Common use of Adjustment Procedures Clause in Contracts

Adjustment Procedures. The adjustments described in Section 1.6(b) will be determined as follows: (i) Within sixty (60) days after the Closing Date, Parent shall prepare and deliver to the Shareholder Representative a balance sheet of the Company as of the Closing Date which shall set forth the Closing Date Working Capital (the “Final Balance Sheet”). The parties acknowledge and agree that for purposes of determining the Closing Amount Adjustment pursuant to this Section 1.6(c)(i) the Final Balance Sheet shall be prepared on a basis consistent with and utilizing the same principles, practices and policies of the Company as those used in preparing the Most Recent Balance Sheet. (ii) The Shareholder Representative and any professionals chosen by the Shareholder Representative shall have the right to review the Surviving Corporation’s books and records relating to, and the work papers of Parent and its advisors utilized in preparing, the Final Balance Sheet. The Final Balance Sheet shall be binding for purposes of the Closing Amount Adjustment unless the Shareholder Representative presents to Parent within thirty (30) days after receipt of the Final Balance Sheet from Parent written notice of disagreement specifying in reasonable detail the nature and extent of the disagreement. (iii) If the Shareholder Representative delivers a timely notice of disagreement, Parent and the Shareholder Representative shall attempt in good faith during the thirty (30) days immediately following Parent’s receipt of timely notice of disagreement to resolve any disagreement with respect to the Final Balance Sheet. If, at the conclusion of such 30-day period, Parent and the Shareholder Representative have not resolved their disagreements regarding the Final Balance Sheet, Parent and the Shareholder Representative shall refer the items of disagreement for final determination to the Austin, Texas office of a national or regional accounting firm which is mutually acceptable to Parent and the Shareholder Representative (the “Accountants”). However, if Parent and the Shareholder Representative are unable to agree on such a firm which is willing to so serve, Parent shall deliver to the Shareholder Representative a list of the Austin, Texas offices of two independent national or regional accounting firms that are not auditors, tax advisors or other consultants to Parent, the Surviving Corporation or the Shareholder Representative (or any of their respective Affiliates), and the Shareholder Representative shall select one of such two firms to be the Accountants within five (5) Business Days. The Accountants, Parent and the Shareholder Representative will enter into such engagement letters as required by the Accountants to perform under this Section 1.6(c)(iii). The Parties will be reasonably available for the Accountants, and shall instruct the Accountants to render a final determination within the twenty (20) days immediately following the referral to the Accountants. The Final Balance Sheet shall be deemed to be conclusive and binding on Parent and the Shareholders upon (A) the failure of the Shareholder Representative to deliver to Parent a notice of disagreement thirty (30) days after receipt of the Final Balance Sheet prepared by Parent, (B) resolution of any disagreement by mutual agreement of Parent and the Shareholder Representative after a timely notice of disagreement has been delivered to Parent, or (C) notification by the Accountants of their final determination of the items of disagreement submitted to them. (iv) The fees and disbursements of the Accountants under this Section 1.6(c) shall be borne exclusively by the Shareholders, unless the adjustments to the Final Balance Sheet resulting from the Shareholder Representative’s notice of disagreement caused change in the Closing Amount Adjustment in excess of Fifty Thousand Dollars ($50,000) in favor of the Shareholders, in which case such fees and disbursements shall be borne exclusively by Parent. In the event the Shareholders are obligated to pay the fees and disbursements of the Accountants hereunder, such amounts shall be disbursed from the Escrow Fund, and then from any other amounts of the Aggregate Transaction Consideration payable to the Shareholders hereunder, whether by right of setoff or otherwise, or if amounts payable hereunder are not sufficient, upon demand by Parent, from the Shareholders.

