Common use of Adjustments to Merger Consideration Clause in Contracts

Adjustments to Merger Consideration. At least three (3) Business Days prior to the Closing Date, the Company shall deliver to the Parent Parties a statement certified by the Company’s chief executive officer (the “Company Closing Statement”) setting forth a good faith calculation of the Company’s estimate of (a) Working Capital as of the close of business on the day prior to the Closing Date, including in reasonable detail, the components thereof, which for the avoidance of doubt shall not factor in the Outstanding Company Convertible Note (the “Closing Working Capital”), (b) Adjusted Closing Net Debt as of the close of business on the day prior to the Closing Date, and (c) Company Transaction Expenses as of immediately prior to the Closing, and the resulting Closing Purchase Price and Closing Merger Consideration based on such calculations, in reasonable detail including for each component thereof, along with the amount owed to each creditor of the Company or any of its Subsidiaries, and bank statements and other evidence reasonably necessary to confirm such calculations. Promptly after delivery of the Company Closing Statement to the Parent Parties, if requested by a Parent Party, the Company will meet with the Parent Parties to review and discuss the Company Closing Statement and the Company will consider in good faith the Parent Parties’ comments to the Company Closing Statement and make any appropriate adjustments to the Company Closing Statement prior to the Closing, which adjusted Company Closing Statement, as mutually approved by the Company and Parent both acting reasonably and in good faith, shall thereafter be used to calculate the Closing Purchase Price and Closing Merger Consideration for all purposes of this Agreement and such calculations shall not be subject any adjustment following the Closing, absent manifest error, willful misconduct or fraud. The Company Closing Statement and the determinations contained therein shall be prepared in accordance with U.S. GAAP and otherwise in accordance with this Agreement.

Adjustments to Merger Consideration. At least (a) Not less than three (3) Business Days nor more than five (5) Business Days prior to the Closing Date, the Company shall deliver to the Parent Parties a statement certified certificate signed by the Company’s chief executive officer Chief Financial Officer of the Company (the “Company Estimated Closing StatementCertificate”) setting forth a good faith calculation forth, in reasonable detail, (i) the proposed balance sheet of the Company’s estimate of (a) Working Capital Company as of the close of business on the day prior to the anticipated Closing Date, including in reasonable detail, the components thereof, which for the avoidance of doubt shall not factor in the Outstanding Company Convertible Note Date (the “Estimated Closing Balance Sheet”), prepared in accordance with GAAP consistently applied, (ii) the Company’s estimate of the Company Net Working Capital (the “Estimated Net Working Capital Amount”) and the amount, if any, by which the Estimated Net Working Capital Amount is greater than or less than the Target Net Working Capital (such amount, if greater than the Target Net Working Capital, the “Estimated Working Capital Surplus” and, if less than the Target Net Working Capital, the “Estimated Working Capital Deficit”), (iii) the Company’s estimate of Indebtedness as of the anticipated Effective Time (the “Estimated Indebtedness”) and the amount, if any, by which the Indebtedness is greater than $0 (the “Net Indebtedness Adjustment”), and (iv) the Company’s estimate of its unpaid Transaction Expenses (the “Estimated Transaction Expenses”), and the calculation of the Merger Consideration based thereon. The Estimated Closing Certificate and the Estimated Closing Balance Sheet shall be in forms reasonably acceptable to Parent. (b) Adjusted Within ninety (90) calendar days after the Closing, Parent may object to the Estimated Closing Balance Sheet, Estimated Company Net Debt Working Capital, Estimated Indebtedness and Estimated Transaction Expenses calculations included in the Estimated Closing Certificate, by delivering to the Securityholders’ Representative a statement setting forth (the “Parent Closing Statement”) (i) a balance sheet as of the close of business on the day prior to the Closing Date, and (c) Company Transaction Expenses as of immediately prior to the Closing, and the resulting Closing Purchase Price and Closing Merger Consideration based on such calculations, in reasonable detail including for each component thereof, along with the amount owed to each creditor of the Company or any of its Subsidiaries, and bank statements and other evidence reasonably necessary to confirm such calculations. Promptly after delivery of the Company Closing Statement to the Parent Parties, if requested by a Parent Party, the Company will meet with the Parent Parties to review and discuss the Company Closing Statement and the Company will consider in good faith the Parent Parties’ comments to the Company Closing Statement and make any appropriate adjustments to the Company Closing Statement prior to the Closing, which adjusted Company Closing Statement, as mutually approved by the Company and Parent both acting reasonably and in good faith, shall thereafter be used to calculate the Closing Purchase Price and Closing Merger Consideration for all purposes of this Agreement and such calculations shall not be subject any adjustment following the Closing, absent manifest error, willful misconduct or fraud. The Company Closing Statement and the determinations contained therein shall be Date prepared in accordance with U.S. GAAP consistently applied (the “Parent Closing Balance Sheet”) and otherwise in accordance (ii) Parent’s calculation of the Company Net Working Capital (the “Proposed Net Working Capital Amount”), Indebtedness as of the Closing (the “Proposed Indebtedness”), and Transaction Expenses of the Company (the “Proposed Transaction Expenses”) and the amount by which the Proposed Net Working Capital Amount is greater or less than the Estimated Net Working Capital Amount (if applicable), the amount by which the Proposed Indebtedness is greater or less than the Estimated Indebtedness (if applicable), and the amount by which the Proposed Transaction Expenses is greater or less than the Estimated Transaction Expenses (if applicable). (c) If the Securityholders’ Representative disagrees with this Agreement.the Parent Closing Balance Sheet, Proposed Net Working Capital Amount, Proposed Indebtedness,

