Common use of Net Assets Adjustment Clause in Contracts

Net Assets Adjustment. (a) The purchase price for the Assets has been predicated on $4,500,000 of Net Assets as reflected on the Statement of Net Assets included as Schedule 1.1(a) hereto, updated to the Closing Date. Net Assets are defined as the net book value of the Assets and Assumed Liabilities as determined in accordance with Generally Accepted Accounting Principles (GAAP) and applied on a consistent basis. As of the Closing Date, Seller shall perform a full closing of its books to derive a balance sheet of Seller and a Statement of Net Assets in the form of Schedule 1.1(a). The amount of Net Assets shown on such Closing Date Statement of Net Assets shall be the "Closing Date Net Assets." As soon as practicable but no later than thirty (30) days after the Closing, Seller shall deliver to the Buyer or, at the request of Buyer, to Buyer and Xxxxxx Xxxxxxxx LLP, such Statement of Net Assets and balance sheet, and Seller shall make available to Buyer and Xxxxxx Xxxxxxxx LLP such books and records relating to said financial statements as they may request. Xxxxxx Xxxxxxxx LLP shall audit said balance sheet of Seller as of the Closing Date and the Statement of Net Assets as of the Closing Date. Buyer shall use its best efforts to cause Xxxxxx Xxxxxxxx LLP to complete such audit and to calculate and provide the Seller with a report, which may be in draft form, on the amount of any adjustments to the Closing Date Net Assets (the "Report") within sixty (60) days following receipt of the Closing Date balance sheet and Statement of Net Assets from Seller. To the extent the Closing Date Net Assets is greater or less than $4,500,000.00, such difference will result in a dollar for dollar increase or decrease, respectively, in the Purchase Price (the "Closing Adjustment"). If the Closing Adjustment is $500,000.00 or less, then it will either be paid in conjunction with the release of the Holdback payment (in the case of a increase in the Purchase Price) or will be deducted from the Holdback (in the case of a decrease in the Purchase Price) one hundred eighty (180) days following the Closing, or such later date on which the parties reach agreement on the Closing Adjustment. If the Closing Adjustment is greater than $500,000.00, then the Closing Adjustment will be paid in cash by the Buyer (in the case of an increase in the Purchase Price) or the Seller (in the case of a decrease in the Purchase Price) within ten (10) days from the date on which the parties reach agreement on the Closing Adjustment. (b) If, by the date which is 180 days after the Closing Date, Buyer has not collected all accounts receivable included in the Closing Date Net Assets determination, despite its commercially reasonable collection efforts, then the Purchase Price will be decreased dollar for dollar to the extent that such receivables are not collected as of that date. Buyer shall be permitted to deduct, in its sole discretion, dollar-for-dollar from the Holdback for such deficiency. Upon such Purchase Price decrease, whether by deduction from the Holdback or cash payment by Seller to Buyer, Buyer shall re-convey to Seller all such unpaid accounts receivable, and all records relating thereto, and Seller shall be responsible for their collection thereafter. (c) If Seller disagrees with the determination of the Closing Adjustment, Seller shall so notify Buyer in writing within twenty days after Seller's acknowledgement of receipt of the Report by Xxxxxx Xxxxxxxx, specifying in detail the basis of such disagreement; provided, however, that if Seller fails to notify Buyer of any disagreement within such twenty day period, then the determination of the Closing Date Net Assets and the Closing Adjustment as reflected in the Report shall be final, conclusive and binding upon the Parties. (d) Seller and Buyer shall negotiate in good faith to resolve any disagreement related to the Closing Adjustment. If any such disagreement cannot be resolved by the parties within ten days after Buyer's receipt of Seller's notice of disagreement, then the Parties shall jointly select a nationally recognized independent public accounting firm (the "Accounting Firm"), to act as an arbitrator to resolve as expeditiously as possible all points of disagreement with respect to the Closing Adjustment (or, in the event they are unable to agree to the selection, either may request the San Diego, CA office of the American Arbitration Association to make such selection, which shall be final and binding on the Parties). All determinations made by the Accounting Firm with respect to the Closing Adjustment shall be final, conclusive and binding on the Parties hereto. Each Party shall be responsible for its own fees and expenses, as well as one-half of the fees and expenses of the Accounting Firm, incurred in connection with the resolution of the dispute.

Net Assets Adjustment. (a) The purchase price For purposes of this Agreement, “Net Assets” as of a certain date shall mean the total assets less the total liabilities of the Company and its Subsidiaries, in each case determined in accordance with GAAP in a manner consistent with the Financial Statements. (b) As soon as practicable following the Closing Date (but no later than ninety (90) days thereafter), Acquiror will prepare and deliver to the Stockholders’ Agent, a balance sheet of the Company, including a computation of the amount of Net Assets (the “Net Assets Calculation”) as of the Effective Time, prepared in accordance with GAAP and audited by the independent public accounting firm which audits Acquiror’s financial statements; provided that for the purposes of the Net Assets has Calculation, such balance sheet shall reflect that the expenses and liabilities which comprise the Adjustment Amount have been predicated paid or otherwise satisfied and shall no longer appear in such balance sheet. If the Stockholders’ Agent agrees with the Net Assets Calculation or does not object to such computation within ten (10) days after receipt of such computation by delivering a Net Assets Objection Notice (as defined below) to Acquiror, the Net Assets Computation shall be deemed to be final and conclusive and shall be binding on $4,500,000 the Company, the Stockholders’ Agent and each of the Company Securityholders. If the Stockholders’ Agent disagrees with the Net Assets Calculation, the Stockholders’ Agent shall, within ten (10) days after receipt of the Net Assets Calculation, deliver a notice (an “Net Assets Objection Notice”) to Acquiror setting forth the Stockholders’ Agent’s proposed calculation of the amount of Net Assets as reflected of the close of business on the Statement of Net Assets included as Schedule 1.1(a) hereto, updated to the Closing Date. Net Assets are defined Acquiror and the Stockholders’ Agent will use their respective commercially reasonable efforts to resolve any disagreements as to the