Common use of Adjustment to Merger Consideration Clause in Contracts

Adjustment to Merger Consideration. (a) Subject to 6.13(b), for all Tax purposes, to the extent permitted by applicable law, any payment by Acquiror or Parent under this Agreement shall be treated as an adjustment to the consideration payable upon consummation of the Merger. (b) If the Internal Revenue Service (the "IRS") (or similar taxing authority) issues a written notice of proposed adjustment (an "Adjustment Notice") (or similar notice) with respect to characterization of an indemnity payment as a Purchase Price adjustment (the "Characterization Issue"), the Acquiror shall notify Parent as soon as practicable but no later than ten business days after the Acquiror's (or any of its Affiliates) receipt of such Adjustment Notice. In the event of any IRS or other proceedings related to a Characterization Issue, Acquiror shall permit Parent to provide comments which shall be considered in good faith (solely with respect to the Characterization Issue), provided, however, that Acquiror shall control all such proceedings. At its sole option, Acquiror may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the IRS in respect of a Characterization Issue and shall be entitled to settle or contest such Characterization Issue, as the case may be; provided, however, that if Parent elects by written notice to Acquiror to fund Acquiror's reasonable expenses with respect to any IRS or other proceeding, Acquiror shall use reasonable commercial efforts to uphold the characterization of the indemnity payment as an adjustment to the Purchase Price, but shall not be required to litigate such treatment unless Parent provides Acquiror with a written opinion of counsel selected by Parent, but reasonably acceptable to Acquiror, that the characterization of the indemnity payment will more likely than not be treated as an adjustment to the Purchase Price. If and to the extent that the treatment of an indemnification payment as an adjustment to the Purchase Price is finally determined to be erroneous pursuant to this Section 6.13, the indemnifying party shall be required to pay to the indemnified party the liability for any Taxes incurred by the indemnified party as a result of the receipt of the indemnity payment.

Adjustment to Merger Consideration. (a) Subject On the fifth (5th) Business Day preceding the Closing Date, the Company shall deliver to 6.13(bCEH LLC and the Designated Representative (i) an estimated balance sheet of the Company and Sea Coast (the "Estimated Aurora Balance Sheet") as of 11:59 p.m. on the day immediately prior to the Closing Date, (ii) a certificate which shall set forth (A) a good faith estimate of (I) the amount of Aurora Net Debt as of such time (the "Estimated Aurora Net Debt") and (II) Aurora Working Capital as of such time (the "Estimated Aurora Working Capital"), for all Tax purposes, in each case prior to payment of Aurora Closing Expenses and (B) a good faith estimate of the extent permitted by applicable law, any payment by Acquiror or Parent under this Agreement Employee Expense Amount. The Estimated Aurora Balance Sheet shall be treated as an adjustment to the consideration payable upon consummation of the Mergerprepared by Aurora in accordance with GAAP consistently applied. (b) If On the Internal Revenue Service second Business Day prior to the Closing Date, CEH LLC shall deliver to the Company and the Designated Representative a certificate which shall set forth a good faith estimate of the Employee Expense Amount (the "IRS") (or similar taxing authority) issues a written notice of proposed adjustment (an "Adjustment Notice") (or similar notice) with respect to characterization of an indemnity payment as a Purchase Price adjustment (the "Characterization IssueEstimated Employee Expense Amount"), the Acquiror shall notify Parent as . (c) As soon as practicable practicable, but no later than ten business ninety (90) days after the AcquirorClosing Date, the Reorganized Company shall prepare and deliver to CEH LLC and the Designated Representative a balance sheet of the Company and Sea Coast as of 11:59 p.m. on the date immediately prior to the Closing Date which shall be audited by Ernst & Young LLP, together with the related audit report of such firm (the "Final Aurora Balance Sheet"). The Reorganized Company shall also deliver a certificate setting forth (i) its calculation of (A) the amount of Aurora Net Debt as of such time (the "Actual Aurora Net Debt") and (B) the amount of Aurora Working Capital as of such time (the "Actual Aurora Working Capital"), in each case prior to payment of Aurora Closing Expenses and (ii) its calculation of the Employee Expense Amount (the "Actual Employment Expense Amount"). The Final Aurora Balance Sheet shall be prepared in accordance with this Agreement and GAAP consistently applied. (d) If either CEH LLC or the Designated Representative has any objections to the Final Aurora Balance Sheet, or any calculations derived from the Final Aurora Balance Sheet or the Actual Employee Expense Amount, it shall deliver a written statement describing its objections in reasonable detail to the other not later than thirty (30) Business Days after its receipt