Common use of Potential Adjustment to Purchase Price Clause in Contracts

Potential Adjustment to Purchase Price. If the earnings before interest and taxes (EBIT) of the Purchaser No. 1's and Purchaser No. 2's Atlanta Divisions in the aggregate during any of fiscal years 1999 (May 6, 1999 to January 5, 2000), 2000, 2001, 2002 and (January 6, 2003 to May 5, 2003) exceed the applicable EBIT threshold for such year set forth below: Fiscal 1999 - $218,559 (May 6, 1999 to January 5, 2000) Fiscal 2000 - $377,814 Fiscal 2001 - $427,814 Fiscal 2002 - $457,814 Fiscal 2003 - $169.254 (January 5, 2003 to May 5, 2003) Purchaser No. 1 and Purchaser No. 2 (according to the percentages set forth below) shall pay Seller, by bank check or wiring within ninety (90) days following the end of the fiscal year, an amount equal to fifty percent (50%) of the aggregate EBIT of Purchaser No. 1's and Purchaser No. 2's Atlanta Divisions in excess of the EBIT Threshold for the applicable year or portion thereof, subject to a cumulative limitation of One Million Four Hundred Seventy-Five Thousand Dollars ($1,475,000.00) during such aggregate period. Any EBIT shortfall in any year shall not be offset against any excess EBIT in any subsequent year(s) hereunder, it being the intent of the parties that the EBIT Threshold set forth herein shall apply to each applicable year separately, subject, however, to the cumulative limitation of One Million Four Hundred Seventy-Five Thousand Dollars ($1,475,000.00) during such aggregate period. Such cash payment by Purchaser Xx. 0 xxx Xxxxxxxxx Xx. 0 xxxxx xx additional Purchase Price which will be added to the good will allocation of the Purchase Price. Commencing on the closing date, a 1.8% royalty fee (MAS-1.5% and Adfund fee-.3%) on gross sales by Purchaser No. 1's and Purchaser No. 2's respective Atlanta Divisions shall be made incident to said determination. For each subsequent year described above in this paragraph for which Purchaser No. 1 and Purchaser No. 2 may be required to pay additional Purchase Price, the parties shall, in good faith, agree upon the MAS and Adfund royalty fee to be charged hereunder based on the level of services and support being provided by Purchaser No. 1 and Purchaser No. 2 to its respective Atlanta Division. Provided, however, such MAS and Adfund royalty fees shall be 1.8% if the parties are unable to come to an agreement for each subsequent year. For purposes of this Section, the term Atlanta Division shall be defined as Business No. 1 and Business No. 2 acquired from Seller, by Purchaser No. 1 and Purchaser No. 2, respectively, and Purchaser No. 1's and Purchaser No. 2's operations in Atlanta, Georgia that existed prior to the closing of the Purchase Agreement. Purchaser No. 1 and Purchaser No. 2 shall pay their respective percentage of any amounts due hereunder, which percentage shall be predicated on the respective EBIT contribution made by each of their Atlanta Divisions to the computation set forth above. For purposes of this Section, the term EBIT shall mean the net income before taxes and before interest expense of Purchaser No. 1's and Purchaser No. 2's Atlanta Divisions during the applicable period. The EBIT shall be determined by the internally-generated financial statements of Purchaser No. 1 and Purchaser No. 2 determined in the manner set forth above in accordance with generally accepted accounting principles, consistently applied, provided that no effect shall be given to any increase in the amounts of depreciation, amortization or other expense or deduction taken on tangible or intangible assets of Purchaser, if such increase is attributable to a revaluation of such assets incident to their acquisition pursuant to the terms of this Agreement. Said determination of EBIT shall be subject to verification as described below. In addition, for purposes of determining EBIT for any particular year, except as noted above, no item of income or expense will be allocated by Purchaser No. 1 or Purchaser No. 2 to Purchaser No. 1's and/or Purchaser No. 2's Atlanta Division unless such items are reasonably calculated to contribute to the increase in profits of such Atlanta Divisions, it being the intent of the parties that the Purchaser No. 1 and Purchaser No. 2 shall exercise the utmost good faith with respect to allocations of income and expense to Purchaser No. 1's and Purchaser No. 2's Atlanta Division. Incident to the determination of EBIT of Purchaser No. 1s and Purchase No. 2's Atlanta Division, no compensation of any executive or other employee of Purchaser No. 1 and/or Purchaser No. 2 or their respective affiliates who do not work directly for Purchaser No. 1s and/or Purchaser No. 2's Atlanta Division shall be allocated to such division. Any payment made to Seller pursuant to this Section 4.5 shall not be charged against the EBIT for any year.