net book value computation of the Assets and Assumed Liabilities as determined in accordance with Generally Accepted Accounting Principles (GAAP) and applied on a consistent basis. As of the Closing Date, Seller shall perform a full closing of its books to derive a balance sheet of Seller and a Statement of Net Assets in the form of Schedule 1.1(a). The amount of Net Assets shown on such Closing Date Statement of Net Assets shall be the "Closing Date Net Assets." As soon as practicable , but no later than if they do not obtain a final resolution within thirty (30) days after Acquiror has received the Closing, Seller shall deliver to the Buyer or, at the request of Buyer, to Buyer and Xxxxxx Xxxxxxxx LLP, such Statement of Net Assets Objection Notice, then all amounts remaining in dispute shall be submitted to an independent public accountant (the “Neutral Auditor”) selected by the Stockholders’ Agent and balance sheet, and Seller shall make available to Buyer and Xxxxxx Xxxxxxxx LLP Acquiror within ten (10) days after expiration of such books and records relating to said financial statements as they may requestthirty (30) day period. Xxxxxx Xxxxxxxx LLP shall audit said balance sheet of Seller as of the Closing Date Acquiror and the Statement of Net Assets as of Stockholders’ Agent will direct the Closing Date. Buyer shall use its best efforts Neutral Auditor to cause Xxxxxx Xxxxxxxx LLP to complete such audit and to calculate and provide the Seller with render a report, which may be in draft form, on the amount of any adjustments to the Closing Date Net Assets (the "Report") determination within sixty (60) days following receipt of its retention and Acquiror, the Closing Date balance sheet Company, the Stockholders’ Agent, the Principal Stockholders and Statement the employees Table of Contents of Acquiror and the Company will cooperate with the Neutral Auditor during their engagement. The Neutral Auditor will consider only those items and amounts set forth in the Net Assets Objection Notice which Acquiror and the Stockholders’ Agent are unable to resolve; provided that, each of Acquiror and the Stockholders’ Agent shall be entitled to make a presentation to the Neutral Auditor regarding the items and amounts that Acquiror and the Stockholders’ Agent are unable to resolve. In making its determination, the Neutral Auditor shall (i) be bound by the terms and conditions of this Agreement, including without limitation, the definition of Net Assets from Seller. To and the extent the Closing Date Net Assets terms of this Section 1.14, and (ii) not assign any value with respect to a disputed amount that is greater than the highest value for such amount claimed by either Acquiror or the Stockholders’ Agent or that is less than $4,500,000.00the lowest value for such amount claimed by either Acquiror or the Stockholders’ Agent. The determination of the Neutral Auditor will be conclusive and binding upon Acquiror, such difference the Company, the Stockholders’ Agent and each of the Company Securityholders. Acquiror and the Company Securityholders will result in a dollar for dollar increase or decreaseeach pay one half of the fees and expenses of the Neutral Auditor, respectively, in the Purchase Price (the "Closing Adjustment"). If the Closing Adjustment is $500,000.00 or less, then it will either be paid in conjunction with the release of the Holdback payment (in the case of a increase in the Purchase Price) or will Company Securityholders’ portion to be deducted from the Holdback (in the case Escrow Fund. The amount of a decrease in the Purchase Price) one hundred eighty (180) days following the ClosingNet Assets, or such later date on which the parties reach agreement on the as finally determined pursuant to this Section 1.14, is referred to herein as “Actual Closing Adjustment. If the Closing Adjustment is greater than $500,000.00, then the Closing Adjustment will be paid in cash by the Buyer (in the case of an increase in the Purchase Price) or the Seller (in the case of a decrease in the Purchase Price) within ten (10) days from the date on which the parties reach agreement on the Closing AdjustmentNet Assets. (b) If, by the date which is 180 days after the Closing Date, Buyer has not collected all accounts receivable included in the Closing Date Net Assets determination, despite its commercially reasonable collection efforts, then the Purchase Price will be decreased dollar for dollar to the extent that such receivables are not collected as of that date. Buyer shall be permitted to deduct, in its sole discretion, dollar-for-dollar from the Holdback for such deficiency. Upon such Purchase Price decrease, whether by deduction from the Holdback or cash payment by Seller to Buyer, Buyer shall re-convey to Seller all such unpaid accounts receivable, and all records relating thereto, and Seller shall be responsible for their collection thereafter.” (c) If Seller disagrees with In the event that the Actual Closing Net Assets is less than $0.00, the Stockholders’ Agent will, as soon as practicable after the determination of the amount of Actual Closing Adjustment, Seller shall so notify Buyer in writing within twenty days after Seller's acknowledgement of receipt of the Report by Xxxxxx Xxxxxxxx, specifying in detail the basis of such disagreement; provided, however, that if Seller fails to notify Buyer of any disagreement within such twenty day period, then the determination of the Closing Date Net Assets but in no event more than two (2) days thereafter, authorize Acquiror and the Escrow Agent to deduct from the Escrow Fund, and the Escrow Agent shall release to Acquiror from the Escrow Fund, an amount equal to (i) $0.00 minus the amount of Actual Closing Adjustment as reflected in the Report shall be finalNet Assets, conclusive and binding upon the Parties. plus (dii) Seller and Buyer shall negotiate in good faith to resolve any disagreement related to the Closing Adjustment. If any such disagreement cannot be resolved by the parties within ten days after Buyer's receipt of Seller's notice of disagreement, then the Parties shall jointly select a nationally recognized independent public accounting firm (the "Accounting Firm"), to act as an arbitrator to resolve as expeditiously as possible all points of disagreement with respect to the Closing Adjustment (or, in the event they are unable to agree to the selection, either may request the San Diego, CA office of the American Arbitration Association to make such selection, which shall be final and binding on the Parties). All determinations made by the Accounting Firm with respect to the Closing Adjustment shall be final, conclusive and binding on the Parties hereto. Each Party shall be responsible for its own fees and expenses, as well as one-half of the fees and expenses of the Accounting FirmNeutral Auditor, if any, incurred in connection with the resolution of the disputepursuant Subsection 1.14(b).

