Common use of Working Capital Settlement Clause in Contracts

Working Capital Settlement. (a) Prior to the Closing Date, the Company shall estimate its working capital position (the "Working Capital") as of the close of business on the Closing Date. Working Capital shall be equal to the sum of (i) cash and cash equivalents, plus (ii) the book value of accounts receivable after the allowance for doubtful accounts, plus (iii) the book value of inventory, including all work-in-process and finished goods, after allowance for all obsolete or unsaleable inventory, plus (iv) the book value of all accounts classified as current assets other than cash, cash equivalents, accounts receivable, inventory, income tax receivable and deferred income tax, including all utility deposits, rental deposits and equipment deposits (even though such deposits are characterized as long-term assets); less the sum of (a) bank overdraft, plus (b) the book value of all accounts payable, plus (c) the book value of accrued payroll, payroll taxes and deductions, as classified as a current liability, plus (d) the book value of advance xxxxxxxx, plus (e) taxes (other than income taxes) payable, plus (f) the book value of accrued expenses as classified as a current liability, excluding all accruals of interest, fees and penalties on Debt. The book value of all amounts shall be as shown on the Company's financial statements prepared in accordance with generally accepted accounting principles, consistently applied with the Financial Statements ("GAAP"). The Company shall provide Parent with a copy of the calculation of the Working Capital three business days prior to the Closing Date. Parent and the Company shall mutually agree to the Working Capital Statement (the "Working Capital Statement") on or before the Closing Date and the Working Capital Statement as amended on the Closing Date (the "Final Working Capital Statement") shall become final and binding on Parent and the Shareholders. (i) If the Working Capital as set forth in the Final Working Capital Statement is less than $25,298,000, then the Aggregate Merger Consideration shall be decreased by such difference. If the Working Capital as set forth in the Final Working Capital Statement is greater than $25,298,000, then the Aggregate Merger Consideration shall be increased by such difference.

Working Capital Settlement. (a) Prior to the Closing Date, the Company shall estimate its consolidated working capital position (the "Working Capital") as of the close of business on the Closing Date (the "Computation Date"). Working Capital shall be equal to mean (x) the sum of (i) cash and cash equivalents, the book value of current assets plus (ii) the book value amount of accounts receivable after the allowance for doubtful accountscapital expenditures listed on SCHEDULE 1.7, plus if any; less (iiiy) the book value of inventory, including all work-in-process and finished goods, after allowance for all obsolete current liabilities excluding any amount of Debt or unsaleable inventory, plus Company Expenses paid by Purchaser at Closing pursuant to Section 1.5(c). The Company shall provide Purchaser a copy of the calculation of the estimated Working Capital (ivthe "Estimated Working Capital Statement") three business days prior to the book value of all accounts classified as current assets other than cash, cash equivalents, accounts receivable, inventory, income tax receivable and deferred income tax, including all utility deposits, rental deposits and equipment deposits (even though such deposits are characterized as long-term assets); less the sum of (a) bank overdraft, plus (b) the book value of all accounts payable, plus (c) the book value of accrued payroll, payroll taxes and deductions, as classified as a current liability, plus (d) the book value of advance xxxxxxxx, plus (e) taxes (other than income taxes) payable, plus (f) the book value of accrued expenses as classified as a current liability, excluding all accruals of interest, fees and penalties on DebtClosing Date. The book value of all amounts and the determination of Working Capital shall be as shown on the Company's financial statements prepared determined in accordance with generally accepted accounting principles, consistently applied with the Financial Statements ("GAAP"). The Company shall provide Parent ) on a basis consistent with a copy of the calculation Company's last audited Financial Statements. (b) If the amount of the Working Capital as shown on the Estimated Working Capital Statement (the "Estimated Working Capital") is greater than $8,691,000 the Merger Consideration shall be increased by the difference between the Estimated Working Capital and $8,691,000. If the amount of the Estimated Working Capital is less than $8,691,000, the Merger Consideration shall be reduced by the difference between $8,691,000 and the Estimated Working Capital. (c) Purchaser shall prepare and deliver to Shareholders a "Final Working Capital Statement" on or before the thirtieth day following Closing. In preparing the Final Working Capital Statement, inventory shall be valued at the lesser of cost or market using FIFO in accordance with GAAP, and shall be based upon a physical count taken by Shareholders and observed by the Purchaser (one-half the cost of which shall be a Company Expense) within three business days prior to the Closing Date. Parent and Except as provided in the Company shall mutually agree to preceding sentence, all amounts set forth on the Final Working Capital Statement (shall be determined in accordance with GAAP on a basis consistent with the "accounting principles used in connection with determining the Estimated Working Capital Statement") on or before the Closing Date and the Capital. The Final Working Capital Statement as amended on the Closing Date (the "Final Working Capital Statement") shall become final and binding on Parent Shareholders and Purchaser (in such instance, the "Final Closing Statement") unless the Shareholders' Representative gives written notice to the Purchaser of his disagreement with respect to any matter contained therein ("Notice of Working Capital Disagreement") within 10 days after the receipt thereof. A Notice of Working Capital Disagreement shall not be permitted unless the aggregate amount in dispute exceeds Ten Thousand Dollars ($10,000). A Notice of Working Capital Disagreement shall specify in reasonable detail the nature of any disagreement so asserted. For a period of 30 days after the delivery of the Notice of Working Capital Disagreement, the Shareholders' Representative and the Shareholders. (i) If Purchaser shall attempt to resolve in writing all of the differences with respect to each matter specified in the Notice of Working Capital as set forth Disagreement, in which case any such resolution of the Final Working Capital Statement is less than $25,298,000shall be final and binding on the parties (in such instance, the "Final Closing Statement"). If, at the end of such 30-day period, the Shareholders' Representative and Purchaser have not resolved in writing all of the differences with respect to any such matter, then the Aggregate Merger Consideration each unresolved matter ("Disputed Working Capital Matter") shall be decreased submitted to and reviewed by the accounting firm of Price Waterhouse LLP or, if such difference. If firm is unwilling or unable to act, to another "big six" accounting firm selected by a panel of three arbitrators in accordance with the Working Capital as set forth in rules of the Final Working Capital Statement is greater than $25,298,000, then American Arbitration Association (the Aggregate Merger Consideration shall be increased by such difference."Neutral Accountant"

