Common use of Adjustment to the Consideration Clause in Contracts

Adjustment to the Consideration. 4.1 If the Completion Working Capital Amount is less than the Target Working Capital Amount (the difference being the “Shortfall Amount”) then the Seller shall owe to the Buyer the Shortfall Amount (the Consideration being adjusted accordingly) and no later than 5 Business Days after (and excluding) the date on which the Completion Working Capital Amount is agreed or deemed agreed or determined, the Seller shall pay a cash amount equal to the Shortfall Amount to the Buyer. 4.2 If the Completion Working Capital Amount is greater than the Target Working Capital Amount (the difference being the “Excess Amount”), then the Buyer shall owe to the Seller the Excess Amount (the Consideration being adjusted accordingly) and no later than 5 Business Days after (and excluding) the date on which the Completion Working Capital Amount is agreed or deemed agreed or determined, the Buyer shall pay a cash amount equal to the Excess Amount to the Seller. 4.3 If the Completion Working Capital Amount is the same as the Target Working Capital Amount, no payment shall be made by either the Seller or the Buyer. 4.4 As soon as practicable following Completion but in any event within 45 Business Days after the Completion Date, the Seller shall procure the preparation of drafts of the Completion Accounts and the Completion Statement calculating the Completion Working Capital Amount and any Shortfall Amount or Excess Amount on the basis of the requirements, accounting policies and accounting methods set out in Part III and Part IV of Schedule 10, and in substantially the same format as the Pro-forma Completion Accounts and Completion Statement. 4.5 When the draft Completion Accounts and Completion Statement have been prepared, the Seller shall forthwith deliver copies thereof, and the documentation requested by the Buyer in accordance with clause 4.8 (or where the release of such documentation requires compliance with a hold harmless, or similar requirement, the form of such hold harmless or similar requirement), to the Buyer. The Buyer and its accountants shall have a period of 90 Business Days from Completion (the “Review Period”) within which to review the draft Completion Accounts and Completion Statement and all of the documents requested by the Buyer in accordance with clause 4.8 and to satisfy itself that they have been duly prepared in accordance with this Agreement and that the value of the Completion Working Capital Amount and any Shortfall Amount or Excess Amount have been correctly calculated. The Buyer shall, before the expiry of the Review Period, either: 4.5.1 confirm in writing to the Seller that it agrees that the draft Completion Accounts and Completion Statement have been duly prepared and that the value of the Completion Working Capital Amount and any Shortfall Amount or Excess Amount have been correctly calculated; or 4.5.2 give notice in writing to the Seller explaining, in reasonable detail, why it is unable so to confirm and setting out details of its proposed adjustments to the draft Completion Accounts and Completion Statement and, to the extent reasonably possible, to the value of the Completion Working Capital Amount and any Shortfall Amount or Excess Amount. 4.6 If the Buyer fails so to confirm or to give such notice in accordance with clause 4.5, the draft Completion Accounts and Completion Statement and the calculations therein of the Completion Working Capital Amount and any Shortfall Amount or Excess Amount shall, upon expiry of the Review Period, be deemed to have been finally accepted and agreed by the parties. 4.7 If the Buyer serves a notice in accordance with clause 4.5.2: 4.7.1 the Buyer and the Seller shall endeavour to resolve all matters in dispute as soon as practicable. If they fail to resolve such matters within 25 Business Days of the date on which the Seller received such notice from the Buyer (or such longer period as the parties shall agree) (the “Resolution Period”), the Buyer or the Seller may refer any matter in dispute to an independent chartered accountant (the “Independent Accountant”) for a resolution. The identity of the Independent Accountant shall be agreed between the parties and he shall be appointed within 15 Business Days of the expiry of the Resolution Period (the “Appointment Period”). If the parties fail to make such appointment within the Appointment Period, the appointment shall be made by the President for the time being of the Institute of Chartered Accountants in England and Wales within 5 Business Days of the expiry of the Appointment Period, on the application of either the Buyer or the Seller. Such application shall specify that the appointee shall be experienced in matters in dispute between the parties and the Independent Accountant shall be instructed to determine the dispute in accordance with the provisions of this clause 4 and to make such determination as soon as practicable and in any event within 30 Business Days of his being instructed or such longer period as he shall, in his discretion, reasonably require. In making such determination, the Independent Accountant shall act as an expert and not as an arbitrator and his decision shall (in the absence of manifest error) be final and binding on the parties. The costs of the Independent Accountant shall be borne by the parties in such proportions as he may direct or, in the absence of any such direction, as to one half by the Buyer and as to the other half by the Seller; and 4.7.2 each party shall bear its own costs in connection with the resolution of the matters in dispute. 4.8 The Buyer and its accountants shall be entitled to examine the working papers relating to the draft Completion Accounts and Completion Statement for the purposes of their review under clause 4.5, subject to the Buyer complying with any hold harmless or similar requirements of the Seller’s external accountants in connection with the release of such working papers to the Buyer. The Buyer undertakes to the Seller to request any such working papers in connection with the draft Completion Accounts and Completion Statement. Subject thereto, the parties agree that they will promptly provide each other and their respective advisers with all information in their respective possession or control relating to the operations of the Target Group as may be relevant for the purposes of the Completion Accounts and Completion Statement, and with all co-operation and assistance as may reasonably be required to facilitate the production, review and agreement of the Completion Accounts and Completion Statement. 4.9 All cash sums payable under this clause 4 shall be paid by telegraphic transfer, in the case of sums payable to the Seller, to the Seller’s Solicitors’ Account and, in the case of sums payable to the Buyer to the Buyer’s Solicitors’ Account and the receipt in the Seller’s Solicitors’ Account or the Buyer’s Solicitors’ Account (as the case may be) of a payment pursuant to clauses 4.1 or 4.2 shall be an absolute discharge of the obligation of the Buyer or the Seller (as the case may be) to make such payment.

