Common use of Balance Sheet Test Clause in Contracts

Balance Sheet Test. As of the Closing Date, the COMPANY shall have (i) positive net worth (excluding all customer deposits and similar escrow-type accounts); (ii) positive net working capital (defined as current assets minus current liabilities, excluding all customer deposits and similar escrow-type accounts); and (iii) all customer deposit accounts and other similar escrow-type accounts fully funded in cash or cash equivalents. To the extent that any condition set forth in clauses (i) through (iii) is not met, the cash portion of the consideration to be paid to the STOCKHOLDERS pursuant to this Section 3 shall be reduced by the amount required to cure any such failure. Indebtedness of the COMPANY in excess of the amount set forth on Annex III that was incurred in connection with the acquisition of the COMPANY by the STOCKHOLDERS, or the acquisition of nonoperating assets by the COMPANY or the STOCKHOLDERS, shall result in a corresponding dollar-for-dollar reduction in the cash portion of the consideration paid to the STOCKHOLDERS pursuant to this Section 3. If necessary, a post-Closing adjustment shall be made to effect the intent of this Section 3.3. Indebtedness, if any, that was incurred for working capital or in connection with the operating assets of the COMPANY, in each case in amounts that are reasonable and consistent with the past practice of the COMPANY, will be assumed or repaid by VPI without a corresponding reduction to consideration paid hereunder. In addition, so long as the conditions set forth in clauses (i) through (iii) are satisfied as of the Closing Date, the COMPANY shall be permitted to distribute any additional cash or cash equivalents to the STOCKHOLDERS or to pay bonuses to the STOCKHOLDERS or employees of the COMPANY at any time prior to the Closing Date, notwithstanding anything in this Agreement to the contrary.

Balance Sheet Test. As of the Closing Date, the COMPANY shall have (i) positive net worth (excluding all customer deposits and similar escrow-type accounts); (ii) positive net working capital (defined as current assets minus current liabilities, excluding all customer deposits and similar escrow-type accounts); and (iii) all customer deposit accounts and other similar escrow-type accounts fully funded in cash or cash equivalents. To the extent that any condition set forth in clauses (i) through (iii) is not met, the cash portion of the consideration to be paid to the STOCKHOLDERS pursuant to this Section 3 shall be reduced by the amount required to cure any such failure. Indebtedness of the COMPANY in excess of the amount set forth on Annex III that was incurred in connection with the acquisition of the COMPANY by the STOCKHOLDERS, or the acquisition of nonoperating assets by the COMPANY or the STOCKHOLDERS, shall result in a corresponding dollar-for-dollar reduction in the cash portion of the consideration paid to the STOCKHOLDERS pursuant to this Section 3. If necessary, a post-Closing adjustment shall be made to effect the intent of this Section 3.3. Indebtedness, if any, that was incurred for working capital or in connection with the operating assets of the COMPANY, in each case in amounts that are reasonable and consistent with the past practice of the COMPANY, will be assumed or repaid by VPI without a corresponding reduction to consideration paid hereunder. In addition, so long as the conditions Notwithstanding anything set forth in clauses above, VPI acknowledges (i) through (iii) are satisfied as of the Closing Date, that the COMPANY has established a reserve in the amount of $385,000 on its balance sheet relating to contingent liabilities and (ii) that this reserve shall be permitted deemed to distribute any additional cash or cash equivalents to have not been established (i.e., shall be ignored and not counted) when conducting the STOCKHOLDERS or to pay bonuses to the STOCKHOLDERS or employees of the COMPANY at any time prior to the Closing Dateabove-referenced balance sheet tests, notwithstanding anything in this Agreement to the contraryincluding positive net working capital, positive net worth and fully funded customer deposits.

Balance Sheet Test. As of the Closing Date, the each COMPANY shall have (i) positive net worth (excluding all customer deposits and similar escrow-type accounts); (ii) positive net working capital (defined as current assets minus current liabilities, excluding all customer deposits and similar escrow-type accounts); and (iii) all customer deposit accounts and other similar escrow-type accounts fully funded in cash or cash equivalents. To the extent that any condition set forth in clauses (i) through (iii) is not met, the cash portion of the consideration to be paid to the STOCKHOLDERS pursuant to this Section 3 shall be reduced by the amount required to cure any such failure. Indebtedness of the each COMPANY in excess of the amount set forth on Annex III that was incurred in connection with the acquisition of the such COMPANY by the STOCKHOLDERS, or the acquisition of nonoperating assets by the such COMPANY or the STOCKHOLDERS, shall result in a corresponding dollar-for-dollar reduction in the cash portion of the consideration paid to the STOCKHOLDERS pursuant to this Section 3. If necessary, a post-Closing adjustment shall be made to effect the intent of this Section 3.3. IndebtednessNotwithstanding the foregoing balance sheet requirements, if anyit is understood that the COMPANY's earnings for the three months ended March 31, that was incurred for working capital or in connection 1998 will reflect, with the operating assets respect to B&B On The Beach, Inc., an amount equal to 25% of the projected earnings for B&B On The Beach, Inc. for the twelve months ended December 31, 1998. The COMPANY's earnings so determined for the three months ended March 31, in each case in amounts that are reasonable and consistent with the past practice of the COMPANY, 1998 will be assumed or repaid by VPI without a corresponding reduction to consideration paid hereunder. In addition, so long as the conditions set forth in clauses (i) through (iii) are satisfied as of the Closing Date, the COMPANY shall be permitted to distribute any additional cash or cash equivalents distributed to the STOCKHOLDERS on the Closing Date and all other revenues including rentals or management fees or commissions (but not any portion thereof previously paid to pay bonuses property owners) related to any periods after March 31, 1998 shall be retained by the COMPANY and acquired by VPI in the transaction contemplated hereunder. The COMPANY's earnings after March 31, 1998 will be retained by the COMPANY. The form of the distribution to the STOCKHOLDERS or employees will be mutually agreed upon by the STOCKHOLDERS and VPI. The parties also will consider entering into a mutual indemnification agreement regarding the tax consequences of the COMPANY at any time prior to the Closing Date, notwithstanding anything in this Agreement to the contrarysuch distribution.