thereof. CEH LLC and the Designated Representative shall use reasonable best efforts to resolve any such objections themselves. If a final resolution of such objections is not made within ten (10) Business Days after receipt by the other party of the objecting party's written objections, CEH LLC and the Designated Representative shall submit the issue to an auditor (the "Referee") for resolution. The Referee shall be the New York office of Deloitte & Touche; provided, that if, for any reason, at the time of such submission, Deloitte & Touche is unavailable to serve as the Referee or if Deloitte & Touche is not in a neutral and impartial position in relation to the parties as determined by Deloitte & Touche, CEH LLC and the Designated Representative shall have ten (10) Business Days from the time of such submission to agree on a substitute Referee. Failing timely agreement, on the request of either CEH LLC or the Designated Representative, the American Arbitration Association shall designate a national accounting firm to serve as the Referee. If issues in dispute are submitted to the Referee for resolution, CEH LLC and the Designated Representative shall furnish to the Referee such work papers and other documents and information relating to the disputed issues as the Referee may request, and shall be afforded the opportunity to present to the Referee any material relating to the resolution of the disputed items and to discuss the resolution of the disputed items with the Referee. The Referee shall be instructed in performing the review that CEH LLC and the Designated Representative shall each be provided with copies of any and all correspondence and drafts exchanged between either of them and the Referee. CEH LLC and the Designated Representative shall be granted reasonable access to information contained in the documents made available to the Referee by the other, provided that any information contained in the documents shall be kept confidential by the recipient party. (e) The Referee shall determine (and written notice thereof shall be given to CEH LLC and the Designated Representative) as promptly as practicable, but in any event within fifteen (15) Business Days of the date on which such dispute is referred to the Referee, based solely on presentations of CEH LLC and the Designated Representative and not by independent review, (i) whether the Final Aurora Balance Sheet (or any component thereof) and/or the Actual Employee Expense Amount was prepared in accordance with the terms of its Affiliatesthis Agreement and (ii) receipt of such Adjustment Notice. In the event of any IRS or other proceedings related to a Characterization Issue, Acquiror shall permit Parent to provide comments which shall be considered in good faith (solely only with respect to the Characterization Issue)disputed items submitted to the Referee) whether and to what extent (if any) the Actual Aurora Net Debt, provided, however, that Acquiror Actual Aurora Working Capital or the Actual Employee Expense Amount requires adjustment. The Company shall control all such proceedingsbear the fees and expenses of the Referee. At its sole option, Acquiror may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with The determination of the IRS in respect of a Characterization Issue and Referee shall be entitled to settle or contest such Characterization Issuefinal, as conclusive and binding on the case may be; providedparties, however, that if Parent elects by written notice to Acquiror to fund Acquirorand the Referee's reasonable expenses with respect to any IRS or other proceeding, Acquiror shall use reasonable commercial efforts to uphold the characterization determination of the indemnity payment as an adjustment Actual Aurora Net Debt, Actual Aurora Working Capital or the Actual Employee Expense Amount shall then be deemed to be the Actual Aurora Net Debt, Actual Aurora Working Capital and the Actual Employee Expense Amount for purposes of this Section 4.1. (f) CEH LLC will cause the Reorganized Company to make the work papers and back-up materials used in preparing the Final Aurora Balance Sheet and in determining the Actual Employee Expense Amount, and the relevant books, records, and the financial staff of the Reorganized Company available to the Purchase Price, but shall not be required to litigate such treatment unless Parent provides Acquiror with a written opinion of counsel selected Designated Representative and its Advisors during normal business hours and upon reasonable notice during (i) the review by Parent, but reasonably acceptable to Acquiror, that the characterization Designated Representative of the indemnity payment will more likely than not be treated as an adjustment to Final Aurora Balance Sheet and the Purchase Price. If determination of the Actual Employee Expense Amount and to (ii) the extent that the treatment of an indemnification payment as an adjustment to the Purchase Price is finally determined to be erroneous pursuant to this Section 6.13, the indemnifying party shall be required to pay to the indemnified party the liability for any Taxes incurred resolution by the indemnified party as a result parties of the receipt of the indemnity paymentany objections thereto.

