Common use of Balance Sheet Adjustment Clause in Contracts

Balance Sheet Adjustment. Seller has prepared a proforma unaudited balance sheet as of February 28, 2001 (the “Baseline Balance Sheet Date”), which is attached hereto as part of Schedule 3.1(d) (the “Baseline Balance Sheet”), in accordance with GAAP and on a basis consistent with that of the audited balance sheet of the Seller as of December 31, 2000, attached hereto as part of Schedule 3.1(d). In addition, Schedule 2.2 sets forth Seller’s and Buyer’s calculation of the net liabilities assumed. Not later than thirty (30) days after the Closing Date, Seller shall prepare in accordance with GAAP on a basis consistent with the Baseline Balance Sheet (provided that Accounts Receivable shall exclude items over 120 days) a balance sheet of the Seller as of the Closing Date (the “Closing Date Balance Sheet”), as well as a revised calculation of the net liabilities assumed based on the Closing Date Balance Sheet and prepared on a basis consistent with Schedule 2.2, both of which shall be delivered to Buyer. Following delivery of the Closing Date Balance Sheet and the revised calculation of the net liabilities assumed, the Purchase Price shall be adjusted as follows: (i) if there is a decrease in the net liabilities assumed (excluding any reduction in the deferred revenue amount and any increase in capitalized software costs), the Purchase Price will be increased by the amount of decrease, if the absolute value of the decrease is greater than 5% of the net liabilities assumed as set forth on Schedule 2.2. If the absolute value of the decrease in the net li- abilities assumed is less than or equal to 5% of the net liabilities assumed as set forth on Schedule 2.2, then there will be no increase in the Purchase Price. (ii) if there is an increase in the net liabilities assumed, the Purchase Price will be decreased by the amount of increase, if the increase is greater than 5% of the net liabilities assumed as set forth on Schedule 2.2. If the increase in the net liabilities assumed is less than or equal to 5% of the net liabilities assumed as set forth on Schedule 2.2, then there will be no decrease in the Purchase Price.

Balance Sheet Adjustment. Seller has prepared a proforma unaudited balance sheet The Purchase Price shall reflect the change in the Adjusted Net Assets and Assumed Indebtedness of the Companies as of February 28, 2001 (reflected on the “Baseline Final Balance Sheet Date”(as defined in Section 1.07). To the extent, if any, that the Adjusted Net Assets on the Closing Date (inclusive) are in excess of the Adjusted Net Assets as set forth on the September 30, 1996 financial statements as provided by Xxxxxx Xxxxxxxx, LLP (a preliminary set of which is attached hereto as part of to Schedule 3.1(d) (the “Baseline Balance Sheet”3.14), the Purchase Price shall increase by such excess, and to the extent, if any, that the Adjusted Net Assets on the Closing Date (inclusive) are less than the Adjusted Net Assets as set forth on the September 30, 1996 financial statements as provided by Xxxxxx Xxxxxxxx, LLP (a preliminary set of which is attached to Schedule 3.14), the Purchase Price shall decrease by such deficiency. To the extent, if any, that the Assumed Indebtedness is in excess of the Estimated Assumed Indebtedness, the Purchase Price shall decrease by such excess, and to the extent, if any, that the Assumed Indebtedness is less than the Estimated Assumed Indebtedness, the Purchase Price shall increase by such deficiency. The net adjustment to the Base Payment described in this Section 1.06 is referred to as the "Balance Sheet Adjustment". For purposes of this Agreement, "Adjusted Net Assets" shall mean total assets of the Business as calculated in accordance with GAAP Exhibit 1.08(c) (other than stockholder or intercompany receivables, amounts due from stockholders or related parties or Excluded Assets reflected in Section 1.02) less accounts payable, accrued expenses and on a basis consistent with that other non-interest bearing operating liabilities or obligations of the audited balance sheet Companies; provided, however, that any changes to Adjusted Net Assets as a result of capital improvements by the Seller as of December 31Sellers made on or after September 30, 2000, attached hereto as part of Schedule 3.1(d). In addition, Schedule 2.2 sets forth Seller’s and Buyer’s calculation of 1996 shall be excluded from the net liabilities assumed. Not later than thirty (30) days after Adjusted Net Assets on the Closing Date; provided, Seller further, that the Adjusted Net Assets at September 30, 1996 shall prepare in accordance with GAAP on a basis consistent with reflect the Baseline Balance Sheet (provided that Accounts Receivable shall exclude items over 120 days) a opening balance sheet sheets and necessary purchase accounting adjustments related to the acquisition of the Seller Milwaukee