Common use of Consideration for Purchased Assets Clause in Contracts

Consideration for Purchased Assets. On the terms and subject to the conditions of this Agreement, as consideration for the sale, transfer, assignment and delivery of the Purchased Assets to Purchaser at the Closing: (a) Purchaser shall assume the Assumed Liabilities as provided herein; (b) Purchaser shall deliver to Sellers at Closing cash by wire transfer to Sellers’ respective designated accounts in an amount equal to the Estimated Cash Purchase Price less the portion of the Holdback Amount delivered pursuant to this Agreement as provided below, subject to the adjustment in Section 2.6 (the “Closing Payment”). (c) Purchaser shall deposit in escrow pursuant to an escrow agreement in form and substance reasonably satisfactory to Purchaser and Seller (the “Escrow Agreement) $3,500,000. This amount shall be combined with the portion of the Holdback Amount delivered into escrow pursuant to the Escrow Agreement under the Related Purchase Agreeement. The Escrow Agreement shall provide for the release of $1,316,667 from escrow upon completion of the purchase price adjustment provided in Section 2.6 of this Agreement and the Related Agreement and $2,633,333 upon the earlier of May 15, 2006 and the completion of the 2005 fiscal year audit of the Purchaser, subject to holdback for claims pursuant to Section 9.4 of this Agreement and the Related Purchase Agreement. The Holdback Amount and any amounts placed in escrow under Section 9.4 or the corresponding provision of the Related Purchase Agreement (the “Offset Amounts”) are a non-exclusive source of payment for claims hereunder and under the Related Purchase Agreement. The parties hereto agree that claims against the all or any portion of the Holdback Amount and the Offset Amounts may be made by either Purchaser or Related Purchaser or both pursuant to the terms of this Agreement, the Related Purchase Agreement and the Escrow Agreement and nothing contained herein shall prevent or preclude Purchaser or Related Purchaser from making a claim against all or any portion of the Holdback Amount or Offset Amounts if such claim is made in accordance with the provisions hereof, the Related Purchase Agreement and/or the Escrow Agreement. (d) Purchaser shall pay the Contingent Payment, if any, in accordance with Section 2.7 and the A/R Payment, if any in accordance with Section 2.12.

Consideration for Purchased Assets. On the terms and subject 3.1.1 The aggregate monetary consideration to the conditions of this Agreement, as consideration be paid by Purchaser to Seller for the sale, transfer, assignment and delivery of the Purchased Assets to Purchaser at (the Closing"Purchase Price") will consist of: (a) Purchaser shall assume a cash payment in the Assumed Liabilities amount of $50,000,000 ("Consideration"), less any "Post-closing Adjustment" per Section 3.1.2, which cash payment is allocated among Seller and among each of the Purchased Assets as provided hereinlisted on Schedule 3.3; (b) the cash payment(s) by Purchaser shall deliver to Sellers at the Seller for the "Grossed-up Tax Payments" as defined in Section 3.4; (c) the "Additional Consideration" as detailed in Section 3.1.3; plus (d) Purchaser will assume all the liabilities and obligations of Seller, except to the extent to which the costs and expenses incurred by Seller in connection with the negotiations respecting this Agreement and the transactions contemplated hereunder, including costs of finders or investment bankers, preparation of documents, obtaining any necessary regulatory approvals and the consummation of the other transactions contemplated hereby, exceeds the amount accrued for such expenses on the Balance Sheet, including without limitation the liabilities listed on the "Balance Sheet" (being the statement of assets and liabilities of the Business as of Closing, to be attached hereto as Exhibit 3.1.1 after Closing), including (i) the "Payables" (being the accounts payable associated with the Business and stated on the Balance Sheet), (ii) the "Accrued Expenses" (being the accrued expenses associated with the Business and stated on the Balance Sheet), (iii) all obligations, whether due or to become due, arising under the contracts assumed by Purchaser, and (iv) all other liabilities and obligations of Seller (the "Assumed Liabilities"). 3.1.2 A "Post-closing Adjustment" to the Consideration will be made in the event that as of the Closing cash by wire transfer to Sellers’ respective designated accounts Date either: (i) the consolidated "Shareholder's Equity" of Seller is less than $8,553,286; or (ii) the consolidated "Working Capital Without Debt" of Seller is less than $10,457,859 or the consolidated "Debt Obligations"of Seller exceeds $19,247,104, except that no adjustment is necessary as long as the consolidated Working Capital Without Debt exceeds $10,457,859 in an amount equal to or greater than the Estimated Cash Purchase Price less the portion consolidated Debt Obligations of the Holdback Amount delivered pursuant to this Agreement as provided below, subject to the adjustment in Section 2.6 (the “Closing Payment”)Seller exceeds $19,247,104. (c) Purchaser shall deposit in escrow pursuant to an escrow agreement in form and substance reasonably satisfactory to Purchaser and Seller (the “Escrow Agreement) $3,500,000. This amount shall be combined with the portion of the Holdback Amount delivered into escrow pursuant to the Escrow Agreement under the Related Purchase Agreeement. The Escrow Agreement shall provide for the release of $1,316,667 from escrow upon completion of the purchase price adjustment provided in Section 2.6 of this Agreement and the Related Agreement and $2,633,333 upon the earlier of May 15, 2006 and the completion of the 2005 fiscal year audit of the Purchaser, subject to holdback for claims pursuant to Section 9.4 of this Agreement and the Related Purchase Agreement. The Holdback Amount and any amounts placed in escrow under Section 9.4 or the corresponding provision of the Related Purchase Agreement (the “Offset Amounts”) are a non-exclusive source of payment for claims hereunder and under the Related Purchase Agreement. The parties hereto agree that claims against the all or any portion of the Holdback Amount and the Offset Amounts may be made by either Purchaser or Related Purchaser or both pursuant to the terms of this Agreement, the Related Purchase Agreement and the Escrow Agreement and nothing contained herein shall prevent or preclude Purchaser or Related Purchaser from making a claim against all or any portion of the Holdback Amount or Offset Amounts if such claim is made in accordance with the provisions hereof, the Related Purchase Agreement and/or the Escrow Agreement. (d) Purchaser shall pay the Contingent Payment, if any, in accordance with Section 2.7 and the A/R Payment, if any in accordance with Section 2.12.