Net Assets Adjustment. (ai) The purchase price for As used herein "Net Assets" shall mean the Assets has been predicated on $4,500,000 of Net Assets dollar amount equal to the total assets (other than Receivables) as reflected on the Statement applicable schedule of Net Assets minus the total liabilities as reflected on the applicable schedule of Net Assets. The schedule of Net Assets of the Business at May 8, 1999 (the "Interim Schedule of Net Assets"), a copy of which is attached hereto as Exhibit D, sets forth only those Purchased Assets (excluding Receivables) and Assumed Liabilities set forth on the May 8, 1999 interim balance sheet of the Business which is included in Schedule 3.2(a) plus raw materials inventory for Toothpaste Products and Effervescent Denture Products (as such products are defined in the Contract Manufacturing Agreement). The Net Assets of the Business as set forth in the Interim Schedule 1.1(a) hereto, updated to the Closing Date. of Net Assets are defined hereinafter referred to as the net book value "Interim Net Assets." Within forty five (45) days after the date of the Closing, Sellers shall submit to Buyer a schedule of Net Assets for the Business, prepared consistently with and on the same basis as the Interim Schedule of Net Assets, showing only Purchased Assets (excluding Receivables) and Assumed Liabilities as determined in accordance with Generally Accepted Accounting Principles (GAAP) and applied on a consistent basis. As of the Closing Date, Seller shall perform a full closing Date (the "Final Closing Date Schedule of its books to derive a balance sheet of Seller Net Assets"). The parties hereby acknowledge and a Statement agree that the Final Closing Date Schedule of Net Assets (i) shall not contain any accrual in respect of the net SAP assets, and (ii) shall exclude the raw materials inventory used in the form manufacture of effervescent denture products and toothpaste products that is also used in the manufacture of other products of Perrxxx'x xxxiness. Sellers shall also provide to Buyer with the Final Closing Date Schedule 1.1(a). The amount of Net Assets shown on such detailed work papers and other supporting schedules and documentation with respect to the Business as shall be reasonably necessary for Buyer to evaluate the Final Closing Date Statement Schedule of Net Assets including, without limitation, supporting items with respect to cash, inventory, prepaid expenses, fixed assets, and related accumulated depreciation, trade payables and accrued expenses that reconcile to the total amount as reflected on the Final Closing Date Schedule of Net Assets. The inventory reflected on the Final Closing Date Schedule of Net Assets shall be valued at PTN's fiscal year 1999 standard cost for such inventory using the "same methodology used to determine PTN's fiscal year 1999 standard cost with respect to the May 8, 1999 interim balance sheet and shall reflect an inventory reserve of five million dollars ($5,000,000). No other reserve for inventory shall be established on the Final Closing Date Schedule of Net Assets." As soon as practicable but no later than thirty . During and within the sixty (3060) days day period after the Closing, Seller shall deliver to the Buyer or, at the request of Buyer, delivery to Buyer of such Final Closing Date Schedule of Net Assets, Buyer and Xxxxxx Xxxxxxxx LLP, such Statement its representatives may review the Final Closing Date Schedule of Net Assets and balance sheet, and Seller shall make available to notify Sellers in writing whether or not Buyer and Xxxxxx Xxxxxxxx LLP such books and records relating to said financial statements as they may request. Xxxxxx Xxxxxxxx LLP shall audit said balance sheet of Seller as of disputes the Final Closing Date and the Statement Schedule of Net Assets as (and, if Buyer does dispute the Final Closing Date Schedule of the Closing Date. Net Assets, Buyer shall use its best efforts deliver to cause Xxxxxx Xxxxxxxx LLP to complete such audit and to calculate and provide the Seller with Sellers a reportwritten statement, which may be in draft form, on the amount of any adjustments giving reasonable detail as to the reasons for such dispute accompanied by copies of such work papers as Buyer relied on in connection with its decision to file such dispute). If Buyer does dispute the Final Closing Date Net Assets (the "Report") within sixty (60) days following receipt of the Closing Date balance sheet and Statement Schedule of Net Assets from Seller. To the extent the Closing Date Net Assets is greater or less than $4,500,000.00, such difference will result in a dollar for dollar increase or decrease, respectively, in the Purchase Price (the "Closing Adjustment"). If the Closing Adjustment is $500,000.00 or less, then it will either be paid in conjunction with the release of the Holdback payment (in the case of a increase in the Purchase Price) or will be deducted from the Holdback (in the case of a decrease in the Purchase Price) one hundred eighty (180) days following the Closing, or such later date on which the parties reach agreement on the Closing Adjustment. If the Closing Adjustment is greater than $500,000.00, then the Closing Adjustment will be paid in cash submitted by the Buyer (in the case of an increase in the Purchase Price) or the Seller (in the case of a decrease in the Purchase Price) within ten (10) days from the date on which the parties reach agreement on the Closing Adjustment. (b) If, by the date which is 180 days after the Closing Date, Buyer has not collected all accounts receivable included in the Closing Date Net Assets determination, despite its commercially reasonable collection efforts, then the Purchase Price will be decreased dollar for dollar to the extent that such receivables are not collected as of that date. Buyer shall be permitted to deduct, in its sole discretion, dollar-for-dollar from the Holdback for such deficiency. Upon such Purchase Price decrease, whether by deduction from the Holdback or cash payment by Seller to Buyer, Buyer shall re-convey to Seller all such unpaid accounts receivableSellers, and all records relating thereto, if Buyer and Seller shall be responsible for their collection thereafter. (c) If Seller disagrees with the determination of the Closing Adjustment, Seller shall so notify Buyer in writing within twenty days after Seller's acknowledgement of receipt of the Report by Xxxxxx Xxxxxxxx, specifying in detail the basis of such disagreement; provided, however, that if Seller fails to notify Buyer of any disagreement within such twenty day period, then the determination of the Closing Date Net Assets and the Closing Adjustment as reflected in the Report shall be final, conclusive and binding upon the Parties. (d) Seller and Buyer shall negotiate in good faith to resolve any disagreement related to the Closing Adjustment. If any such disagreement cannot be resolved by the parties within ten days after Buyer's receipt of Seller's notice of disagreement, then the Parties shall jointly select a nationally recognized independent public accounting firm (the "Accounting Firm"), to act as an arbitrator to resolve as expeditiously as possible all points of disagreement with respect to the Closing Adjustment (or, in the event they Sellers are unable to agree resolve such dispute within forty five (45) days of Sellers' receipt of Buyer's written notice thereof, the Final Closing Date Schedule of Net Assets shall be submitted to the selection, either may request the San Diego, CA Chicago office of Ernst & Young whose determination as to the American Arbitration Association to make such selection, which dispute shall be final and binding on the Parties)parties. All determinations made The expenses of Ernst & Young shall be borne equally by Buyer and Sellers. The Net Assets of the Accounting Firm with respect to Business at the Closing Adjustment shall be finalDate, conclusive and binding as shown on the Parties hereto. Each Party shall be responsible for its own fees and expenses, Final Closing Date Schedule of Net Assets are hereinafter referred to as well as one-half of the fees and expenses of the Accounting Firm, incurred in connection with the resolution of the dispute"Final Net Assets."