Adjustment to Merger Consideration. (a) Subject Parent will prepare a pro-forma balance sheet (the "Closing Balance Sheet") of the Company as of December 31, 2010, including a computation of stockholders' equity as of the December 31, 2010. Parent will deliver the Closing Balance Sheet to 6.13(bStockholder within sixty days after the Closing Date. If within thirtydays following delivery of the Closing Balance Sheet, Stockholder has not given Parent notice of his objection to the Closing Balance Sheet (such notice must contain a statement of the basis of Stockholder's objection), then the stockholders' equity reflected in the Closing Balance Sheet will be used in computing the Adjustment Amount. If Stockholder gives such notice of objection, then the issues in dispute will be submitted to ▇▇▇▇▇▇ LLP, certified public accountants (the "Accountants"), for all Tax purposes, resolution. If issues in dispute are submitted to the extent permitted by applicable lawAccountants for resolution, any payment by Acquiror or Parent under this Agreement shall be treated as an adjustment (i) each Party will furnish to the consideration payable upon consummation Accountants such workpapers and other documents and information relating to the disputed issues as the Accountants may request and are available to that Party (or its independent public accountants), and will be afforded the opportunity to present to the Accountants any material relating to the determination and to discuss the determination with the Accountants; (ii) the determination by the Accountants, as set forth in a notice delivered to both parties by the Accountants, will be binding and conclusive on the parties; and (iii) Parent and Stockholder will each bear 50% of the Mergerfees of the Accountants for such determination. (b) If On the Internal Revenue Service (third Business Day following the "IRS") (or similar taxing authority) issues a written notice of proposed adjustment (an "Adjustment Notice") (or similar notice) with respect to characterization of an indemnity payment as a Purchase Price adjustment (the "Characterization Issue"), the Acquiror shall notify Parent as soon as practicable but no later than ten business days after the Acquiror's (or any of its Affiliates) receipt of such Adjustment Notice. In the event of any IRS or other proceedings related to a Characterization Issue, Acquiror shall permit Parent to provide comments which shall be considered in good faith (solely with respect to the Characterization Issue), provided, however, that Acquiror shall control all such proceedings. At its sole option, Acquiror may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the IRS in respect of a Characterization Issue and shall be entitled to settle or contest such Characterization Issue, as the case may be; provided, however, that if Parent elects by written notice to Acquiror to fund Acquiror's reasonable expenses with respect to any IRS or other proceeding, Acquiror shall use reasonable commercial efforts to uphold the characterization final determination of the indemnity payment as Adjustment Amount (i) if there is a Negative Adjustment Amount, Stockholder shall pay the amount thereof to Parent in cash in immediately available funds, or (ii) if there is a Positive Adjustment Amount, Parent shall issue to Stockholder additional unregistered shares of Parent Common Stock having an adjustment aggregate value, based on the Agreed Parent Share Valuation, equal to the Purchase Price, but shall not be required to litigate such treatment unless Parent provides Acquiror with a written opinion of counsel selected by Parent, but reasonably acceptable to Acquiror, that the characterization of the indemnity payment will more likely than not be treated as an adjustment to the Purchase Price. If and to the extent that the treatment of an indemnification payment as an adjustment to the Purchase Price is finally determined to be erroneous pursuant to this Section 6.13, the indemnifying party shall be required to pay to the indemnified party the liability for any Taxes incurred by the indemnified party as a result of the receipt of the indemnity paymentPositive Adjustment Amount.

Adjustment to Merger Consideration. (a) Subject Attached hereto as Exhibit 3 is (i) a projected unaudited balance sheet of TARGET, which (A) gives effect to 6.13(bthe transactions contemplated hereby and other actions of TARGET contemplated herein, including, among other things, the receipt by TARGET of an additional $2,504,486 from the issuance of convertible promissory notes issued prior to the Closing, payment or adequate accrual of transaction expenses, settlement of or adequate accrual for the proceeding referenced in Section 4.15 of the TARGET Disclosure Letter, a $60,000 accrual for 2006 audit fees and all amounts owing to Comerica under that certain Amended and Restated Loan and Security Agreement referenced in Section 4.2 of the TARGET Disclosure Letter, and (B) sets forth TARGET’s estimate of the Cash Ratio (the “Estimated Cash Ratio”) as of April 3, 2007 and (ii) a schedule of TARGET’s accounts receivable as of the date hereof other than accounts receivable pursuant to the terms and conditions of the Primo Contract (the “Other Accounts Receivable”). If the Closing shall not have been consummated on or prior to April 6, 2007, TARGET shall prepare and deliver to PURCHASER an updated projected unaudited balance sheet of TARGET as of the Closing Date, which (x) gives effect to the transactions contemplated hereby and other actions of TARGET contemplated in the projected balance sheet attached