AUGUST 31, 2009 EXCEEDS THE GREATER OF (X) $0 OR (Y) UCA'S EBITDA FOR THE
12-MONTH PERIOD ENDING AUGUST 31, 2008; PURCHASER SHALL PAY TO SELLER AN AMOUNT
EQUAL TO FOUR (4) TIMES THE DIFFERENCE.
Example #1: If UCA's EBITDA was $800 for the 12-month period ending August 31,
2008 and was $800 (or less) for the 12-month period ending August 31, 2009,
Purchaser would owe Seller $0.
3.
Certain Procedures and Requirements.
(A)
WITHIN NINETY (90) DAYS AFTER THE END
OF THE RESPECTIVE EARN-OUT PERIODS SET FORTH IN SECTION 2, PURCHASER SHALL
REPORT SSI'S AND UCA'S EBITDA (PURSUANT TO GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES AS ADJUSTED BELOW) ALONG WITH THE CORRESPONDING PROJECTED EARN-OUT
PAYMENT TO SELLER. THE SELLER SHALL HAVE THIRTY (30) DAYS FROM RECEIPT OF
PURCHASER'S PAYMENT CALCULATIONS TO DISPUTE THE CALCULATIONS AND SUCH DISPUTE
MUST BE IN WRITING. SELLER WILL BE GIVEN REASONABLE ACCESS TO BOOKS AND RECORDS
DURING THE TERM OF THIS AGREEMENT. PARTIES SHALL ATTEMPT TO RESOLVE ANY DISPUTES
AMONG THEMSELVES, BUT IF UNABLE TO RESOLVE, THE PARTIES WILL SUBMIT THE
CALCULATIONS TO A MUTUALLY AGREED UPON INDEPENDENT ACCOUNTING FIRM OF REGIONAL
OR NATIONAL REPUTATION WHOSE DETERMINATION SHALL BE DEFINITIVE. IF THE PURCHASER
DOES NOT RECEIVE WRITTEN NOTICE FROM THE SELLER WITHIN THE THIRTY (30) DAY
PERIOD, THE PURCHASER'S CALCULATION OF EBITDA AND RELATED EARN-OUT PAYMENTS
SHALL BE DEEMED CONCLUSIVE FOR ALL PURPOSES.
(B)
PAYMENTS (IF ANY) REQUIRED BY SECTION
2 OF THIS AGREEMENT SHALL BE MADE WITHIN ONE HUNDRED AND TWENTY (120) DAYS AFTER
THE END OF EACH RESPECTIVE EARN-OUT PERIOD. SUCH PAYMENTS SHALL BE MADE WITHOUT
INTEREST.
2
4.
Credits and Adjustments.
(a)
Credit Adjustment to Earn-Out Payment.
(i)
Credit. Purchaser shall receive a credit
in the aggregate amount of $400,000 toward Earn-Out Payments due and owing
Seller under Section 2 (the "Earn-Out Credit").
Example #1: If, in the first year (for the period ending August 31, 2008),
Purchaser owes Seller $200,000 under Section 2(a)(i) and $200,000 under Section
2(b)(i), after credit adjustment, Purchaser would owe Seller $0. The second year
there would be no credit adjustment.
Example #2: If, over a period of two years (for the periods ending August 31,
2008 and August 31, 2009), Purchaser owes Seller $100,000 under Section 2(a)(i)
and $100,000 under Section 2(b)(i), $100,000 under Section 2(a)(ii) and $200,000
under Section 2(b)(ii), after credit adjustment, Purchaser would owe Seller $0
in the first year and $100,000 in the second year.
(ii)
Payment for Unapplied Earn-Out Credit. In
the event that any or all of the Earn-Out Credit remains unapplied at the
termination of this Agreement, Seller shall pay Purchaser an amount equal to the
amount of any unapplied Earn-Out Credit. At the sole discretion of Purchaser,
such payment may be made as a deduction from the Escrowed Funds or Purchaser may
require that Sellers pay the amount directly to Purchaser.
(b)
Adjustments to EBITDA. EBITDA will be
adjusted by Purchaser for the following items:
(I)
SALES OF SSI/UCA PRODUCTS BY PURCHASER'S
SALES FORCE TO PURCHASER CUSTOMERS WOULD