Balance Sheet Test. As of the Closing Date, the COMPANY shall have (i) positive net worth (excluding all customer deposits and similar escrow-type accounts); (ii) positive net working capital (defined as current assets minus current liabilities, excluding all customer deposits and similar escrow-type accounts); and (iii) all customer deposit accounts and other similar escrow-type accounts fully funded in cash or cash equivalents. To the extent that any condition set forth in clauses (i) through (iii) is not met, the cash portion of the consideration to be paid to the STOCKHOLDERS pursuant to this Section 3 shall be reduced by the amount required to cure any such failure. Indebtedness of the COMPANY in excess of the amount set forth on Annex III that was incurred in connection with the acquisition of the COMPANY by the STOCKHOLDERS, or the acquisition of nonoperating assets by the COMPANY or the STOCKHOLDERS, shall result in a corresponding dollar-for-dollar reduction in the cash portion of the consideration paid to the STOCKHOLDERS pursuant to this Section 3. If necessary, a post-Closing adjustment shall be made to effect the intent of this Section 3.3. Indebtedness, if any, that was incurred for working capital or in connection with the operating assets of the COMPANY, in each case in amounts that are reasonable and consistent with the past practice of the COMPANY, will be assumed or repaid by VPI without a corresponding reduction to consideration paid hereunder. In addition, so long as the conditions Notwithstanding anything set forth in clauses above, VPI acknowledges (i) through (iii) are satisfied as of the Closing Date, that the COMPANY has established a reserve in the amount of $125,000 on its balance sheet relating to contingent liabilites and (ii) that this reserve shall be permitted deemed to distribute any additional cash or cash equivalents to have not been established (i.e., shall be ignored and not counted) when conducting the STOCKHOLDERS or to pay bonuses to the STOCKHOLDERS or employees of the COMPANY at any time prior to the Closing Dateabove-referenced balance sheet tests, notwithstanding anything in this Agreement to the contraryincluding positive net working capital, positive net worth and fully funded customer deposits.

Balance Sheet Test. As of the Closing Date, the COMPANY shall have (i) positive net worth (excluding all customer deposits and similar escrow-type accounts); (ii) positive net working capital (defined as current assets minus current liabilities, excluding all customer deposits and similar escrow-type accounts); and (iii) all customer deposit accounts and other similar escrow-type accounts fully funded in cash or cash equivalents. To the extent that any condition set forth in clauses (i) through (iii) is not met, the cash portion of the consideration to be paid to the STOCKHOLDERS STOCKHOLDER pursuant to this Section 3 shall be reduced by the amount required to cure any such failure. Indebtedness of the COMPANY in excess of the amount set forth on Annex III that was incurred in connection with the acquisition of the COMPANY by the STOCKHOLDERSSTOCKHOLDER, or the acquisition of nonoperating assets by the COMPANY or the STOCKHOLDERSSTOCKHOLDER, shall result in a corresponding dollar-for-dollar reduction in the cash portion of the consideration paid to the STOCKHOLDERS STOCKHOLDER pursuant to this Section 3. If necessary, a post-Closing adjustment shall be made to effect the intent of this Section 3.3. Indebtedness, if any, that was incurred for working capital Certain indebtedness of affiliates of the STOCKHOLDER to the COMPANY and of the STOCKHOLDER to the COMPANY shall be reduced to unsecured promissory notes bearing interest at a rate of ____% per annum payable to the COMPANY or its order with interest-only payments over a ten-year term. STOCKHOLDER shall be the primary obligor on or shall personally guarantee all such indebtedness. Four million dollars ($4,000,000) in connection with principal under these unsecured notes payable to the operating COMPANY shall be treated as good assets of the COMPANY, in each case in amounts that are reasonable and consistent with COMPANY for purposes of determination of whether the past practice of the COMPANY, will be assumed or repaid by VPI without COMPANY has a corresponding reduction to consideration paid hereunder. In addition, so long as the conditions set forth in clauses positive net worth under clause (i) through (iii) are satisfied as above and the cash portion of the consideration to be paid to STOCKHOLDER shall not be reduced on account of these receivables payable by the STOCKHOLDER. STOCKHOLDER may, prior to or upon the Closing Date, the COMPANY shall be permitted to distribute any additional cash or cash equivalents to the STOCKHOLDERS or to pay bonuses to the STOCKHOLDERS or employees assume selected liabilities of the COMPANY at any time prior evidenced by promissory notes or contracts. Any such assumption shall be treated as being in repayment of the indebtedness of the STOCKHOLDER to the Closing DateCOMPANY. STOCKHOLDER shall indemnify the COMPANY with respect to all such liabilities of the COMPANY which may be so assumed by STOCKHOLDER. Notwithstanding anything set forth above, notwithstanding anything VPI acknowledges (i) that the COMPANY has established a reserve in the amount of $500,000 on its balance sheet relating to contingent liabilities and (ii) that this Agreement reserve shall be deemed to have not been established (i.e., shall be ignored and not counted) when conducting the contraryabove-referenced balance sheet tests, including positive net working capital, positive net worth and fully funded customer deposits.