Common use of Adjustment After Closing Clause in Contracts

Adjustment After Closing. Upon determination of the Final Net Working Capital pursuant to Section 2.4, the Aggregate Purchase Price shall be (i) reduced by the amount, if any, by which the Estimated Net Working Capital exceeds the Final Net Working Capital as of the day prior to the Closing Date as determined pursuant to Section 2.4, or (ii) increased by the amount, if any, by which the Final Net Working Capital exceeds the Estimated Net Working Capital. The reduction in and addition to the Aggregate Purchase Price referred to in the preceding sentence are hereafter collectively referred to as the “Post-Closing Reduction” and “Post-Closing Addition”, respectively. After the Closing Balance Sheet and the calculation of the Final Net Working Capital become final and binding upon the parties in accordance with the provisions of Section 2.4, then, within ten (10) days following such calculation: (i) if any Post-Closing Reduction is required, Buyer and the Stockholders Representative shall direct the Escrow Agent to pay such amount out of the Adjustment Escrow Fund to Buyer in accordance with the terms of the Escrow Agreement, and (A) in the event the Adjustment Escrow Fund is insufficient to cover the full amount of such Post-Closing Reduction (the amount by which the Post-Closing Reduction exceeds the amount of the Escrow Adjustment Fund shall be referred to herein as the “Deficiency”), then the Escrow Agent shall distribute the entire Adjustment Escrow Fund to Buyer as provided in the Escrow Agreement, and each Seller, severally and not jointly, on a Pro Rata basis, shall immediately deliver the Deficiency to Buyer in immediately available funds by wire transfer or check, and in the event that the Sellers shall fail to pay the amount of the Deficiency by the date on which the Escrow Agent distributes the Adjustment Escrow Fund to Buyer pursuant to the Escrow Agreement, Buyer may at any time thereafter deliver written notice to the Escrow Agent and the Stockholders Representative specifying such amount, and the Escrow Agent shall pay such amount out of the Environmental Indemnity Escrow Fund to Buyer in accordance with the terms of the Escrow Agreement; provided, however, that each Seller that failed to deliver to Buyer such Seller’s Pro Rata share of the Deficiency shall remain liable in the event the Environmental Indemnity Escrow Fund is insufficient to cover such Seller’s Pro Rata share of the Deficiency; provided, further that no failure on the part of Buyer to deliver the specified notice shall relieve any Seller of the obligation to pay the amount of such deficiency to Buyer. and (B) in the event the amount of funds in the Adjustment Escrow Fund exceeds the amount of the Post-Closing Reduction, the Escrow Agent, after paying the amount of the Post-Closing Reduction to Buyer, shall pay the remaining amount of funds in the Adjustment Escrow Fund to Sellers, on a Pro Rata basis; and

Adjustment After Closing. Upon (1) Promptly following the Closing Date, but in no event later than 90 days after the Closing Date, Seller shall prepare and submit to Buyer a balance sheet of the Company as of the close of business on the day immediately preceding the Closing Date (provided that such balance sheet shall be prepared as if the Closing Date Dividend and the transactions contemplated by Section 4.6 had occurred on the day preceding the Closing Date) (the "CLOSING BALANCE SHEET"), together with Seller's calculation of Closing Date Net Working Capital (the "PROPOSED FINAL NET WORKING CAPITAL AMOUNT") (such calculation, together with the Closing Balance Sheet being referred to herein as the "CLOSING DATE STATEMENT"). Seller shall prepare the Closing Date Statement in accordance with Agreement Accounting Principles. The Closing Date Statement will be accompanied by a report of Ernst & Young LLP ("E&Y") based upon an audit of the Closing Date Statement stating that such statement presents fairly, in all material respects, the Closing Date Net Working Capital, in conformity with Agreement Accounting Principles. All fees and expenses of E&Y in auditing the Closing Date Statement shall be borne by Seller. Buyer shall cause the Company and its respective employees and agents to assist Seller and E&Y in the preparation and audit of the Closing Date Statement and shall