjustment Measurement Date, as such term is defined below, and (y) the Permitted Amount) through the third business day immediately preceding the mailing of Closing Date (the Proxy Statement "Estimated Seller Bank Book Value"). If necessary, on the fifteenth business day after the Closing Date or such earlier date as may be agreed to in writing by the parties (as such term is defined in Section 3.04(b), with such date being referred to as the "Adjustment Measurement Payment Date"), an adjustment payment (the "Adjustment Payment") shall be made either by First Tennessee to Buyer Bank or by Buyer Bank to First Tennessee, as appropriate, so as to correct any discrepancy between the amount of the Estimated Seller Bank Book Value and the Seller Bank Book Value, plus interest on the Adjustment Payment amount accruing from the Closing Date to the CompanyAdjustment Payment Date at a rate equal to the Federal Funds rate as published by the Board of Governors of the Federal Reserve System for the applicable period. First Tennessee shall provide, at Buyer Bank's stockholdersrequest, a closing statement which reflects the calculation of the Adjustment Payment. The sum Adjustment Payment and interest due to either party pursuant to this Section shall be paid to such party on the Adjustment Payment Date by the other party by wire transfer of immediately available funds to an account designed by the amounts in clauses (A) and (B) is defined as the "Aggregate Consideration Adjustment Amount"payee party. (ii) The Cash Consideration parties hereby agree that, prior to the Effective Time, accountants selected by Buyer Bank shall be reduced have the right to review the unaudited financial statements and books and records of Seller Bank through December 31, 2000, at Buyer Bank's sole expense (the "Financial Review"). In the event the Financial Review results in a determination by such accountants that Seller Bank has not prepared its financial statements in material accordance with generally accepted accounting principles ("GAAP"), consistently applied, the accountants shall confer with accountants employed by First Tennessee regarding the proposed adjustments necessary to result in the financial statements of Seller Bank being prepared in accordance with GAAP. First Tennessee shall cause such adjustments as agreed to by the "Per Share Cash Adjustment Amount." The Per Share Cash Consideration Adjustment Amount shall accountants (which adjustments include the tax impact of such changes) to be equal made either by (a) causing such agreed changes to be posted as an adjustment to the quotient determined by dividing stockholders equity of Seller Bank or (Ab) adjusting the Aggregate Consideration Adjustment Amount by (B$13,000,000 cash payment made pursuant to Section 1.4(a) the Company Common Stock Capitalization Number, rounding up to the nearest whole cent. For purposes of this calculation, the Company Common Stock Capitalization Number shall mean the number of shares of Company Common Stock outstanding on the Adjustment Measurement Date as certified to Parent by the Company's transfer agentAgreement accordingly. (iii) The Exchange Ratio shall be recalculated and shall be equal to the amount determined as the product of (A) .1490 multiplied by (B) the quotient determined by dividing (x) the Cash Consideration as reduced pursuant to clause (ii) above by (y) $1.95.

