QUOTATION SYSTEM ON WHICH ANY OF THE BUYER'S
SECURITIES ARE THEN LISTED OR QUOTED. IN ADDITION, THE BUYER SHALL ISSUE THE
COMMON STOCK PAYABLE PURSUANT TO SECTION 2.1 TO ANY AFFILIATE OF THE SELLER
ENTITIES AS THE APPLICABLE SELLER ENTITY SHALL DIRECT IN WRITING; PROVIDED,
HOWEVER, THAT (1) SUCH ISSUANCE COMPLIES WITH ALL APPLICABLE LAWS, INCLUDING ALL
APPLICABLE FOREIGN, FEDERAL AND STATE SECURITIES LAWS; (2) SUCH ISSUANCE CAN BE
MADE WITHOUT REGISTRATION UNDER APPLICABLE FOREIGN, FEDERAL OR STATE SECURITIES
LAWS; (3) SUCH ISSUANCE DOES NOT REQUIRE ANY FILING WITH ANY GOVERNMENTAL
AUTHORITY PURSUANT TO THE HSR ACT; (4) SUCH PARTY BECOMES A PARTY HERETO BY
EXECUTION OF A JOINDER AGREEMENT IN THE FORM ATTACHED HERETO TO THE EXTENT OF
THE COMMON STOCK SO ISSUED TO SUCH PARTY; AND (5) SUCH PARTY BECOMES A PARTY TO
THE INVESTOR RIGHTS AGREEMENT.
(G)
FOR PURPOSES OF THIS SECTION 2.1:
(I)
"PURCHASE PRICE" SHALL MEAN THE GREATER OF (A) TWO (2) TIMES
REVENUE OR (B) ELEVEN (11) TIMES PRE-TAX PROFIT, IN EACH CASE AS CALCULATED
UNDER GAAP CONSISTENTLY APPLIED AND DETERMINED IN ACCORDANCE WITH PARAGRAPHS
(II) AND (III) BELOW.
12
(II)
"REVENUE" SHALL MEAN THE REVENUE ATTRIBUTABLE TO THE BUSINESS OF
THE SELLER ENTITIES FOR THE 12-MONTH PERIOD BEGINNING ON THE SEVENTH CALENDAR
QUARTER COMMENCING AFTER THE FIRST CLOSING (AS DEFINED IN THE FTNF ACQUISITION
AGREEMENT) (THE "PURCHASE PRICE DETERMINATION PERIOD") AND REFLECTED ON THE
PURCHASE PRICE FINANCIAL STATEMENTS (AS SUCH TERM IS DEFINED IN SECTION 5.4(D)).
(III)
"PRE-TAX PROFIT" SHALL MEAN THE PRE-TAX PROFIT (INCLUDING
ALLOCATIONS OF OVERHEAD AND OTHER ITEMS CONTAINED THEREIN) ATTRIBUTABLE TO THE
BUSINESS OF THE SELLER ENTITIES PURCHASED AT THE CLOSING FOR THE PURCHASE PRICE
DETERMINATION PERIOD AND REFLECTED ON THE PURCHASE PRICE FINANCIAL STATEMENTS.
PRE-TAX PROFIT SHALL BE DETERMINED EXCLUDING ALL COSTS AND EXPENSES OF THE
SELLER ENTITIES INCURRED IN CONNECTION WITH THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY (I.E. THE PRE-TAX PROFIT WILL BE ADJUSTED UPWARD AS IF SUCH
EXPENSES HAD NOT BEEN INCURRED).
(IV)
FOR THE AVOIDANCE OF DOUBT, THE PARTIES ACKNOWLEDGE THAT THE
AMOUNTS DUE UNDER SECTIONS 2.1(A) THROUGH 2.1(C) CAN NOT BE CALCULATED, AND
AMOUNTS CAN NOT BE PAID, UNTIL SUCH TIME AS THE PURCHASE PRICE FINANCIAL
STATEMENTS ARE DELIVERED TO BUYER AS REQUIRED BY SECTION 5.4 HEREOF AND BUYER
HAS A REASONABLE OPPORTUNITY TO REVIEW SUCH FINANCIAL STATEMENTS.
2.2
Allocation of Purchase Price. Buyer and the Seller Entities
hereby agree on the allocation of the Purchase Price among the Transferred
Assets pursuant to the methodology set forth on Schedule 2.2,(5) which
allocation shall be in accordance with Section 1060 of the Internal Revenue Code
of 1986, as amended (the "Code"), and the applicable Treasury Regulations (and
any similar provision of state, local or foreign law, as applicable; provided
that in the event of conflict with any such provisions such allocation shall be
made in accordance with Section 1060 of the Code). Such allocation shall be
binding upon Buyer and the Seller Entities for all tax purposes and the parties
shall file all