provide Seller and E&Y access at reasonable times and upon reasonable notice to the personnel, properties, books and records of the Company for such purpose. (2) If Buyer disputes the correctness of the Proposed Final Net Working Capital Amount and the aggregate amount of all of Buyer's proposed adjustments to the Proposed Final Net Working Capital Amount would exceed $50,000, Buyer shall notify Seller in writing and in reasonable detail of the reasons for Buyer's objections on or before the 120th day after Buyer's receipt of the Closing Date Statement. Buyer agrees that it shall not propose adjustments to or dispute portions of the Closing Date Statement prepared by Seller if such adjustments or disputes involve changes in or question the accounting principles, methodology or practices of the Company that are in conformity with Agreement Accounting Principles in determining the carrying value of the Current Assets and Current Liabilities. Any proposed adjustments by Buyer shall be accompanied by a statement of an independent public accounting firm that is nationally recognized in the United States, stating that such adjustments are required for the Closing Date Statement to comply with Agreement Accounting Principles. To the extent Buyer does not object to a matter in the Closing Date Statement in writing and with reasonable specificity in accordance with and within the time period contemplated by this Section 1.4(e)(2), Buyer shall be deemed to have accepted Seller's calculation and presentation in respect of the matter, and the matter shall not be disputed. (3) Seller and Buyer shall endeavor in good faith to resolve any disputed matters within 20 days after Seller's receipt of Buyer's notice of objections. If Seller and Buyer are unable to resolve the disputed matters, Seller and Buyer shall, not later than 10 days after the expiration of such 20 day period, select a nationally known independent accounting firm (which firm shall not be E&Y or the then regular auditors of the Company (if different from E&Y) or Buyer) (the "ARBITER") to resolve the matters in dispute (in a manner consistent with Section 1.4(e) and with any matters not in dispute). The determination of the Arbiter in respect of the correctness of each matter remaining in dispute shall be conclusive and binding on Seller and Buyer. The determination of the Arbiter shall be based solely on presentations by Seller and Buyer and shall not be by independent review. The fees, costs and expenses of the Arbiter (x) shall be borne by Buyer in the proportion that the aggregate dollar amount of such items submitted to the Arbiter that are unsuccessfully disputed by Buyer (as finally determined by the Arbiter) bears to the aggregate dollar amount of such items so submitted and (y) shall be borne by the Seller in the proportion that the aggregate dollar amount of such items so submitted that are successfully disputed by Buyer (as finally determined by the Arbiter) bears to the aggregate dollar amount of such items so submitted. The amount of Closing Date Net Working Capital, as finally determined pursuant to this Section 1.4(e) (whether by failure of Buyer to deliver notice of objection, by agreement of Seller and Buyer or by determination of the Arbiter), is referred to herein as the "FINAL NET WORKING CAPITAL AMOUNT." (4) If the Final Net Working Capital Amount is greater than the Estimated Net Working Capital Amount, Buyer shall pay to Seller the amount of such difference, with simple interest thereon, based on the number of calendar days from the Closing Date to the date of payment at a floating rate per 360-day period equal to the Prime Rate. If the Final Net Working Capital Amount is less than the Estimated Net Working Capital Amount, Seller shall pay to Buyer the amount of such difference, with simple interest thereon based on the number of calendar days from the Closing Date to the date of payment at a floating rate per 360-day period equal to the Prime Rate. Such payment shall be made not later than five business days after the determination of the Final Net Working Capital pursuant Amount by wire transfer of immediately available funds in U.S. Dollars to Section 2.4a bank account designated in writing by the party entitled to receive the payment. (5) To the extent not available from the Company, Seller shall make available to Buyer and, upon