Net Assets Adjustment. The Purchase Price shall be, as the case may be: (a) The purchase price increased, on a U.S. dollar for U.S. dollar basis, by the Assets has been predicated on $4,500,000 of amount, if any, by which the Closing Net Assets as reflected exceed the Estimated Net Assets; and (b) reduced, on a U.S. dollar for U.S. dollar basis, by the Statement of amount, if any, by which the Estimated Net Assets included as Schedule 1.1(a) hereto, updated to exceed the Closing DateNet Assets. For purposes of this adjustment, an exchange rate equal to USD 0.153 for FRF 1 shall be used to convert into U.S. dollars the Estimated Net Assets are defined as and the net book value of the net assets of BEA for the Closing Net Assets and Assumed Liabilities calculations. This adjustment, which is described in Article 10 below, shall be referred to herein as the NET ASSETS ADJUSTMENT. In the event the Net Assets Adjustment as finally determined in accordance with Generally Accepted Accounting Principles (GAAP) and applied on a consistent basis. As of Article 10 below is payable by the Closing DatePurchaser to Bull, Seller shall perform a full closing of its books to derive a balance sheet of Seller and a Statement of Net Assets in the form of Schedule 1.1(a). The amount of Net Assets shown on such Closing Date Statement of Net Assets thereof shall be paid in U.S. dollars within 10 Business Days after such determination, by the "Closing Date Net Assets." As soon Purchaser to Bull, in immediately available funds by bank wire transfer to such account as practicable but Bull shall notify in writing to the Purchaser no later than thirty (30) days three Business Days after such determination. In the Closing, Seller shall deliver event the Net Assets Adjustment as finally determined in accordance with Article 10 below is payable by Bull to the Buyer orPurchaser, at the request of Buyer, to Buyer and Xxxxxx Xxxxxxxx LLP, such Statement of Net Assets and balance sheet, and Seller shall make available to Buyer and Xxxxxx Xxxxxxxx LLP such books and records relating to said financial statements as they may request. Xxxxxx Xxxxxxxx LLP shall audit said balance sheet of Seller as of the Closing Date and the Statement of Net Assets as of the Closing Date. Buyer shall use its best efforts to cause Xxxxxx Xxxxxxxx LLP to complete such audit and to calculate and provide the Seller with a report, which may be in draft form, on the amount of any adjustments to the Closing Date Net Assets (the "Report") within sixty (60) days following receipt of the Closing Date balance sheet and Statement of Net Assets from Seller. To the extent the Closing Date Net Assets is greater or less than $4,500,000.00, such difference will result in a dollar for dollar increase or decrease, respectively, in the Purchase Price (the "Closing Adjustment"). If the Closing Adjustment is $500,000.00 or less, then it will either thereof shall be paid in conjunction with U.S. dollars within 10 Business Days after such determination, by Bull to the release of Purchaser, in immediately available funds by bank wire transfer to such account as the Holdback payment (Purchaser shall notify in the case of a increase in the Purchase Price) or will writing to Bull no later than three Business Days after such determination. The Sellers shall be deducted from the Holdback (in the case of a decrease in the Purchase Price) one hundred eighty (180) days following the Closing, or jointly and severally liable for any such later date on which the parties reach agreement on the Closing Adjustmentamounts. If the Closing Adjustment is greater than $500,000.00, then the Closing Adjustment will be paid in cash by the Buyer (in the case of an increase in the Purchase Price) or the Seller (in the case of a decrease in the Purchase Price) within ten (10) days Any amounts payable under this Article 4.2 shall bear interest from the date on which the parties reach agreement on payment is due until payment is made and without any further actions being required, at an annual rate equal to 9,5 %, it being understood that this provision does not entitle the Closing Adjustment. (b) If, by the date which is 180 days after the Closing Date, Buyer has not collected all accounts receivable included in the Closing Date Net Assets determination, despite its commercially reasonable collection efforts, then the Purchase Price will be decreased dollar for dollar to the extent that such receivables are not collected as of that date. Buyer shall be permitted to deduct, in its sole discretion, dollar-for-dollar from the Holdback for such deficiency. Upon such Purchase Price decrease, whether by deduction from the Holdback or cash payment by Seller to Buyer, Buyer shall re-convey to Seller all such unpaid accounts receivable, and all records relating thereto, and Seller shall be responsible for their collection thereafter. (c) If Seller disagrees with the determination of the Closing Adjustment, Seller shall so notify Buyer in writing within twenty days after Seller's acknowledgement of receipt of the Report by Xxxxxx Xxxxxxxx, specifying in detail the basis of such disagreement; provided, however, that if Seller fails to notify Buyer of any disagreement within such twenty day period, then the determination of the Closing Date Net Assets and the Closing Adjustment as reflected in the Report shall be final, conclusive and binding upon the Parties. (d) Seller and Buyer shall negotiate in good faith to resolve any disagreement related to the Closing Adjustment. If any such disagreement cannot be resolved by the parties within ten days after Buyer's receipt of Seller's notice of disagreement, then the Parties shall jointly select a nationally recognized independent public accounting firm (the "Accounting Firm"), to act as an arbitrator to resolve as expeditiously as possible all points of disagreement with respect to the Closing Adjustment (or, in the event they are unable to agree to the selection, either may request the San Diego, CA office of the American Arbitration Association paying Party to make such selection, which shall be final and binding on the Parties). All determinations made by the Accounting Firm with respect to the Closing Adjustment shall be final, conclusive and binding on the Parties hereto. Each Party shall be responsible for its own fees and expenses, as well as one-half of the fees and expenses of the Accounting Firm, incurred in connection with the resolution of the disputelate payment.