Adjustments to Merger Consideration. The Exchange Ratio and the Cash Merger Consideration shall be subject to reduction if the following adjustments: (i) Closing Merger Consideration. The Company shall, not less than two (2) Business Days prior to the "JV Termination Expenses" Closing Date, deliver to the Buyer a consolidated balance sheet of the Company and its Subsidiaries as of the Closing Date that shall exceed be certified by the "Permitted Amount" Chief Financial Officer of the Company and prepared in accordance with GAAP on a consistent basis with past practice and the Most Recent Balance Sheet, without giving effect to (as such terms are defined in Section 6.17i) (such excess amount being referred adjustments for the transactions contemplated hereby, except for Company Expenses paid on or prior to herein as the "Excess Expenses"), and/or Closing Date or (ii) any fees related to termination of the CIT Agreement (and reflecting each of the line items included in the Baseline Net Working Capital as set forth in Schedule I attached hereto) (the "Estimated Closing Date Balance Sheet"). Such delivery shall be accompanied by a certificate of the Chief Financial Officer of the Company shall borrow funds from Parent pursuant to the provisions setting forth a good faith determination of the "Loan and Security Agreement" described in Section 6.18. Each estimated Net Working Capital Amount of the Exchange Ratio and Company as of the Cash Consideration Closing Date, which amount shall be adjusted calculated in a manner consistent with the calculation of the Baseline Net Working Capital as described, and set forth in Schedule I attached hereto (the amounts determined, "Estimated Net Working Capital Amount"). The Merger Consideration payable at Closing shall be determined as follows: (i) The (A) Excess ExpensesIf the Estimated Net Working Capital Amount is less than the Baseline Net Working Capital, if any, shall then the Merger Consideration will be added to decreased on a dollar-for-dollar basis by the amount of such deficiency; and (B) If the aggregate principal Estimated Net Working Capital Amount is greater than the Baseline Net Working Capital, then the Merger Consideration will be increased on a dollar-for-dollar basis by the amount of funds borrowed by the Company from Parent, plus any interest accrued thereon through the Adjustment Measurement Date (as such term is defined below) and any "Parent Loan Expenses" (but only to the extent unpaid at the Adjustment Measurement Date) as such term is described in the Loan and Security Agreement (but only to the extent that such aggregate amount shall exceed the lesser of (x) the JV Termination Expenses actually paid prior to the Adjustment Measurement Date, as such term is defined below, and (y) the Permitted Amount) through the third day immediately preceding the mailing of the Proxy Statement (as such term is defined in Section 3.04(b), with such date being referred to as the "Adjustment Measurement Date") to the Company's stockholders. The sum of the amounts in clauses (A) and (B) is defined as the "Aggregate Consideration Adjustment Amount"excess. (ii) The Cash Consideration shall be reduced by the "Per Share Cash Adjustment Amount." The Per Share Cash Consideration Adjustment Amount shall be equal to the quotient determined by dividing (A) the Aggregate Consideration Adjustment Amount by (B) the Company Common Stock Capitalization Number, rounding up to the nearest whole cent. For purposes of this calculation, the Company Common Stock Capitalization Number shall mean the number of shares of Company Common Stock outstanding on the Adjustment Measurement Date as certified to Parent by the Company's transfer agent. (iii) The Exchange Ratio shall be recalculated and shall be equal to the amount determined as the product of (A) .1490 multiplied by (B) the quotient determined by dividing (x) the Cash Consideration as reduced pursuant to clause (ii) above by (y) $1.95.

Adjustments to Merger Consideration. The Exchange Ratio All legal, investment banking, and other professional, advisory, and other transaction-related expenses of the Acquired Companies and the Cash Consideration Members incurred during the six-month period prior to Closing in connection with all efforts to prepare the Acquired Companies for possible sale and engage in the sale process, including but not limited to the expenses incurred in connection with or resulting from the Closing of the Contemplated Transactions, and which are paid by the Acquired Companies at or prior to Closing (the “Transaction Costs”) shall be subject to reduction if (i) the "JV Termination Expenses" shall exceed the "Permitted Amount" (as such terms are defined in Section 6.17) (such excess amount being referred to herein as the "Excess Expenses"), and/or (ii) liability and obligation of the Company shall borrow funds from Parent pursuant to (and not the provisions of the "Loan and Security Agreement" described in Section 6.18. Each of the Exchange Ratio and the Cash Consideration shall be adjusted as described, and in the amounts determined, as follows: (i) The (A) Excess Expenses, if any, shall be added to (B) the aggregate principal amount of funds borrowed by the Company from Parent, plus any interest accrued thereon through the Adjustment