and Gretna Centers and Adjusted Net Assets as of the Closing Date (shall exclude any accounts receivable balances related to the “Closing Date Balance Sheet”)Milwaukee and Gretna Centers. For purposes of this Agreement, "Assumed Indebtedness" shall mean the total indebtedness of Nations, Bloomington and their respective subsidiaries outstanding as well as a revised calculation of the net liabilities assumed based on the Closing Date Balance Sheet and prepared on a basis consistent with Schedule 2.2, both of which shall be delivered to Buyer. Following delivery of the Closing Date and the total indebtedness of the Asset Companies and their respective subsidiaries as of the Closing Date, provided that the Buyers have specifically agreed in writing to assume or pay such indebtedness. Notwithstanding anything else contained herein, items which are not reflected in the Final Balance Sheet but which would cause a revision in the Balance Sheet Adjustment and which are discovered by Buyers on or prior to February 28, 1998 shall be taken into account in the revised calculation period incurred in calculating the Adjusted Net Assets for purposes of the net liabilities assumed, determining the Purchase Price shall be adjusted as follows: (i) if there is a decrease in and the net liabilities assumed (excluding any reduction in the deferred revenue amount and any increase in capitalized software costs), the Purchase Price will be increased by the amount of decrease, if the absolute value of the decrease is greater than 5% of the net liabilities assumed as set forth on Schedule 2.2. If the absolute value of the decrease in the net li- abilities assumed is less than or equal to 5% of the net liabilities assumed as set forth on Schedule 2.2, then there will be no increase in the Purchase PriceBalance Sheet Adjustment. (ii) if there is an increase in the net liabilities assumed, the Purchase Price will be decreased by the amount of increase, if the increase is greater than 5% of the net liabilities assumed as set forth on Schedule 2.2. If the increase in the net liabilities assumed is less than or equal to 5% of the net liabilities assumed as set forth on Schedule 2.2, then there will be no decrease in the Purchase Price.

Balance Sheet Adjustment. Seller has prepared a proforma unaudited balance sheet as of February 28, 2001 (the “Baseline Balance Sheet Date”), which is attached hereto as part of Schedule 3.1(di) (the “Baseline Balance Sheet”), in accordance with GAAP and on a basis consistent with that of the audited balance sheet of the Seller as of December 31, 2000, attached hereto as part of Schedule 3.1(d). In addition, Schedule 2.2 sets forth Seller’s and Buyer’s calculation of the net liabilities assumed. Not later than thirty (30) days after the Closing Date, Seller shall prepare in accordance with GAAP on a basis consistent with the Baseline Balance Sheet (provided that Accounts Receivable shall exclude items over 120 days) a balance sheet of the Seller as of the Closing Date (the “Closing Date Balance Sheet”), as well as a revised calculation of the net liabilities assumed based on the Closing Date Balance Sheet and prepared on a basis consistent with Schedule 2.2, both of which shall be delivered to Buyer. Following delivery of the Closing Date Balance Sheet and the revised calculation of the net liabilities assumed, the The Purchase Price shall be adjusted as follows: provided below, to the extent that the "Effective Time Net Working Capital" (ias defined below) if there is a decrease in either less than $17 million or greater than $20 million. The Effective Time Net Working Capital means the pro forma net liabilities assumed working capital of the Post-Closing Wet Business (excluding any reduction in the deferred revenue amount and any increase in capitalized software costsas defined below), at and as of the Purchase Price will be increased Effective Time, determined by the amount of decrease, if the absolute value of the decrease is greater assets (other than 5% cash and cash equivalents) of the net liabilities assumed as Transferred Subsidiaries, together with the assets of the Wet Business that are transferred at the Closing to the Buyer by Xxxxxxx and WPI (and not owned by the Transferred Subsidiaries), corresponding to the categories of assets included in a pro forma Wet Business balance sheet determined in accordance with the description set forth on Section 1.4(c) of the Xxxxxxx Disclosure Schedule 2.2(the "Pro Forma Balance Sheet Instructions"), minus the liabilities as described in the Pro Forma Balance Sheet Instructions (which, for the elimination of doubt, is to include all liabilities of the Transferred Subsidiaries and all liabilities otherwise assumed under this Agreement by Buyer at the Effective Time that would constitute "current liabilities" for purposes of a balance sheet prepared in accordance with GAAP in a manner