Adjustments to Merger Consideration. At least three (3a) Business Days prior to As soon as reasonably practicable following the Closing Date, and in any event within ninety (90) calendar days thereof, the Holder Representative shall prepare and deliver to Acquiror (i) an audited consolidated balance sheet of the Company shall deliver to the Parent Parties a statement certified by the Company’s chief executive officer (the “Company Closing Statement”) setting forth a good faith calculation of the Company’s estimate of (a) Working Capital and its consolidated Subsidiaries as of the close of business on the day prior to the Closing Date, including in reasonable detail, the components thereof, which for the avoidance of doubt shall not factor in the Outstanding Company Convertible Note (the “Closing Balance Sheet”), (ii) a calculation of Net Working Capital of the Company and its consolidated Subsidiaries as set forth on the Closing Balance Sheet (“Closing Date Net Working Capital”), (biii) Adjusted Closing Net a calculation of the aggregate principal amount of all Funded Debt of the Company and its consolidated Subsidiaries, if any, as of the close of business Closing Date as set forth on the day prior to Closing Balance Sheet (the “Closing Date Funded Debt”) and (iv) a calculation of the Cash and Cash Equivalents as of the Closing Date, and (c) Company Transaction Expenses Date as of immediately prior to the Closing, and the resulting Closing Purchase Price and Closing Merger Consideration based set forth on such calculations, in reasonable detail including for each component thereof, along with the amount owed to each creditor of the Company or any of its Subsidiaries, and bank statements and other evidence reasonably necessary to confirm such calculations. Promptly after delivery of the Company Closing Statement to the Parent Parties, if requested by a Parent Party, the Company will meet with the Parent Parties to review and discuss the Company Closing Statement and the Company will consider in good faith the Parent Parties’ comments to the Company Closing Statement and make any appropriate adjustments to the Company Closing Statement prior to the Closing, which adjusted Company Closing Statement, as mutually approved by the Company and Parent both acting reasonably and in good faith, shall thereafter be used to calculate the Closing Purchase Price Balance Sheet (the “Closing Date Cash and Closing Merger Consideration for all purposes of this Agreement and such calculations shall not be subject any adjustment following the Closing, absent manifest error, willful misconduct or fraudCash Equivalents”). The Company Closing Statement and the determinations contained therein Balance Sheet shall be prepared in accordance with U.S. GAAP United States generally accepted accounting principles (“GAAP”) consistent with the preparation of the historical consolidated financial statements of the Company and otherwise its consolidated Subsidiaries and shall be prepared using the same accounting methods, policies, practices and procedures, with consistent classifications, judgments and estimation methodology, as were used in accordance with this Agreement.preparation of the Interim Balance Sheet and shall fairly present the consolidated financial position of the Company and its consolidated Subsidiaries as of the Closing. Following the Closing, Acquiror shall provide the Holder Representative and its representatives access to the records and employees of the Surviving Corporation and its Subsidiaries to the extent necessary for the preparation of the Closing Balance Sheet and shall cooperate and cause the Surviving Corporation and its Subsidiaries and the employees of the

Adjustments to Merger Consideration. At least three (3a) Business Days The Merger Consideration shall be increased or decreased, as the case may be, by the dollar amount that the Net Cash exceeds or is less than, as the case may be, $1,548,856 as of the Closing Date. Net Cash shall be defined as the total of the consolidated cash and cash equivalents of the Company, minus the consolidated current and long term indebtedness of the Company. The Net Cash 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 Net Cash as of the Closing Date (the “Estimated Closing Statement”). The Estimated Closing Statement (i) will be prepared based upon the good faith estimate of the Net Cash of the Company on a consolidated basis on the Closing Date, the Company shall deliver to the Parent Parties a statement certified by the Company’s chief executive officer (the “Company Closing Statement”ii) setting forth a good faith calculation of the Company’s estimate of (a) Working Capital as of the close of business on the day prior to the Closing Date, including in reasonable detail, the components thereof, which for the avoidance of doubt shall not factor in the Outstanding Company Convertible Note (the “Closing Working Capital”), (b) Adjusted Closing Net Debt as of the close of business on the day prior to the Closing Date, and (c) Company Transaction Expenses as of immediately prior to the Closing, and the resulting Closing Purchase Price and Closing Merger Consideration based on such calculations, in reasonable detail including for each component thereof, along with the amount owed to each creditor of the Company or any of its Subsidiaries, and bank statements and other evidence reasonably necessary to confirm such calculations. Promptly after delivery of the Company Closing Statement to the Parent Parties, if requested by a Parent Party, the Company will meet with the Parent Parties to review and discuss the Company Closing Statement and the Company will consider in good faith the Parent Parties’ comments to the Company Closing Statement and make any appropriate adjustments to the Company