Working Capital Settlement. (a) Prior to the Closing Date, the Company shall estimate its working capital position (the "Working Capital") as of the close of business on the Closing Date (the "Computation Date"). Working Capital shall be equal to mean (x) the sum of (i) cash and cash equivalents, the book value of current assets plus (ii) the book value amount of accounts receivable after the allowance for doubtful accounts, plus capital expenditures listed on Schedule 1.7; less (iiiy) the book value of inventory, including all work-in-process and finished goods, after allowance for all obsolete current liabilities excluding any amount of Debt or unsaleable inventory, plus Company Expenses paid by Purchaser at Closing pursuant to Section 1.5(c). The Company shall provide Purchaser a copy of the calculation of the estimated Working Capital (ivthe "Estimated Working Capital Statement") three business days prior to the book value of all accounts classified as current assets other than cash, cash equivalents, accounts receivable, inventory, income tax receivable and deferred income tax, including all utility deposits, rental deposits and equipment deposits (even though such deposits are characterized as long-term assets); less the sum of (a) bank overdraft, plus (b) the book value of all accounts payable, plus (c) the book value of accrued payroll, payroll taxes and deductions, as classified as a current liability, plus (d) the book value of advance xxxxxxxx, plus (e) taxes (other than income taxes) payable, plus (f) the book value of accrued expenses as classified as a current liability, excluding all accruals of interest, fees and penalties on DebtClosing Date. The book value of all amounts and the determination of Working Capital shall be as shown on the Company's financial statements prepared determined in accordance with generally accepted accounting principles, consistently applied with the Financial Statements ("GAAP"). The Company shall provide Parent ) on a basis consistent with a copy of the calculation Company's last audited Financial Statements. (b) If the amount of the Working Capital as shown on the Estimated Working Capital Statement (the "Estimated Working Capital") is greater than $1,754,463, the Merger Consideration shall be increased by the difference between the Estimated Working Capital and $1,754,463. If the amount of the Estimated Working Capital is less than $1,754,463, the Merger Consideration shall be reduced by the difference between $1,754,463 and the Estimated Working Capital. (c) Purchaser shall prepare and deliver to Shareholders a "Final Working Capital Statement" on or before the thirtieth day following Closing. In preparing the Final Working Capital Statement, inventory shall be valued at the lesser of cost or market using FIFO in accordance with GAAP, and shall be based upon a physical count taken by Shareholders and observed by the Purchaser (one-half the cost of which shall be a Company Expense) within three business days prior to the Closing Date. Parent and Except as provided in the Company shall mutually agree to the Working Capital Statement (the "Working Capital Statement") on or before the Closing Date and the Working Capital Statement as amended on the Closing Date (the "Final Working Capital Statement") shall become final and binding on Parent and the Shareholders. (i) If the Working Capital as preceding sentence, all amounts set forth in on the Final Working Capital Statement is less than $25,298,000, then the Aggregate Merger Consideration shall be decreased by such differencedetermined in accordance with GAAP on a basis consistent with the accounting principles used in connection with determining the Estimated Working Capital. If the Working Capital as set forth in the The Final Working Capital Statement is greater than $25,298,000, then the Aggregate Merger Consideration shall be increased by such difference.become final and