request, to the Arbiter, the Aggregate Purchase Price shall be (i) reduced by the amountbooks, if anyrecords, by which the Estimated Net Working Capital exceeds the Final Net Working Capital as documents and, after Buyer's receipt of the day prior to the Closing Date as determined pursuant Statement, the work papers and back-up materials, in each case underlying the preparation of the Closing Date Statement. Buyer shall make available to Section 2.4Seller and, or (ii) increased by the amountupon request, if any, by which the Final Net Working Capital exceeds the Estimated Net Working Capital. The reduction in and addition to the Aggregate Purchase Price referred to Arbiter, the books, records, documents and work papers created or prepared by or for Seller in connection with the preceding sentence are hereafter collectively referred to as the “Post-Closing Reduction” and “Post-Closing Addition”, respectively. After review of the Closing Balance Sheet and the calculation of the Final Net Working Capital become final and binding upon the parties in accordance with the provisions of Section 2.4, then, within ten (10) days following such calculation: (i) if any Post-Closing Reduction is required, Buyer and the Stockholders Representative shall direct the Escrow Agent to pay such amount out of the Adjustment Escrow Fund to Buyer in accordance with the terms of the Escrow Agreement, and (A) in the event the Adjustment Escrow Fund is insufficient to cover the full amount of such Post-Closing Reduction (the amount by which the Post-Closing Reduction exceeds the amount of the Escrow Adjustment Fund shall be referred to herein as the “Deficiency”), then the Escrow Agent shall distribute the entire Adjustment Escrow Fund to Buyer as provided in the Escrow Agreement, and each Seller, severally and not jointly, on a Pro Rata basis, shall immediately deliver the Deficiency to Buyer in immediately available funds by wire transfer or check, and in the event that the Sellers shall fail to pay the amount of the Deficiency by the date on which the Escrow Agent distributes the Adjustment Escrow Fund to Buyer pursuant to the Escrow Agreement, Buyer may at any time thereafter deliver written notice to the Escrow Agent and the Stockholders Representative specifying such amount, and the Escrow Agent shall pay such amount out of the Environmental Indemnity Escrow Fund to Buyer in accordance with the terms of the Escrow Agreement; provided, however, that each Seller that failed to deliver to Buyer such Seller’s Pro Rata share of the Deficiency shall remain liable in the event the Environmental Indemnity Escrow Fund is insufficient to cover such Seller’s Pro Rata share of the Deficiency; provided, further that no failure on the part of Buyer to deliver the specified notice shall relieve any Seller of the obligation to pay the amount of such deficiency to Buyer. and (B) in the event the amount of funds in the Adjustment Escrow Fund exceeds the amount of the Post-Closing Reduction, the Escrow Agent, after paying the amount of the Post-Closing Reduction to Buyer, shall pay the remaining amount of funds in the Adjustment Escrow Fund to Sellers, on a Pro Rata basis; andDate Statement.

Adjustment After Closing. Upon determination As soon as practicable, but in no event later than 90 days following the Closing Date, Seller shall deliver to Buyer a schedule prepared by Seller (the "Final Schedule") setting forth the Capital Expenditures Amount, if any, and the amount of Adjustment Assets and Adjustment Liabilities as of Determination Time, as finally determined by Seller. If Buyer and Seller cannot agree on the Capital Expenditures Amount, if any, or the amount of the Adjustment Assets or Adjustment Liabilities as of the Determination Time within 30 days of delivery by Seller of the Final Net Working Capital pursuant to Section 2.4Schedule, the Aggregate amounts thereof as of Determination Time shall be determined by the Austin office of Price Waterhouse (the "Accountants"), whose determination shall be final, conclusive and binding upon Buyer and Seller. All reasonable costs and fees of such Accountants shall be borne one-half by Buyer and one-half by Seller. The Final Purchase Price shall be (i) reduced increased by an amount equal to the amountCapital Expenditures Amount, if any, by which the Estimated Net Working Capital exceeds as shown