THE PURCHASER (WITH A
DUPLICATE COPY TO THE ESCROW AGENT) A CERTIFICATE IN THE FORM ATTACHED HERETO AS
SCHEDULE 1.2.2 (THE "ESTIMATED CLOSING ADJUSTMENTS CERTIFICATE") SETTING FORTH,
IN REASONABLE DETAIL, THE ESTIMATED CLOSING NET WORKING CAPITAL (TOGETHER WITH
THE COMPANY'S BALANCE SHEET) AND THE TRANSACTION EXPENSES, EACH AS OF THE
CLOSING.
THE COMPANY SHALL DELIVER TO PURCHASER, TOGETHER WITH THE ESTIMATED
CLOSING ADJUSTMENT CERTIFICATES, ALL THE SUPPORTING WORK PAPERS PREPARED FOR THE
CALCULATION OF THE AMOUNTS STATED THEREIN AND SUCH OTHER SUPPORTING
DOCUMENTATION AS PURCHASER SHALL REASONABLY REQUEST. THE ESTIMATED CLOSING
ADJUSTMENTS CERTIFICATE SHALL BE DEEMED TO BE A REPRESENTATION AND WARRANTY OF
THE SELLERS HEREUNDER.
THE PURCHASE PRICE SHALL BE SUBJECT TO THE FOLLOWING
ADJUSTMENTS:
.
THE PURCHASE PRICE SHALL BE REDUCED, ON A DOLLAR FOR DOLLAR
BASIS, BY THE AMOUNT, IF ANY, BY WHICH THE CLOSING NET WORKING CAPITAL IS LESS
THAN $650,000 (WITH ANY NEGATIVE RESULT, I.E. THE ESTIMATED CLOSING NET WORKING
CAPITAL BEING IN EXCESS OF $650,000, TREATED IN ACCORDANCE WITH
SECTION ), AS SET FORTH IN THE ESTIMATED CLOSING ADJUSTMENTS CERTIFICATE.
.
IN THE EVENT THAT THE CLOSING NET WORKING CAPITAL AS SET FORTH
IN THE ESTIMATED CLOSING ADJUSTMENTS CERTIFICATE IS IN EXCESS OF $650,000, THEN,
AT THE SELLERS' ELECTION, SUCH EXCESS AMOUNT SHALL BE: (I) ADDED TO THE PURCHASE
PRICE, ON A DOLLAR FOR DOLLAR BASIS, OR (II) PERMITTED TO BE DECLARED AND PAID
AS DIVIDENDS BY THE COMPANY TO THE SELLERS PRIOR TO OR CONCURRENTLY WITH THE
CLOSING. SELLERS MAY ELECT EITHER OF THE MANNERS OF PAYMENTS SET FORTH IN
CLAUSES (I) OR (II) ABOVE, OR A COMBINATION THEREOF THAT HAS THE RESULT OF
MAKING THE FULL PAYMENT OF SUCH EXCESS AMOUNT TO THE SELLERS.
.
THE PURCHASE PRICE SHALL BE REDUCED, ON A DOLLAR FOR DOLLAR
BASIS, BY THE AMOUNT OF ANY TRANSACTION EXPENSES OUTSTANDING AT THE CLOSING, AS
SET FORTH IN THE ESTIMATED CLOSING ADJUSTMENTS CERTIFICATE.
FAILURE OF THE COMPANY TO TIMELY AND DULY DELIVER THE ESTIMATED CLOSING
ADJUSTMENTS CERTIFICATE MAY BE WAIVED BY PURCHASER, IN ITS SOLE DISCRETION
(WITHOUT DEROGATING FROM ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT, INCLUDING,
WITHOUT LIMITATION, UNDER SECTION 9).
1.3.
ESCROW; HOLDBACK.
THE SELLERS HEREBY AGREE THAT THE ESCROW
AMOUNT SHALL NOT BE PAID TO THE SELLERS AT THE CLOSING, BUT INSTEAD, AT THE
ELECTION OF THE PURCHASER, SHALL BE EITHER (OR IN A COMBINATION OF THE
FOLLOWING):
1.3.1.
HELD BACK (IN WHOLE OR IN PART WITH RESPECT TO ANY PORTION OF
THE ESCROW AMOUNT NOT DEPOSITED IN ESCROW PURSUANT TO SECTION 1.3.2 BELOW) BY
THE PURCHASER TO OFFSET ANY AMOUNT DUE BY SELLERS UNDER SECTIONS 1.2 AND 9
HEREOF (THE "HOLDBACK"), AND THE REMAINING AMOUNT SHALL BE PAID (IF ANY) TO THE
SELLERS, TOGETHER WITH INTEREST THEREON AT THE RATE OF 7% PER ANNUM ON THE
ESCROW AMOUNT, COMPUTED ON THE BASIS OF ACTUAL NUMBER OF DAYS ELAPSED OVER A
360-DAY YEAR, UPON THE SECOND ANNIVERSARY OF THE CLOSING (THE "HOLDBACK RELEASE
DATE") PURSUANT TO SECTION 9 HEREOF. IN THE EVENT THAT THE