Closing Statement prior to the Closing, which adjusted Company Closing Statement, as mutually approved by the Company and Parent both acting reasonably and in good faith, shall thereafter be used to calculate the Closing Purchase Price and Closing Merger Consideration for all purposes of this Agreement and such calculations shall not be subject any adjustment following the Closing, absent manifest error, willful misconduct or fraud. The Company Closing Statement and the determinations contained therein shall be prepared in accordance with U.S. GAAP the books of account and otherwise records of the Company and its Subsidiary, (iii) 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 (iv) 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 preliminarily adjusted based on the Estimated Closing Statement (as preliminarily adjusted, the “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 Net Cash as of the Closing Date (the “Proposed Closing Statement”). The Proposed Closing Statement (i) will be prepared based upon a consolidated basis on the Closing Date, (ii) will be in accordance with the books of account and records of the Company and its Subsidiary, (iii) 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 (iv) 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, 2004 is attached hereto as Exhibit B and made a part hereof. At the Shareholder’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) (whereupon all references herein to the “Final Closing Statement” will mean the same as so finally determined). Within thirty (30) days after receipt of the Proposed Closing Statement, the Shareholder Representative will deliver, on behalf of the Company’s shareholders, written objections to the Proposed Closing Statement (if any) to Parent. To the 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 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 Shareholder Representative within thirty (30) days after submission to such firm, will be final and 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 accordance with the Final Closing Statement is less than the Initial Merger Consideration, then the amount of such difference, but only to the extent available from the Escrow Amount, shall be refunded to Parent from the Escrow Amount with same day funds within ten (10) days of the final determination of the Final Closing Statement by the Escrow Agent. If the Adjusted Merger Consideration as calculated in accordance with the Final Closing Statement exceeds the Initial Merger Consideration, then the difference will be paid by Parent to the Shareholders, both in the same manner and in the same percentages as the Initial Merger Consideration was paid with same day funds within ten (10) days of the final determination of the Final Closing Statement. Under no circumstances will the Shareholders be requested to reimburse Parent if the Adjusted Merger Consideration as calculated in accordance with the Final Closing Statement is less than the Initial Merger Consideration by an amount more than the Escrow Amount.

Adjustments to Merger Consideration. At least three (3) Business Days prior to the Closing Date, the Company shall deliver to the Parent Parties a statement certified by the Company’s chief executive officer (the “Company Closing Statement”) setting forth a good faith calculation of the Company’s estimate of (a) Working Capital The Merger Consideration is based in part on the premise that the Net Worth (as defined in Section 2.11(b)(i) below) as reflected in the balance sheet of the Company as of the close of business on the day prior to Closing Date will be at least $109,099.70. Within ten (10) days after the Closing Date, including in reasonable detail, the components thereof, which for Purchaser will prepare and deliver to the avoidance of doubt shall not factor in the Outstanding Company Convertible Note Stockholders' Representative a balance sheet (the “"Draft Closing Working Capital”), (bDate Balance Sheet") Adjusted Closing Net Debt of the Company as of the close of business on the day prior Closing Date and statements of operations and cash flow for the period then ending (collectively, the "Closing Financial Statements"). The Merger Consideration adjustment described below shall be based upon changes from the balance sheet of the Company as of May 31, 1998, which is set forth in Exhibit I and which reflects certain agreed adjustments to such balance sheet (the "Agreed Latest Balance Sheet"). The Closing Financial Statements shall be: (i) determined on a pro forma basis as though the parties had not consummated the Contemplated Transactions, but as if the fiscal year had then ended; (ii) prepared in accordance with GAAP applied on a basis consistent with the preparation of the Agreed Latest Balance Sheet; and (iii) reviewed by Deloitte & Touche LLP, the Purchaser's and the Company's certified public accountants. Notwithstanding the foregoing, the amount of any balance sheet reserves affecting the Closing Financial Statements shall not be less than the amount of such reserves reflected in the Agreed Latest Balance Sheet. (b) The Purchaser also will prepare and deliver to the Closing Date, and (c) Company Transaction Expenses as of immediately prior to the Closing, and the resulting Closing Purchase Price and Closing Merger Consideration based on such calculations, in reasonable detail including for each component thereofStockholders' Representative, along with the amount owed to each creditor Draft Closing Date Balance Sheet, a draft calculation of the Company or any of its Subsidiaries, and bank statements and other evidence reasonably necessary to confirm such calculations. Promptly after delivery of the Company Closing Statement adjustment to the Parent Parties, if requested by a Parent Party, the Company will meet with the Parent Parties to review and discuss the Company Closing Statement and the Company will consider in good faith the Parent Parties’ comments to the Company Closing Statement and make any appropriate adjustments to the Company Closing Statement prior to the Closing, which adjusted Company Closing Statement, as mutually approved by the Company and Parent both acting reasonably and in good faith, shall thereafter be used to calculate the Closing Purchase Price and Closing Merger Consideration for all purposes of this Agreement and such calculations shall not be subject any adjustment following as determined below (the Closing, absent manifest error, willful misconduct or fraud"Draft Adjustment Calculation"). The Company Closing Statement and the determinations contained therein shall Merger Consideration will be prepared in accordance with U.S. GAAP and otherwise in accordance with this Agreement.adjusted as follows:

