Common use of Net Asset Adjustment Clause in Contracts

Net Asset Adjustment. The Purchase Price shall be subject to -------------------- adjustment after the Closing Date as follows: (i) Within 45 days following the Closing Date, the Buyer shall prepare a statement of acquired assets and assumed liabilities of the Business as of the Closing Date (the "Closing Statement of Acquired Assets and Assumed ------------------------------------------------ Liabilities") and deliver such Closing Statement of Acquired Assets and Assumed Liabilities to the Company. The Closing Statement of Acquired Assets and Assumed Liabilities shall be prepared in accordance with U.S. generally accepted accounting principles consistently applied ("GAAP") and consistent with the ---- method of preparation of the statement of acquired assets and assumed liabilities required to be delivered pursuant to Sections 2.8 and 6.2 below. (ii) The Closing Statement of Acquired Assets and Assumed Liabilities delivered pursuant to paragraph (i) above shall be accompanied by a statement setting forth the sum, if any, by which the aggregate net book value of (x) the Assets, minus (y) the Assumed Liabilities, in each case as shown on the Closing Statement of Acquired Assets and Assumed Liabilities (the "Net --- Adjusted Book Value"), is greater than, or less than, the aggregate net book ------------------- value (after deduction of Assumed Liabilities) shown on the statement of acquired assets and assumed liabilities of the Business as of July 31, 1999 referred to in Section 2.8 below for the same categories of assets as are included in Net Adjusted Book Value (the "Net Asset Adjustment"). -------------------- (iii) Immediately upon the expiration of the 15-day period for giving the Dispute Notice (as defined below), if no Dispute Notice is given, or immediately upon the resolution of disputes, if any, pursuant to Section 1.7(d) below, the Purchase Price shall be adjusted as follows: the amount of the Net Asset Adjustment, if positive, shall be added to the Purchase Price and paid promptly by the Buyer to the Company, subject to Section 7.8, and if negative shall be deducted from the Purchase Price and paid promptly by the Company to the Buyer. In either case, payment shall be made in shares of Buyer Common Stock, valued at $27.50 per share (as adjusted proportionately for any stock split or similar recapitalization after the date hereof).

Net Asset Adjustment. The Purchase Price (a) Exhibit C sets forth the consolidated balance sheet of TBI as of December 31, 2000 (the "December 31 Balance Sheet"), which has been prepared and certified by TBI's chief financial officer as reflecting the financial condition of TBI as of the date thereof, which is being delivered for purposes of determining the Net Asset Benchmark (hereinafter defined). (b) Within sixty (60) days following the Closing, Starbase shall cause the December 31 Balance Sheet to be audited by Deloitte & Touche, its certified public accountants (the "Auditors"), in accordance with GAAP, which audited balance sheet of TBI as of December 31, 2000 (the "Audited Balance Sheet") shall be used for purposes of determining the Audited Net Asset Benchmark. Starbase shall deliver the Audited Balance Sheet to the Representative (hereinafter defined) promptly after its receipt. The Representative shall have fifteen (15) days after receipt of the Audited Balance Sheet (the "Dispute Period") to dispute any item, calculation or amount, or the method of calculation of any item or amount, reflected therein (a "Dispute"). If the Representative does not give written notice of a Dispute (a "Dispute Notice") to Starbase within the Dispute Period, the Audited Balance Sheet shall be deemed to have been accepted by the Representative in the form in which it was delivered by Starbase. In the event that the Representative does not agree with any entry, calculation or amount, or the method of calculation of any entry or amount, reflected on the Audited Balance Sheet, the Representative shall give Starbase a Dispute Notice within the Dispute Period, setting forth the basis of its disagreement, and the Representative and Starbase shall, within thirty (30) days after receipt by Starbase of such Dispute Notice (the "Resolution Period"), attempt to resolve such Dispute and agree in writing upon the Audited Balance Sheet. In the event that the Representative and Starbase are unable to resolve any such Dispute within the Resolution Period, then a nationally recognized certified public accounting firm as may be mutually agreed upon by the Representative and Starbase shall be employed as arbitrator hereunder (the "Arbitrator") to settle such Dispute as soon as reasonably practicable. If the Representative and Starbase are unable to mutually agree upon the selection of a nationally recognized certified public accounting firm, then the parties agree to the appointment by the American Arbitration Association ("AAA") of a nationally recognized certified public accounting firm to act as the Arbitrator. The parties agree that the Arbitrator shall decide only the matters involved in the Dispute and not any other matters, whether or not arising under this Agreement, and shall have no other authority hereunder. Any arbitration pursuant to this Section 2.4 shall be conducted by the national office of the Arbitrator or in a location to be mutually agreed upon in accordance with the Commercial Arbitration Rules of the AAA then existing. The Arbitrator's determination with respect to any Dispute shall be final and binding on all parties and not subject to -------------------- adjustment after appeal on any ground, and judgment on the Closing Date as follows:arbitration award may be enforced in any court having jurisdiction over the subject matter of the controversy. The Representative and Starbase shall each pay one-half of the fees and expenses of the Arbitrator for the services of the Arbitrator in the arbitration. (c) If the Audited Net Asset Benchmark is less than the Net Asset Benchmark by an amount in excess of $50,000, then the Escrowed Shares held in escrow under the Escrow Agreement shall be reduced by that number of shares of Starbase Common Stock (the "Returned Escrowed Shares") equal to the quotient of (1) the difference of (i) Within 45 days following the Closing Date, the Buyer shall prepare a statement of acquired assets and assumed liabilities of the Business as of the Closing Date (the "Closing Statement of Acquired Assets and Assumed ------------------------------------------------ Liabilities") and deliver such Closing Statement of Acquired Assets and Assumed Liabilities to the Company. The Closing Statement of Acquired Assets and Assumed Liabilities shall be prepared in accordance with U.S. generally accepted accounting principles consistently applied ("GAAP") and consistent with the ---- method of preparation of the statement of acquired assets and assumed liabilities required to be delivered pursuant to Sections 2.8 and 6.2 below. Net Asset Benchmark minus (ii) The Closing Statement of Acquired Assets and Assumed Liabilities delivered pursuant to paragraph the Audited Net Asset Benchmark divided by (i2) above shall be accompanied by a statement setting forth the sumStarbase Price Per Share (or, if anyapplicable, by which the aggregate net book value of (x) the Assets, minus (y) the Assumed Liabilities, in each case as shown on the Closing Statement of Acquired Assets and Assumed Liabilities (the "Net --- Adjusted Book Value"), is greater than, or less than, the aggregate net book ------------------- value (after deduction of Assumed LiabilitiesAverage Price Per Share) shown on the statement of acquired assets and assumed liabilities of the Business as of July 31, 1999 referred to in Section 2.8 below for the same categories of assets as are included in Net Adjusted Book Value (the "Net Asset AdjustmentShortfall"). -------------------- The number of any Returned Escrowed Shares shall, within ten (iii10) Immediately upon the expiration business days of delivery of the 15-day period for giving Audited Balance Sheet to the Dispute Notice (as defined below)Escrow Agent, if no Dispute Notice is given, or immediately upon be returned by the resolution of disputes, if any, pursuant Escrow Agent to Section 1.7(d) below, Starbase. To the Purchase Price shall be adjusted as follows: extent that the Escrowed Shares are not sufficient to cover the amount of the any Net Asset AdjustmentShortfall, if positive, the TBI Shareholders shall be added liable to Starbase for such amount in proportion to the Purchase Price and paid promptly Starbase Common Stock received by the Buyer to TBI Shareholders in the CompanyMerger. (d) As used in this Section 2.4, subject to Section 7.8"Net Asset Benchmark" shall mean TBI's current assets minus total liabilities, and if negative shall be deducted from as reflected on the Purchase Price and paid promptly by the Company to the Buyer. In either case, payment shall be made in shares of Buyer Common Stock, valued at $27.50 per share (as adjusted proportionately for any stock split or similar recapitalization after the date hereof)December 31 Balance Sheet.

Net Asset Adjustment. The Purchase Price shall be subject to -------------------- adjustment Not later than ninety (90) days after the Closing Date as follows: (i) Within 45 days following the Closing Date, the Seller Representative shall cause to be prepared and delivered to Buyer shall prepare a an audited special purpose statement of acquired assets and assumed liabilities of the Business Net Assets (as defined below) as of the Closing Date (the "Closing Statement of Acquired Assets and Assumed ------------------------------------------------ LiabilitiesNet Asset Statement") and deliver such Closing Statement of Acquired Assets and Assumed Liabilities to the Companywhich shall have been audited by ▇. The Closing Statement of Acquired Assets and Assumed Liabilities shall be prepared ▇. ▇▇▇▇▇▇ Company in accordance with U.S. generally accepted GAAP, applied on a basis consistent with, and following the accounting principles consistently applied principles, procedures, policies and methods employed by Target in preparing Target's Most Recent Fiscal Year End balance sheet ("GAAP") and to the extent consistent with GAAP); provided, however, that appropriate adjustments shall be made to exclude the ---- method Excluded Assets and Excluded Liabilities. Buyer and Sellers each shall be responsible for one-half of the fees and expenses charged by ▇. ▇. ▇▇▇▇▇▇ Company for preparing such Closing Net Asset Statement. Buyer and Sellers shall promptly provide the other Party hereto access to, and copies of, all information reasonably requested by the other Party or its representatives in connection with the preparation of the statement Closing Net Asset Statement or to investigate the basis of acquired assets and assumed liabilities required to be delivered pursuant to Sections 2.8 and 6.2 belowany dispute therewith. (ii) The Closing Statement of Acquired Assets and Assumed Liabilities delivered pursuant to paragraph (i) above Buyer shall be accompanied by have a statement period of thirty (30) days after delivery to it of the Closing Net Asset Statement to provide to the Seller Representative notice setting forth with reasonable specificity any objection thereto, which objection shall relate only to any matters which affect the sum, if any, by which the aggregate net book value amount of (x) the Assets, minus (y) the Assumed Liabilities, in each case as Net Assets shown on the Closing Net Asset Statement of Acquired Assets and Assumed Liabilities (the an "Net --- Adjusted Book ValueObjection Notice"); provided, is greater thanhowever, that no such objection may be made by reason of any accounting methods, principles or less thanpractices used consistently by Target prior to the Closing, the aggregate net book ------------------- value (after deduction of Assumed Liabilities) as applied in or shown on the statement Financial Statements described in section 4(g) of acquired assets and assumed liabilities of the Business as of July 31, 1999 referred this Agreement. Failure to in Section 2.8 below for the same categories of assets as are included in Net Adjusted Book Value (the "Net Asset Adjustment"). -------------------- (iii) Immediately upon the expiration of the 15-day period for giving the Dispute provide an Objection Notice (as defined below), if no Dispute Notice is given, or immediately upon the resolution of disputes, if any, pursuant to Section 1.7(d) below, the Purchase Price shall be adjusted as follows: the amount of the Net Asset Adjustment, if positive, shall be added to the Purchase Price and paid promptly by the Buyer to the Company, subject to Section 7.8, and if negative shall be deducted from the Purchase Price and paid promptly by the Company to the Buyer. In either case, payment shall be made in shares of Buyer Common Stock, valued at $27.50 per share (as adjusted proportionately for any stock split or similar recapitalization after the date hereof).within such thirty-

Net Asset Adjustment. The Purchase Price shall be subject to -------------------- adjustment after the Closing Date as follows: (ia) Within 45 60 days following after the Closing Date, the Buyer Lydall shall prepare a and deliver to Affinity an itemized statement of (the "Closing Date Statement") setting forth the acquired assets and assumed liabilities of the Business Net Assets (as defined in Section 5.05(d)(iii)) as of the Closing Date (the "Closing Statement of Acquired Assets and Assumed ------------------------------------------------ LiabilitiesDate Net Assets") and deliver all relevant data and calculations supporting such Closing Statement of Acquired Assets and Assumed Liabilities to the Companystatement. The Closing Date Statement shall also set forth a calculation of Acquired the amount by which Closing Date Net Assets and Assumed Liabilities shall be prepared in accordance with U.S. generally accepted accounting principles consistently applied exceeds or is less than $4,765,516 ("GAAP") and consistent with the ---- method of preparation of the statement of acquired assets and assumed liabilities required to be delivered pursuant to Sections 2.8 and 6.2 below. (ii) The Closing Statement of Acquired Assets and Assumed Liabilities delivered pursuant to paragraph (i) above shall be accompanied by a statement setting forth the sum, if any, by which the aggregate net book value of (x) the Assets, minus (y) the Assumed Liabilities, in each case as shown on the Closing Statement of Acquired Assets and Assumed Liabilities (the "Net --- Adjusted Book Value"), is greater than, or less than, the aggregate net book ------------------- value (after deduction of Assumed Liabilities) shown on the statement of acquired assets and assumed liabilities of the Business as of July 31, 1999 referred to in Section 2.8 below for the same categories of assets as are included in Net Adjusted Book Value (the "Net Asset Adjustment"). --------------------Within 120 days of the Closing Date, Affinity shall complete its examination of the Closing Date Statement and shall deliver to Lydall either a written acknowledgment accepting the Closing Date Statement and the Asset Adjustment or a written report ("Adjustment Report") setting forth in detail any proposed adjustments to the Closing Date Statement and the Asset Adjustment and the reasons and supporting data therefor. In the event that Affinity fails to deliver such acknowledgment or Adjustment Report within such one hundred twenty (120) day period, the Closing Date Statement (and each of the Closing Date Net Assets and the Asset Adjustment set forth thereon) delivered by Lydall shall be deemed to be correct and to have been finally determined under Section 5.05 (c) below; (iiib) Immediately If Affinity shall deliver an Adjustment Report to Lydall within the period set forth in Section 5.05(a), Lydall and Affinity shall attempt to resolve any differences and agree upon the expiration Asset Adjustment. In the event that Affinity and Lydall fail to agree on any or all of the 15-day period proposed adjustments to the Closing Date Statement contained in the Adjustment Report within 15 days after Lydall receives the Adjustment Report, then the parties shall select an independent certified public accounting firm of national reputation (who shall not be a firm previously or currently retained by Lydall or Affinity) which is mutually agreeable to the parties (the "Independent Accountants") to resolve any dispute. The Independent Accountants, acting as independent accountants and not for giving the Dispute Notice benefit of Lydall or Affinity, shall make the final determination with respect to the correctness of the adjustments in Closing Date Net Assets proposed in the Adjustment Report in light of the terms and provisions of this Agreement. The decision of the Independent Accountants shall be in writing and state the basis for the finding and shall be final and binding on Lydall and Affinity. The costs and expenses of the Independent Accountants for their services rendered pursuant hereto shall be borne equally by Lydall and Affinity. (as defined belowc) The term "Final Closing Date Statement" shall mean the Closing Date Statement delivered pursuant to Section 5.05(a), if no Dispute Notice is given, or immediately upon the resolution of disputesas adjusted, if anyat all, pursuant to Section 1.7(d5.05(a) belowor 5.05(b) and the "Settlement Date" shall mean the date on which the Final Closing Date Statement is agreed to by the parties or finally determined by the Independent Accountants, as the Purchase Price shall be adjusted as follows: case may be. Until the amount Settlement Date, Lydall agrees to provide Affinity, its representatives and advisors, and the Independent Accountants with access, during Lydall's normal business hours and upon reasonable advance notice, to Lydall's financial books and records of the Net Asset Adjustment, if positive, shall be added Operation and to the Purchase Price and paid promptly by working papers supporting the Buyer to the Company, subject to Section 7.8, and if negative shall be deducted from the Purchase Price and paid promptly by the Company to the Buyer. In either case, payment shall be made in shares of Buyer Common Stock, valued at $27.50 per share (as adjusted proportionately for any stock split or similar recapitalization after the date hereof)Closing Date Statement.

Net Asset Adjustment. The Purchase Price shall be subject to -------------------- adjustment after the Closing Date as follows: (ia) Within 45 60 days following after the Closing Date, the Buyer Ludlow shall prepare and deliver to Lydall a statement of acquired assets and assumed liabilities of (the Business "Closing Date Statement") setting forth Net Assets (as defined in Section 3.2d(iii)) as of the Closing Date (the "Closing Statement of Acquired Assets and Assumed ------------------------------------------------ LiabilitiesDate Net Assets") and deliver such Closing Statement of Acquired Assets and Assumed Liabilities to the Company). The Closing Date Statement shall also set forth a calculation of Acquired the amount by which the Closing Date Net Assets exceed or are less than $7,901,907, which is based on the September 30, 2000 balance sheet as detailed in Schedule 3.2. This difference is the Net Asset Adjustment. Within 120 days after the Closing Date, Lydall shall complete its examination of the Closing Date Statement and shall deliver to Ludlow either a written acknowledgment of Lydall accepting the Closing Date Statement and the Net Asset Adjustment or a written report ("Adjustment Report") setting forth in detail any proposed adjustments to the Closing Date Statement and the Net Asset Adjustment and the reasons and supporting data therefore. In the event that Lydall fails to deliver such acknowledgment or Adjustment Report within such one hundred twenty (120) day period, the Closing Date Statement (and each of the Closing Date Net Assets and Assumed Liabilities the Net Asset Adjustment set forth thereon) delivered by Ludlow to Lydall shall be prepared deemed to be correct and to have been finally determined under Section 3.2 (b) below; (b) If Lydall shall deliver an Adjustment Report to Ludlow within the period set forth in accordance with U.S. generally accepted Section 3.2 (a), Lydall and Ludlow shall attempt to resolve any differences and agree upon the Net Asset Adjustment. In the event that Ludlow and Lydall fail to agree on any or all of Lydall's proposed adjustments to the Closing Date Statement contained in the Adjustment Report within 15 days after Ludlow receives the Adjustment Report, then the parties shall select an independent certified public accounting principles consistently applied firm of national reputation (who shall not be a firm previously or currently retained by Lydall or Ludlow) which is mutually agreeable to the parties (the "GAAPIndependent Auditors") to resolve any dispute. The Independent Auditors, acting as independent auditors and consistent not for the benefit of Lydall or Ludlow, shall make the final determination with respect to the ---- method of preparation calculation of the statement Closing Date Net Assets in light of acquired assets the terms and assumed liabilities required to provisions of this Agreement within a period of less than 30 days. The decision of the Independent Auditors shall be in writing and state the basis for the finding and shall be final and binding on Lydall and Ludlow. The costs and expenses of the Independent Auditors for their services rendered pursuant hereto shall be borne equally by Lydall and Ludlow; (c) The term "Final Closing Date Statement" shall mean the Closing Date Statement delivered pursuant to Sections 2.8 and 6.2 below. (ii) The Closing Statement of Acquired Assets and Assumed Liabilities delivered pursuant to paragraph (i) above shall be accompanied by a statement setting forth the sumSection 3.2(a), as adjusted, if any, by which the aggregate net book value of (x) the Assets, minus (y) the Assumed Liabilities, in each case as shown on the Closing Statement of Acquired Assets and Assumed Liabilities (the "Net --- Adjusted Book Value"), is greater than, or less than, the aggregate net book ------------------- value (after deduction of Assumed Liabilities) shown on the statement of acquired assets and assumed liabilities of the Business as of July 31, 1999 referred to in Section 2.8 below for the same categories of assets as are included in Net Adjusted Book Value (the "Net Asset Adjustment"). -------------------- (iii) Immediately upon the expiration of the 15-day period for giving the Dispute Notice (as defined below), if no Dispute Notice is given, or immediately upon the resolution of disputes, if anyat all, pursuant to Section 1.7(d3.2(a) belowor 3.2(b) and the "Settlement Date" shall mean the date on which the Final Closing Date Statement is agreed to by the parties or finally determined by the Independent Auditors, as the Purchase Price shall be adjusted as follows: case may be. Until the amount Settlement Date, Ludlow agrees to provide Lydall, its representatives and advisors, and the Independent Auditors with access, during Ludlow's normal business hours and upon reasonable advance notice, to the books and records of the Net Asset Adjustment, if positive, shall be added to Business for the Purchase Price purpose of reviewing the Closing Date Statement and paid promptly by preparing any proposed adjustments set forth in the Buyer to the Company, subject to Section 7.8, and if negative shall be deducted from the Purchase Price and paid promptly by the Company to the Buyer. In either case, payment shall be made in shares of Buyer Common Stock, valued at $27.50 per share (as adjusted proportionately for any stock split or similar recapitalization after the date hereof).Adjustment Report;

Net Asset Adjustment. The Purchase Price (a) Exhibit 1.11 sets forth the balance sheet of Company as at December 31, 2000 for purposes of determining the Net Asset Benchmark (as defined herein). (b) Within sixty (60) days following the Closing, Parent shall cause the balance sheet of Company as at December 31, 2000 to be audited by Deloitte & Touche, its certified public accountants (the "Auditors"), in accordance with GAAP, which audited balance sheet of Company as at December 31, 2000 (the "Audited Balance Sheet") shall be used for purposes of determining the Audited Net Asset Benchmark. Parent shall deliver the Audited Balance Sheet to the Designee promptly upon its receipt. The Designee shall have thirty (30) days after receipt of the Audited Balance Sheet (the "Dispute Period") to dispute any item, calculation or amount, or the method of calculation of any item or amount, reflected therein (a "Dispute"). If the Designee does not give written notice of a Dispute (a "Dispute Notice") to Parent within the Dispute Period, the Audited Balance Sheet shall be deemed to have been accepted by the Designee in the form in which it was delivered by Parent. In the event that the Designee does not agree with any entry, calculation or amount, or the method of calculation of any entry or amount, reflected on the Audited Balance Sheet, the Designee shall give Parent notice within the Dispute Period, setting forth the basis of its disagreement (the "Dispute Notice"), and Designee and Parent shall, within thirty (30) days after receipt by Parent of such Dispute Notice, attempt to resolve such Dispute and agree in writing upon the Audited Balance Sheet. In the event that the Designee and Parent are unable to resolve any such Dispute within such resolution period, then the national office of a nationally recognized certified public accounting firm as may be mutually agreed upon by the Designee and Parent (the "Arbitrator") shall be employed as arbitrator hereunder to settle such Dispute as soon as reasonably practicable. If the Designee and Parent are unable to mutually agree upon the selection of a nationally recognized certified public accounting firm, then the parties agree to the appointment of a nationally recognized certified public accounting firm to act as Arbitrator by the American Arbitration Association ("AAA"). The parties agree that the Arbitrator shall decide only the matters involved in the Dispute and not any other matters, and shall have no other authority hereunder. Any arbitration pursuant to this Section shall be conducted by the national office of the Arbitrator or in a location to be mutually agreed upon in accordance with the Commercial Arbitration Rules of the AAA then existing. The Arbitrator's determination with respect to any Dispute shall be final and binding on all parties and not subject to -------------------- adjustment after appeal on any ground, and judgment on the Closing Date as follows:arbitration award may be enforced in any court having jurisdiction over the subject matter of the controversy. The LLC and Parent shall each pay one-half of the fees and expenses of the Arbitrator for the services of the Arbitrator in the arbitration. (c) If the Audited Net Asset Benchmark is less than the Net Asset Benchmark by an amount in excess of $50,000, then the number of Indemnity Escrow Shares held in escrow under the Escrow Agreement shall be reduced by that number of shares of Parent Common Stock (the "Returned Escrowed Shares") equal to the quotient of (1) the difference of (i) Within 45 days following the Closing Date, the Buyer shall prepare a statement of acquired assets and assumed liabilities of the Business as of the Closing Date (the "Closing Statement of Acquired Assets and Assumed ------------------------------------------------ Liabilities") and deliver such Closing Statement of Acquired Assets and Assumed Liabilities to the Company. The Closing Statement of Acquired Assets and Assumed Liabilities shall be prepared in accordance with U.S. generally accepted accounting principles consistently applied ("GAAP") and consistent with the ---- method of preparation of the statement of acquired assets and assumed liabilities required to be delivered pursuant to Sections 2.8 and 6.2 below. Net Asset Benchmark minus (ii) The Closing Statement of Acquired Assets and Assumed Liabilities delivered pursuant to paragraph the Audited Net Asset Benchmark divided by (i) above shall be accompanied by a statement setting forth the sum, if any, by which the aggregate net book value of (x2) the Assets, minus (y) the Assumed Liabilities, in each case as shown on the Closing Statement of Acquired Assets and Assumed Liabilities (the "Net --- Adjusted Book Value"), is greater than, or less than, the aggregate net book ------------------- value (after deduction of Assumed Liabilities) shown on the statement of acquired assets and assumed liabilities of the Business as of July 31, 1999 referred to in Section 2.8 below for the same categories of assets as are included in Net Adjusted Book Value Parent Market Price (the "Net Asset AdjustmentShortfall"). --------------------The number of any Returned Escrowed Shares shall, within ten (10) business days of delivery of the Final Audited Balance Sheet to the Escrow Agent, be returned by the Escrow Agent to Parent. (iiid) Immediately upon As used in this Section, "Net Asset Benchmark" shall mean the expiration of Company's current assets minus the 15Company's current liabilities plus long-day period for giving the Dispute Notice term debt (as defined belowexcluding Notes), if no Dispute Notice is given, or immediately upon the resolution of disputes, if any, pursuant to Section 1.7(d) below, the Purchase Price shall be adjusted as follows: the amount of the Net Asset Adjustment, if positive, shall be added to the Purchase Price and paid promptly by the Buyer to the Company, subject to Section 7.8, and if negative shall be deducted from the Purchase Price and paid promptly by the Company to the Buyer. In either case, payment shall be made in shares of Buyer Common Stock, valued at $27.50 per share (as adjusted proportionately for any stock split or similar recapitalization after the date hereof)reflected on Exhibit 1.

Net Asset Adjustment. The Purchase Price shall be subject to -------------------- adjustment Not later than ninety (90) days after the Closing Date as follows: (i) Within 45 days following the Closing Date, the Majority Holders shall cause to be prepared and delivered to Buyer shall prepare a an audited special purpose statement of acquired assets and assumed liabilities of the Business Net Assets (as defined below) as of the Closing Date (the "Closing Statement of Acquired Assets and Assumed ------------------------------------------------ LiabilitiesCLOSING NET ASSET STATEMENT") and deliver such Closing Statement of Acquired Assets and Assumed Liabilities to the Company. The Closing Statement of Acquired Assets and Assumed Liabilities which shall be prepared have been audited by Coopers & ▇▇▇▇▇▇▇ L.L.P. in accordance with U.S. generally accepted GAAP, applied on a basis consistent with, and following the accounting principles consistently applied principles, procedures, policies and methods employed by Target in preparing Target's Most Recent Fiscal Year End balance sheet ("GAAP") and to the extent consistent with GAAP); provided, however, that appropriate adjustments shall be made to exclude the ---- method Excluded Assets and Excluded Liabilities. It is understood that the Closing Net Asset Statement will reflect payment of, and any liability incurred for, payment of the Compensation Amount. Buyer and Sellers each shall be responsible for one-half of the fees and expenses charged by Coopers & ▇▇▇▇▇▇▇ for preparing such Closing Net Asset Statement. Buyer and Sellers shall promptly provide the other Party hereto access to, and copies of, all information reasonably requested by the other Party or its representatives in connection with the preparation of the statement Closing Net Asset Statement or to investigate the basis of acquired assets and assumed liabilities any dispute therewith (provided that Sellers shall not be required to provide any Excluded Books and Records which would not reasonably be delivered pursuant deemed material to Sections 2.8 and 6.2 belowthe preparation of the Closing Net Asset Statement). (ii) The Closing Statement of Acquired Assets and Assumed Liabilities delivered pursuant to paragraph (i) above Buyer shall be accompanied by have a statement period of thirty (30) days after delivery to it of the Closing Net Asset Statement to provide to the Seller Representative notice setting forth with reasonable specificity any objection thereto, which objection shall relate only to any matters which affect the sum, if any, by which the aggregate net book value amount of (x) the Assets, minus (y) the Assumed Liabilities, in each case as Net Assets shown on the Closing Statement of Acquired Assets and Assumed Liabilities (the "Net --- Adjusted Book Value"), is greater than, or less than, the aggregate net book ------------------- value (after deduction of Assumed Liabilities) shown on the statement of acquired assets and assumed liabilities of the Business as of July 31, 1999 referred to in Section 2.8 below for the same categories of assets as are included in Net Adjusted Book Value (the "Net Asset AdjustmentStatement (an "OBJECTION NOTICE"). -------------------- (iii) Immediately upon the expiration of the 15Failure to provide an Objection Notice within such thirty-day period for giving shall constitute Buyer's approval of the Dispute Notice Closing Net Asset Statement as so delivered. If Buyer timely provides an Objection Notice, Buyer and the Seller Representative shall promptly commence good faith discussions in an attempt to resolve any issues raised in the Objection Notice. If Buyer and the Seller Representative are unable to resolve such dispute within thirty (as defined below)30) days after the delivery of the Objection Notice, if no Dispute Notice is given, or immediately upon the resolution of disputes, if any, pursuant to Section 1.7(d) below, the Purchase Price such dispute shall be adjusted resolved by a Big Six accounting firm mutually acceptable to the Buyer and the Majority Holders or, in the absence of agreement, by a Big Six accounting firm selected by lot after eliminating Target's and Buyer's principal outside accountants and one additional firm designated as follows: objectionable by Buyer and the amount of Seller Representative. At or prior to the time such dispute is submitted to such accounting firm for resolution, Buyer shall provide a specific proposed Net Asset Adjustment, if positive, amount. The accounting firm so selected shall be added to the Purchase Price and paid promptly by the Buyer to the Company, subject to Section 7.8, and if negative shall be deducted from the Purchase Price and paid promptly by the Company to the Buyer. In either case, payment shall be made in shares of Buyer Common Stock, valued at $27.50 per share (as adjusted proportionately for any stock split or similar recapitalization after the date hereof).make its