Common use of Purchase Price Adjustment Clause in Contracts

Purchase Price Adjustment. (a) Within thirty (30) days after the Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Net Assets Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.

Purchase Price Adjustment. (a) Within thirty The parties acknowledge that the stated Purchase Price has been determined based on an assumption that the portfolio of Containers being purchased hereunder consists of (i) a certain number of 20-foot and 40-foot dry van containers and 40-foot high cube containers shown on Exhibit “A” hereto, comprising (as of September 18, 2006) 20,910.7 Container Equivalent Units (“CEUs”) assigned an allocated unit price as set forth on Exhibit “A”, and (ii) 423 refrigerated containers assigned allocated unit price as set forth on Exhibit “A”. Such assumption is based upon a report prepared by Cronos prior to Closing as to container inventory as of September 18, 2006, and will be updated prior to Closing with the report from Cronos on or about September 30, 2006 (referred to in Section 3.01 above). If the actual number of Containers of any type sold by Seller to Buyer differs from the number and type of Containers listed on Exhibit “A” hereto (as updated at Closing by the September 30 report), then and in such event Seller or Buyer, as the case may be, shall either (i) days after in case the Closing Dateactual number is lower, Seller shall prepare and deliver refund the per unit amount of any overpayment of the Purchase Price to Buyer a statement within five (the “Net Assets Statement”5) setting forth (i) the sum business days after Buyer and/or Seller becomes aware of the Accounts Receivable (net of reserves)shortfall, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus or (ii) in case the sum actual number is higher, Buyer shall pay the additional purchase price per Container as applicable pursuant to Exhibit “A” also within five (5) business days after Buyer and/or Seller becomes aware of the Accounts Payableoverage. Upon the return of any overpayment or payment of any shortfall, reserve as called for Warranty Expensesherein, and accounts payable and accrued expenses of Iteris GmbHSeller or Buyer, in each as the case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement may be, shall be prepared, entitled to all casualty payments and the Closing Net Assets sale proceeds attributable to any casualty loss or sale of a Container reported as part of a shortfall or overage hereunder. A party shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value deemed aware of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on shortfall or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth overage in the Net Assets Objection within sixty (60number of Containers actually purchased hereunder when Cronos provides notice(s) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.thereof

