Note 12 - Palladium Contingent Purchase Price

9 Months Ended

Sep. 30, 2011

Business Combination Disclosure Text Box

12.   Palladium Contingent Purchase Price

On May 1, 2010, the Company entered into Amendment No. 2 to the Share Purchase and Shareholders’ Rights Agreement with Palladium to revise the terms of the remaining future purchase price for Palladium payable in 2013.  Pursuant to Amendment No. 2, the fair value of the future purchase price for Palladium, i.e. the Contingent Purchase Price (“CPP”), will be equal to the net present value of €3,000,000 plus up to €500,000 based on an amount calculated in accordance with a formula driven by Palladium’s EBITDA for the twelve months ended December 31, 2012.  The €500,000 CPP will be determined each quarter based on the current quarter’s projection of Palladium’s EBITDA for the twelve months ended December 31 of the current year.  Excluding the initial recognition of the CPP, any change in CPP is based on the change in net present value of the €3,000,000 and the current quarter’s EBITDA projection, and will be recognized as interest income or interest expense during the current quarter.

The change in the CPP for the nine and three months ended September 30, 2011 and 2010 was as follows (in thousands):

	Nine Months Ended September 30,				Three Months Ended September 30,
	2011		2010		2011			2010
Beginning balance	$	3,689	$	0	$	4,148		$	3,320
Initial recognition of the net present value of the CPP		0		3,320		0			0
Change in net present value of the CPP		197		427		(262	)		427
Ending balance	$	3,886	$	3,747	$	3,886		$	3,747