Adjustments to Merger Consideration. At (a) The parties intend that, on the Closing Date, the Company will have $0 (the “Target Closing NWC”) of Net Working Capital. To the extent that the Company has less than the Target Closing NWC on the close of business on the Closing Date, such deficiency will be deducted from the Base Amount, as the “Net Working Capital Adjustment.” (b) The parties intend that, on the Closing Date, the Company will have $0 (the “Target Closing Indebtedness”) of Indebtedness. To the extent that the Company has more than the Target Closing Indebtedness on the close of business on the Closing Date, such additional debt will be deducted from the Base Amount, as the “Debt Adjustment.” (c) No later than 11:00 a.m. Eastern Standard Time at least three two (32) Business Days prior to the Closing Date, the Company shall prepare and deliver to the Parent Parties a statement certified by the Company’s chief executive officer (the “Company Preliminary Closing Statement”) setting forth a in good faith calculation its computations of the Company’s estimate of (a) estimated Net Working Capital (the “Preliminary Closing NWC”) and estimated Indebtedness (the “Preliminary Closing Indebtedness”) as of the close of business on the day prior anticipated Closing Date. The parties will use the Preliminary Closing NWC and Preliminary Closing Indebtedness to calculate the Common Per Share Closing Consideration and Option Per Share Closing Consideration for purposes of Closing. (d) As promptly as practicable following the Closing Date, including but in reasonable detailno event later than thirty (30) days thereafter, the components thereof, which for the avoidance of doubt Joint Representatives shall not factor in the Outstanding Company Convertible Note cause to be prepared and delivered to Parent a statement (the “Post-Closing Statement”) setting forth the calculation of Net Working Capital”), (b) Adjusted Closing Net Debt Capital and Indebtedness as of the close of business on the day prior to the Closing Date, and (c) Company Transaction Expenses as of immediately prior to the Closing, and the resulting Closing Purchase Price and Closing Merger Consideration based on such calculations, in reasonable detail including for each component thereof, along with the amount owed to each creditor of the Company or any of its Subsidiaries, and bank statements and other evidence reasonably necessary to confirm such calculations. Promptly after delivery of the Company The Post-Closing Statement to the Parent Parties, if requested by a Parent Party, the Company will meet with the Parent Parties to review and discuss the Company Closing Statement and the Company will consider in good faith the Parent Parties’ comments to the Company Closing Statement and make any appropriate adjustments to the Company Closing Statement prior to the Closing, which adjusted Company Closing Statement, as mutually approved by the Company and Parent both acting reasonably and in good faith, shall thereafter be used to calculate the Closing Purchase Price and Closing Merger Consideration for all purposes of this Agreement and such calculations shall not be subject any adjustment following the Closing, absent manifest error, willful misconduct or fraud. The Company Closing Statement and the determinations contained therein shall be prepared in good faith in accordance with U.S. GAAP and, to the extent not inconsistent with GAAP, in a manner consistent with the past practices of the Company. Parent shall cooperate in all reasonable respects with the Joint Representatives (and otherwise their respective representatives) in connection with the preparation of the Post-Closing Statement, including affording the Joint Representatives (and their respective representatives) reasonable access to all books and records and all financial and accounting personnel of the Surviving Corporation. (e) Parent shall have thirty (30) days after the receipt of the Post-Closing Statement (the “Review Period”) to review the information and calculations provided therein. During the Review Period, the Joint Representatives shall afford Parent (and its representatives) reasonable access to all books and records and all financial and accounting personnel used to prepare the Post-Closing Statement under control of or in the possession of the Joint Representatives. (f) Parent may dispute the calculation of the Post-Closing Statement within the Review Period by providing written notice (a “Dispute Notice”) to the Joint Representatives of such dispute, setting forth in detail the particulars of such dispute, including Parent’s calculation of Net Working Capital and Indebtedness. In the event that Parent does not deliver a Dispute Notice within the Review Period, then the Post-Closing Statement shall be final and binding upon the parties hereto. In the event a Dispute Notice is timely provided, Parent and the Joint Representatives shall use their reasonable best efforts for a period of thirty (30) days (or such longer period as to which they shall mutually agree) to resolve the disputed matters. If, at the end of such period, the Joint Representatives and Parent are unable to resolve the disputed matters, then the Joint Representatives and Parent shall, within five (5) days of the end of such period, jointly submit all disputed matters raised in the Dispute Notice and not so resolved (the “Disputed Matters”) to the Arbiter (to be selected as set forth in subsection (g) below) for final resolution in accordance with the terms and provisions of this Agreement. The determination of the Arbiter shall be final and binding upon the parties hereto and shall be limited to Disputed Matters. All