as Exhibit 3 and (y) sets forth an Estimated Cash Ratio updated as of the Closing Date. The balance sheet contemplated by this Section 3.10(a), for all Tax purposesas updated if applicable, to the extent permitted by applicable law, any payment by Acquiror or Parent under this Agreement shall be treated as an adjustment to the consideration payable upon consummation of the Merger“Pro Forma Balance Sheet.” (b) If At PURCHASER’s option, within ninety-five (95) days following the Internal Revenue Service Closing Date, if it so elects, PURCHASER shall prepare and deliver to the Stockholders’ Agent (i) an unaudited balance sheet (the "IRS"“Final Balance Sheet”) of the Surviving Corporation as of the Adjustment Date and (ii) a schedule of Other Accounts Receivable that have not been collected by TARGET or similar taxing authorityany PURCHASER Company on or before the ninetieth (90th) issues a written notice of proposed adjustment (an "Adjustment Notice") (or similar notice) with respect to characterization of an indemnity payment as a Purchase Price adjustment day following the Closing Date (the "Characterization Issue"“Uncollected Accounts Receivable”), the Acquiror shall notify Parent as soon as practicable but no later than ten business days after the Acquiror's (or any of its Affiliates) receipt of such Adjustment Notice. In the event of any IRS or other proceedings related to a Characterization Issue, Acquiror shall permit Parent to provide comments which The Final Balance Sheet shall be considered substantially in the form of the Pro Forma Balance Sheet and shall be prepared in good faith and on a basis consistent with and utilizing the same GAAP compliant principles, practices and policies as those used in preparing the Pro Forma Balance Sheet. The Final Balance Sheet shall set forth the Cash Ratio as of the Adjustment Date (solely with respect to the Characterization Issue“Final Cash Ratio”), provided, however, that Acquiror shall control all such proceedings. At its sole option, Acquiror may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the IRS in respect of a Characterization Issue and The Stockholders’ Agent shall be entitled given timely access to settle all supporting workpapers used in the preparation of the Final Balance Sheet and the schedule of Uncollected Accounts Receivable. (c) The Stockholders’ Agent may dispute any amounts reflected on the Final Balance Sheet or contest the calculation of the Final Cash Ratio or amounts reflected on the schedule of Uncollected Accounts Receivable by notifying PURCHASER in writing of each disputed item, specifying the amount thereof in dispute and setting forth, in reasonable detail, the basis for such Characterization Issuedispute, as within thirty (30) days of PURCHASER’s delivery of the case may be; providedFinal Balance Sheet and schedule of Uncollected Accounts Receivable pursuant to Section 3.10(b) hereof. If the Stockholders’ Agent delivers a notice of disagreement within such thirty (30)-day period, howeverthe Stockholders’ Agent and PURCHASER shall, that if Parent elects during the thirty (30) days following such delivery, each use good faith efforts to reach agreement on the disputed items or amounts in order to finally determine the Final Balance Sheet, Final Cash Ratio and/or Uncollected Accounts Receivable. If the Stockholders’ Agent and PURCHASER are unable to reach agreement concerning the Final Balance Sheet, Final Cash Ratio and/or Uncollected Accounts Receivable during such thirty (30)-day period, either PURCHASER or the Stockholders’ Agent may, by written notice to Acquiror to fund Acquiror's reasonable expenses with respect to any IRS or other proceedingthe other, Acquiror shall use reasonable commercial efforts to uphold the characterization demand arbitration of the indemnity payment matter in accordance with the procedures set forth in Section 12.6 hereof. (d) The Final Balance Sheet, Final Cash Ratio and Uncollected Accounts Receivable shall be deemed conclusively determined for purposes of this Agreement upon the earlier to occur of (i) the failure of the Stockholders’ Agent to notify PURCHASER of a dispute within thirty (30) days of PURCHASER’s delivery of the Final Balance Sheet and schedule of Uncollected Accounts Receivable as set forth in Section 3.10(c) hereof, (ii) the written resolution of all disputes pursuant to Section 3.10(c) hereof by PURCHASER and the Stockholders’ Agent, and (iii) the resolution of all disputes by the arbitrator pursuant to Section 12.6 hereof. Within three (3) business days of such conclusive determination: if (A) the Final Cash Ratio is less than 2.30, and/or (B) the amount of the Uncollected Accounts Receivable exceeds the Established Reserve, then PURCHASER and the Stockholders’ Agent shall jointly instruct the Escrow Agent in writing to transfer from the Escrow Amount to PURCHASER an adjustment amount equal to the Purchase Price, but shall not be required to litigate such treatment unless Parent provides Acquiror with a written opinion of counsel selected by Parent, but reasonably acceptable to Acquiror, that the characterization of the indemnity payment will more likely than not be treated as an adjustment to the Purchase Price. If and to the extent that the treatment of an indemnification payment as an adjustment to the Purchase Price is finally determined to be erroneous pursuant to this Section 6.13, the indemnifying party shall be required to pay to the indemnified party the liability for any Taxes incurred by the indemnified party as a result of the receipt of the indemnity paymentAdjustment Amount.