Measurement Date (as such term is defined below) and any "Parent Loan Expenses" (but only to the extent unpaid at the Adjustment Measurement Date) as such term is described in the Loan and Security Agreement (but only Members); provided that to the extent that any such aggregate amount shall Transaction Costs exceed the lesser of (xi) five hundred thousand dollars ($500,000) or (ii) fifty percent (50%) of the JV Termination Expenses actually Transaction Costs, then such excess (the “Excess Amount”) shall reduce the Merger Consideration in the manner described below in this subsection (vi). At least two (2) business days prior to Closing, the Company will deliver to the Buyer the total amount of Transaction Costs that will be paid by the Company at or prior to the Adjustment Measurement Date, as such term is defined below, Closing and (y) the Permitted Amount) through the third day immediately preceding the mailing a calculation of the Proxy Statement Excess Amount (as such term is defined in Section 3.04(bthe “Cost Calculation”), with such date being referred to as the "Adjustment Measurement Date") . The Merger Consideration will be adjusted downward to the Company's stockholdersextent that the Excess Amount is a positive number as described in the next sentence. The sum aggregate amount of the amounts in clauses (AMerger Consideration that is payable to each Member pursuant to Section 2.2(b)(v) and (B) is defined as the "Aggregate Consideration Adjustment Amount". (ii) The Cash Consideration hereof shall be reduced by the "Per Share Cash Adjustment Amount." The Per Share Cash Consideration Adjustment Amount shall be an amount equal to the quotient determined Excess Amount multiplied by dividing (A) the Aggregate Consideration Adjustment Amount percentage set forth opposite such Member’s name on Schedule 7.4 hereto. Any legal, investment banking, and other professional, advisory, and other transaction-related expenses of the Acquired Companies and the Members incurred by (B) the Company Common Stock Capitalization Number, rounding up to after the nearest whole cent. For purposes of this calculation, Closing or any Transaction Costs which are not reflected in the Company Common Stock Capitalization Number shall mean the number of shares of Company Common Stock outstanding on the Adjustment Measurement Date as certified to Parent by the Company's transfer agent. (iii) The Exchange Ratio Cost Calculation shall be recalculated the responsibility and shall obligation of the Members and not the Acquired Companies. The Members agree that any liabilities and obligations that result from the application of the previous sentence will be equal to paid by each Member on a pro rata basis in accordance with the amount determined as the product of (A) .1490 multiplied by (B) the quotient determined by dividing (x) the Cash Consideration as reduced pursuant to clause (ii) above by (y) $1.95percentages set forth on Schedule 7.4 hereto.

Adjustments to Merger Consideration. The Exchange Ratio and the Cash Consideration shall be subject to reduction if (i) the "JV Termination Expenses" shall exceed the "Permitted Amount" (as such terms are defined in Section 6.17) (such excess amount being referred to herein as the "Excess Expenses"), and/or (ii) the Company shall borrow funds from Parent pursuant to the provisions of the "Loan and Security Agreement" described in Section 6.18. Each of the Exchange Ratio and the Cash The Merger Consideration shall be adjusted as describeddownward or upward, and dollar for dollar, in the amounts determined, as follows: (i) The amount of the difference between (A) Excess Expenses, if any, shall be added to (B) cash plus the aggregate principal net amount of funds borrowed by accounts receivable in excess of accounts payable as reflected on the Company from Parent, plus any interest accrued thereon through the Adjustment Measurement Date (as such term is defined below) and any "Parent Loan Expenses" (but only to the extent unpaid at the Adjustment Measurement Date) as such term is described in the Loan and Security Agreement (but only to the extent that such aggregate amount shall exceed the lesser of (x) the JV Termination Expenses actually paid prior to the Adjustment Measurement Date, as such term is defined below, and (y) the Permitted Amount) through the third day immediately preceding the mailing of the Proxy Statement (as such term is defined in Section 3.04(b), with such date being referred to as the "Adjustment Measurement Date") to the Company's stockholders. The sum of the amounts in clauses (A) Base Balance Sheet and (B) is defined cash plus the net amount of accounts receivable in excess of accounts payable as reflected on the "Aggregate Consideration Adjustment Amount"balance sheet included in the Financial Statements for the year ended December 31, 1997, as prepared by Company and audited, or caused to be audited, for accuracy by Boots & Xxxxx at its sole expense in accordance with Section 2.9 hereof. (ii) The Cash operation of the business on or before December 31, 1997, shall be for the account of Stockholders and all revenues and expenses, costs and liabilities relating to the business (including, without limitation, rental or similar charges or payments payable in respect of any contracts, leases or agreements