Potential Adjustment to Purchase Price. If the earnings net profits before interest and taxes (EBIT"NPBT") of the Purchaser No. 1's and Purchaser No. 2's Atlanta Raleigh, North Carolina Divisions in the aggregate during any of fiscal years 1999 2000 (May 6July 28, 1999 2000 to January 5, 20002001), 2000, 2001, 2002 2002, 2003, 2004 and (January 6, 2003 2005 to May 5July 27, 20032005) exceed the applicable EBIT NPBT threshold for such year set forth below: Fiscal 1999 Year 2000 - $218,559 (May 6, 1999 Closing Date to January 5, 20002001 - pro rate $2,250,000.00) Fiscal 2000 - $377,814 Fiscal Year 2001 - $427,814 2,400,000 Fiscal Year 2002 - $457,814 2,550,000 Fiscal Year 2003 - $169.254 2,700,000 Fiscal Year 2004 - $2,850,000 (January 5, 2003 2005 to May 5July 27, 20032005) - Pro rate $2,250,000 Purchaser No. 1 and Purchaser No. 2 (according to the percentages set forth below) shall pay SellerDataNet, by bank check or wiring within ninety (90) days following the end of the fiscal year, an amount equal to fifty percent (50%) of the aggregate EBIT NPBT of Purchaser No. 1's and Purchaser No. 2's Atlanta Raleigh, North Carolina Divisions in excess of the EBIT NPBT Threshold for the applicable year or portion thereof, subject to a cumulative limitation of One Six Million Four Hundred Seventy-Five Thousand Dollars ($1,475,000.006,000,000.00) during such aggregate period. Any EBIT NPBT shortfall in any year shall not be offset against any excess EBIT NPBT in any subsequent year(s) hereunder, it being the intent of the parties that the EBIT NPBT Threshold set forth herein shall apply to each applicable year separately, subject, however, to the cumulative limitation of One Six Million Four Hundred Seventy-Five Thousand Dollars ($1,475,000.006,000,000.00) during such aggregate period. Such cash payment by Purchaser XxNo. 0 xxx Xxxxxxxxx Xx1 and Purchaser No. 0 xxxxx xx 2 shall be additional Purchase Price No. 1 and Purchase Price No. 2, in the proportions set forth below, which will be added to the good will allocation of Purchase Price No. 1 and Purchase Price No. 2, in the Purchase Priceproportions set forth below. Commencing on upon the closing dateinstallation of the Astea (MAS and Accounting) System at the Purchaser's No. 1 and Purchaser's No. 2 Rxxxxxx, a 1.8Xxxxx Xxxxxxxx Xxxxxxxxx, x 0.0% royalty XXX xxyalty fee (MAS-1.5% and Adfund fee-.3%) on gross sales by Purchaser No. 1's and Purchaser No. 2's respective Atlanta Raleigh, North Carolina Divisions shall be made incident to said determination. For each subsequent year described above in this paragraph for which Purchaser No. 1 and Purchaser No. 2 may be required to pay additional Purchase PricePrice No. 1 and Purchase Price No. 2, in the proportions set forth below, the parties shall, in good faith, agree upon the MAS and Adfund royalty fee to be charged hereunder based on the level of services and support being provided by Purchaser No. 1 and Purchaser No. 2 to its respective Atlanta DivisionRaleigh, North Carolina Divisions. Provided, however, such