Common use of Potential Adjustment to Purchase Price Clause in Contracts

Potential Adjustment to Purchase Price. If the NPBT of Company during fiscal years 2003, 2004 and 2005 exceed the applicable NPBT Threshold for such year set forth below: NPBT Threshold ------------------------ Fiscal Year 2003 Closing Date through January 5, 2004) - 1,750,000.00 (Pro Rate) Fiscal Year 2004 - $ 1,750,000.00 Fiscal Year 2005 - $ 1,750,000.00 Fiscal Year 2006 (January 6, 2006 through third annual anniversary of Closing Date) - 1,750,000.00 (Pro Rate) Purchaser shall pay to Sellers according to the percentages below, by bank check or wire transfer within one hundred twenty (120) days following the end of the fiscal year, an amount equal to fifty percent (50%) of the NPBT of Company in excess of the NPBT Threshold for the applicable year or portion thereof, subject to a cumulative limitation of Three Million Five Hundred Thousand Dollars ($3,500,000.00) during such aggregate period. Any NPBT shortfall in any year shall not be offset against any excess NPBT in any subsequent year(s) hereunder, it being the intent of the parties that the NPBT Threshold set forth herein shall apply to each applicable year separately, subject, however, to the cumulative limitation of Three Million Five Hundred Thousand Dollars ($3,500,000.00) during such aggregate period. Such cash payment by Purchaser shall be additional Purchase Price for Company Shares. Commencing upon the earlier of the conversion of the Astea accounting system at Company or April 5, 2003, a 2.0% infrastructure fee and a .3% MDF fee on gross sales by Company shall be made incident to said determination. For each subsequent year described above in this paragraph for which Purchaser may be required to pay additional Purchase Price, the parties shall, in good faith, agree upon the infrastructure and MDF fees to be charged hereunder based on the level of services and support being provided by Purchaser to Company. Provided, however, such infrastructure fee shall be 2.0% and the MDF fee shall be .3% if the parties are unable to come to an agreement for each subsequent year. Attached hereto as Exhibit A is a list of the type of administrative services and marketing and development services that are provided by Purchaser to Company as a result of the infrastructure fee and MDF fee paid by Company on gross sales. In addition, Exhibit B attached hereto sets forth a list of clients that Company is currently receiving favorable pricing on products from certain original equipment manufacturers. Purchaser and Company shall in good faith determine on a case-by-case basis whether any gross sales by the Company will be subject to a reduced infrastructure fee and MDF fee because of the special circumstances surrounding the sale of certain equipment to customers of clients for which favorable pricing may be available. The granting of a reduction in the infrastructure fee and/or the MDF fee on any transaction shall not be an agreement to reduce such fees on any subsequent sales by Company to the same customer or any other customer based on a prior transaction, and each transaction shall be evaluated in good faith on its own merits by Company and Purchaser, taking into account all facts and circumstances relating to that particular transaction. The NPBT of Company shall be determined by the internally-generated financial statements of Company determined in the manner set forth above in accordance with generally accepted accounting principles, consistently applied. Said determination of NPBT of Company shall be subject to verification as described below. In addition, for purposes of determining NPBT of Company for any particular year, except as noted above, no item of income or expense will be allocated by Purchaser to Company unless such items are reasonably calculated to contribute to the increase in profits of Company, it being the intent of the parties that Purchaser shall exercise the utmost good faith with respect to allocations of income and expense to Company. Incident to the determination of NPBT of Company, no compensation of any executive or other employee of Purchaser or its respective affiliates who do not work directly for Company shall be allocated to Company. Within ninety (90) days after the end of each fiscal year or period described herein, Purchaser will deliver to Sellers a copy of the report of NPBT prepared by Purchaser for the subject period along with any supporting documentation reasonably requested by Sellers. Within thirty (30) days following delivery to Sellers of such report, Sellers shall have the right to object in writing to the results contained in such determination. If timely objection is not made by Sellers to such determination, such determination shall become final and binding for purposes of this Agreement. If timely objection is made by Sellers to Purchaser and Sellers and Purchaser are able to resolve their differences in writing within thirty (30) days following the expiration of the thirty-day (30-day) period, then such determination shall become final and binding as it regards to this Agreement. If timely objection is made by Sellers to Purchaser and Sellers and Purchaser are unable to resolve their differences in writing within thirty (30) days following the expiration of the thirty-day (30-day) period, then all disputed accounting matters pertaining to the report shall be submitted to and reviewed by an arbitrator (the "Arbitrator") which shall be an independent accounting firm selected by Purchaser and Sellers. If Purchaser and Sellers are unable to agree promptly on an accounting firm to serve as the Arbitrator, each shall select