on the Final Net Working Capital Schedule or, if applicable, as of determined by the day prior Accountants. To the extent that Adjustment Assets as shown on the Final Schedule or, if applicable, as determined by the Accountants, exceed Adjustment Liabilities as shown on the Final Schedule, or if applicable, as determined by the Accountants, the Purchase Price shall be increased by such excess and the Purchase Price as so adjusted, and as adjusted with respect to the Closing Date as determined pursuant to Section 2.4, or (ii) increased by the amountCapital Expenditures Amount, if any, by which shall be the Final Net Working Capital exceeds Purchase Price. To the Estimated Net Working Capital. The reduction in extent that Adjustment Liabilities as shown on the Final Schedule, or if applicable, as determined by the Accountants, exceed Adjustment Assets as shown on the Final Schedule, or if applicable, as determined by the Accountants, the Purchase Price shall be decreased by such excess and addition the Purchase Price as so adjusted, and as adjusted with respect to the Aggregate Capital Expenditures Amount, if any, shall be the Final Purchase Price referred to in Price. On the preceding sentence are hereafter collectively referred to as 30th day (the “Post-Closing Reduction” and “Post-Closing Addition”, respectively. After the Closing Balance Sheet and the calculation "Final Adjustment Payment Date") following receipt by Buyer of the Final Net Working Capital become final and binding upon Finax Schedule, or, if applicable, such determination by the parties in accordance with the provisions of Section 2.4, then, within ten (10) days following such calculation: Accountants (i) if any Post-Closing Reduction is required, Buyer and the Stockholders Representative shall direct the Escrow Agent to pay such amount out of the Adjustment Escrow Fund to Buyer in accordance with the terms of the Escrow Agreement, and (A) in the event the Adjustment Escrow Fund is insufficient to cover the full amount of such Post-Closing Reduction (the amount by which the Post-Closing Reduction Preliminary Purchase Price exceeds the amount of the Escrow Adjustment Fund Final Purchase Price, Seller shall be referred to herein as the “Deficiency”), then the Escrow Agent shall distribute the entire Adjustment Escrow Fund to Buyer as provided in the Escrow Agreement, and each Seller, severally and not jointly, on a Pro Rata basis, shall immediately deliver the Deficiency pay to Buyer in immediately available funds by wire transfer or check, and in the event that the Sellers shall fail to pay the amount of the Deficiency by the date on which the Escrow Agent distributes the Adjustment Escrow Fund to Buyer pursuant to the Escrow Agreement, Buyer may at any time thereafter deliver written notice to the Escrow Agent and the Stockholders Representative specifying such amount, and the Escrow Agent shall pay such amount out of the Environmental Indemnity Escrow Fund to Buyer in accordance with the terms of the Escrow Agreement; provided, however, that each Seller that failed to deliver to Buyer such Seller’s Pro Rata share of the Deficiency shall remain liable in the event the Environmental Indemnity Escrow Fund is insufficient to cover such Seller’s Pro Rata share of the Deficiency; provided, further that no failure on the part of Buyer to deliver the specified notice shall relieve any Seller of the obligation to pay the amount of such deficiency excess, or (ii) if the Final Purchase Price exceeds the Preliminary Purchase Price, Buyer shall pay to Buyer. and (B) Seller in the event immediately available funds the amount of funds such excess. Any amount due one party to the other pursuant to the immediately preceding sentence which is not paid on or prior to the Final Adjustment Payment Date shall bear interest until paid at a rate of eight percent (8%) per annum for the period commencing on the day next succeeding the Final Adjustment Payment Date and ending on the day on which such amount is actually paid (based upon a 365 day year and the actual number of days elapsed in the Adjustment Escrow Fund exceeds the amount of the Post-Closing Reduction, the Escrow Agent, after paying the amount of the Post-Closing Reduction to Buyer, shall pay the remaining amount of funds in the Adjustment Escrow Fund to Sellers, on a Pro Rata basis; andsuch period).