MAS and Adfund royalty fees fee shall be 1.81.5% if the parties are unable to come to an agreement for each subsequent year. For purposes of this Section, the term Atlanta Division "Raleigh, North Carolina Divisions" shall be defined as Business No. 1 and Business No. 2 acquired from Seller, by Purchaser No. 1 and Purchaser No. 2, respectively. Provided, however, commencing upon the Astea (MAS and Accounting) System conversion, the term "Raleigh, North Carolina Divisions" shall include Purchaser No. 1's and Purchaser No. 2's operations in Atlantaexisting Triangle, Georgia that existed prior to the closing of the Purchase AgreementNorth Carolina branch. Purchaser No. 1 and Purchaser No. 2 shall pay their respective percentage of any amounts due hereunder, which percentage shall be predicated on the respective EBIT NPBT contribution made by each of their Atlanta Raleigh, North Carolina Divisions to the computation set forth above. For purposes of this Section, the term EBIT shall mean the net income before taxes and before interest expense of Purchaser No. 1's and Purchaser No. 2's Atlanta Divisions during the applicable period. The EBIT shall be determined by the internally-generated financial statements of Purchaser No. 1 and Purchaser No. 2 determined in will continue to explore the manner set forth above in accordance with generally accepted accounting principles, consistently applied, provided that no effect shall be given viability of the E-1 Consulting business unit as it pertains to any increase in the amounts of depreciation, amortization or other expense or deduction taken on tangible or intangible assets of Purchaser, if such increase is attributable to a revaluation of such assets incident to their acquisition pursuant to the terms of this Agreement. Said determination of EBIT shall be subject to verification as described below. In addition, for purposes of determining EBIT for any particular year, except as noted above, no item of income or expense will be allocated by Purchaser No. 1 or Purchaser No. 2 to Purchaser No. 1's and/or Purchaser No. 2's Atlanta Division unless such items are reasonably calculated to contribute to company wide professional service strategy and the increase in profits potential financial ramification it could have on the earn-out of such Atlanta Divisions, it being the intent of the parties that the Purchaser No. 1 and Purchaser No. 2 shall exercise the utmost good faith with respect to allocations of income and expense to Purchaser No. 1's and Purchaser No. 2's Atlanta Division. Incident to the determination of EBIT of Purchaser No. 1s and Purchase No. 2's Atlanta Division, no compensation of any executive or other employee of Purchaser No. 1 and/or Purchaser No. 2 or their respective affiliates who do not work directly for Purchaser No. 1s and/or Purchaser No. 2's Atlanta Division shall be allocated to such division. Any payment made to Seller pursuant to this under Section 4.5 shall not be charged against the EBIT for any year4.6.