by no later than the 30th day following the expiration of the sixty-day (60-day) period, an accounting firm, and the two selected accounting firms shall be instructed to select promptly another independent accounting firm, such newly selected firm to serve as the Arbitrator. The Arbitrator shall consider only the disputed accounting matters pertaining to the determination and shall act promptly to resolve all disputed matters, and its decision with respect to all disputed matters shall be final and binding upon Sellers and Purchaser. Expenses of the Arbitration shall be borne one-half (1/2) by Purchaser and one-half (1/2) by Sellers. Each party shall be responsible for its own attorney and accounting fees. The resolution of any disputed legal matters pertaining to the report shall be subject to judicial review. Two-thirds (2/3) of any earnout to be paid hereunder shall be payable to the Sellers actively employed by Purchaser in accordance with the following percentages: R. Hays, Trustee - 00.33% D. Yoka, Trustee - 00.33% Page 11 of 54 Pages M. Cussigh - 00.00% If R. Hays, D. Yoka or M. Xxxxxxx wouxx xxxxxtarily xxxxxxxxx his employment with Purchaser before the expiration of the earnout period, or in the event R. Hays, D. Yoka or M. Cussixx'x xxplxxxxxx woulx xx terminated by Purchaser for cause, said individual shall forfeit his right to receive any future earnout payments hereunder and any forfeited earnout payments shall be reallocated in equal proportions to any of the other individuals set forth above who continue their employment with Purchaser. One-third () of any earnout to be paid hereunder will be payable to the Sellers based on their share ownership set forth in Section 2.04(a). In the event of the death or disability of any Seller, any amount owing to said Seller hereunder shall be paid to said individual or his personal representative or guardian, as due. In the event that R. Hays, D. Yoka and M. Cussxxx xxxld xxx xxluntaxxxx terminate their employment with Purchaser or would have their employment terminated by Purchaser for cause before the expiration of the earnout period, all Sellers shall forfeit their right to any earnout payments hereunder.

Potential Adjustment to Purchase Price. If the NPBT earnings before interest and taxes ("EBIT") of Company the Purchaser's Indiana Division during fiscal years 2003July 24, 2004 and 2005 exceed the applicable NPBT Threshold for such year set forth below: NPBT Threshold ------------------------ Fiscal Year 2003 Closing Date 1997 through January 5, 20041998, during the fiscal years 1998 or 1999 or during the first seven months twenty-three days of the year 2000 exceed Five Hundred Thirty-six Thousand Six Hundred Dollars ($536,600.00) - 1,750,000.00 (Pro Rate"EBIT Threshold") Fiscal Year 2004 - $ 1,750,000.00 Fiscal Year 2005 - $ 1,750,000.00 Fiscal Year 2006 (January 6prorated to $235,221.92 in 1997 and $301,378.08 in 2000 based on the date of Closing), 2006 through third annual anniversary of Closing Date) - 1,750,000.00 (Pro Rate) Purchaser shall pay to Sellers according to the percentages belowSeller No. 2 cash, by bank check or wire transfer wiring within one hundred twenty ninety (12090) days following the end of the fiscal year, except for the period ending July 23, 2000, which such payment shall be made within sixty (60) days of the expiration of such period, an amount equal to fifty percent (50%) of the NPBT EBIT of Company Purchaser's Indiana Division in excess of the NPBT EBIT Threshold for the applicable year or portion thereof, subject to a cumulative limitation of Three One Million Five Hundred Thousand Dollars ($3,500,000.00) during such aggregate period. Any NPBT shortfall in any year shall not be offset against any excess NPBT in any subsequent year(s) hereunder, it being the intent of the parties that the NPBT Threshold set forth herein shall apply to each applicable year separately, subject, however, to the cumulative limitation of Three Million Five Hundred Thousand Dollars ($3,500,000.001,500,000.00) during such aggregate period. Such cash payment by the Purchaser shall be additional Purchase Price for Company Shares. Commencing upon which will be added to the earlier good will allocation of the conversion Purchase Price. For the year 1997, in making the determination of EBIT for the Astea accounting system at Company or April 5, 2003Purchaser's Indiana Division, a 2.01.5% infrastructure fee and a .3% MDF MAS royalty fee on gross sales by Company the Purchaser's Indiana Division shall be made incident to said determination. A MAS royalty fee is a fee charged to each branch of the Purchaser for the following services performed by the Purchaser's corporate headquarters: marketing, advertising, professional, accounting and other related expenses. For each subsequent year described above in this paragraph for which the Purchaser may be required to pay additional Purchase Price, the parties shall, in good faith, agree upon the infrastructure and MDF fees a MAS royalty fee to be charged hereunder based on the level of services and support being provided by the Purchaser to Companyits Indiana Division. Provided, however, such infrastructure MAS royalty fee shall be 2.0% and the MDF fee shall be .31.5% if the parties are unable to come to an agreement for each subsequent year. Attached hereto as Exhibit A is a list of the type of administrative services and marketing and development services that are provided by Purchaser to Company as a result of the infrastructure fee and MDF fee paid by Company on gross sales. In addition, Exhibit B attached hereto sets forth a list of clients that Company is currently receiving favorable