fees and disbursements of the Arbiter shall be paid by Parent. The determination of the Arbiter shall be reflected in a written report which shall be delivered by the Arbiter to the Joint Representatives and Parent no later than thirty (30) days following the submission of the Disputed Matters to the Arbiter for resolution. (g) The Arbiter (the “Arbiter”) shall be a regional or nationally recognized accounting firm jointly selected by Parent and the Joint Representatives (other than any accounting firm which has been employed by the Company or Parent, or any of their respective Affiliates, in the last two (2) years) (an “independent accounting firm”). In the event that Parent and the Joint Representatives are unable to jointly agree upon the Arbiter, then Parent, on the one hand, and the Joint Representatives, on the other hand, shall each select an independent accounting firm to select the Arbiter, and such two (2) independent accounting firms shall have twenty (20) days thereafter to mutually select the Arbiter, which selection shall be binding upon Parent and the Joint Representatives. (h) The final, conclusive, and binding Net Working Capital amount determined in accordance with this AgreementSection 2.10 will be the “Final Closing NWC.” The final, conclusive, and binding Indebtedness amount determined in accordance with this Section 2.10 will be the “Final Closing Indebtedness.” (i) If (A) the amount of the Final Closing NWC reduced by the Final Closing Indebtedness (whether such amount is a positive or negative amount) is less than (B) the amount of the Preliminary Closing NWC reduced by the Preliminary Closing Indebtedness (whether such amount is a positive or negative amount), then the Joint Representatives shall instruct the Escrow Agent within two (2) Business Days after the date of final determination to release from the Indemnification Escrow Account the amount of the shortfall to Parent. The Indemnification Escrow Account shall be the sole source of payment for any decrease in the Merger Consideration arising out of this Section 2.10.

Adjustments to Merger Consideration. At least three (3) Business Days prior to the Closing Date, the Company shall deliver to the Parent Parties a statement certified by the Company’s chief executive officer (the “Company Closing Statement”) setting forth a good faith calculation of the Company’s estimate of (a) Working Capital as of the close of At least five (5) business on the day prior to the Closing Date, including in reasonable detail, the components thereof, which for the avoidance of doubt shall not factor in the Outstanding Company Convertible Note (the “Closing Working Capital”), (b) Adjusted Closing Net Debt as of the close of business on the day prior to the Closing Date, and (c) Company Transaction Expenses as of immediately days prior to the Closing, and the resulting Closing Purchase Price and Closing Merger Consideration based on such calculations, in reasonable detail including for each component thereof, along with the amount owed to each creditor of the Company or any of its Subsidiaries, and bank statements and other evidence reasonably necessary to confirm such calculations. Promptly after delivery of the Company Closing Statement to the Parent Parties, if requested by a Parent Party, the Company will meet with the Parent Parties to review and discuss the Company Closing Statement and the Company will consider in good faith the Parent Parties’ comments to the Company Closing Statement and make any appropriate adjustments to the Company Closing Statement prior to the Closing, which adjusted Company Closing Statement, as mutually approved by the Company and the Parent both acting reasonably and in good faith, shall thereafter be used to calculate finalize an Estimated Closing Balance Sheet as of the Closing Purchase Price and Date on a post-Closing Merger Consideration for all purposes of this Agreement and such calculations shall not be subject any adjustment following basis (the Closing“Estimated Closing Balance Sheet”), absent manifest error, willful misconduct or fraud. The Company Closing Statement and the determinations contained therein which shall be prepared in accordance with U.S. GAAP and otherwise consistent with the principles and procedures used in accordance preparing the Balance Sheet, except as set forth on Appendix B-1. (b) The Closing Consideration to be paid at the Closing shall be reduced by the following amounts, if any, as set forth on the Estimated Closing Balance Sheet: (i) the amount of any indebtedness of the Company or any Subsidiary for borrowed money (including, without limitation, any indebtedness of the type required to be reflected on line items “Term Note – Citizens”, “Term Note A – ACS”, “Term Note B – ACS”, “Seller Note – ENTEK”, “Subordinated Debt – Jr.” and “Subordinated Debt –Sr.” of the Balance Sheet) as of the Closing Date plus the amount of any Qualified Accounts Payable as of the Closing Date (collectively, “Indebtedness for Borrowed Money”), (ii) the amount of all Liabilities not incurred in the ordinary course of business of the Company or any Subsidiary as of the Closing Date, including, without limitation, the Executive Bonus Payments and any other liability for severance and other compensation, provided or payable to employees or consultants of the Company or any Subsidiary in connection with this Agreementthe Merger plus the Wachovia Closing Payment and any other transaction fees and expenses related to the Merger and the transactions contemplated hereby, including, without limitation, financial advisory fees, legal fees and expenses, broker and finder fees and expenses of accountants (collectively, “Non-Ordinary Course Liabilities”), (iii) an amount equal to the ACS Closing Payment, and (iv) the Estimated Working Capital Deficit, if any. Such adjustment shall be referred to herein as the “Estimated Closing Adjustment”. “Estimated Working Capital Deficit” shall mean the amount, if any, determined as of the Closing Date, by which the Target Working Capital exceeds the Estimated Working Capital. The Estimated Closing Adjustment shall be determined without regard to the limitations set forth in Sections 9.4 and 9.5 hereof.