of Company, insurance premiums, sales and use Taxes payable in respect of services and equipment furnished in connection with the operation of the business, power and utility charges, real and personal property Taxes and rentals, sales and service charges, Taxes and similar prepaid and deferred items), shall be prorated, with Stockholders being entitled to all revenues and subject to all such expenses, costs and liabilities relating to the period at or prior to such time and Boots & Xxxxx entitled to all revenues and subject to all such expenses relating to the period after such time, determined in accordance with Tax basis accounting principles consistently applied. An increase or decrease in the Merger Consideration shall be reduced by the "Per Share Cash Adjustment Amount." The Per Share Cash Consideration Adjustment Amount shall be equal to the quotient determined by dividing (A) the Aggregate Consideration Adjustment Amount by (B) the Company Common Stock Capitalization Numbermade, rounding up to the nearest whole cent. For purposes of this calculationas appropriate, the Company Common Stock Capitalization Number shall mean the number of shares of Company Common Stock outstanding on the Adjustment Measurement Date as certified to Parent by the Company's transfer agentbased upon such proration. (iii) Stockholders shall deliver to Boots & Xxxxx, not less than one (1) business day prior to the Closing Date, a certificate (the "Closing Adjustment Certificate") which shall set forth Stockholders' good faith estimate and representation of the amount of the adjustments and prorations set forth above, as of December 31, 1997. The Exchange Ratio Closing Adjustment Certificate shall be recalculated in form and substance satisfactory to Boots & Xxxxx, and Stockholders shall deliver to Boots & Xxxxx with the Closing Adjustment Certificate a copy of such supporting evidence as shall be equal appropriate hereunder and as Boots & Xxxxx may reasonably request. (iv) Adjustments shall be made to the amount determined as cash and stock components of the product of (A) .1490 multiplied by (B) the quotient determined by dividing (x) the Cash Merger Consideration as reduced at Closing pursuant to clause the Closing Adjustment Certificate as necessary to maintain the proportions thereof at twenty percent (ii20%) above by cash and eighty percent (y80%) $1.95stock.

Adjustments to Merger Consideration. (a) The Exchange Ratio Merger Consideration (i) shall be increased or decreased, as the case may be, by the dollar amount of the Closing Working Capital (whether positive or negative), (ii) shall be decreased by the dollar amount of the Closing Indebtedness, and (iii) shall be decreased by the total liability of the Company as of the Closing Date related to the Employment Agreements referenced in Schedule 2.11 hereto including but not limited to any federal employment taxes imposed on the Company on account of the required payments, and the Cash insurance liabilities related to retirees Xxxxxxx Xxxxxxxxxx, Xxxxxxx and Xxxx Xxxxx, Xxxxxx Xxxxxxxx and Xxxxx and Xxxx Xxxxxxx as referenced in Schedule 2.11. The Closing Working Capital and the Closing Indebtedness shall be determined in accordance with GAAP and this Section 1.9. The Company, in conjunction with its accountant and subject to the review and approval of Parent, shall prepare and deliver to Parent, not less than ten (10) days prior to Closing, a statement setting forth its good faith estimates of the Closing Working Capital and the Closing Indebtedness as of the Closing Date (the "Estimated Closing Statement"). The Estimated Closing Statement (A) will be prepared based upon the good faith estimate of the assets and liabilities of the Company on a consolidated basis on the Closing Date, (B) will be in accordance with the books of account and records of the Company and its Subsidiaries, (C) will be prepared in accordance with GAAP and the Company's past practices consistent with its historical financial statements, but adjusted to reflect the specific definitions set forth in Section X DEFINITIONS hereof, and (D) will present fairly and accurately a good faith estimate of the Company's consolidated financial position as of the Closing Date. The Merger Consideration shall be subject to reduction if preliminarily adjusted based on the Estimated Closing Statement (i) as preliminarily adjusted, the "JV Termination Expenses" shall exceed Initial Merger Consideration"). Within 90 days after the Closing Date, Parent (at its expense) will prepare and deliver to the Shareholder Representative a statement setting forth its good faith determination of the Closing Working Capital and the Closing Indebtedness as of the Closing Date (the "Permitted Amount" Proposed Closing Statement"). The Proposed Closing Statement (as such terms are defined A) will be prepared based upon the assets and liabilities of the Company on a consolidated basis on the Closing Date, (B) will be in accordance with the books of account and records of the Company and its Subsidiaries, (C) will be prepared in accordance with GAAP and the Company's past practices consistent with its historical financial statements, but adjusted to reflect the specific definitions set forth in Section 6.17X DEFINITIONS hereof, and (D) will present fairly and