consistent with the historic preparation of the Xxxxxxx Financial Statements, but is to exclude all liabilities relating to Special Accounts, as defined in Section 5.14, all in accordance with the description included in Section 1.4(c) of the Xxxxxxx Disclosure Schedule). If None of the absolute Transferred Subsidiaries shall have any long-term liabilities as of the Effective Time, and no long-term liabilities shall be transferred by Xxxxxxx or any of the Xxxxxxx Subsidiaries to Buyer pursuant to this Agreement. The value of the decrease in the net li- abilities assumed is less than or equal to 5% relevant assets and current liabilities for purposes of determining Effective Time Net Working Capital of the net liabilities assumed Post-Closing Wet Business shall be calculated in accordance with GAAP (except as set forth noted on Schedule 2.2Section 1.4(c) of the Xxxxxxx Disclosure Schedule, then there will where items are to be no increase valued on a shipments basis), in a manner consistent with the Purchase Price. (ii) if there historic preparation of the Xxxxxxx Financial Statements. The "Post-Closing Wet Business" is an increase in the net liabilities assumedbusiness comprised of the Transferred Subsidiaries, the Purchase Price will be decreased by Assets and the amount of increase, if the increase is greater than 5% of the net liabilities assumed as set forth on Schedule 2.2. If the increase in the net liabilities assumed is less than or equal to 5% of the net liabilities assumed as set forth on Schedule 2.2, then there will be no decrease in the Purchase PriceAssumed Contracts.

Balance Sheet Adjustment. Seller has (a) As promptly as practicable, but no later than 60 days after the Effective Time, Buyer will cause to be prepared and delivered to Sellers’ Representative the Closing Balance Sheet and a proforma unaudited balance sheet as certificate based on such Closing Balance Sheet setting forth Buyer’s calculation of February 28, 2001 Closing Working Capital and Closing Net Debt. The Closing Balance Sheet (the “Baseline Balance Sheet Date”), which is attached hereto as part of Schedule 3.1(d) (the “Baseline Closing Balance Sheet”), ) shall (x) fairly present the financial position of the Company as of the Effective Time in accordance with GAAP and applied on a consistent basis with the Company Balance Sheet, (y) be prepared in accordance with accounting policies and practices consistent with that those used in the preparation of the audited balance sheet of Company Balance Sheet, and (z) include line items substantially consistent with those in the Seller as of December 31, 2000, attached hereto as part of Schedule 3.1(d). In addition, Schedule 2.2 sets forth Seller’s and Company Balance Sheet. (b) If Sellers’ Representative disagrees with the Closing Balance Sheet or the Buyer’s calculation of the net liabilities assumed. Not later than thirty (30) Closing Working Capital or Closing Net Debt delivered pursuant to Section 2.3(a), Sellers’ Representative may, within 20 days after delivery thereof, deliver a notice to Buyer disagreeing with such calculation and setting forth its calculation of such amount and the grounds for such disagreement. Any such notice of disagreement shall specify those items or amounts as to which Sellers’ Representative disagrees, and Sellers’ Representative shall be deemed to have agreed with all other items and amounts contained in the Closing Date, Seller shall prepare in accordance with GAAP on a basis consistent with the Baseline Balance Sheet (provided that Accounts Receivable shall exclude items over 120 days) a balance sheet of the Seller as of the Closing Date (the “Closing Date Balance Sheet”), as well as a revised calculation of the net liabilities assumed based on the Closing Date Balance Sheet and prepared on a basis consistent with Schedule 2.2, both of which shall be delivered to Buyer. Following delivery of the Closing Date Balance Sheet and the revised calculation of Closing Working Capital and Closing Net Debt delivered pursuant to Section 2.3(a). (c) If a notice of disagreement shall be duly delivered pursuant to Section 2.3(b), Buyer and Sellers’ Representative shall, during the 15 days following such delivery, use their best efforts to reach agreement on the disputed items or amounts in order to determine, as may be required, the amount of Closing Working Capital and Closing Net Debt. If Buyer and Sellers’ Representative are unable to reach an agreement during such period, they shall promptly thereafter cause independent accountants of nationally recognized standing reasonably satisfactory to Buyer and Sellers’ Representative (who shall not have any material relationship with Buyer or any of the stockholders of the Company prior to the Effective Time), promptly to review this Agreement and the disputed items or amounts for the purpose of calculating Closing Working Capital and Closing Net Debt, as