pricing on products from certain original equipment manufacturers. Purchaser and Company shall in good faith determine on a case-by-case basis whether any gross sales by the Company will be subject to a reduced infrastructure fee and MDF fee because of the special circumstances surrounding the sale of certain equipment to customers of clients for which favorable pricing may be available. The granting of a reduction in the infrastructure fee and/or the MDF fee on any transaction shall not be an agreement to reduce such fees on any subsequent sales by Company to the same customer or any other customer based on a prior transaction, and each transaction shall be evaluated in good faith on its own merits by Company and Purchaser, taking into account all facts and circumstances relating to that particular transaction. The NPBT of Company shall be determined by the internally-generated financial statements of Company determined in the manner set forth above in accordance with generally accepted accounting principles, consistently applied. Said determination of NPBT of Company shall be subject to verification as described below. In addition, for purposes of determining NPBT of Company for any particular year, except as noted above, no item of income or expense will be allocated by Purchaser to Company unless such items are reasonably calculated to contribute to the increase in profits of Company, it being the intent of the parties that Purchaser shall exercise the utmost good faith with respect to allocations of income and expense to Company. Incident to the determination of NPBT of Company, no compensation of any executive or other employee of Purchaser or its respective affiliates who do not work directly for Company shall be allocated to Company. Within ninety (90) days after the end of each fiscal year or period described herein, Purchaser will deliver to Sellers a copy of the report of NPBT prepared by Purchaser for the subject period along with any supporting documentation reasonably requested by Sellers. Within thirty (30) days following delivery to Sellers of such report, Sellers shall have the right to object in writing to the results contained in such determination. If timely objection is not made by Sellers to such determination, such determination shall become final and binding for For purposes of this AgreementSection, the term "Indiana Division" shall include, but not be limited to, the business acquired from Seller No. If timely objection is made 1 and Seller 2 together with the business conducted in Indiana by Sellers to the Purchaser and Sellers and Purchaser are able to resolve their differences in writing within thirty (30) days following on the expiration date of the thirty-day (30-day) period, then such determination shall become final and binding as it regards Closing. The Purchaser agrees to this Agreement. If timely objection is made by Sellers to Purchaser and Sellers and Purchaser are unable to resolve their differences in writing within thirty (30) days following conduct the expiration business of the thirty-day (30-day) period, then all disputed accounting matters pertaining to the report shall be submitted to and reviewed by an arbitrator (the "Arbitrator") which shall be an independent accounting firm selected by Purchaser and Sellers. If Purchaser and Sellers are unable to agree promptly on an accounting firm to serve as the Arbitrator, each shall select by no later than the 30th day following the expiration of the sixty-day (60-day) period, an accounting firm, and the two selected accounting firms shall be instructed to select promptly another independent accounting firm, such newly selected firm to serve as the Arbitrator. The Arbitrator shall consider only the disputed accounting matters pertaining to the determination and shall act promptly to resolve all disputed matters, and its decision with respect to all disputed matters shall be final and binding upon Sellers and Purchaser. Expenses of the Arbitration shall be borne one-half (1/2) by Purchaser and one-half (1/2) by Sellers. Each party shall be responsible for its own attorney and accounting fees. The resolution of any disputed legal matters pertaining to the report shall be subject to judicial review. Two-thirds (2/3) of any earnout to be paid hereunder shall be payable to the Sellers actively employed by Purchaser in accordance with the following percentages: R. Hays, Trustee - 00.33% D. Yoka, Trustee - 00.33% Page 11 of 54 Pages M. Cussigh - 00.00% If R. Hays, D. Yoka or M. Xxxxxxx wouxx xxxxxtarily xxxxxxxxx his employment with Purchaser before the expiration of the earnout period, or Indiana Division in the event R. Hays, D. Yoka or M. Cussixx'x xxplxxxxxx woulx xx terminated by Purchaser for cause, said individual shall forfeit his right to receive any future earnout payments hereunder and any forfeited earnout payments shall be reallocated in equal proportions to any of the other individuals set forth above who continue their employment ordinary course generally consistent with Purchaser. One-third () of any earnout to be paid hereunder will be payable to the Sellers based on their share ownership set forth in Section 2.04(a). In the event of the death or disability of any Seller, any amount owing to said Seller hereunder shall be paid to said individual or his personal representative or guardian, as due. In the event that R. Hays, D. Yoka and M. Cussxxx xxxld xxx xxluntaxxxx terminate their employment with Purchaser or would have their employment terminated by Purchaser for cause before the expiration of the earnout period, all Sellers shall forfeit their right to any earnout payments hereunderpast practice.