Net Assets Adjustment. (a) The purchase price for As soon as practicable (but not later than 60 days) following the Assets has been predicated on $4,500,000 of Closing Date, Buyer shall prepare and deliver to Seller a statement (the "Closing Net Assets as reflected on Statement"), setting forth the Statement of Net Assets included of the Business as Schedule 1.1(a) hereto, updated to of the open of business on the Closing Date. The Closing Net Assets are defined as Asset Statement shall be prepared in good faith in conformity with GAAP in effect on the net book value of the Assets and Assumed Liabilities as determined in accordance with Generally Accepted Accounting Principles (GAAP) and Closing Date applied on a basis consistent basis. As with the Financial Statements. (b) In connection with the preparation of the Closing Net Assets Statement, on the Closing Date, Seller shall perform take a full closing of physical inventory observed by Buyer and/or its books to derive a balance sheet of Seller and a Statement of Net Assets in the form of Schedule 1.1(a)representatives. The amount of Net Assets shown on such Closing Date Statement inventory included in the calculation of Net Assets shall be include only inventory that (i) meets Seller's specifications and industry standards applicable to such inventory and (ii) is usable and saleable in the "Closing Date Net Assets." As soon as practicable but no later than thirty (30) days after ordinary course of the Business within nine months from the Closing, Seller . Said physical inventory shall deliver to list the Buyer or, at the request of Buyer, to Buyer type and Xxxxxx Xxxxxxxx LLP, such Statement of Net Assets and balance sheet, and Seller shall make available to Buyer and Xxxxxx Xxxxxxxx LLP such books and records relating to said financial statements as they may request. Xxxxxx Xxxxxxxx LLP shall audit said balance sheet of Seller as quantity of the Closing Date and the Statement of Net Assets as of the Closing Date. Buyer shall use its best efforts to cause Xxxxxx Xxxxxxxx LLP to complete such audit and to calculate and provide the Seller with a report, which may be in draft form, on the amount of any adjustments to the Closing Date Net Assets (the "Report") within sixty (60) days following receipt of the Closing Date balance sheet and Statement of Net Assets from Seller. To the extent the Closing Date Net Assets is greater or less than $4,500,000.00, such difference will result in a dollar for dollar increase or decrease, respectively, in the Purchase Price (the "Closing Adjustment"). If the Closing Adjustment is $500,000.00 or less, then it will either be paid in conjunction with the release of the Holdback payment (in the case of a increase in the Purchase Price) or will be deducted from the Holdback (in the case of a decrease in the Purchase Price) one hundred eighty (180) days following the Closing, or such later date on which the parties reach agreement on the Closing Adjustment. If the Closing Adjustment is greater than $500,000.00, then the Closing Adjustment will be paid in cash by the Buyer (in the case of an increase in the Purchase Price) or the Seller (in the case of a decrease in the Purchase Price) within ten (10) days from the date on which the parties reach agreement on the Closing Adjustment. (b) If, by the date which is 180 days after the Closing Date, Buyer has not collected all accounts receivable included in the Closing Date Net Assets determination, despite its commercially reasonable collection efforts, then the Purchase Price will be decreased dollar for dollar to the extent that such receivables are not collected as of that date. Buyer shall be permitted to deduct, in its sole discretion, dollar-for-dollar from the Holdback for such deficiency. Upon such Purchase Price decrease, whether by deduction from the Holdback or cash payment by Seller to Buyer, Buyer shall re-convey to Seller all such unpaid accounts receivable, and all records relating thereto, and Seller shall be responsible for their collection thereafterinventory. (c) If Seller disagrees with the determination After receipt of the Closing AdjustmentNet Assets Statement, Seller shall so notify have 30 days to review it. Seller and its representatives shall have full access to all relevant books and records and employees of Buyer in writing within twenty days after connection with Seller's acknowledgement review of the Closing Net Assets Statement. Unless Seller delivers written notice to Buyer on or prior to the 30th day after receipt of the Report by Xxxxxx Xxxxxxxx, Closing Net Assets Statement of its disagreement as to any amount included in or omitted from the Closing Net Assets Statement specifying in reasonable detail the basis for its disagreement, Seller shall be deemed to have accepted and agreed to the Closing Net Assets Statement. If Seller so notifies Buyer of such disagreement; provided, however, that if Seller fails an objection to notify Buyer of any disagreement within such twenty day period, then the determination of the Closing Date Net Assets Statement, Seller and Buyer shall within 30 days following the Closing Adjustment date of such notice (the "Net Assets Resolution Period") attempt to resolve their differences. Any resolution by them as reflected in the Report to any disputed amount shall be final, binding, conclusive and binding upon the Partiesnonappealable. (d) Seller and Buyer shall negotiate If at the conclusion of the Net Assets Resolution Period there are amounts still remaining in good faith to resolve any disagreement related to the Closing Adjustment. If any such disagreement cannot be resolved by the parties within ten days after Buyer's receipt of Seller's notice of disagreementdispute, then the Parties all amounts remaining in dispute shall jointly select be submitted to a firm of nationally recognized independent public accounting firm accountants reasonably acceptable to Buyer and Seller (the "Accounting FirmNeutral Auditor"). Buyer and Seller agree to execute, to if requested by the Neutral Auditor, a reasonable engagement letter. The Neutral Auditor shall act as an arbitrator to resolve as expeditiously as possible all points of disagreement with respect to the Closing Adjustment (ordetermine, based solely on presentations by Buyer and Seller, and not by independent review, only those amounts still in the event they are unable to agree to the selection, either may request the San Diego, CA office of the American Arbitration Association to make such selection, which dispute. The Neutral Auditor's determination shall be final made within 30 days of its engagement, shall be set forth in a written statement delivered to Buyer and binding on the Parties). All determinations made by the Accounting Firm with respect to the Closing Adjustment Seller and shall be final, conclusive binding and binding on the Parties heretoconclusive. Each Party shall be responsible for its own fees and expenses, as well as one-half of the The fees and expenses of the Accounting FirmNeutral Auditor shall be allocated between Buyer and Seller so that Seller's share of such fees and expenses shall be equal to the product of (i) and (ii), incurred where (i) is the aggregate amount of such fees and expenses, and where (ii) is a fraction, the numerator of which is the amount in connection dispute that is ultimately unsuccessfully disputed by Seller (as determined by the Neutral Auditor) and the denominator of which is the total amount in dispute submitted to arbitration. The balance of any such fees and expenses shall be paid by Buyer. The term "Final Closing Net Assets Statement," means the definitive Closing Net Assets Statement accepted by Seller or agreed to by Buyer and Seller in accordance with Section 1.6(c) or the resolution of definitive Closing Net Assets Statement resulting from the disputedeterminations made by the Neutral Auditor in accordance with this Section 1.6(d) (in addition to those items theretofore accepted by Seller or agreed to by Buyer and Seller).