applicable. In making such calculation, such independent accountants shall consider only those items or amounts in the Closing Balance Sheet or Buyer’s calculation of Closing Working Capital or Closing Net Debt as to which Sellers’ Representative has disagreed. Such independent accountants shall deliver to Buyer and Sellers’ Representative, as promptly as practicable, a report setting forth its calculation of the net liabilities assumeddisputed amount(s), the Purchase Price which amount(s) shall be adjusted as follows: consistent with the proviso in the last sentence of this subsection. The cost of such review and report shall be paid 50% by Buyer and 50% shall be deducted from the Escrow Amount. “Final Working Capital” and “Final Net Debt” mean the Closing Working Capital and Closing Net Debt, respectively, (i) if there is a decrease as shown in the net liabilities assumed (excluding any reduction in the deferred revenue amount and any increase in capitalized software costsBuyer’s calculation delivered pursuant to Section 2.3(a), the Purchase Price will be increased by the amount if no notice of decrease, if the absolute value of the decrease disagreement with respect thereto is greater than 5% of the net liabilities assumed as set forth on Schedule 2.2. If the absolute value of the decrease in the net li- abilities assumed is less than duly delivered pursuant to 2.3(b); or equal to 5% of the net liabilities assumed as set forth on Schedule 2.2, then there will be no increase in the Purchase Price. (ii) if there such a notice of disagreement is an increase delivered, as agreed by Buyer and Sellers’ Representative or, in the net liabilities assumedabsence of such agreement, the Purchase Price will be decreased by the amount of increase, if the increase is greater than 5% of the net liabilities assumed as set forth on Schedule 2.2. If the increase shown in the net liabilities assumed is independent accountant’s calculation delivered pursuant to 2.3(c); provided that Final Working Capital shall not be less than the Buyer’s calculation delivered pursuant to Section 2.3(a) or equal more than the Sellers’ Representative’s calculation delivered pursuant to 5% of Section 2.3(b), and Final Net Debt shall not be more than the net liabilities assumed as set forth on Schedule 2.2, then there will be no decrease in Buyer’s calculation delivered pursuant to Section 2.3(a) or less than the Purchase PriceSellers’ Representative’s calculation delivered pursuant to Section 2.3(b).

Balance Sheet Adjustment. Seller has prepared a proforma unaudited balance sheet as of February 28, 2001 (the “Baseline Balance Sheet Date”), which is attached hereto as part of Schedule 3.1(da) (the “Baseline Balance Sheet”), in accordance with GAAP and on a basis consistent with that of the audited balance sheet of the Seller as of December 31, 2000, attached hereto as part of Schedule 3.1(d). In addition, Schedule 2.2 sets forth Seller’s and Buyer’s calculation of the net liabilities assumed. Not later less than thirty (30) five days after prior to the Closing Date, Seller the Company shall prepare in accordance with GAAP on and deliver to Acquiror a basis consistent with schedule (the Baseline Balance Sheet "Company Calculation") showing the Company's best estimate of (provided that Accounts Receivable shall exclude items over 120 daysi) a balance sheet the Total Liabilities, (ii) the aggregate exercise price of the Seller outstanding Option Securities that are exercisable as of the Effective Time (the "Exercise Price") and (iii) the Company's cash and trade accounts receivable as of the Closing Date net of an allowance for billing adjustments and doubtful accounts (the “Closing Date Balance Sheet”"Short-Term Assets"). The parties agree that, as well as a revised calculation of the net liabilities assumed based on date hereof, $180,000 is a reasonable allowance for such billing adjustments and doubtful accounts. If Acquiror disagrees with such estimate, Representatives of the Closing Date Balance Sheet Company and prepared on a basis consistent with Schedule 2.2Acquiror shall meet to discuss such estimate, both of which and the Company Calculation shall be delivered revised, to Buyer. Following delivery the extent agreed, to reflect such discussions; provided that, if the Representatives of the Closing Date Balance Sheet Parties are unable to agree, Acquiror shall prepare and deliver to the Company a schedule (the "Alternative Calculation") showing Acquiror's estimate of the Total Liabilities, the Exercise Price and the revised calculation of Short-Term Assets, and the net liabilities assumedAlternative Calculation shall be used in the determination made with respect to the Cash Amount set forth in the following sentence. If, pursuant to the Company Calculation or the Alternative Calculation, as the case may be, the Purchase Price shall be adjusted as follows: Total