Potential Adjustment to Purchase Price. If the NPBT EBIT of Company (as hereinafter defined as Purchaser's Columbus Division) during the fiscal years 20032000, 2004 2001, 2002 and 2005 2003 exceed the applicable NPBT EBIT Threshold for such year set forth below: NPBT Threshold ------------------------ Fiscal Year 2000 - $1,589,000.00 Fiscal 2001 - $1,689,000.00 Fiscal 2002 - $1,789,000.00 Fiscal 2003 Closing Date through January 5, 2004) - 1,750,000.00 (Pro Rate) Fiscal Year 2004 - $ 1,750,000.00 Fiscal Year 2005 - $ 1,750,000.00 Fiscal Year 2006 (January 6, 2006 through third annual anniversary of Closing Date) - 1,750,000.00 (Pro Rate) $1,889,000.00 Purchaser shall pay to Sellers according to the percentages set forth in Section 2.04(a) below, by bank check or wire transfer wiring within one hundred twenty ninety (12090) days following the end of the fiscal year, an amount equal to fifty percent (50%) of the NPBT EBIT of Company in excess of the NPBT EBIT Threshold for the applicable year or portion thereof, subject to a cumulative limitation of Three Five Million Five Hundred Thousand Dollars ($3,500,000.005,000,000.00) during such aggregate period. Any NPBT EBIT shortfall in any year shall not be offset against any excess NPBT EBIT in any subsequent year(s) hereunder, it being the intent of the parties that the NPBT EBIT Threshold set forth herein shall apply to each applicable year separately, subject, however, to the cumulative limitation of Three Five Million Five Hundred Thousand Dollars ($3,500,000.005,000,000.00) during such aggregate period. Such cash payment by Purchaser shall be additional Purchase Price for the Company Shares. Commencing upon on the earlier later of the conversion closing date or the installation of the Astea accounting system ASTEA Accounting System at Company or April 5Company, 2003, a 2.01.5% infrastructure MAS royalty fee and a .3% MDF Adfund fee on gross sales by Company shall be made incident to said determination. For each subsequent year described above in this paragraph for which Purchaser may be required to pay additional Purchase Price, the parties shall, in good faith, agree upon the infrastructure MAS and MDF fees Adfund royalty fee to be charged hereunder based on the level of services and support being provided by Purchaser to Company. Provided, however, such infrastructure MAS royalty fee shall be 2.01.5% and the MDF Adfund royalty fee shall be .3% if the parties are unable to come to an agreement for each subsequent year. Attached hereto as Exhibit A is a list For purposes of this Section 2.03, the term "Purchaser's Columbus Division" shall be the business acquired by Purchaser from Sellers under this Agreement including any part of the type business that is operated by Purchaser's wholly-owned subsidiary, Xxxxxxx Select Integration Solutions, Inc., and shall include Purchaser's operations in Columbus, Ohio that existed prior to the closing of administrative services and marketing and development services this Agreement. In the event that are provided by during the term of this Section 2.03, Purchaser would cause Company to merge into Purchaser or any Affiliate of Purchaser, the term "Purchaser's Columbus Division" shall also include such entity into which Company as a result is merged to the extent of such entity's Columbus Division. It being the intent of the infrastructure fee and MDF fee paid by Company on gross sales. In addition, Exhibit B attached hereto sets forth a list of clients that Company is currently receiving favorable pricing on products from certain original equipment manufacturers. Purchaser and Company shall in parties to exercise good faith determine on a case-by-case basis whether any gross sales by in the Company will be subject to a reduced infrastructure fee and MDF fee because implementation of this provision in the event of the special circumstances surrounding merger of Company into Purchaser or any of its Affiliates during the sale term of certain equipment to customers of clients for which favorable pricing may be availablethis Agreement. The granting of a reduction in the infrastructure fee and/or the MDF fee on any transaction shall not be an agreement to reduce such fees on any subsequent sales by Company to the same customer or any other customer based on a prior transaction, and each transaction shall be evaluated in good faith on its own merits by Company and Purchaser, taking into account all facts and circumstances relating to that particular transaction. The NPBT EBIT of Company shall be determined by the internally-generated