Net Assets Adjustment. (a) The purchase price for Seller shall prepare (or cause to be prepared) an estimated unaudited consolidated balance sheet of the Assets has been predicated on $4,500,000 Company Group as of Net Assets as reflected the close of business on the Statement of Net Assets included as Schedule 1.1(a) hereto, updated Business Day immediately prior to the Closing Date. Net Assets are defined as the net book value of the Assets and Assumed Liabilities as determined , which balance sheet shall be prepared in accordance with Generally Accepted Accounting the Closing Balance Sheet Principles (GAAP) the “Estimated Closing Balance Sheet”). Seller shall provide Buyer with a draft of the Estimated Closing Balance Sheet no later than ten Business Days prior to the Closing. Seller and applied Buyer will in good faith discuss the Estimated Closing Balance Sheet delivered to Buyer and Seller will consider Buyer’s comments on a such draft to the extent consistent basiswith the Closing Balance Sheet Principles, provided that such comments are delivered in writing to Seller within three Business Days of Buyer’s receipt of the draft Estimated Closing Balance Sheet. As The final version of the Estimated Closing Balance Sheet shall be delivered to Buyer at least two Business Days prior to the Closing Date, Seller shall perform a full closing of its books to derive a balance sheet of Seller and a Statement of Net Assets in the form of Schedule 1.1(a). The amount of Net Assets shown on such Closing Date Statement of Net Assets shall be the "Closing Date Net Assets." As soon as practicable but no later than thirty (30) days after the Closing, Seller shall deliver to the Buyer or, at the request of Buyer, to Buyer and Xxxxxx Xxxxxxxx LLP, such Statement of Net Assets and balance sheet, and Seller shall make available to Buyer and Xxxxxx Xxxxxxxx LLP such books and records relating to said financial statements as they may request. Xxxxxx Xxxxxxxx LLP shall audit said balance sheet of Seller as of the Closing Date and the Statement of Net Assets as of the Closing Date. Buyer shall use its best efforts to cause Xxxxxx Xxxxxxxx LLP to complete such audit and to calculate and provide the Seller with a report, which may be in draft form, on the amount of any adjustments to the Closing Date Net Assets (the "Report") within sixty (60) days following receipt of the Closing Date balance sheet and Statement of Net Assets from Seller. To the extent the Closing Date Net Assets is greater or less than $4,500,000.00, such difference will result in a dollar for dollar increase or decrease, respectively, in the Purchase Price (the "Closing Adjustment"). If the Closing Adjustment is $500,000.00 or less, then it will either be paid in conjunction with the release of the Holdback payment (in the case of a increase in the Purchase Price) or will be deducted from the Holdback (in the case of a decrease in the Purchase Price) one hundred eighty (180) days following the Closing, or such later date on which the parties reach agreement on the Closing Adjustment. If the Closing Adjustment is greater than $500,000.00, then the Closing Adjustment will be paid in cash by the Buyer (in the case of an increase in the Purchase Price) or the Seller (in the case of a decrease in the Purchase Price) within ten (10) days from the date on which the parties reach agreement on the Closing Adjustment. (b) If, by the date which is 180 days after As soon as reasonably practicable following the Closing Date, Buyer has not collected all accounts receivable included and in the Closing Date Net Assets determination, despite its commercially reasonable collection efforts, then the Purchase Price will be decreased dollar for dollar to the extent that such receivables are not collected as of that date. Buyer shall be permitted to deduct, in its sole discretion, dollar-for-dollar from the Holdback for such deficiency. Upon such Purchase Price decrease, whether by deduction from the Holdback or cash payment by Seller to Buyerno event more than 60 days thereafter, Buyer shall re-convey prepare and deliver to Seller all such unpaid accounts receivablean unaudited consolidated balance sheet of the Company Group as of the close of business on the Business Day immediately prior to the Closing Date, and all records relating thereto, and Seller which balance sheet shall be responsible for their collection thereafterprepared in accordance with the Closing Balance Sheet Principles (the “Final Closing Balance Sheet”). (c) Within 60 days after delivery to Seller of the Final Closing Balance Sheet (during which period Buyer shall provide access to such working papers and information of it and its Affiliates and their accountants relating to the preparation of the Final Closing Balance Sheet as may be reasonably requested by Seller and its Affiliates and their respective representatives), Seller may dispute all or a portion of such Final Closing Balance Sheet by giving written notice (a “Notice of Disagreement”) to Buyer setting forth in reasonable detail the basis for any such dispute (any such dispute being hereinafter called a “Disagreement”). The parties shall promptly commence good faith negotiations with a view to resolving all such Disagreements. If Seller disagrees with does not provide a Notice of a Disagreement to Buyer within the determination of the Closing Adjustment60-day period set forth in this subsection (c), Seller shall so notify Buyer in writing within twenty days after Seller's acknowledgement of receipt of be deemed to have irrevocably accepted the Report by Xxxxxx Xxxxxxxx, specifying in detail the basis of such disagreement; provided, however, that if Seller fails to notify Buyer of any disagreement within such twenty day period, then the determination of the Final Closing Date Net Assets and the Closing Adjustment as reflected Balance Sheet in the Report shall be final, conclusive and binding upon the Partiesform delivered to it by Buyer. (d) If Seller delivers a Notice of Disagreement and Buyer does not dispute all or any portion of such Notice of Disagreement by giving written notice to Seller setting forth in reasonable detail the basis for such dispute within 45 days following the delivery of such Notice of Disagreement (during which period Seller shall negotiate in good faith provide access to resolve any disagreement related such working papers and information of it and its Affiliates and their accountants relating to the preparation of the Notice of Disagreement as may be reasonably requested by Buyer and its representatives), Buyer shall be deemed to have irrevocably accepted the Final Closing AdjustmentBalance Sheet as modified by Seller in the manner set forth in the Notice of Disagreement. (e) If Buyer shall dispute a Notice of Disagreement by delivery of written notice to Seller within the 45-day period set forth in the preceding subsection (d), and within the 20 days following the delivery to Seller of the notice of such dispute, the parties do not resolve the Disagreement in writing, such Disagreement shall thereafter be referred to the Independent Accounting Firm for a resolution of such Disagreement in accordance with the terms of this Agreement. If any remaining issues in dispute