Adjustment to the Consideration. 4.1 If 3.1 The Vendor and the Purchaser shall procure that there shall be ascertained by the Company the amount of cash (both in hand and at bank) in the Company as at the close of business on the Completion Working Capital Amount is less than Date and, insofar as the Target Working Capital Amount same shall reasonably be practicable, there shall be prepared on the Completion Date: (i) a list of all trade debtors and all trade creditors as at the difference close of business on the Completion Date (including details of the amounts owed in each case) (ii) a list of all accrued compensation and related items and other accrued liabilities (as such items and liabilities were calculated for the purpose of the Management Accounts) as at the close of business on the Completion Date (a copy of each such list being the “Shortfall Amount”) then the Seller shall owe delivered to the Buyer Vendor and the Shortfall Amount (the Consideration being adjusted accordinglyPurchaser at Completion) and no later than 5 Business Days after (and excluding) the date on which the Completion Working Capital Amount is agreed or deemed agreed or determined, the Seller Purchaser shall pay a cash amount equal to the Shortfall Amount to the Buyer. 4.2 If the Completion Working Capital Amount is greater than the Target Working Capital Amount (the difference being the “Excess Amount”), then the Buyer shall owe to the Seller the Excess Amount (the Consideration being adjusted accordingly) and no later than 5 Business Days after (and excluding) the date on which the Completion Working Capital Amount is agreed or deemed agreed or determined, the Buyer shall pay a cash amount equal to the Excess Amount to the Seller. 4.3 If the Completion Working Capital Amount is the same ensure that as the Target Working Capital Amount, no payment shall be made by either the Seller or the Buyer. 4.4 As soon as practicable following Completion but Completion, and in any event within 45 Business Days not later than 30 days after the Completion Date, such lists and details shall be further reviewed and checked, and modified if necessary, and that a draft of the Seller Specified Asset Value Calculation ("draft Specified Asset Value Calculation") shall procure be prepared by the Purchaser in accordance with Clause 3.2 and delivered to the Vendor together with such lists as aforesaid (with any changes to such lists from those delivered on the Completion Date being identified and explained). 3.2 The draft Specified Asset Value Calculation shall be prepared: (a) stating the cash (in hand and at bank), trade debtors, trade creditors and accrued compensation and related items and other accrued liabilities (as such items and liabilities were calculated for the purpose of the Management Accounts) of the Company as at the close of business on the Completion Date; and (b) using the same accounting principles, policies, bases and practices as were used in the preparation of drafts the Accounts subject to the following adjustments: (i) amounts owed to or by other companies in the Pfizer Group, if any, shall be ignored and excluded; and (ii) the amount of US$350,000 is to be debited against trade debtors as an allowance for uncollectable trade debts (and no other adjustment is to be made for uncollectable trade debts) (iii) there shall be treated as an accrued liability the amount of US$336,000 with respect to exchanging patient data modules (iv) there shall be treated as an accrued liability an amount equivalent to the cost of repairing or replacing customer returns at the Company as at the Completion Date (such amount presently estimated to be in the region of US$115,000) (c) so as to show the Specified Asset Value, which shall be first expressed in pounds sterling (other than the amounts of US$350,000 and US$336,000 referred to in sub-paragraphs (b)(ii) and (iii) above) and then converted into US Dollars at the average exchange rate (as reflected in Bloomberg spot quotations ) for the 30 calendar days immediately preceding the Completion Date. 3.3 As soon as practicable after delivery of the Completion Accounts draft Specified Asset Value Calculation to the Vendor, the Vendor and the Completion Statement calculating Purchaser shall each use their reasonable endeavours to agree the Completion Working Capital Amount and any Shortfall Amount or Excess Amount on Specified Asset Value. If the basis of Vendor agrees with the requirements, accounting policies and accounting methods set out Specified Asset Value it shall so confirm to the Purchaser in Part III and Part IV of Schedule 10, and in substantially writing. If agreement is not reached as to the same format as the Pro-forma Completion Accounts and Completion Statement. 