Consideration for Purchased Assets. On the terms and subject to the conditions of this Agreement, as consideration for the sale, transfer, assignment and delivery of the Purchased Assets to Purchaser at the Closing: (a) Purchaser shall assume the Assumed Liabilities as provided herein; (b) Purchaser shall deliver to Sellers Seller at Closing cash by wire transfer to Sellers’ respective Seller’s designated accounts account in an amount equal to the Estimated Cash Purchase Price less the portion of the Holdback Amount delivered pursuant to this Agreement as provided below, subject to the adjustment in Section 2.6 (the “Closing Payment”). (c) Purchaser shall deposit in escrow pursuant to an escrow agreement in form and substance reasonably satisfactory to Purchaser and Seller $450,000 (the “Escrow Agreement”) $3,500,000450,000. This amount shall be combined with the portion of the Holdback Amount delivered into escrow pursuant to the Escrow Agreement under the Related Purchase AgreeementAgreement. The Escrow Agreement shall provide for the release of $1,316,667 from escrow upon completion of the purchase price adjustment provided in Section 2.6 of this Agreement and the Related Purchase Agreement and $2,633,333 upon the earlier of May 15, 2006 and the completion of the 2005 fiscal year audit of the Purchaser, subject to holdback for claims pursuant to Section 9.4 of this Agreement and the Related Purchase Agreement. The Holdback Amount and any amounts placed in escrow under Section 9.4 or the corresponding provision of the Related Purchase Agreement (the “Offset Amounts”) are a non-exclusive source of payment for claims hereunder and under the Related Purchase Agreement. The parties hereto agree that claims against the all or any portion of the Holdback Amount and the Offset Amounts may be made by either Purchaser or Related Purchaser or both pursuant to the terms of this Agreement, the Related Purchase Agreement and the Escrow Agreement and nothing contained herein shall prevent or preclude Purchaser or Related Purchaser from making a claim against all or any portion of the Holdback Amount or Offset Amounts if such claim is made in accordance with the provisions hereof, the Related Purchase Agreement and/or the Escrow Agreement. (d) Purchaser shall pay the Contingent Payment, if any, in accordance with Section 2.7 and the A/R Payment, Payment if any in accordance with Section 2.12.