Adjustments to Merger Consideration. At least three (3a) Not later than two Business Days prior to the Closing Date, the Company and the Stockholder Representative shall deliver to provide Parent with (i) a written good faith estimate of the Parent Parties a statement certified by Closing Working Capital (as defined below), based upon the Company’s chief executive officer accounting books and records of the Company (the “Estimated Working Capital”), (ii) a written good faith estimate of the Closing Company Debt (as defined below), based upon the accounting books and records of the Company (the “Estimated Company Debt”) and (iii) all underlying documentation supporting the Estimated Working Capital and Estimated Company Debt, all of which shall be reasonably acceptable to Parent. The determination of the Estimated Working Capital and Estimated Company Debt shall be binding on all of the parties hereto and shall be used to determine the Closing Date Merger Consideration pursuant to Section 1.7(a). (b) As promptly as practicable, but no later than 45 days after the Closing Date, Parent shall cause to be prepared and delivered to the Stockholder Representative (i) a statement (the “Closing Statement”) setting forth a good faith calculation presenting (A) the Net Working Capital of the Company’s estimate of (a) Working Capital Company as of the close of business on the day prior to the Closing Date, including in reasonable detail, the components thereof, which for the avoidance of doubt shall not factor in the Outstanding Company Convertible Note (the “Closing Working Capital”), ) and (bB) Adjusted Closing Net the Company Debt as of the close Closing (the “Closing Company Debt”) and (ii) a certificate based on such Closing Statement that sets forth Parent’s calculation of business on the day prior to the Closing Date, Working Capital and the Closing Company Debt. (c) If the Stockholder Representative disagrees with Parent’s calculation of Closing Working Capital and/or Closing Company Transaction Expenses as of immediately prior Debt delivered pursuant to Section 1.10(b), the ClosingStockholder Representative may, and the resulting Closing Purchase Price and Closing Merger Consideration based on such calculations, in reasonable detail including for each component thereof, along with the amount owed to each creditor of the Company or any of its Subsidiaries, and bank statements and other evidence reasonably necessary to confirm such calculations. Promptly within 30 days after delivery of the Closing Statement, deliver a notice to Parent disagreeing with such calculation(s) and setting forth the Stockholder Representative’s calculation(s) of Closing Working Capital and/or Closing Company Closing Statement Debt, as applicable. Any such notice of disagreement shall (i) specify those items or amounts as to which the Parent PartiesStockholder Representative disagrees, if requested by a Parent Party, and the Company will meet Stockholder Representative shall be deemed to have agreed with all other items and amounts contained in the Parent Parties to review and discuss the Company Closing Statement and the calculation of Closing Working Capital and Closing Company will Debt delivered pursuant to Section 1.10(b) and (ii) only include disagreements based on mathematical errors or Parent’s failure to follow Applicable Accounting Principles in its calculation of Closing Working Capital and/or Closing Company Debt, as applicable. (d) If a notice of disagreement is duly delivered pursuant to Section 1.10(c), Parent and the Stockholder Representative shall, during the 15 days following such delivery, use their respective commercially reasonable efforts to reach agreement on the disputed items or amounts in order to determine the amount of Closing Working Capital and/or Closing Company Debt, as applicable. If during such period, Parent and the Stockholder Representative are unable to reach such agreement, they shall promptly thereafter cause McGladrey & Xxxxxx, LLP (the “Accounting Referee”) to review this Agreement and the disputed items or amounts for the purpose of calculating Closing Working Capital and/or Closing Company Debt, as applicable. In making such calculation, the Accounting Referee shall consider only (i) those items or amounts in good faith the Parent Parties’ comments to the Company Closing Statement and make Parent’s calculation of Closing Working Capital and/or Closing Company Debt, as applicable, as to which the Stockholder Representative has disagreed and (ii) disagreements based on mathematical errors or Parent’s failure to follow Applicable Accounting Principles in its calculation of Closing