4.5 When the draft Completion Accounts and Completion Statement have been preparedSpecified Asset Value within 20 days following such delivery, the Seller parties shall forthwith deliver copies thereof, and the documentation requested by the Buyer in accordance with clause 4.8 (or where the release of such documentation requires compliance with a hold harmless, or similar requirement, the form of such hold harmless or similar requirement), to the Buyer. The Buyer and its accountants shall have a period of 90 Business Days from Completion (the “Review Period”) within which to review the draft Completion Accounts and Completion Statement and all of the documents requested by the Buyer in accordance with clause 4.8 and to satisfy itself that they have been duly prepared in accordance with this Agreement and that the value of the Completion Working Capital Amount and any Shortfall Amount or Excess Amount have been correctly calculated. The Buyer shall, before the expiry of the Review Period, either: 4.5.1 confirm in writing to the Seller that it agrees procure that the draft Completion Accounts and Completion Statement have been duly prepared and that the value of the Completion Working Capital Amount and any Shortfall Amount or Excess Amount have been correctly calculated; or 4.5.2 give notice in writing Specified Asset Value Calculation is delivered to the Seller explaining, in reasonable detail, why it is unable so to confirm and setting out details of its proposed adjustments to the draft Completion Accounts and Completion Statement and, to the extent reasonably possible, to the value of the Completion Working Capital Amount and any Shortfall Amount or Excess Amount. 4.6 If the Buyer fails so to confirm or to give such notice in accordance with clause 4.5, the draft Completion Accounts and Completion Statement and the calculations therein of the Completion Working Capital Amount and any Shortfall Amount or Excess Amount shall, upon expiry of the Review Period, be deemed to have been finally accepted and agreed by the parties. 4.7 If the Buyer serves a notice in accordance with clause 4.5.2: 4.7.1 the Buyer and the Seller shall endeavour to resolve all matters in dispute as soon as practicable. If they fail to resolve such matters Accountants within 25 Business Days of the date on which the Seller received such notice from the Buyer (or such longer period as the parties shall agree) (the “Resolution Period”), the Buyer or the Seller may refer any matter in dispute to an independent chartered accountant (the “Independent Accountant”) for a resolution. The identity of the Independent Accountant shall be agreed between the parties and he shall be appointed within 15 3 Business Days of the expiry of the Resolution Period (the “Appointment Period”). If the parties fail to make such appointment period. 3.4 As soon as practicable and, in any event, within the Appointment Period, the appointment shall be made by the President for the time being 40 days after delivery of the Institute of Chartered draft Specified Asset Value Calculation to the Accountants in England and Wales within 5 Business Days of the expiry of the Appointment Period, on the application of either the Buyer or the Seller. Such application shall specify that the appointee shall be experienced in matters in dispute between the parties and the Independent Accountant shall be instructed to determine the dispute in accordance with Clause 3.3 ("the provisions of this clause 4 and to make such determination as soon as practicable and in any event within 30 Business Days of his being instructed or such longer period as he shall, in his discretion, reasonably require. In making such determinationReview Period"), the Independent Accountant Accountants shall act as an expert review the draft Specified Asset Value Calculation and not as an arbitrator and his decision shall endeavour to agree what adjustments (if any) need to be made to it in the absence of manifest error) be final and binding on the parties. The costs of the Independent Accountant shall be borne by the parties in such proportions as he may direct or, in the absence of any such direction, as order for it to one half by the Buyer and as to the other half by the Seller; and 4.7.2 each party shall bear its own costs in connection comply with the resolution of the matters in disputeClause 3.2. 4.8 The Buyer and its accountants shall 3.5 If: (a) the Accountants agree that no adjustments need to be entitled to examine the working papers relating made to the draft Completion Accounts and Completion Statement for the purposes of their review under clause 4.5, subject to the Buyer complying with any hold harmless or similar requirements of the Seller’s external accountants in connection with the release of such working papers to the Buyer. The Buyer undertakes to the Seller to request any such working papers in connection with the draft Completion Accounts and Completion Statement. Subject thereto, the parties agree that they will promptly provide each other and their respective advisers with all information in their respective possession or control relating to the operations of the Target Group as may be relevant for the purposes of the Completion Accounts and Completion Statement, and with all co-operation and assistance as may reasonably be required to facilitate the production, review and agreement of the Completion Accounts and Completion Statement. 4.9 All cash sums payable under this clause 4 shall be paid by telegraphic transfer, in the case of sums payable to the Seller, to the Seller’s Solicitors’ Account and, in the case of sums payable to the Buyer to the Buyer’s Solicitors’ Account and the receipt in the Seller’s Solicitors’ Account or the Buyer’s Solicitors’ Account (as the case may be) of a payment pursuant to clauses 4.1 or 4.2 shall be an absolute discharge of the obligation of the Buyer or the Seller (as the case may be) to make such payment.Specified Asset Value Calculation; or