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first anniversary of the Closing, and (B)
Thomas shall be paid $7,500,000 in 21
quarterly installments of $357,143,
commencing on the first anniversary of the
Closing. (Such agreements are sometimes
collectively referred to herein as the
“Noncompete Agreements”).
* * * * * * *
12. PURCHASE PRICE ADJUSTMENTS.
(a) The parties acknowledge that the
purchase price is based upon Sellers’
representation that the Company’s net worth
(as defined below) at June 4, 1988 will be
$8,000,000.00. A certified audit of the
Company will be conducted as of June 4, 1988
by Peat Marwick, Main & Company (or such
independent public accountants as are
satisfactory to Buyer and Sellers) (said
audit being sometimes referred to herein as
the “June 4, 1988 Audit”). If said audit
determines that the net worth of the company
is less than or greater than as so
represented by Sellers, then the purchase
price shall be adjusted in accordance with
the following formula:
(i) The portion of the purchase
price payable to each Seller shall
be reduced one dollar ($1.00) for
each dollar that net worth of the
Company as at June 4, 1988 is below
$8,000,000.00.
(ii) The portion of the purchase
price payable to each Seller shall
be increased one-half dollar ($.50)
for each dollar that net worth of
the Company as at June 4, 1988 is
above $8,000,000.00.
For the purpose of this Section and June 4, 1988 Audit,
“net worth” shall be the stockholders’ equity
determined as of such date on the accrual basis in
accordance with generally accepted accounting
principles consistently applied less (i) the amount
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