Potential Adjustment to Purchase Price. If the earnings before interest interest, taxes, depreciation and taxes amortization (EBIT"EBITDA") of the Purchaser No. 1's and Purchaser No. 2's Atlanta System 5/Ballantyne Divisions in the aggregate during any of fiscal years 1999 2002 (May January 6, 1999 2002 to January 5, 20002003), 2000, 2001, 2002 2003 and (January 6, 2003 to May 5, 2003) 2004 exceed the applicable EBIT EBITDA threshold for such year set forth below: Fiscal 1999 - $218,559 (May 6, 1999 to January 5, 2000) Fiscal 2000 - $377,814 Fiscal 2001 - $427,814 Fiscal Year 2002 - $457,814 1,358,744 Fiscal Year 2003 - $169.254 (January 5, 2003 to May 5, 2003) 1,358,744 Fiscal Year 2004 - $1,358,744 E27 Purchaser No. 1 and Purchaser No. 2 (according to the percentages set forth below) shall pay Seller, by bank check or wiring within ninety (90) days following the end of the fiscal year, an amount equal to 57.40% of fifty percent (50%) of the aggregate EBIT EBITDA of Purchaser No. 1's and Purchaser No. 2's Atlanta System 5/Ballantyne Divisions in excess of the EBIT EBITDA Threshold for the applicable year or portion thereofyear, subject to a cumulative limitation of One Three Million Four Two Hundred Seventy-Five One Thousand Nine Hundred Seventy-Four Dollars ($1,475,000.003,271,974.00) during such aggregate period. Any EBIT EBITDA shortfall in any year shall not be offset against any excess EBIT EBITDA in any subsequent year(s) hereunder, it being the intent of the parties that the EBIT EBITDA Threshold set forth herein shall apply to each applicable year separately, subject, however, to the cumulative limitation of One Three Million Four Two Hundred Seventy-Five One Thousand Nine Hundred Seventy-Four Dollars ($1,475,000.003,271,974.00) during such aggregate period. Such cash payment by Purchaser XxNo. 0 xxx Xxxxxxxxx Xx1 and Purchaser No. 0 xxxxx xx 2 shall be additional Purchase Price No. 1 and Purchase Price No. 2, in the proportions set forth below, which will be added to the good will allocation of Purchase Price No. 1 and Purchase Price No. 2, in the Purchase Priceproportions set forth below, provided, however, Purchaser No. 1 and/or Purchaser No. 2 shall not be liable to pay to Seller the first Two Hundred Ninety-Five Thousand Two Hundred Sixty-Two Dollars ($295,262.00), as may be adjusted pursuant to the provisions of Section 5.1, that may be earned under this Section 4.6, it being the intent of the parties that such amount to the extent earned hereunder shall not be due and payable to Seller but rather Purchaser No. 1 and/or Purchaser No. 2 xxxxx xx xxxxxxxx xx xx xxxxxx xxxinst any amount owing hereunder until it has recovered such amount. Commencing on upon the closing dateearlier of February 1, a 1.8% royalty fee 2002 or the installation of the Astea (MAS-1.5% MAS and Adfund fee-.3%Accounting) on gross sales by System at the Purchaser No. 1's and Purchaser No. 2's respective Atlanta Divisions System 5/Ballantyne Division, a 1.5% MAS royalty fee and a .3% Ad Fund royalty fee on gross sales by the Purchaser No. 1's and Purchaser No. 2's System 5/Ballantyne Division shall be made incident to said determination. The parties shall exercise good faith in effectuating the implementation of said Astea Accounting System at Purchaser No. 1's and Purchaser No. 2's System 5/Ballantyne Division. In the event the Astea (MAS and Accounting) System is not implemented by February 1, 2002 because of the determination of Purchaser No. 1 and/or Purchaser No. 2, the 1.5% MAS royalty free and the .3% Ad Fund royalty fee shall not be made incident to said EBITDA determination until said Astea (MAS and Accounting) System is installed at the Purchaser No. 1's and Purchaser No. 2's System 5/Ballantyne Division. For each subsequent year described above in this paragraph for which Purchaser No. 1 and Purchaser No. 2 may be required to pay additional Purchase PricePrice No. 1 and Purchase Price No. 2, in the proportions set forth below, the parties shall, in good faith, agree upon the MAS royalty fee and Adfund the Ad Fund royalty fee to be charged hereunder based on the level of services and support being provided by Purchaser No. 1 and Purchaser No. 2 to its respective Atlanta DivisionSystem 5/Ballantyne Divisions. Provided, however, such MAS