accurately the Company's consolidated financial position as of the Closing Date. To illustrate the application of the concepts set forth in this Section 1.9(a), a pro forma calculation of the Adjusted Merger Consideration based upon a hypothetical closing as of December 31, 2002 is attached hereto as Exhibit C and made a part hereof. At the Shareholder Representative's expense, representatives of the Shareholders may examine the work papers of the Parent developed in connection with preparing the Proposed Closing Statement. (b) The Final Closing Statement will be finally determined as provided by this Section 1.9(b) (such excess amount being referred whereupon all references herein to herein as the "Excess Expenses"Final Closing Statement" will mean the same as so finally determined). Within thirty (30) days after receipt of the Proposed Closing Statement, and/or the Shareholder Representative will deliver, on behalf of the Company's shareholders, written objections to the Proposed Closing Statement (iiif any) to Parent. To the Company shall borrow funds from extent that the Shareholder Representative fails to deliver any such objections within such 30-day period, the Proposed Closing Statement (or such undisputed item(s) thereof) will be deemed the Final Closing Statement and binding upon all parties for all purposes. If the Shareholder Representative delivers any such objection, Shareholder Representative and Parent pursuant will use their respective best efforts to resolve such dispute(s) promptly by mutual agreement, in writing, and any such mutually agreed resolution will be final and binding upon all parties for all purposes. Failing mutually agreed resolution of any such dispute(s) within ten (10) days of delivery of any such objection, the Shareholder Representative, on behalf of the Company's shareholders, and Parent will then each have the right to require that such dispute(s) be submitted to an independent third-party national accounting firm chosen by the Shareholder Representative and Parent for computation or verification in accordance with the provisions of this Agreement. Such firm's resolution of such dispute(s), which will be delivered to Parent and the "Loan Shareholder Representative within thirty (30) days after submission to such firm, will be final and Security Agreement" described binding upon all parties for all purposes, and such firm's fees and expenses therefor will be borne equally by the parties hereto. (c) If the Adjusted Merger Consideration as calculated in Section 6.18. Each accordance with the Final Closing Statement is less than the Initial Merger Consideration, then the amount of such difference shall be refunded to Parent from the Escrow Amount with same day funds within ten (10) days of the Exchange Ratio and final determination of the Cash Final Closing Statement by the Escrow Agent. If the Adjusted Merger Consideration shall as calculated in accordance with the Final Closing Statement exceeds the Initial Merger Consideration, then the difference will be adjusted as describedpaid by Parent to the Shareholders, both in the same manner and in the amounts determined, same percentages as follows: the Initial Merger Consideration was paid with same day funds within ten (i10) The (A) Excess Expenses, if any, shall be added to (B) the aggregate principal amount of funds borrowed by the Company from Parent, plus any interest accrued thereon through the Adjustment Measurement Date (as such term is defined below) and any "Parent Loan Expenses" (but only to the extent unpaid at the Adjustment Measurement Date) as such term is described in the Loan and Security Agreement (but only to the extent that such aggregate amount shall exceed the lesser of (x) the JV Termination Expenses actually paid prior to the Adjustment Measurement Date, as such term is defined below, and (y) the Permitted Amount) through the third day immediately preceding the mailing days of the Proxy Statement (as such term is defined in Section 3.04(b), with such date being referred to as the "Adjustment Measurement Date") to the Company's stockholders. The sum final determination of the amounts Final Closing Statement. Under no circumstances will the Shareholders be required to reimburse Parent if the Adjusted Merger Consideration as calculated in clauses (A) and (B) accordance with the Final Closing Statement is defined as less than the "Aggregate Initial Merger Consideration Adjustment Amount". (ii) The Cash Consideration shall be reduced by an amount more than the "Per Share Cash Adjustment Escrow Amount." The Per Share Cash Consideration Adjustment Amount shall be equal to the quotient determined by dividing (A) the Aggregate Consideration Adjustment Amount by (B) the Company Common Stock Capitalization Number, rounding up to the nearest whole cent. For purposes of this calculation, the Company Common Stock Capitalization Number shall mean the number of shares of Company Common Stock outstanding on the Adjustment Measurement Date as certified to Parent by the Company's transfer agent. (iii) The Exchange Ratio shall be recalculated and shall be equal to the amount determined as the product of (A) .1490 multiplied by (B) the quotient determined by dividing (x) the Cash Consideration as reduced pursuant to clause (ii) above by (y) $1.95.