Working Capital and/or Closing Company Debt, as applicable. The Accounting Referee shall deliver to Parent and the Stockholder Representative, as promptly as practicable (but in any appropriate adjustments to case no later than 30 days from the date of engagement of the Accounting Referee), a report setting forth a calculation of Closing Working Capital and/or Closing Company Closing Statement prior to the ClosingDebt, as applicable, which adjusted Company Closing Statement, as mutually approved by the Company and Parent both acting reasonably and in good faith, shall thereafter be used to calculate the Closing Purchase Price and Closing Merger Consideration for all purposes of this Agreement and such calculations amount shall not be subject any adjustment following more than the Closing, absent manifest error, willful misconduct or fraudamount thereof shown in Parent’s calculation(s) delivered pursuant to Section 1.10(b) nor less than the amount thereof shown in the Stockholder Representative’s calculation(s) delivered pursuant to Section 1.10(c). Such report shall be final and binding upon all parties hereto. The cost of such review and report shall be borne equally by Parent, on the one hand, and the former Company Stockholders (including, without limitation, by causing the Escrow Agent to release Escrow Consideration to the Accounting Referee pursuant to the terms of the Escrow Agreement), on the other hand. (e) The parties shall, and shall cause their respective representatives (and Parent shall cause the Surviving Corporation), to cooperate and assist in the preparation of the Closing Statement and the determinations contained therein calculation of Closing Working Capital and Closing Company Debt and in the conduct of the review referred to in this Section 1.10, including, without limitation, the making available to the extent reasonably necessary of books, records, work papers and personnel. (f) Upon the determination of Final Working Capital and Final Company Debt, the Merger Consideration shall be prepared adjusted as follows: (i) If (A) the result obtained by subtracting Final Company Debt from Final Working Capital (the “Net Final Working Capital”) exceeds (B) the result obtained by subtracting Estimated Company Debt from Estimated Working Capital (the “Net Estimated Working Capital”), Parent shall, within three Business Days following the determination of both the Final Working Capital and Final Company Debt, pay to the Stockholder Representative (to be distributed to the former Company Stockholders) the amount by which Net Final Working Capital so exceeds Net Estimated Working Capital as an adjustment to the dollar amount of the Merger Consideration, and the entire PPA Escrow Amount shall be distributed from the Escrow Account to the Stockholder Representative; or (ii) If Net Estimated Working Capital exceeds Net Final Working Capital, (A) the amount by which Net Estimated Working Capital so exceeds Net Final Working Capital (the “Net Adjusted Working Capital Shortfall Amount”) as an adjustment to the dollar amount of the Merger Consideration, up to the PPA Escrow Amount, shall be distributed from the Escrow Account to Parent in accordance with U.S. GAAP the terms of the Escrow Agreement, and otherwise (B) either (1) the Stockholder Representative, on behalf of the former Company Stockholders, shall, within three Business Days of the determination of both the Final Working Capital and Final Company Debt, cause to paid to Parent (including, without limitation, by causing the Escrow Agent to release Escrow Consideration to Parent pursuant to the terms of the Escrow Agreement) the amount, if any, by which the Net Adjusted Working Capital Shortfall Amount exceeds the PPA Escrow Amount as a further adjustment to the dollar amount of the Merger Consideration or (2) the amount by which the PPA Escrow Amount exceeds the Net Adjusted Working Capital Shortfall Amount shall be distributed from the Escrow Account to the Stockholder Representative in accordance with this the terms of the Escrow Agreement. (g) For all purposes hereunder, “Final Working Capital” means Closing Working Capital and “Final Company Debt” means Closing Company Debt, in each case, (i) as shown in Parent’s calculation(s) delivered pursuant to Section 1.10(b) if no notice of disagreement with respect thereto is duly delivered pursuant to Section 1.10(c) or (ii) if such a notice of disagreement is delivered, (A) as agreed by Parent and the Stockholder Representative pursuant to Section 1.10(d) or (B) in the absence of such agreement, as shown in the Accounting Referee’s calculation(s) delivered pursuant to Section 1.10(d).