Adjustment Procedures. The adjustments Closing Adjustment described in Section 1.6(b1.4(c) will be determined as follows: (i) Within sixty ninety (6090) days after the Closing Date, Parent Buyer shall prepare prepare, in accordance with GAAP, and deliver to the Shareholder Representative Sellers a balance sheet of the Company as of the Closing Date which shall set forth the Closing Date Working Capital (the “Final Balance Sheet”). The parties Parties acknowledge and agree that for purposes of determining the Closing Amount Adjustment pursuant to this Section 1.6(c)(i1.4(d)(i) the Final Balance Sheet shall be prepared on a basis consistent with and utilizing the same principles, practices and policies of the Company as those used in preparing the Most Recent Balance Sheet. (ii) The Shareholder Representative Sellers and any professionals chosen by the Shareholder Representative Sellers shall have the right to review the Surviving CorporationCompany’s books and records relating to, and the work papers of Parent Buyer and its advisors utilized in preparingin, preparing the Final Balance Sheet. The Final Balance Sheet shall be binding for purposes of the Closing Amount Adjustment unless the Shareholder Representative presents to Parent within thirty (30) days after receipt of the Final Balance Sheet from Parent written notice of disagreement specifying in reasonable detail the nature and extent of the disagreement. (iii) If the Shareholder Representative delivers Sellers deliver a timely notice of disagreement, Parent Buyer and the Shareholder Representative Sellers shall attempt in good faith during the thirty (30) days immediately following ParentBuyer’s receipt of timely notice of disagreement to resolve any disagreement with respect to the Final Balance Sheet. If, at the conclusion of such 30-day period, Parent Buyer and the Shareholder Representative Sellers have not resolved their disagreements regarding the Final Balance Sheet, Parent Buyer and the Shareholder Representative Sellers shall refer the items of disagreement for final determination to the AustinOrange County, Texas California office of a national or regional accounting firm which is mutually acceptable to Parent Buyer and the Shareholder Representative Sellers (the “Accountants”). However, if Parent Buyer and the Shareholder Representative Sellers are unable to agree on such a firm which is willing to so serve, Parent Buyer shall deliver to the Shareholder Representative Sellers a list of the Austin, Texas offices of two independent national or regional accounting firms that are not auditors, tax advisors or other consultants to Parent, the Surviving Corporation Buyer or the Shareholder Representative (its Affiliates or any of Sellers or their respective Affiliates), and the Shareholder Representative Sellers shall select one of such two firms to be the Accountants within five (5) Business Days. The Accountants, Parent Buyer and the Shareholder Representative Sellers will enter into such engagement letters as required by the Accountants to perform under this Section 1.6(c)(iii1.4(d)(iii). The Parties will be reasonably available for the Accountants, and shall instruct the Accountants to render a final determination within the twenty thirty (2030) days immediately following the referral to the Accountants. After the end of the aforesaid 30-day period, neither Sellers nor Buyer may introduce additional disagreements or increase the amount of any disagreement, and any item not so identified shall be deemed to be agreed to by all Parties and will be final and binding upon the Parties. If any dispute is submitted to the Accountants, each Party will furnish to the Accountants such work papers and other documents and information relating to the disputed issues as the Accountants may request and are available to that Party or its independent accountants (including information of the Company) and each Party shall be afforded the opportunity to present the Accountants material relating to the determination and to discuss the determination with the Accountants. The Accountants shall act as an expert and not as an arbitrator and shall resolve matters in dispute and adjust and establish any disputed amount to reflect such resolution. It is the intent of Buyer and Sellers that the process set forth in this Section 1.4(d)(iii) and the activities of the Accountants in connection herewith are not intended to be and, in fact, are not arbitration and that no formal arbitration rules shall be followed (including rules with respect to procedures and discovery). Notwithstanding anything to the contrary in this Agreement, the scope of the Accountants’ review of any dispute between Buyer and Sellers regarding the Final Balance Sheet and/or the calculation of the Closing Date Working Capital pursuant to this Section 1.4(d)(iii) shall be limited solely to the resolution of the objections to the calculation of the Closing Date Working Capital that are set forth in the notice of disagreement, and the Accountants shall have not authority over any other disagreement (including but not limited to questions of Law, interpretation of contract, and fraud). Within thirty (30) days after the matter is submitted to the Accountants, the Accountants shall issue a written report of its review, setting forth in reasonable detail its calculation of such Final Balance Sheet. The Final Balance Sheet shall be deemed to be conclusive and binding on Parent Buyer and the Shareholders Sellers upon (A) the failure of the Shareholder Representative Sellers to deliver to Parent Buyer a notice of disagreement thirty within fifteen (3015) days after Business Days of receipt of the Final Balance Sheet prepared by ParentBuyer, (B) resolution of any disagreement by mutual agreement of Parent Buyer and the Shareholder Representative Sellers after a timely notice of disagreement has been delivered to ParentBuyer, or (C) notification by the Accountants of their final determination of the items of disagreement submitted to them. (iv) The If the Closing Adjustment based on the Accountants’ review of the Final Balance Sheet is closer to Sellers’ Closing Adjustment proposal in its notice of disagreement than the Closing Adjustment based on the Final Balance Sheet, the fees and disbursements of the Accountants under this Section 1.6(c1.4(d) shall be borne exclusively by Buyer. If the Shareholders, unless Closing Adjustment based on the adjustments to Accountants’ review of the Final Balance Sheet resulting from is closer to the Shareholder Representative’s Closing Adjustment based on the Final Balance Sheet than Sellers’ Closing Adjustment proposal in its notice of disagreement caused change in the Closing Amount Adjustment in excess of Fifty Thousand Dollars ($50,000) in favor of the Shareholdersdisagreement, in which case such fees and disbursements shall be borne exclusively by Parent. In the event the Shareholders are obligated to pay the fees and disbursements of the Accountants hereunder, such amounts under this Section 1.4(d) shall be disbursed from borne exclusively by Sellers. If any such required payment by Sellers is not paid within five (5) Business Days following the Escrow Funddate on which such payment is required to be made, Buyer shall have the right, but not the obligation, to setoff any such amount owed by Sellers against and then from any other amounts reduce the Closing Shares, dollar for dollar, using the Share Valuation Method, calculated as of the Aggregate Transaction Consideration payable Closing Date. In the case of any such setoff by Buyer, the obligation of the Sellers to make such payment shall be deemed satisfied and discharged to the Shareholders hereunder, whether by right extent of setoff or otherwise, or if amounts payable hereunder are not sufficient, upon demand by Parent, from the Shareholderssuch setoff.