are submitted to the Independent Accounting Firm for resolution, each of Buyer and Seller will be afforded an opportunity to present to the Independent Accounting Firm any material relating to the determination of the matters in dispute and to discuss such disagreement canmatters with the Independent Accounting Firm as the Independent Accounting Firm may request or permit. The Independent Accounting Firm shall act as an expert and not be resolved by the parties within ten days after Buyer's receipt of Seller's notice of disagreement, then the Parties shall jointly select a nationally recognized independent public accounting firm (the "Accounting Firm"), to act as an arbitrator to resolve as expeditiously as possible all points calculate the Final Closing Balance Sheet and shall be instructed that its calculation must be made in accordance with the standards and definitions in this Agreement (including the Closing Balance Sheet Principles). Buyer and Seller shall instruct the Independent Accounting Firm that the determinations of disagreement such firm with respect to the Closing Adjustment (or, in the event they are unable to agree to the selection, either may request the San Diego, CA office any Disagreement shall be rendered within 30 days after referral of the American Arbitration Association Disagreement to such firm or as soon thereafter as reasonably possible. The Independent Accounting Firm shall make such selectiona determination with respect to any unresolved Disagreement only in a manner consistent with this Section 1.4, which and in no event shall the Independent Accounting Firm’s determination of the unresolved Disagreements be for an amount that is outside the range of Buyer’s and Seller’s proposals with respect to each individual Disagreement. Such determinations shall be final and binding on upon the Parties)parties, and the amount so determined shall be used to complete the Final Closing Balance Sheet. All determinations made by Each of Buyer and Seller shall use its reasonable best efforts to cause the Independent Accounting Firm to render its determination within the 30-day period described in the fourth sentence of this subsection (e), and each shall cooperate with respect such firm and provide such firm with access to the Closing Adjustment shall be finalbooks, conclusive records, personnel and binding on the Parties heretorepresentatives of it and such other information as such firm may require in order to render its determination. Each Party shall be responsible for its own fees and expenses, as well as one-half of the The fees and expenses of the Independent Accounting FirmFirm shall be borne by the party whose proposed Final Net Asset amount as reflected in such party’s submission to the Independent Accounting Firm differs the most from the Final Net Asset amount finally determined by the Independent Accounting Firm (or, incurred if such differences of the parties are equal, equally by Buyer and Seller). (f) Promptly after the Final Closing Balance Sheet has been finally determined in connection accordance with this Section 1.4 (including by means of a deemed acceptance of such documents by Buyer or Seller as provided in subsections (c) and (d) of this Section 1.4), but in no event later than five Business Days following such final determination, (i) if Final Net Assets is greater than the Estimated Net Assets, Buyer shall pay to Seller an amount in cash equal in the aggregate to such difference by Wire Transfer as set forth in written instructions from Seller and (ii) if the Final Net Assets is less than the Estimated Net Assets, Seller shall pay to Buyer an amount in cash equal to such difference by Wire Transfer as set forth in written instructions from Buyer. In any case, the foregoing amount payable shall be accompanied by interest thereon calculated from the Closing Date until the date of payment at the Applicable Rate. (g) The provisions of Section 1.4(e) relating to resolutions of disputes by the Independent Accounting Firm are not intended to and shall not be interpreted to require that the parties refer to such a firm (i) any dispute arising out of a breach by one of the parties of its obligations under this Agreement or (ii) any dispute the resolution of which requires the disputeconstruction of this Agreement (apart from the mathematical calculation of Final Net Assets and the accounting treatment of components thereof as such treatment affects the calculation of Final Net Assets). (h) The adjustments contemplated by this Section 1.4 shall be the exclusive remedy of the parties with respect to the subject matter hereof and no party shall have any right of recovery under Article VIII with respect thereto. (i) Any payment under this Section 1.4 and under Section 1.5 or Section 1.6 shall be treated as an adjustment to the Purchase Price for any Tax purposes, except as otherwise required by Applicable Law.

Net Assets Adjustment. (a) The purchase price for the Assets has been predicated on $4,500,000 of Net Assets as reflected on the Statement of Net Assets included as Schedule 1.1(a) hereto, updated Not less than five business days prior to the Closing Date. Net Assets are defined as , the net book value Chief Financial Officer of the Assets and Assumed Liabilities as determined in accordance with Generally Accepted Accounting Principles RP shall deliver to Buyer (GAAP1) and applied on a consistent basis. As of the Closing Date, Seller shall perform a full closing of its books to derive a an estimated balance sheet of Seller and a Statement of Net Assets in the form of Schedule 1.1(a). The amount of Net Assets shown on such Closing Date Statement of Net Assets shall be the "Closing Date Net Assets." As soon as practicable but no later than thirty (30) days after the Closing, Seller shall deliver to the Buyer or, at the request of Buyer, to Buyer and Xxxxxx Xxxxxxxx LLP, such Statement of Net Assets and balance sheet, and Seller shall make available to Buyer and Xxxxxx Xxxxxxxx LLP such books and records relating to said financial statements as they may request. Xxxxxx Xxxxxxxx LLP shall audit said balance sheet of Seller Business as of the Closing Date and without giving effect to the Statement Closing (the "ESTIMATED CLOSING BALANCE SHEET") and (2) a certificate (the "NET ASSETS DIFFERENTIAL CERTIFICATE") which shall (in a form of reasonable detail and with appropriate backup illustrating the calculation thereof) set forth a good faith estimate, based on the Estimated Closing Balance Sheet and expressed as a positive or a negative number, as the case may be, of the amount of the Final Net Assets Differential (the "ESTIMATED NET ASSETS DIFFERENTIAL"). The Estimated Closing Balance Sheet shall be prepared on a basis consistent with the preparation of the audited balance sheets of RP as of December 31, 2000 and 2001 included in the Audited RP Financial Statements and the calculation of Closing Net Assets shall be prepared therefrom consistent with the determination of Baseline Net Assets as set forth in Schedule 3.2 (a) Buyer shall be given reasonable access during normal business hours to the books and records of RP and reasonably permitted to review the working papers of RP relating to the Estimated Closing Balance Sheet