Adjustment After Closing. Upon determination (1) Promptly following the Closing Date, but in no event later than 90 days after the Closing Date, Seller shall prepare and submit to Buyer a balance sheet of the Final Company as of the close of business on the day immediately preceding the Closing Date (provided that such balance sheet shall be prepared as if the Closing Date Dividend and the transactions contemplated by Section 4.6 had occurred on the day preceding the Closing Date) (the "CLOSING BALANCE SHEET"), together with Seller's calculation of Closing Date Net Working Capital pursuant to Section 2.4(the "PROPOSED FINAL NET WORKING CAPITAL AMOUNT") (such calculation, the Aggregate Purchase Price shall be (i) reduced by the amount, if any, by which the Estimated Net Working Capital exceeds the Final Net Working Capital as of the day prior to the Closing Date as determined pursuant to Section 2.4, or (ii) increased by the amount, if any, by which the Final Net Working Capital exceeds the Estimated Net Working Capital. The reduction in and addition to the Aggregate Purchase Price referred to in the preceding sentence are hereafter collectively referred to as the “Post-Closing Reduction” and “Post-Closing Addition”, respectively. After together with the Closing Balance Sheet and the calculation of the Final Net Working Capital become final and binding upon the parties in accordance with the provisions of Section 2.4, then, within ten (10) days following such calculation: (i) if any Post-Closing Reduction is required, Buyer and the Stockholders Representative shall direct the Escrow Agent to pay such amount out of the Adjustment Escrow Fund to Buyer in accordance with the terms of the Escrow Agreement, and (A) in the event the Adjustment Escrow Fund is insufficient to cover the full amount of such Post-Closing Reduction (the amount by which the Post-Closing Reduction exceeds the amount of the Escrow Adjustment Fund shall be being referred to herein as the “Deficiency”"CLOSING DATE STATEMENT"). Seller shall prepare the Closing Date Statement in accordance with Agreement Accounting Principles. The Closing Date Statement will be accompanied by a report of Ernst & Young LLP ("E&Y") based upon an audit of the Closing Date Statement stating that such statement presents fairly, then in all material respects, the Escrow Agent Closing Date Net Working Capital, in conformity with Agreement Accounting Principles. All fees and expenses of E&Y in auditing the Closing Date Statement shall distribute be borne by Seller. Buyer shall cause the entire Adjustment Escrow Fund Surviving Corporation and its respective employees and agents to Buyer as provided assist Seller and E&Y in the Escrow Agreement, preparation and each Seller, severally and not jointly, on a Pro Rata basis, shall immediately deliver the Deficiency to Buyer in immediately available funds by wire transfer or check, and in the event that the Sellers shall fail to pay the amount audit of the Deficiency by the date on which the Escrow Agent distributes the Adjustment Escrow Fund to Buyer pursuant to the Escrow Agreement, Buyer may Closing Date Statement and shall provide Seller and E&Y access at any time thereafter deliver written reasonable times and upon reasonable notice to the Escrow Agent personnel, properties, books and records of the Surviving Corporation for such purpose. (2) If Buyer disputes the correctness of the Proposed Final Net Working Capital Amount and the Stockholders Representative specifying aggregate amount of all of Buyer's proposed adjustments to the Proposed Final Net Working Capital Amount would exceed $50,000, Buyer shall notify Seller in writing and in reasonable detail of the reasons for Buyer's objections on or before the 120th day after Buyer's receipt of the Closing Date Statement. Buyer agrees that it shall not propose adjustments to or dispute portions of the Closing Date Statement prepared by Seller if such amountadjustments or disputes involve changes in or question the accounting principles, methodology or practices of the Company that are in conformity with Agreement Accounting Principles in determining the carrying value of the Current Assets and Current Liabilities. Any proposed adjustments by Buyer shall be accompanied by a statement of an independent public accounting firm that is nationally recognized in the United States, stating that such adjustments are required for the Closing Date Statement to comply with Agreement Accounting Principles. To the extent Buyer does not object to a matter in the Closing Date Statement in writing and with reasonable specificity in accordance with and within the time period contemplated by this Section 1.9(e)(2), Buyer shall be deemed to have accepted Seller's calculation and presentation in respect of the matter, and the Escrow Agent matter shall pay such amount out of the Environmental Indemnity Escrow Fund to Buyer in accordance with the terms of the Escrow Agreement; provided, however, that each Seller that failed to deliver to Buyer such Seller’s Pro Rata share of the Deficiency shall remain liable in the event the Environmental Indemnity Escrow Fund is insufficient to cover such Seller’s Pro Rata share of the Deficiency; provided, further that no failure on the part of Buyer to deliver the specified notice shall relieve any Seller of the obligation to pay the amount of such deficiency to Buyer. and (B) in the event the amount of funds in the Adjustment Escrow Fund exceeds the amount of the Post-Closing Reduction, the Escrow Agent, after paying the amount of the Post-Closing Reduction to Buyer, shall pay the remaining amount of funds in the Adjustment Escrow Fund to Sellers, on a Pro Rata basis; andnot be disputed.