Liabilities are greater than the sum of (ix) if there is a decrease in the net liabilities assumed Exercise Price, plus (excluding any reduction in y) the deferred revenue amount and any increase in capitalized software costsShort-Term Assets, plus (z) $5,000,000 (the "Measured Assets"), the Purchase Price will Cash Amount shall be reduced by the amount of such excess; if the Measured Assets are greater than the Total Liabilities, the Cash Amount shall be increased by the amount of decreasesuch excess. (b) As promptly as practicable after the Effective Time, but in any event within 90 days thereafter, Acquiror shall cause its independent public accountants, Xxxxxx Xxxxxxxx LLP, to audit the Closing Balance Sheet of the Company as of the Closing Date in accordance with generally accepted auditing standards. Xxxxxx Xxxxxxxx LLP shall prepare and deliver to Acquiror and to the Agent a schedule based upon such audit (the "Audited Calculation") showing their determination of the Total Liabilities and the Measured Assets. (c) If the Agent, acting pursuant to the instructions of a majority in interest of the Stockholders, disagrees with the Audited Calculation, the Agent shall give notice thereof to the Acquiror within 10 days after delivery of the Audited Calculation to the Agent. If the Agent and Acquiror are unable to settle the dispute within the 30-day period following delivery of such notice, the dispute shall be submitted to independent public accountants selected by Acquiror and reasonably acceptable to the Agent for resolution, and the decision of such independent certified public accountants shall be final and binding upon Acquiror and the Stockholders. The costs of such independent public accountants shall be paid one-half by Acquiror and one-half by the Stockholders (to be satisfied out of the Escrow Indemnity Funds). Acquiror and the Stockholders shall use reasonable efforts to have the dispute resolved within 30 days after such dispute is submitted to said accountants, but neither Acquiror or the Stockholders shall have any liability to any party hereto if such dispute is not resolved within such 30-day period. (d) Within 10 business days after a final determination of the absolute Total Liabilities and the Measured Assets (whether as a result of the Stockholders' failure to give timely notice of their disagreement with the Audited Calculation, or a resolution by Acquiror and the Stockholders of any such disagreement, or a determination of Total Liabilities by the accountants described in paragraph (c)), then Acquiror shall promptly receive payment from the Escrow Indemnity Funds or Acquiror shall pay to the Stockholders, as the case may be, any additional payment to which Acquiror or the Stockholders would have been entitled based on the final determination of the Total Liabilities and the Measured Assets; provided, that no payment shall be made by any party unless the difference between the final determination and the Company Calculation or the Alternative Calculation, as the case may be, is greater than $10,000. Any such payment to the Stockholders shall be made to each Stockholder pro rata in accordance with such Stockholder's ownership of Company Stock. Notwithstanding the foregoing, payment by Acquiror of any amounts due hereunder shall, to the extent necessary to cause the aggregate Stock Consideration to be not less than 50% of the value of the decrease is greater than 5% of the net liabilities assumed aggregate Merger Consideration as set forth on Schedule 2.2. If the absolute value of the decrease described in the net li- abilities assumed is less than or equal proviso to 5% of the net liabilities assumed as set forth on Schedule 2.2Section 2.1(a) above, then there will be no increase in the Purchase Priceform of Acquiror Stock. (e) All calculations regarding the balance sheet adjustment contemplated by this Section 8.7 shall be made in accordance with GAAP, consistently applied in accordance with the audit by Xxxxxx Xxxxxxxx LLP of the Company's financial statements for the year ended December 31, 1996, and this Agreement; provided, however, that (i) no effect shall be given to any restatement in the Audited Calculation arising from treatment of the recognition of deferred revenue in accordance with GAAP and (ii) if there is an increase the deferred revenue shown on the most recent Financial Statements in the net liabilities assumed, the Purchase Price will be decreased by the amount of increaseapproximately $200,000, if representing deferred revenue arising from existing multi-year contracts, shall not be restated in connection with the increase is greater than 5% of the net liabilities assumed as set forth on Schedule 2.2. If the increase in the net liabilities assumed is less than or equal to 5% of the net liabilities assumed as set forth on Schedule 2.2, then there will be no decrease in the Purchase PriceAudited Calculation.