Adjustments to Merger Consideration. The Exchange Ratio (a) Promptly, but in any event within ninety (90) days after the Closing Date, Acquiror shall prepare and the Cash Consideration shall be subject deliver to reduction if (i) the "JV Termination Expenses" shall exceed the "Permitted Amount" (as such terms are defined in Section 6.17) (such excess amount being referred to herein as the "Excess Expenses"), and/or (ii) the Company shall borrow funds from Parent pursuant to Holders’ Agent a statement (the provisions “Acquiror Closing Statement”) setting forth Acquiror’s determination of the "Loan and Security Agreement" described in Section 6.18. Each following as of the Exchange Ratio and the Cash Consideration shall be adjusted as described, and in the amounts determined, as followsClosing Date: (i) The the total amount of Company Cash along with Acquiror’s good faith calculation of such amount in reasonable detail, and on the basis thereof, the difference between (A) Excess Expenses, if any, shall be added to the Estimated Company Cash minus (B) Company Cash as determined by Acquiror (such difference, the aggregate principal amount of funds borrowed by the Company from Parent, plus any interest accrued thereon through the Adjustment Measurement Date (as such term is defined below) and any "Parent Loan Expenses" (but only to the extent unpaid at the Adjustment Measurement Date) as such term is described in the Loan and Security Agreement (but only to the extent that such aggregate amount shall exceed the lesser of (x) the JV Termination Expenses actually paid prior to the Adjustment Measurement Date, as such term is defined below, and (y) the Permitted Amount) through the third day immediately preceding the mailing of the Proxy Statement (as such term is defined in Section 3.04(b), with such date being referred to as the "Adjustment Measurement Date") to the Company's stockholders. The sum of the amounts in clauses (A) and (B) is defined as the "Aggregate Consideration “Cash Adjustment Amount".”); (ii) The Cash Consideration shall be reduced by the "Per Share Cash Adjustment Amount." The Per Share Cash Consideration Adjustment Amount shall be equal to amount of unpaid Transaction Expenses, including an itemized list of each such unpaid Transaction Expense, and on the quotient determined by dividing basis thereof, the difference between (A) the Aggregate Consideration Adjustment Amount unpaid Transaction Expenses as determined by Acquiror minus (B) the Company Common Stock Capitalization Number, rounding up to the nearest whole cent. For purposes of this calculationEstimated Transaction Expenses (such difference, the Company Common Stock Capitalization Number shall mean the number of shares of Company Common Stock outstanding on the “Transaction Expense Adjustment Measurement Date as certified to Parent by the Company's transfer agent.Amount”); (iii) The Exchange Ratio shall be recalculated an itemized list of all Company Debt, and shall be equal to on the amount determined as basis thereof, the product of difference between (A) .1490 multiplied Company Debt as determined by Acquiror minus (B) Estimated Company Debt (such difference, the quotient determined by dividing “Company Debt Adjustment Amount”); and (xiv) the Cash Consideration total amount of Net Working Capital along with Acquiror’s good faith calculation of such amount in reasonable detail, and on the basis thereof (the “Final Net Working Capital”); and the “Net Working Capital Adjustment Amount” shall be defined as reduced pursuant to clause (ii) above by (y) $1.95.follows:

Adjustments to Merger Consideration. The Exchange Ratio (a) In the event of any change for any reason (including without limitation as a result of a forward or reverse stock split, stock dividend or distribution, reclassification, recapitalization, merger, subdivision, issuer tender or exchange offer or other similar transaction) in the number of Company Shares or Convertible Securities (other than Company Shares or Convertible Securities owned by Purchaser Companies, and other than any matter set forth on Part 4.2(b) of the Cash Company Disclosure Memorandum) issued and outstanding at any time after the Signing Date and prior to the Effective Time (excluding changes resulting from any repurchase, redemption or repayment by the Company or its Subsidiaries of any shares of Company Shares or Convertible Securities), the Merger Consideration shall be subject