Adjustment to Merger Consideration. (a) Subject to 6.13(bAt the Closing, $1,125,000 in cash and 16,436 shares of the Purchaser Series D Stock, which shares are included in the aggregate number of shares described in Section 2.6(b)(ii), for all Tax purposes, and which cash and shares otherwise would be deliverable as provided in Section 2.6(b) (such cash and shares together representing $2,500,000) shall be deposited into an escrow account pursuant to the extent permitted by applicable lawEscrow Agreement attached as EXHIBIT D (the "Escrow Agreement"). As provided in the Escrow Agreement, any payment by Acquiror or Parent under this a portion of the cash and Purchaser Series D Stock held pursuant to the Escrow Agreement shall be treated returned to Purchaser, and in the case of Purchaser Series D Stock cancelled, as an appropriate to account for (i) the amount of any post-closing adjustment pursuant to Section 2.9(b) below and (ii) amounts covered by the consideration payable upon consummation indemnity provisions of the MergerSection 10 below. (b) If Net Working Capital and Merger Consideration Adjustment. As of December 31, 1999, the Internal Revenue Service Net Working Capital of the Company was $1,760,038. After the Closing, there shall be a final determination of Net Working Capital as of the Effective Time (the "IRSFinal Net Working Capital") as follows: (i) Within 60 days following the date of Closing, Purchaser shall deliver to Sellers' Representative (A) a consolidated balance sheet reflecting the assets and liabilities of the Company as of the Effective Time (the "Closing Balance Sheet") and (B) the work papers supporting the Closing Balance Sheet. The Closing Balance Sheet shall be prepared in accordance with GAAP applied on a consistent basis. In addition, Purchaser shall deliver to Sellers' Representative, along with the Closing Balance Sheet, a calculation of the Final Net Working Capital, based on the information contained in the Closing Balance Sheet (the "Purchaser's Proposed Final Net Working Capital"). (ii) Sellers' Representative shall have thirty (30) days from receipt of the Closing Balance Sheet (the "Verification Period") to verify Purchaser's Proposed Final Net Working Capital. Any disagreements as to the Closing Balance Sheet or similar taxing authority) issues Purchaser's Proposed Final Net Working Capital shall be described in a written notice of proposed adjustment to Purchaser within the Verification Period (an "Adjustment Notice") (or similar notice) with respect to characterization of an indemnity payment as a Purchase Price adjustment (the "Characterization Issue"), setting forth (A) Sellers' Representative's objections to Purchaser's Proposed Final Net Working Capital, (B) Sellers' Representative's determination of the Acquiror Closing Balance Sheet and (C) Sellers' Representative's proposed calculation of the Final Net Working Capital. If Sellers' Representative does not deliver an Adjustment Notice to Buyer within the Verification Period, the Closing Balance Sheet shall notify Parent as soon as practicable but no later than ten business be deemed final and binding on all parties and the Final Net Working Capital shall be equal to Purchaser's Proposed Final Net Working Capital. The Merger Consideration shall then be subject to potential adjustment in accordance with subparagraph (iv) below. (iii) If Sellers' Representative delivers an Adjustment Notice and Purchaser and Sellers' Representative are unable to agree upon the amount of any adjustment to the Merger Consideration within fifteen (15) days after the Acquiror's (or any of its Affiliates) receipt delivery of such Adjustment Notice. In , then a nationally recognized independent public accounting firm to be mutually agreed upon by Purchaser and Sellers' Representative (the event of any IRS or other proceedings related to a Characterization Issue, Acquiror shall permit Parent to provide comments which "Auditor") shall be considered requested to conduct a review and determine any amounts in good faith (solely with respect dispute between the parties relating to the Characterization Issue), provided, however, calculation of the Final Net Working Capital. The Auditor shall be instructed in performing the review that Acquiror Purchaser and 13 18 Sellers' Representative shall control all such proceedings. At its sole option, Acquiror may pursue or forgo each be provided with copies of any and all administrative appeals, proceedings, hearings correspondence and conferences with drafts distributed to any party and that the IRS in respect of a Characterization Issue and review shall be entitled done as soon as is practicable. Purchaser and Sellers' Representative shall be granted reasonable access to settle or contest such Characterization Issue, as the case may be; provided, however, that if Parent elects by written notice to Acquiror to fund Acquiror's reasonable expenses with respect to any IRS or other proceeding, Acquiror shall use reasonable commercial efforts to uphold the characterization of the indemnity payment as an adjustment all documents made available to the Purchase PriceAuditor by the other party, but provided that any information contained in the documents shall be subject to the confidentiality provisions set forth in this Agreement. Prior to the Auditor's issuance of its final determination, Purchaser and Sellers' Representative shall have the opportunity to provide the Auditor with input and any additional information that they deem relevant, provided that the Auditor shall not be required to litigate use any such treatment unless Parent provides Acquiror input or information in connection with a written opinion its review and determination. The Auditor shall promptly deliver copies of counsel selected by Parentits report to Purchaser and Sellers' Representative, but reasonably acceptable setting forth its determination of any amount due between the parties relating to Acquiror, that the characterization calculation of the indemnity payment Final Net Working Capital (the "Auditor's Report"). The Auditor's Report will more likely than not be treated as an conclusive and binding upon all parties