financial statements of Company determined in the manner set forth above in accordance with generally accepted accounting principles, consistently applied. Said determination of NPBT of Company EBIT shall be subject to verification as described below. In addition, for purposes of determining NPBT of Company EBIT for any particular year, except as noted above, no item of income or expense will be allocated by Purchaser to Company unless such items are reasonably calculated to contribute to the increase in profits of Company, it being the intent of the parties that Purchaser shall exercise the utmost good faith with respect to allocations of income and expense to Company. Incident to the determination of NPBT EBIT of Company, no compensation of any executive or other employee of Purchaser or its respective affiliates who do not work directly for Company shall be allocated to Companysuch division. Within ninety (90) days after the end of each fiscal year or period described herein, Purchaser will deliver to Sellers a copy of the report of NPBT EBIT prepared by Purchaser for the subject period along with any supporting documentation reasonably requested by Sellers. Within thirty ninety (3090) days following delivery to Sellers of such report, Sellers shall have the right to object in writing to the results contained in such determination. If timely objection is not made by the Sellers to such determination, such determination shall become final and binding for purposes of this Agreement. If timely objection is made by Sellers to Purchaser and Sellers and Purchaser are able to resolve their differences in writing within thirty (30) days following the expiration of the thirtyninety-day (3090-day) period, then such determination shall become final and binding as it regards to this Agreement. If timely objection is made by Sellers to Purchaser and Sellers and Purchaser are unable to resolve their differences in writing within thirty (30) days following the expiration of the thirtyninety-day (3090-day) period, then all disputed accounting matters pertaining to the report shall be submitted to and reviewed by an arbitrator (the "Arbitrator") which shall be an independent accounting firm selected by Purchaser and Sellers. If Purchaser and Sellers are unable to agree promptly on an accounting firm to serve as the Arbitrator, each shall select by no later than the 30th day following the expiration of the sixtyone hundred twenty-day (60120-day) period, an accounting firm, and the two selected accounting firms shall be instructed to select promptly another independent accounting firm, such newly selected firm to serve as the Arbitrator. The Arbitrator shall consider only the disputed accounting matters pertaining to the determination and shall act promptly to resolve all disputed matters, and its decision with respect to all disputed matters shall be final and binding upon Sellers and Purchaser. Expenses of the Arbitration shall be borne one-half (1/2) by Purchaser and one-half (1/2) by Sellers. Each party shall be responsible for its own attorney and accounting fees. The resolution of any disputed legal matters pertaining to the report shall be subject to judicial review. Two-thirds (2/3) of any earnout to be paid hereunder shall be payable to the Sellers actively employed by Purchaser in accordance with the following percentages: R. Hays, Trustee - 00.33% D. Yoka, Trustee - 00.33% Page 11 of 54 Pages M. Cussigh - 00.00% If R. Hays, D. Yoka or M. Xxxxxxx wouxx xxxxxtarily xxxxxxxxx his employment with Purchaser before the expiration of the earnout period, or in the event R. Hays, D. Yoka or M. Cussixx'x xxplxxxxxx woulx xx terminated by Purchaser for cause, said individual shall forfeit his right to receive any future earnout payments hereunder and any forfeited earnout payments shall be reallocated in equal proportions to any of the other individuals set forth above who continue their employment with Purchaser. One-third () of any earnout to be paid hereunder will be payable to the Sellers based on their share ownership set forth in Section 2.04(a). In the event of the death or disability of any Seller, any amount owing to said Seller hereunder shall be paid to said individual or his personal representative or guardian, as due. In the event that R. Hays, D. Yoka and M. Cussxxx xxxld xxx xxluntaxxxx terminate their employment with Purchaser or would have their employment terminated by Purchaser for cause before the expiration of the earnout period, all Sellers shall forfeit their right to any earnout payments hereunder.