appropriately adjusted to reduction if (i) the "JV Termination Expenses" shall exceed the "Permitted Amount" (as such terms are defined in Section 6.17) (such excess amount being referred to herein as the "Excess Expenses"), and/or (ii) the Company shall borrow funds from Parent pursuant provide to the provisions holders of Company Shares and Convertible Securities the "Loan and Security Agreement" described same aggregate amount of consideration (i.e., Three Dollars ($3.00) multiplied by the number of As Converted Total Company Shares as in Section 6.18. Each of effect at the Exchange Ratio and the Cash Consideration shall be adjusted as described, and in the amounts determinedSigning Date, as follows: (i) The (A) Excess Expensesappropriately adjusted to reflect any changes resulting from any repurchase, if any, shall be added to (B) the aggregate principal amount of funds borrowed redemption or repayment by the Company from Parent, plus or its Subsidiaries of any interest accrued thereon through the Adjustment Measurement Date (as such term is defined below) and any "Parent Loan Expenses" (but only to the extent unpaid at the Adjustment Measurement Date) as such term is described in the Loan and Security Agreement (but only to the extent that such aggregate amount shall exceed the lesser of (x) the JV Termination Expenses actually paid prior to the Adjustment Measurement Date, as such term is defined below, and (y) the Permitted Amount) through the third day immediately preceding the mailing of the Proxy Statement (as such term is defined in Section 3.04(b), with such date being referred to as the "Adjustment Measurement Date") to the Company's stockholders. The sum of the amounts in clauses (A) and (B) is defined as the "Aggregate Consideration Adjustment Amount". (ii) The Cash Consideration shall be reduced by the "Per Share Cash Adjustment Amount." The Per Share Cash Consideration Adjustment Amount shall be equal to the quotient determined by dividing (A) the Aggregate Consideration Adjustment Amount by (B) the Company Common Stock Capitalization Number, rounding up to the nearest whole cent. For purposes of this calculation, the Company Common Stock Capitalization Number shall mean the number of shares of Company Common Stock outstanding on or Company Options after the Adjustment Measurement Date Signing Date) (the "TOTAL MERGER CONSIDERATION") (for the avoidance of doubt, Total Merger Consideration excludes any Merger Consideration payable in respect of Company Shares or Convertible Securities owned by Purchaser Companies) which they would have received had such change not occurred; and as certified so adjusted shall thereafter be the Merger Consideration, subject to Parent by the Company's transfer agentfurther adjustment in accordance with this Section 3.10. (iiib) The Exchange Ratio In the event that Section 4.2(c) below as in effect at the Signing Date misstates the As Converted Company Total Shares, then the Merger Consideration shall be recalculated appropriately reduced or increased as appropriate to provide to the holders of Company Common Stock and Convertible Securities the aggregate amount of Total Merger Consideration which they would have received if Section 4.2(c) as in effect at the Signing Date had been accurate; and as so adjusted shall thereafter be the Merger Consideration, subject to further adjustment in accordance with this Section 3.10; provided, however, that no adjustment pursuant to this paragraph shall be equal made for any matter set forth on Part 4.2(b) of the Company Disclosure Memorandum. (c) Notwithstanding anything herein to the amount determined as the product of (A) .1490 multiplied by (B) the quotient determined by dividing (x) the Cash Consideration as reduced contrary, no adjustment shall be made pursuant to clause this Section 3.10 unless all of the adjustments to be made pursuant to this Section 3.10 would in the aggregate cause an adjustment in the Merger Consideration of more than $.01 per share (iii.e., if the adjustment would result in Merger Consideration of $2.99 per share or $3.01 per share, the Merger Consideration shall remain at $3.00 per share). (d) above Notwithstanding any adjustment to the per share Merger Consideration made pursuant to this Section 3.10, the aggregate Merger Consideration to be received by any holder of Company Shares or Convertible Securities in the Merger will be rounded up or down to the nearest one cent (y) $1.95.01).