to this Agreement; the Final Net Working Capital shall be calculated based on the determinations set forth in the Auditor's Report; and the Merger Consideration shall then be subject to potential adjustment in accordance with subparagraph (iv) below. Fifty percent of the costs and expenses of the Auditor and the Auditor's Report contemplated by this paragraph shall be borne by Sellers, and the remainder shall be borne by Purchaser. (iv) Adjustments to the Purchase Price. If Merger Consideration shall be made as set forth below, and any payments due under this Section 2.9(b)(iv) shall be made on the later of (X) thirty (30) days after the end of the Verification Period or (Y) in the event of delivery of an Adjustment Notice, thirty (30) days after the delivery of the Auditor's Report. (A) in the event the Final Net Working Capital is greater than zero but less than $500,000 (in each case less the principal amount of the Redemption Notes outstanding immediately prior to the extent that Closing), no adjustment shall be made; (B) in the treatment event the Final Net Working Capital is less than zero (less the principal amount of the Redemption Notes outstanding at or following the Closing), Sellers shall deliver to Purchaser in immediately available funds an indemnification payment as an adjustment amount equal to the Purchase Price is finally determined to be erroneous pursuant to this Section 6.13, difference between zero (less the indemnifying party shall be required to pay principal amount of the Redemption Notes outstanding immediately prior to the indemnified party Closing) and the liability for any Taxes incurred by Final Net Working Capital; and (C) in the indemnified party as a result event the Final Net Working Capital is greater than $500,000 (less the principal amount of the receipt Redemption Notes outstanding immediately prior to the Closing), Purchaser shall deliver to Sellers in immediately available funds pro rata in accordance with their Percentage Interest an amount equal to the difference between the Final Net Working Capital and $500,000 (less the principal amount of the indemnity paymentRedemption Notes outstanding immediately prior to the Closing).

Adjustment to Merger Consideration. (a) Subject The Cash Consideration will be adjusted, on a dollar-for-dollar basis, pursuant to 6.13(band in accordance with Section 2.3(f) and 2.3(g) (the “Adjustment Amount”). At or before Closing, Tempus shall deliver to QuadraMed (i) a balance sheet of Tempus as of the Closing Date (the “Closing Balance Sheet”), for all Tax purposes, to the extent permitted by applicable law, any payment by Acquiror or Parent under this Agreement which shall be treated as an adjustment prepared in accordance with GAAP, and which will be reviewed by KPMG LLP in accordance with agreed upon procedures (which shall be reflected in a written report by KPMG LLP to be delivered no later than 45 days after the consideration payable upon consummation Closing Date), (ii) a statement of the Mergercalculation of Net Cash and Net Working Capital as of the Closing Date, as determined from the Closing Balance Sheet, and (iii) a statement of the calculation of the resulting Adjustment Amount, if any (collectively, the “Adjustment Documents”). (b) If QuadraMed and the Internal Revenue Service (Shareholders’ Representative shall have full and complete access to the "IRS") (work papers, schedules or similar taxing authority) issues a written notice other documents prepared by or on behalf of proposed adjustment (an "Tempus in connection with the preparation of the Adjustment Notice") (or similar notice) Documents. QuadraMed and the Shareholders’ Representative shall cooperate fully with respect to characterization furnishing all information and documents reasonably requested in connection with the preparation of an indemnity payment as a Purchase Price adjustment the Adjustment Documents. QuadraMed and Tempus acknowledge that they have consulted each other in connection with the preparation of the Adjustment Documents. (c) If QuadraMed disputes the correctness of the Adjustment Documents provided to QuadraMed, QuadraMed shall notify the Shareholders’ Representative in writing of its objections (the "Characterization Issue")“Objection Notice”) within 30 days after its receipt of the Adjustment Documents. The Objection Notice shall describe, in reasonable detail, the Acquiror reasons for QuadraMed’s objections. If QuadraMed fails to deliver an Objection Notice within such 30-day period, QuadraMed shall notify Parent as soon as practicable but no later than ten business be deemed to have accepted the Adjustment Documents, which shall be final and binding on the parties. If, however, QuadraMed delivers an Objection Notice within such 30-day period, the Shareholders’ Representative and QuadraMed shall endeavor in good faith to resolve any disputed items within 30 days after the Acquiror's date of the Shareholders’ Representative’s receipt of the Objection Notice. If QuadraMed and the Shareholders’ Representative are unable to resolve any items in dispute relating to the Adjustment Documents within such 30-day period, QuadraMed and the Shareholders’ Representative shall submit the Objection Notice to an Accounting Firm mutually agreed upon by QuadraMed and the Shareholders’ Representative (or, if QuadraMed and the Shareholders’ Representative cannot agree on such an Accounting Firm, then each shall select an Accounting Firm and such Accounting Firms shall select a third Accounting Firm) (the Accounting Firm mutually agreed upon by the Shareholders’ Representative and QuadraMed or such other Accounting Firms being the “Independent Accounting Firm”) to resolve all items remaining in dispute, and the determination of the Independent Accounting Firm in respect of such items shall be conclusive and binding on the parties. The Independent Accounting Firm shall be instructed by the Shareholders’ Representative and QuadraMed to prepare and deliver, within 30 days after its appointment, to the Shareholders’ Representative and QuadraMed, after resolving any items in dispute between the Shareholders’ Representative and QuadraMed, a balance sheet