and Adfund royalty fees fee shall be 1.81.5% and the Ad Fund royalty fee shall be .3% if the parties are unable to come to an agreement for each subsequent year. For purposes of this Section, the term Atlanta Division "System 5/Ballantyne Divisions" shall be defined as Business No. 1 and Business No. 2 acquired from Seller, Seller by Purchaser No. 1 and Purchaser No. 2, respectively, and the business acquired from Ballantyne Consulting Group, Inc. by Purchaser No. 1's and 2 pursuant to an Asset Purchase Agreement of even date. It shall not include any EBITDA from any business of Purchaser No. 2's operations in Atlanta, Georgia 1 or Purchaser No. 2 from any of its other branches that existed prior is relocated to the closing of System 5/Ballantyne Divisions unless it is mutually agreed upon by all parties to include such EBITDA within the Purchase AgreementSystem 5/Ballantyne Divisions. Purchaser No. 1 and Purchaser No. 2 shall pay their respective percentage of any amounts due hereunder, which percentage shall be predicated on the respective EBIT EBITDA contribution made by each of their Atlanta System 5/Ballantyne Divisions to the computation set forth above. For purposes of this Section, the term EBIT shall mean the net income before taxes and before interest expense of Purchaser No. 1's and Purchaser No. 2's Atlanta Divisions during the applicable period. The EBIT shall be determined by the internally-generated financial statements of Purchaser No. 1 and Purchaser No. 2 determined in the manner set forth above in accordance with generally accepted accounting principles, consistently applied, provided that no effect shall be given to any increase in the amounts of depreciation, amortization or other expense or deduction taken on tangible or intangible assets of Purchaser, if such increase is attributable to a revaluation of such assets incident to their acquisition pursuant to the terms of this Agreement. Said determination of EBIT shall be subject to verification as described below. In addition, for purposes of determining EBIT for any particular year, except as noted above, no item of income or expense will be allocated by Purchaser No. 1 or Purchaser No. 2 to Purchaser No. 1's and/or Purchaser No. 2's Atlanta Division unless such items are reasonably calculated to contribute to the increase in profits of such Atlanta Divisions, it being the intent of the parties that the Purchaser No. 1 and Purchaser No. 2 shall exercise the utmost good faith with respect to allocations of income and expense to Purchaser No. 1's and Purchaser No. 2's Atlanta Division. Incident to the determination of EBIT of Purchaser No. 1s and Purchase No. 2's Atlanta Division, no compensation of any executive or other employee of Purchaser No. 1 and/or Purchaser No. 2 or their respective affiliates who do not work directly for Purchaser No. 1s and/or Purchaser No. 2's Atlanta Division shall be allocated to such division. Any payment made to Seller pursuant to this Section 4.5 shall not be charged against the EBIT for any year.

Potential Adjustment to Purchase Price. If the earnings net profits before interest and taxes (EBIT"NPBT") of the Purchaser No. 1's and Purchaser No. 2's Atlanta Minneapolis/St. Paul Divisions in the aggregate during any of fiscal years 1999 2000 (May 6Juxx 0, 1999 2000 to January 5, 20002001), 2000, 2001, 2002 2002, 2003, 2004 and (January 6, 2003 2005 to May 5July 2, 20032005) exceed the applicable EBIT NPBT threshold for such year set forth below: Fiscal 1999 Year 2000 - $218,559 (May 6, 1999 Closing Date to January 5, 20002001-pro rate $650,000.00) Fiscal 2000 - $377,814 Fiscal Year 2001 - $427,814 650,000 Fiscal Year 2002 - $457,814 650,000 Fiscal Year 2003 - $169.254 650,000 Fiscal Year 2004 - $650,000 (January 56, 2003 2005 to May 5July 2, 20032005) - Pro rate $650,000 Purchaser No. 1 and Purchaser No. 2 (according to the percentages set forth below) shall pay Seller, by bank check or wiring within ninety (90) days following the end of the fiscal year, an amount equal to fifty percent (50%) of the aggregate EBIT NPBT of Purchaser No. 1's and Purchaser No. 2's Atlanta Minneapolis/St. Paul Divisions in excess of the EBIT NPBT Threshold for the applicable year yxxx or portion thereof, subject to a cumulative limitation of One