and the Net Assets Differential Certificate a reasonable period prior to the fifth business day prior to the Closing. RP shall use reasonable efforts to revise the Net Assets Differential Certificate and the Estimated Closing Balance Sheet to the extent Buyer and RP agree to the existence of errors therein. Within 15 business days after Closing, RP shall deliver to Buyer a balance sheet of the Business as of the Closing Date. Buyer shall use its best efforts to cause Xxxxxx Xxxxxxxx LLP to complete such audit and to calculate and provide the Seller with a report, which may be in draft form, on the amount of any adjustments Date but without giving effect to the Closing Date Net Assets (the "ReportCLOSING BALANCE SHEET") within sixty (60) days following receipt of the Closing Date balance sheet and Statement of Net Assets from Seller. To the extent the Closing Date Net Assets is greater or less than $4,500,000.00a schedule, such difference will result in a dollar for dollar increase or decrease, respectively, in the Purchase Price (the "Closing Adjustment"). If the Closing Adjustment is $500,000.00 or less, then it will either be paid in conjunction with the release of the Holdback payment (in the case of a increase in the Purchase Price) or will be deducted from the Holdback (in the case of a decrease in the Purchase Price) one hundred eighty (180) days following the Closing, or such later date on which the parties reach agreement based on the Closing Adjustment. If Balance Sheet, setting forth the Closing Adjustment is greater than $500,000.00Net Assets. The Closing Balance Sheet shall be prepared on a basis consistent with the preparation of the audited balance sheets of RP as of December 31, then the Closing Adjustment will be paid in cash by the Buyer (2000 and 2001 and included in the case Audited RP Financial Statements, and the calculation of an increase in Closing Net Assets shall be prepared therefrom consistent with the Purchase Price) or the Seller (in the case determination of a decrease in the Purchase Price) within ten (10) days from the date Baseline Net Assets set forth on which the parties reach agreement on the Closing AdjustmentSchedule 3.2(a). (b) If, by the date which is 180 Within 45 days after of delivery to Buyer of the Closing DateBalance Sheet, Buyer has not collected all accounts receivable included Ernst & Young shall audit the Closing Balance Sheet (together with the schedule setting forth the Closing Net Assets). In connection with such audit, KPMG LLP shall review the work papers of Ernst & Young. All items in the schedule setting forth the Closing Date Net Assets determination, despite its commercially reasonable collection efforts, then delivered with the Purchase Price will be decreased dollar for dollar to Closing Balance Sheet the extent that such receivables amounts of which are not collected as objected to or questioned by RP or Buyer during the 14-day period following completion of that date. Buyer the audit of the Closing Balance Sheet by Ernst & Young shall be permitted to deduct, in its sole discretion, dollar-for-dollar from the Holdback for such deficiency. Upon such Purchase Price decrease, whether deemed agreed upon by deduction from the Holdback or cash payment by Seller to Buyer, RP and Buyer shall re-convey to Seller all such unpaid accounts receivable, and all records relating thereto, and Seller shall be responsible deemed conclusive for their collection thereafterpurposes of determining the Final Closing Net Assets. (c) If Seller disagrees with As promptly as practicable, but no later than 14 days after completion of the determination audit of the Closing Adjustment, Seller shall so notify Buyer in writing within twenty days after Seller's acknowledgement of receipt of Balance Sheet and the Report by Xxxxxx Xxxxxxxx, specifying in detail the basis of such disagreement; provided, however, that if Seller fails to notify Buyer of any disagreement within such twenty day period, then the determination of schedule setting forth the Closing Date Net Assets, RP and Buyer shall attempt to resolve any items comprising Closing Net Assets as to which RP and Buyer differ (the "DISPUTED ITEMS"). If during such 14-day period RP and Buyer are able to resolve all Disputed Items, the Closing Adjustment as reflected in the Report Net Assets so agreed upon shall be final, conclusive and binding upon the Parties"FINAL CLOSING NET ASSETS." (d) Seller If during such 14-day period any such Disputed Items cannot be resolved, those items to the extent of the amounts agreed upon by RP and Buyer shall negotiate be deemed agreed upon, shall no longer constitute Disputed Items and shall be conclusive for purposes of determining the Final Closing Net Assets, and each of RP and Buyer shall promptly but in good faith no event more than 14 days thereafter cause Deloitte & Touche LLP (or another accounting firm of internationally recognized standing) reasonably satisfactory to resolve any disagreement related them promptly to review this Agreement and the remaining Disputed Items for purposes of resolving the remaining Disputed Items and calculating the Final Closing AdjustmentNet Assets. If any In making such disagreement cancalculation, such accounting firm shall make a determination only of Disputed Items not be resolved by the parties within ten days after Buyer's receipt of Seller's notice of disagreement, then the Parties shall jointly select a nationally recognized independent public accounting firm (the "Accounting Firm"), to act as an arbitrator to resolve as expeditiously as possible all points of disagreement with respect to the Closing Adjustment (orRP and Buyer and, in the event they case of all other items, shall use the amounts which are unable agreed upon by RP and Buyer. Such accounting firm shall deliver to agree to the selectionRP and Buyer, either may request the San Diegoas promptly as practicable, CA office a report setting forth its resolution of the American Arbitration Association to make such selection, which remaining Disputed Items and its calculation of Closing Net Assets. Such report shall be final and binding on upon the Parties)parties hereto. All determinations made The cost of such review and report shall be borne by the Accounting Firm with respect to party against whom the Closing Adjustment disagreement is in large part resolved or, if the resolution does not substantially favor either RP or Buyer, such costs shall be finalborne equally by RP and Buyer. In all events, conclusive such accounting firm will determine the assessment of such costs. (e) The Closing Net Assets agreed to by RP and binding on Buyer or as calculated by the Parties hereto. Each Party accounting firm as set forth in Section 3.2(d) shall be responsible the "FINAL CLOSING NET ASSETS," which shall be conclusive for its own fees all purposes of this Agreement. (1) If the Final Net Assets Differential is positive or zero, then this clause (f)(1) shall apply and expenses, as well as one-half the "CASE 1 FINAL AMOUNT" shall be the difference of (A) the fees greater of (x) the Final Net Assets Differential minus $6 million and expenses of the Accounting Firm, incurred in connection with the resolution of the dispute.(y) zero minus (B)