of Tempus as of the Closing Date reflecting its resolution of all issues in dispute and a statement of the calculation of Net Working Capital and Net Cash as of the Closing Date determined therefrom. The Independent Accounting Firm shall have exclusive jurisdiction over, and resort to the Independent Accounting Firm shall be the sole recourse and remedy of the parties against one another or any other Person with respect to, any disputes arising out of or relating to the Closing Balance Sheet and the Final Closing Balance Sheet. The Independent Accounting Firm’s determination shall be conclusive and binding on all parties and shall be enforceable in a court of law. (d) The Closing Balance Sheet, as finally determined pursuant to Section 2.3(c) (whether by failure of QuadraMed to deliver an Objection Notice, by the agreement of the Shareholders’ Representative and QuadraMed, or by the final determination of the Independent Accounting Firm) shall be deemed to be, and shall be referred to herein, as the “Final Closing Balance Sheet.” (e) The Shareholders shall bear, and be solely responsible for, all of the costs and expenses incurred by Tempus or the Shareholders (including the fees and costs of KPMG LLP and their other Representatives) in connection with the preparation of the Adjustment Documents. QuadraMed shall bear, and be responsible for, the costs and expenses incurred by QuadraMed (including the fees and expenses of its AffiliatesRepresentatives) receipt in connection with its review of such the Adjustment NoticeDocuments. In If the event of any IRS or other proceedings related to a Characterization IssueIndependent Accounting Firm is engaged, Acquiror shall permit Parent to provide comments which the Independent Accounting Firm shall be considered instructed to allocate and account for its fees and out-of-pocket expenses as such fees and expenses relate to each of the disputed matters that are submitted to it for resolution. Promptly following the time that matters submitted to the Independent Accounting Firm have been resolved by the Independent Accounting Firm or have been settled among the parties, the Independent Accounting Firm shall determine the manner in good faith (solely which its fees and expenses should be allocated and paid as between the Shareholders’ Representative and QuadraMed taking into account the relationship between the manner in which the disputed matters have been finally settled or resolved and the position each party took initially with respect to the Characterization Issuematters when the matters were originally submitted to the Independent Accounting Firm for resolution. The Shareholders’ Representative and QuadraMed shall pay the fees and expenses of the Independent Accounting Firm in accordance with the manner in which they are allocated by the Independent Accounting Firm. (f) If Net Cash as of the Closing Date is finally determined in accordance with this Section 2.3 to be less than $500,000, each Shareholder shall be severally responsible for paying to QuadraMed such Shareholder’s Applicable Percentage of the amount by which Net Cash is less than $500,000. In addition, if Net Working Capital as of the Closing Date is finally determined in accordance with this Section 2.3 to be less than $2,309,000 (assuming Net Cash equals $500,000), provided, however, that Acquiror shall control all such proceedings. At its sole option, Acquiror may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the IRS in respect of a Characterization Issue and each Shareholder shall be entitled severally responsible for paying to settle or contest QuadraMed such Characterization Issue, as Shareholder’s Applicable Percentage of the case may be; provided, however, that if Parent elects amount by written notice which Net Working Capital is less than $2,309,000. The cash payment to Acquiror to fund Acquiror's reasonable expenses QuadraMed with respect to each Shareholder’s Applicable Percentage of any IRS or other proceeding, Acquiror Adjustment Amount shall use reasonable commercial efforts to uphold the characterization be made first from such Shareholder’s Applicable Percentage of the indemnity payment as an adjustment Escrow Cash. If a Shareholder’s Applicable Percentage of Escrow Cash is insufficient to pay in full such Shareholder’s Applicable Percentage of any Adjustment Amount, such Shareholder shall be severally responsible (based on its Applicable Percentage) for the Purchase Priceexcess. In such case, but each such Shareholder shall not be required pay to litigate QuadraMed its Applicable Percentage of such treatment unless Parent provides Acquiror with a written opinion excess by certified check or wire transfer of counsel selected by Parent, but reasonably acceptable to Acquiror, that the characterization immediately available funds within five days of the indemnity payment will more likely than not be treated date on which the Final Closing Balance Sheet has been finally determined. (g) If Net Cash as an adjustment to of the Purchase Price. If and to the extent that the treatment of an indemnification payment as an adjustment to the Purchase Price Closing Date is finally determined in accordance with this Section 2.3 to be erroneous greater than $500,000, QuadraMed, within five days of the date on which the Final Closing Balance Sheet has been finally determined, shall pay to the Shareholder’s Representative an amount equal to the amount by which Net Cash is greater than $500,000 (the “Refund Amount”). The Shareholder’s Representative shall distribute the Refund Amount to the Shareholders (based on each Shareholder’s Applicable Percentage) within five days of the receipt from QuadraMed of the Refund Amount. (h) The provisions of this Section 2.3 shall not limit or modify any other rights or remedies available to the parties pursuant to this Section 6.13Agreement, under law or at equity except that QuadraMed may not recover twice for an Adjustment Amount and an indemnity claim for the indemnifying party shall be required to pay to the indemnified party the liability for any Taxes incurred by the indemnified party as a result of the receipt of the indemnity paymentsame matter.