Adjustments to Merger Consideration. At least three (3a) Business Days prior Prior to the Closing DateClosing, the Company shall deliver in good faith prepare a pro forma estimated balance sheet of the Company as of the Closing and without giving effect to the Parent Parties a statement certified transactions contemplated hereby, except as set forth in this Section 2.05, in the manner set forth in this Section 2.05 that contains only such balances that are necessary for the adjustments contemplated by the Company’s chief executive officer this Section 2.05 (the “Company Estimated Closing Statement”) setting forth a good faith calculation of the Company’s estimate of (a) Working Capital as of the close of business on the day prior to the Closing Date, including in reasonable detail, the components thereof, which for the avoidance of doubt shall not factor in the Outstanding Company Convertible Note (the “Closing Working CapitalDate Balance Sheet”), (b) Adjusted Closing Net Debt as of the close of business on the day prior to the Closing Date, and (c) Company Transaction Expenses as of immediately prior to the Closing, and the resulting Closing Purchase Price and Closing Merger Consideration based on such calculations, in reasonable detail including for each component thereof, along with the amount owed to each creditor of the Company or any of its Subsidiaries, and bank statements and other evidence reasonably necessary to confirm such calculations. Promptly after delivery of the Company Closing Statement to the Parent Parties, if requested by a Parent Party, the Company will meet with the Parent Parties to review and discuss the Company Closing Statement and the Company will consider in good faith the Parent Parties’ comments to the Company Closing Statement and make any appropriate adjustments to the Company Closing Statement prior to the Closing, which adjusted Company Closing Statement, as mutually approved by the Company and Parent both acting reasonably and in good faith, shall thereafter be used to calculate the Closing Purchase Price and Closing Merger Consideration for all purposes of this Agreement and such calculations shall not be subject any adjustment following the Closing, absent manifest error, willful misconduct or fraud. The Company Estimated Closing Statement and the determinations contained therein Date Balance Sheet shall be prepared in accordance with U.S. GAAP consistently applied to the extent appropriate under U.S. GAAP and, to the extent then applicable, with such assumptions, estimates and otherwise applications of U.S. GAAP as was used by the Company in preparing the March 31, 2007 balance sheet. Not later than three (3) business days prior to the Closing, the Company shall deliver to Parent the Estimated Closing Date Balance Sheet, together with worksheets and data that support the Estimated Closing Date Balance Sheet and any other information that Parent may reasonably request in order to verify the amounts reflected on the Estimated Closing Date Balance Sheet. As provided in Section 2.01(a) hereof, the Aggregate Merger Consideration to be paid at the Closing shall be adjusted: (i) either (A) dollar-for-dollar up to the extent that the Working Capital set forth on the Estimated Closing Date Balance Sheet (the “Estimated Closing Working Capital”) is more than $6.9 million or (B) dollar-for-dollar down to the extent that the Estimated Closing Working Capital is less than $6.9 million (such adjustment resulting from clause (i) being the “Estimated Closing Working Capital Adjustment”). (b) As soon as practical after the Closing, but no later than sixty (60) days following the Closing, Parent shall cause the Company to prepare in good faith a pro-forma consolidated balance sheet of the Company as of the Closing and without giving effect to the transactions contemplated hereby except as contemplated in the definition of Current Assets and Current Liabilities (the “Post-Closing Balance Sheet”). The Post-Closing Balance Sheet shall be prepared in accordance with U.S. GAAP and, to the extent then applicable, with such assumptions, estimates and applications of U.S. GAAP as was used by the Company in preparing the March 31, 2007 balance sheet. Parent shall, within sixty (60) days of the Closing Date, deliver the Post-Closing Balance Sheet to the Stockholders’ Representative, together with worksheets which detail any adjustments from the Estimated Closing Date Balance Sheet and the basis thereof and Parent’s calculation of Working Capital based on the Post-Closing Balance Sheet. If the Stockholders’ Representative disagrees with the Post-Closing Balance Sheet and the calculation of Working Capital set forth therein, it shall notify Parent of such disagreement in writing, setting forth in reasonable detail the particulars of such disagreement (the “Seller Dispute Notice”), within 45 days of its receipt of the Post-Closing Balance Sheet. In the event that the Stockholders’ Representative does not provide a Seller Dispute Notice within such 45 day period, the Stockholders’ Representative shall be deemed to have accepted the Post-Closing Balance Sheet and the calculations of Working Capital by Parent, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, Parent and the Stockholders’ Representative shall use commercially reasonable efforts for a period of 30 days (or such longer period as they may mutually agree) to resolve any disagreements with respect to Parent’s calculation of the Working Capital. If, at the end of such period, they are unable to resolve any such disagreements, then an independent accounting firm of recognized national standing as may be mutually selected by Parent and the Stockholders’ Representative (the “Auditor”) shall resolve any remaining disagreements. The Auditor shall determine as promptly as practicable, but in any event within 30 days of the date on which such dispute is referred to the Auditor, whether and to what extent (if any) Parent’s calculation of Working Capital requires adjustment. The fees and expenses of the Auditor shall be paid by Parent and the Stockholders’ Representative in inverse proportion as they may prevail on the matters resolved by the Auditor, as determined by the Auditor. The determinations of the Auditor shall be final, conclusive and binding on the parties. The final Working Capital amount as determined pursuant to this Section 2.05(b) is referred to as the “Final Working Capital Amount.” (c) With respect to adjustments made pursuant to Section 2.05(b) only, if the Aggregate Merger Consideration (determined as of the Effective Time) and as, following the Closing pursuant to this Section 2.05, is adjusted (A) up for any positive Net Working Capital Adjustment or (B) down for any negative Net Working Capital Adjustment, results in: (1) an amount greater than the Aggregate Merger Consideration (as determined as of the Effective Time), then Parent shall promptly pay such difference to the Escrow Agent (such payment to be made in a combination of Shares and cash, as described in Section 2.05(f), below and to be distributed by the Escrow Agent in the manner specified in Section 2.05(f), below; or (2) an amount less than the Aggregate Merger Consideration (as determined as of the Effective Time), then Parent shall be promptly paid in cash the amount of such shortfall out of the Escrow Fund. (d) As used in the Agreement., the following terms shall have the following meanings: