Common use of Post-Closing Adjustments to Purchase Price Clause in Contracts

Post-Closing Adjustments to Purchase Price. (a) The Purchase Price has been agreed to by the Parties hereto based upon the representations by the Agencies and the Shareholders that the Tangible Net Worth of the Agencies as of the Closing Date (calculated in the same manner that the Tangible Net Worth was calculated in preparing the August 31, 2003 balance sheet of the Agencies) was at least negative Four Hundred Ninety-Four Thousand One Hundred Sixty-Four and 00/100 Dollars (-$494,164.00) (the "Minimum Tangible Net Worth"). (b) As promptly as practicable, but not later than ninety (90) days after the Closing Date, the Acquiror will cause to be prepared and delivered to the Agencies and the Shareholders combined balance sheets for the Agencies as of the Closing Date (collectively the "Closing Balance Sheet"), and a certificate based on such Closing Balance Sheet setting forth the Acquiror's calculation of the Tangible Net Worth of the Agencies. The Closing Balance Sheet shall fairly present the consolidated financial position of the Agencies at the close of business on the Closing Date, prepared on a modified cash basis in accordance with general industry standards, applied on basis consistent with those used in the preparation of the Most Recent Financial Statements (as defined below). The Closing Balance Sheet shall not include any premiums or other amounts payable or to be payable to the Agencies for insurance policies having an effective date after the Closing Date. The Closing Balance Sheet shall be deemed final upon the earliest of (i) the date on which Acquiror and the Shareholders jointly agree that such documents are final, (ii) the tenth (10th) day after delivery of such documents pursuant to this Section 2.4(b), if the Shareholders have not delivered a notice to Acquiror expressing disagreement with such calculations and setting forth their calculations of such amount(s), or (iii) the date on which all disputes relating to such statements and calculations between the parties are resolved in accordance with Section 2.4(c). If the Shareholders deliver a notice of disagreement pursuant to this Section 2.4(b), such notice shall specify those items or amounts as to which they disagree, and they shall be deemed to have agreed with all other items and amounts contained in the Closing Balance Sheet and the calculation of Tangible Net Worth delivered pursuant to Section 2.4(b) (except to the extent resolution of the items or amounts to which the Shareholders or Acquiror express disagreement requires conforming changes to other items and amounts contained in the Closing Balance Sheet or the calculation of the Tangible Net Worth). (c) If the Shareholders shall deliver a notice of disagreement pursuant to Section 2.4(b), the Shareholders and Acquiror shall, during the thirty (30) days following such delivery (the "Discussion Period"), use their reasonable efforts to reach agreement on the disputed items or amounts (the "Disputed Amounts"). If at the conclusion of the Discussion Period the Shareholders and Acquiror are unable to reach such agreement, they shall promptly thereafter submit such matter to an independent accountant agreed upon by the parties for determination. In making such determination, such independent accountant shall act as an expert and not an arbitrator and shall consider only the disputed amounts, solely in accordance with the terms of this Agreement. Such independent accountant shall deliver to the Shareholders and Acquiror, as promptly as practicable, a report setting forth such determination. Such report shall be final and binding upon the Shareholders and Acquiror. The cost of such review and report shall be borne by the non-prevailing party as determined by such independent accountant. In the event that agreement is not reached as to an independent accountant within thirty (30) days after the expiration of the Discussion Period, the determination as to the Disputed Amounts shall be made, and shall be binding on all parties, by the majority vote of a board of three (3) accountants, the Acquiror appointing one (1) accountant, the Shareholders appointing one (1) accountant, and the two (2) appointed accountants appointing the third (3rd) accountant. If the two (2) appointed accountants fail to appoint the third (3rd) accountant within twenty (20) days of their appointment, the appointment of the third (3rd) accountant shall be made by the American Arbitration Association in accordance with its rules then obtaining. The Acquiror and the Shareholders shall each be responsible for the fees and costs charged by the accountant selected by them and for one-half (1/2) of the fees and costs of the third accountant. After all three accountants have been appointed, they shall have no more than sixty (60) days to make a determination regarding the Disputed Amounts. (d) The Shareholders and Acquiror agree that they will, and will cause their respective independent accountants to, cooperate and assist in the preparation of the Closing Balance Sheet and the calculation of Tangible Net Worth (including the identification of any possible disputed amounts) and in the conduct of the reviews referred to in this Section 2.4, including, without limitation, making available, to the extent necessary, relevant books, records, working papers, analyses and schedules, and permitting representatives of the parties to consult with the respective employees, auditors, actuaries, attorneys and agents of the Agencies and Acquiror. (e) If Tangible Net Worth is less than the Minimum Tangible Net Worth, the Acquiror shall remove from the Escrow Shares Stock having a cumulative Average Price equal to the amount of the shortfall and promptly remit the balance of the Escrow Shares to the Agencies in the same pro rata amounts as the Initial Payment. If the shortfall is greater than the cumulative Average Price of all of the Escrow Shares, the Acquiror shall retain all of the Escrow Shares and the Agencies shall keep the Initial Payment.

Post-Closing Adjustments to Purchase Price. (ai) The After Closing, the Purchase Price has been shall be increased without duplication by the following amounts: (A) the amount of all accounts or trade payables and all direct operating expenses (other than Taxes) in connection with the Assets related to time periods after the Adjustment Time that are incurred and paid by SELLER or any Affiliate; (B) all capital expenditures approved by BUYER which are paid by SELLER on or after the execution date of this Agreement; (C) one half of the amount incurred by Seller, if any, in excess of $50.00/rod to resolve those Required Consents as provided in Section 5(b)(i)(A); and (D) any further amounts mutually agreed upon in writing by the Parties. (ii) After Closing, the Purchase Price shall be decreased without duplication by the following amounts: (A) the amount of all income, revenues and proceeds in connection with the Assets related to time periods after the Adjustment Time that are collected by SELLER or any Affiliate; (B) the amount of all accounts or trade payables and all direct operating expenses (other than Taxes) in connection with the Assets related to time periods prior to the Adjustment Time that are paid by BUYER or any Affiliate; (C) all proceeds received by SELLER in respect of any Assets sold, leased or otherwise disposed of by SELLER on or after the Adjustment Time; (D) any further amounts mutually agreed upon in writing by the Parties; (E) the Allocable Share of all unpaid ad valorem or similar Taxes on the Facilities for the year 2004, prorated to the Adjustment Time, based on the amount of such Taxes paid with respect to the year 2003 (with BUYER then to cause all such Taxes for the year 2004 to be duly paid), in accordance with Section 7(e); (F) any amounts agreed to by the Parties hereto based with respect to Asserted Environmental Defects, and Casualty Losses, in accordance with Sections 5(f) and (k); (G) any obligations with respect to Suspense Account Funds in accordance with Section 7(b); and (H) the estimated or agreed upon the representations amount of future costs for any capital expenditures that are commenced prior to Closing, which were not approved by the Agencies and the Shareholders that the Tangible Net Worth of the Agencies as of the Closing Date (calculated in the same manner that the Tangible Net Worth was calculated in preparing the August 31, 2003 balance sheet of the Agencies) was at least negative Four Hundred Ninety-Four Thousand One Hundred Sixty-Four and 00/100 Dollars (-$494,164.00) (the "Minimum Tangible Net Worth")BUYER. (biii) As promptly soon as practicable, but not later than ninety (90) days 60 days, after the Closing Date, SELLER shall prepare and deliver to BUYER a statement (the Acquiror will cause "Settlement Statement") setting forth in reasonable detail its calculation of each adjustment to the Purchase Price contemplated by Section 7(a)(i) and Section 7(a)(ii) along with any other amounts that are payable or are to be prepared and delivered to the Agencies and the Shareholders combined balance sheets for the Agencies prorated hereunder as of the Closing Date (collectively Adjustment Time. As may be reasonably requested by SELLER, BUYER shall promptly furnish all information that it or its Affiliates may have and that is useful to SELLER in the "Closing Balance Sheet")calculation or verification of the Settlement Statement. On or before the 30th day after receipt of the Settlement Statement, BUYER shall deliver to the SELLER a written report containing any changes that BUYER proposes to be made to the Settlement Statement. If SELLER does not deliver the Settlement Statement when required, BUYER may prepare and deliver it to SELLER, and a certificate based in such case, SELLER shall have BUYER's objection rights under this Section . (iv) The Settlement Statement shall become final and binding on such Closing Balance Sheet setting forth the Acquiror's calculation of the Tangible Net Worth of the Agencies. The Closing Balance Sheet shall fairly present the consolidated financial position of the Agencies at the close of business SELLER and BUYER on the Closing Date31st day following the date the Settlement Statement is received by BUYER, prepared on a modified cash basis in accordance with general industry standards, applied on basis consistent with those used unless prior to such date BUYER proposes any changes to the accounting set forth in the preparation of the Most Recent Financial Statements Settlement Statement (as defined below). The Closing Balance Sheet shall not include any premiums or other amounts payable or to be payable to the Agencies for insurance policies having an effective date after the Closing Date. The Closing Balance Sheet shall be deemed final upon the earliest of (i) the date on which Acquiror and the Shareholders jointly agree that such documents are final, (ii) the tenth (10th) day after delivery of such documents pursuant to this Section 2.4(b), if the Shareholders have not delivered a notice to Acquiror expressing disagreement with such calculations and setting forth their calculations of such amount(s), or (iii) the date on which all disputes relating to such statements and calculations between the parties are resolved in accordance with Section 2.4(c). If the Shareholders deliver a notice of disagreement pursuant to this Section 2.4(b), such notice shall specify those items or amounts as to which they disagree, and they shall be deemed to have agreed with all other items and amounts contained in the Closing Balance Sheet and the calculation of Tangible Net Worth delivered pursuant to Section 2.4(b) (except to the extent resolution of the items or amounts to which the Shareholders or Acquiror express disagreement requires conforming changes to other items and amounts contained in the Closing Balance Sheet or the calculation of the Tangible Net Worth"Settlement Notice"). (cv) Any Settlement Notice shall set forth BUYER's proposed changes to the Settlement Statement, including an explanation in reasonable detail of the basis on which BUYER proposes such changes. If the Shareholders BUYER has timely delivered a Settlement Notice, BUYER and SELLER shall deliver a notice of disagreement pursuant to Section 2.4(b), the Shareholders and Acquiror shall, during the thirty (30) days following such delivery (the "Discussion Period"), use their reasonable good faith efforts to reach agreement on the disputed items. If the disputed items or amounts have not been resolved by BUYER and SELLER by the 30th day following SELLER `s receipt of a Settlement Notice, any remaining disputed items shall be submitted to Ernst & Young (the "Disputed AmountsIndependent Accountants"). If at ) for resolution within five (5) Business Days after the conclusion end of the Discussion Period the Shareholders and Acquiror are unable to reach such agreement, they shall promptly thereafter submit such matter to an independent accountant agreed upon by the parties for determination. In making such determination, such independent accountant shall act as an expert and not an arbitrator and shall consider only the disputed amounts, solely in accordance with the terms of this Agreement. Such independent accountant shall deliver to the Shareholders and Acquiror, as promptly as practicable, a report setting forth such determination. Such report shall be final and binding upon the Shareholders and Acquirorforegoing 30-day period. The cost fees and expenses of such review and report the Independent Accountants shall be borne fifty percent (50%) by the non-prevailing party as determined by such independent accountant. In the event that agreement is not reached as to an independent accountant within thirty SELLER and fifty percent (30) days after the expiration of the Discussion Period, the determination as to the Disputed Amounts shall be made, and shall be binding on all parties, by the majority vote of a board of three (3) accountants, the Acquiror appointing one (1) accountant, the Shareholders appointing one (1) accountant, and the two (2) appointed accountants appointing the third (3rd) accountant. If the two (2) appointed accountants fail to appoint the third (3rd) accountant within twenty (20) days of their appointment, the appointment of the third (3rd) accountant shall be made by the American Arbitration Association in accordance with its rules then obtaining. The Acquiror and the Shareholders shall each be responsible for the fees and costs charged by the accountant selected by them and for one-half (1/2) of the fees and costs of the third accountant. After all three accountants have been appointed, they shall have no more than sixty (60) days to make a determination regarding the Disputed Amounts. (d) The Shareholders and Acquiror agree that they will, and will cause their respective independent accountants to, cooperate and assist in the preparation of the Closing Balance Sheet and the calculation of Tangible Net Worth (including the identification of any possible disputed amounts) and in the conduct of the reviews referred to in this Section 2.4, including, without limitation, making available, to the extent necessary, relevant books, records, working papers, analyses and schedules, and permitting representatives of the parties to consult with the respective employees, auditors, actuaries, attorneys and agents of the Agencies and Acquiror. (e) If Tangible Net Worth is less than the Minimum Tangible Net Worth, the Acquiror shall remove from the Escrow Shares Stock having a cumulative Average Price equal to the amount of the shortfall and promptly remit the balance of the Escrow Shares to the Agencies in the same pro rata amounts as the Initial Payment. If the shortfall is greater than the cumulative Average Price of all of the Escrow Shares, the Acquiror shall retain all of the Escrow Shares and the Agencies shall keep the Initial Payment.50%)