Seven Million Four Three Hundred Seventy-Five Thousand Dollars ($1,475,000.007,300,000.00) during such aggregate period. Any EBIT NPBT shortfall in any year shall not be offset against any excess EBIT NPBT in any subsequent year(s) hereunder, it being the intent of the parties that the EBIT NPBT Threshold set forth herein shall apply to each applicable year separately, subject, however, to the cumulative limitation of One Seven Million Four Three Hundred Seventy-Five Thousand Dollars ($1,475,000.007,300,000.00) during such aggregate period. Such cash payment by Purchaser XxNo. 0 xxx Xxxxxxxxx Xx1 and Purchaser No. 0 xxxxx xx 2 shall be additional Purchase Price which will be added to the good will allocation wilx xx xxxxx xx xxx xxxx xxxx xxxxxxtion of the Purchase Price. Commencing on the closing dateinstallation of the Astea (MIS and Accounting) System at the Purchaser's No. 1 and Purchaser's No. 2 Minneapolis/St. Paul Divisions, a 1.81.5% MAS royalty fee (MAS-1.5% and Adfund fee-.3%) on gross sales by Purchaser NoXx. 1's and Purchaser No. 2's respective Atlanta Minneapolis/St. Paul Divisions shall be made incident to said determination. For each exxx subsequent year described above in this paragraph for which Purchaser No. 1 and Purchaser No. 2 may be required to pay additional Purchase Price, the parties shall, in good faith, agree upon the MAS and Adfund royalty fee to be charged hereunder based on the level of services and support being provided by Purchaser No. 1 and Purchaser No. 2 to its respective Atlanta Minneapolis/St. Paul Division. Provided, however, such MAS and Adfund royalty fees fee shall be 1.81.5% if the parties txx xarties are unable to come to an agreement for each subsequent year. For purposes of this Section, the term Atlanta Division "Minneapolis/St. Paul Division" shall be defined as Business No. 1 and Business No. 2 acquired acquxxxx from Seller, by Purchaser No. 1 and Purchaser No. 2, respectively, and Purchaser No. 1's and Purchaser No. 2's operations in Atlanta, Georgia that existed prior to the closing of the Purchase Agreement. Purchaser No. 1 and Purchaser NoXx. 2 shall pay their respective percentage of any amounts 0 xxxxx xxx xxxxx xxxxxxxxxx xxxxxxxxxx xx xxx xmounts due hereunder, which percentage shall be predicated on the respective EBIT NPBT contribution made by each of their Atlanta Minneapolis/St. Paul Divisions to the computation set forth above. For purposes of this Section, the term EBIT shall mean the net income before taxes and before interest expense of Purchaser No. 1's and Purchaser No. 2's Atlanta Divisions during the applicable period. The EBIT shall be determined by the internally-generated financial statements of Purchaser No. 1 and Purchaser No. 2 determined in the manner set forth above in accordance with generally accepted accounting principles, consistently applied, provided that no effect shall be given to any increase in the amounts of depreciation, amortization or other expense or deduction taken on tangible or intangible assets of Purchaser, if such increase is attributable to a revaluation of such assets incident to their acquisition pursuant to the terms of this Agreement. Said determination of EBIT shall be subject to verification as described below. In addition, for purposes of determining EBIT for any particular year, except as noted above, no item of income or expense will be allocated by Purchaser No. 1 or Purchaser No. 2 to Purchaser No. 1's and/or Purchaser No. 2's Atlanta Division unless such items are reasonably calculated to contribute to the increase in profits of such Atlanta Divisions, it being the intent of the parties that the Purchaser No. 1 and Purchaser No. 2 shall exercise the utmost good faith with respect to allocations of income and expense to Purchaser No. 1's and Purchaser No. 2's Atlanta Division. Incident to the determination of EBIT of Purchaser No. 1s and Purchase No. 2's Atlanta Division, no compensation of any executive or other employee of Purchaser No. 1 and/or Purchaser No. 2 or their respective affiliates who do not work directly for Purchaser No. 1s and/or Purchaser No. 2's Atlanta Division shall be allocated to such division. Any payment made to Seller pursuant to this Section 4.5 shall not be charged against the EBIT for any year.