Adjustment to Merger Consideration. (a) Subject to 6.13(b), for all Tax purposes, to For the extent permitted by applicable lawpurposes of this Section 1.10, any payment by Acquiror or Parent under this Agreement calculations relating to (i) the Estimated Closing Statements and (ii) the Interim Closing Statements shall be treated as an adjustment to prepared and calculated in accordance with the consideration payable upon consummation of the MergerAccounting Principles. (b) If No later than three (3) Business Days prior to the Internal Revenue Service Closing Date, (i) Seller shall deliver to Parent a statement setting out Seller’s good faith estimate of (x) the Company’s Indebtedness which has been included in the calculation of the Company Adjusted NAV and (y) the Company’s Working Capital (the "IRS"“Estimated Company Working Capital Amount”), and (ii) (or similar taxing authority) issues Parent shall deliver to Seller a written notice statement setting out Parent’s good faith estimate of proposed adjustment (an "Adjustment Notice") (or similar notice) with respect to characterization the Parent’s Net Working Capital and Indebtedness which has been included in the calculation of an indemnity payment the Parent Adjusted NAV, including a schedule of Parent’s accounts receivable trial balance as a Purchase Price adjustment of the Closing (the "Characterization Issue"“A/R Schedule”), in each case calculated in accordance with the Acquiror shall notify Parent as soon as practicable but Accounting Principles (each an “Estimated Net Working Capital and Indebtedness Closing Statement”). In addition, no later than ten business days after three (3) Business Days prior to the Acquiror's Closing Date, Seller shall deliver to Parent a statement setting out Seller’s good faith estimate of the Net VIP Amount (or any of its Affiliates) receipt of such Adjustment Noticethe “Estimated Net VIP Amount”), calculated in accordance with the Accounting Principles (the “Estimated Net VIP Closing Statement”). In Each Estimated Net Working Capital and Indebtedness Closing Statement and the event of any IRS or other proceedings related to a Characterization Issue, Acquiror shall permit Parent to provide comments which Estimated Net VIP Closing Statement shall be considered referred to herein as an “Estimated Closing Statement”. The “Estimated Net Working Capital and Indebtedness Amount” shall mean the total of the line items shown in good faith an Estimated Net Working Capital and Indebtedness Closing Statement, and the “Estimated Net VIP Amount” shall mean the total of the line items shown in the Estimated Net VIP Closing Statement (solely with respect to the Characterization Issueparties acknowledging and agreeing that the Net VIP Amount shall only include the line items shown in the illustrative Net VIP Amount calculation included in the Accounting Principles), provided, however, that Acquiror shall control all such proceedings. At its sole option, Acquiror may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the IRS in respect of a Characterization Issue and The Estimated Closing Statements shall be entitled to settle or contest such Characterization Issue, as accompanied by reasonably detailed data and documentation supporting the case may be; provided, however, that if Parent elects by written notice to Acquiror to fund Acquiror's reasonable expenses with respect to any IRS or other proceeding, Acquiror shall use reasonable commercial efforts to uphold the characterization determination of each of the indemnity payment as an adjustment to the Purchase Price, but shall not be required to litigate such treatment unless Parent provides Acquiror with a written opinion of counsel selected by Parent, but reasonably acceptable to Acquiror, that the characterization of the indemnity payment will more likely than not be treated as an adjustment to the Purchase Price. If and to the extent that the treatment of an indemnification payment as an adjustment to the Purchase Price is finally determined to be erroneous pursuant to this Section 6.13, the indemnifying party shall be required to pay to the indemnified party the liability for any Taxes incurred by the indemnified party as a result of the receipt of the indemnity paymentcalculations therein.