Consideration for Purchased Assets. On the terms and subject to ---------------------------------- the conditions of this Agreement, as consideration for the sale, transfer, assignment and delivery of the Purchased Assets to Purchaser at Purchaser, subject to adjustment as described in Section 2.6 (the Closing:"Purchase Price"): -------------- (a) Purchaser shall assume and pay, perform or otherwise discharge as the same shall become due in accordance with their respective terms, all of the Assumed Liabilities as provided herein;Liabilities. (b) Purchaser shall deliver to Sellers Seller at Closing (i) cash by wire transfer to Sellers’ respective designated accounts Seller's account in an the amount equal of $2,000,000, less any deposits paid by Purchaser to Seller and less any adjustment to the Estimated Cash Purchase Price less under Section 2.6(a), (ii) a promissory note in the portion principal amount of $1,000,000 in the Holdback Amount delivered pursuant to this Agreement form attached hereto as provided below, subject to the adjustment in Section 2.6 Exhibit A (the “Closing Payment”"Promissory Note") and (iii) a --------- --------------- warrant in the form attached hereto as Exhibit B (the "Warrant").. --------- ------- (c) For each successive calendar quarter ended January 31, April 30 and July 31 during each of the first five years commencing August 5, 1998 and ending July 31, 2003 (each year will be referred to as a "Royalty Payment Year" -------------------- and the first Royalty Payment Year will be 361 days), in the event that cumulative Total Net Revenues for such Royalty Payment Year to date exceed the thresholds set forth on Schedule 2.5(c) (each, a "Royalty Payment Threshold"), --------------- ------------------------- then Purchaser shall deposit deliver to Seller within 45 days following the last day of such quarter additional payments ("Royalty Payments") equal to that percentage of cumulative ---------------- Total Net Revenues for such Royalty Payment Year to date set forth on Schedule 2.5(c); provided, that Purchaser shall be credited any Royalty Payments made in escrow pursuant a prior quarter and to an escrow agreement in form and substance reasonably satisfactory the extent that Purchaser has overpaid Royalty Payments to Seller, Seller shall refund to Purchaser and Seller (the “Escrow Agreement) $3,500,000amount of such overpayment within three business days of written notice thereof. This amount shall be combined Concurrently with the portion of the Holdback Amount delivered into escrow pursuant to the Escrow Agreement under the Related Purchase Agreeement. The Escrow Agreement each payment, Purchaser shall provide for Seller with a certificate, signed by its chief financial officer, showing the release computation of $1,316,667 from escrow upon completion of the purchase price adjustment provided in Section 2.6 of this Agreement and the Related Agreement and $2,633,333 upon the earlier of May 15, 2006 and the completion of the 2005 fiscal year audit of the Purchaser, subject to holdback for claims pursuant to Section 9.4 of this Agreement and the Related Purchase Agreement. The Holdback Amount and any amounts placed in escrow under Section 9.4 or the corresponding provision of the Related Purchase Agreement (the “Offset Amounts”) are a non-exclusive source of payment for claims hereunder and under the Related Purchase Agreement. The parties hereto agree that claims against the all or any portion of the Holdback Amount and the Offset Amounts may be made by either Purchaser or Related Purchaser or both pursuant to the terms of this Agreement, the Related Purchase Agreement and the Escrow Agreement and nothing contained herein shall prevent or preclude Purchaser or Related Purchaser from making a claim against all or any portion of the Holdback Amount or Offset Amounts if such claim is made in accordance with the provisions hereof, the Related Purchase Agreement and/or the Escrow Agreementpayment. (d) Each payment under Section 2.5(c) shall be accompanied by a reasonably detailed statement of the computation of the amount thereof. Not more than once in any calendar year, Seller shall have the right to audit any of Purchaser's books of account, documents, records, papers and files relating to the payments under Section 2.5(c). If Seller has any objections to the computations, it will deliver detailed statements describing its objections to Purchaser shall pay within 20 days after such audit. The parties will use their reasonable efforts to resolve any such Seller's objections. If, however, the Contingent Paymentparties do not obtain final resolution of this matter within 20 days after Purchaser has received the statements of objections, if anythe dispute (other than disputes regarding Backlog, which will be handled in accordance with Section 2.7 2.5(e)) shall be referred to Deloitte & Touche LLP or such other accounting firm as agreed to Purchaser and Seller, in any event, which accounting firm shall not have provided services to either party within two years of the date of its engagement to settle such dispute (the "Accountant"). The parties will ---------- cooperate with the Accountant. The Accountant's determination of such payment shall be binding upon all parties. Purchaser and Seller will share responsibility for the fees and expenses of the Accountant based on the degree to which the Accountant accepts the respective positions of the parties, as conclusively determined by the Accountant. For example, if it is Purchaser's position that the Royalty Payment owed is $100, Seller's position that the Royalty Payment owed is $300 and the A/R PaymentAccountant's finding that the Royalty Payment owed is $250, then Purchaser shall pay 75% (i.e., (250-100/300-100)) of the Accountant's fees and expenses and Seller shall pay 25% (i.e., (300-250/300- 100)) of the Accountant's fees and expenses. (e) In the event that (i) Backlog (as defined below) as of the end of any Royalty Payment Year exceeds $350,000 and (ii) cumulative Total Net Revenues for such Royalty Payment Year are less than any Royalty Payment Threshold by an amount that is less than the amount by which Backlog exceeds $350,000 (the "Excess Backlog"), then the parties shall meet to discuss the -------------- reasons for the Excess Backlog, and after such discussions, if Seller believes that the reason for such Excess Backlog was Purchaser's design or intent to avoid a Royalty Payment Threshold, then such matter will be settled by binding arbitration before a single arbitrator, in proceedings conducted by the AAA and pursuant to such organization's rules for commercial disputes. Unless otherwise agreed by the parties, arbitration will be held in Los Angeles, California. The arbitrator shall review the Excess Backlog and to the extent that the arbitrator finds that the reason for any or all of the Excess Backlog was Purchaser's design or intent to avoid a Royalty Payment Threshold and not due to any other valid business reason or reason beyond Purchaser's control, then the amount of such Excess Backlog shall be included as Total Net Revenues for purposes of calculating the Royalty Payment for such Royalty Payment Year and shall be deducted from Total Net Revenues in accordance with Section 2.12.the following Royalty Payment Year;