Purchase Price Adjustment. (a) Within thirty ninety (3090) days after the Closing Date, Seller shall prepare and deliver to Buyer Purchaser a statement (the “Net Assets Statement”) ), setting forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case Net Cash as of the close of business on the Closing Date (the “Closing Net AssetsCash”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, ) determined in accordance with Section 2.03, together with any supporting information that Purchaser may reasonably request. In connection with preparing the agreed procedures and accounting practices set forth on Schedule 3.2(a) (Statement, Seller shall have the “Agreed Procedures”) and right, but not the net book value obligation, to conduct, at Seller’s expense, an audit of the Inventory and Iteris GmbH inventory shall be computed based upon balance sheet of the quantities of Inventory and Iteris GmbH inventory on hand Company as of the Closing Date as determined through a physical inventory conducted by in accordance with generally accepted auditing standards; provided, however, that nothing in this sentence shall either change the definition of Net Cash from that set forth in Section 2.03 or extend the time frame in which Seller on or before must deliver the fifth day following Statement to Purchaser. After the Closing Date, the results of which shall be adjusted from Buyer’s and at Seller’s request, Purchaser shall, and shall cause the Company to, assist Seller and its representatives in the preparation of the Statement and the conduct of the audit and shall provide Seller and its representatives any information reasonably requested and shall provide them access at all reasonable times to the personnel, properties and books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration Company for such purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than Within thirty (30) days after receipt of the date on which Statement, Purchaser shall deliver to Seller delivered a written statement describing its objections, if any, to the Net Assets Statement to Buyer, which notice shall specify (the nature “Statement of each dispute and the basis therefor (a “Net Assets ObjectionObjections”). Failure by Buyer to If Purchaser does not deliver a Net Assets Objection Statement of Objections to Seller within the such thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the Statement shall become final and binding upon the parties. If Purchaser delivers a Statement of Objections to Seller within such thirty-day period, and the parties cannot resolve any such objection within ten (10) Business Days after the receipt by Seller of such Statement of Objections, any remaining disputes shall follow be resolved by Ernst & Young LLP (the arbitration procedures “Accounting Firm”). The Accounting Firm shall be instructed to resolve such disputes within thirty (30) days after receipt by the Accounting Firm of the materials delivered by Seller to Purchaser pursuant to Section 2.04(a) and by Purchaser to Seller pursuant to this Section 2.04(b), which materials shall be delivered by Seller and Purchaser to the Accounting Firm within five (5) Business Days following the expiration of the ten (10) Business Day period referenced in the preceding sentence. The resolution of disputes by the Accounting Firm shall be set forth in writing and shall be conclusive and binding upon the parties, and the Statement, as modified by such resolution, shall become final and binding upon the date of such resolution. The determination of the Accounting Firm for any item in dispute cannot be in excess of, nor less than, the greatest or lowest value, respectively, claimed for that particular item in the Statement, in the case of Seller, or in the Statement of Objections, in the case of Purchaser. The Accounting Firm shall have no right to make any determination with respect to the undisputed portions of the Statement, and no such determination with respect to the undisputed portions of the Statement shall be binding on Seller or Purchaser. The Accounting Firm shall be instructed to calculate Net Cash in accordance with Section 3.32.03. The fees and expenses of the Accounting Firm shall be apportioned between Seller and Purchaser by the Accounting Firm based on the degree to which Seller’s and Purchaser’s claims were unsuccessful and shall be paid by Seller and Purchaser in accordance with such determination. (c) As used herein, Upon the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection becoming final and binding in accordance with Section 3.2(b2.04(b); , the Initial Purchase Price shall be increased by fifty percent (ii50%) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved amount by mutual agreement which the Closing Net Cash exceeds the Estimated Closing Net Cash or decreased by fifty percent (50%) of the Partiesamount by which the Closing Net Cash is less than the Estimated Closing Net Cash. If the Closing Net Cash exceeds the Estimated Closing Net Cash, Purchaser shall pay to Seller fifty percent (50%) of the amount of such excess, together with a sum equivalent to interest thereon at a rate equal to the LIBOR Rate from the Closing Date to the date of payment. If the Estimated Closing Net Assets StatementCash exceeds the Closing Net Cash, Seller shall pay to Purchaser fifty percent (50%) of the amount of such excess, together with a sum equivalent to interest thereon at a rate equal to the LIBOR Rate from the Closing Date to the date of payment. Any such payment hereunder shall be made in accordance with Section 9.04 within five (5) Business Days after final determination of the Statement to an account designated in writing by Purchaser or Seller, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitratorcase may be.

Purchase Price Adjustment. (a) Within thirty (30) As promptly as practicable, but not later than 60 days after the Closing Date, Purchaser shall cause to be prepared and delivered to Seller shall prepare and deliver to Buyer a statement (the “Net Assets Statement”) setting forth (i) the sum of Closing Date Balance Sheet audited by the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) Purchaser Accountants and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) a report (the “Agreed Procedures”"Net Asset Value Report") and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as setting forth a calculation of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing DateNet Asset Value. Purchaser shall, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access cause the Purchaser Accountants to, make available to Seller and the Seller Accountants all books and records of the Company and each Company Subsidiary and all work papers used in connection with the preparation and audit of the Closing Date Balance Sheet or the preparation of the Net Asset Value Report. The Closing Date Balance Sheet and the Net Asset Value Report delivered pursuant to this Section 2.3 shall not be binding on Seller if Seller timely exercises its right to dispute the same pursuant to the procedures set forth in this Section 2.3. If Seller does not exercise such right with respect to the Inventory. For illustration purposesClosing Date Balance Sheet or the Net Asset Value Report on a timely basis under this Section 2.3, a Net Assets Statement then Seller shall be deemed to have accepted the same as of June 30, 2011 is included in Schedule 3.2(a)delivered pursuant to this Section 2.3. (b) If Buyer reasonably believes that Seller disputes any item in the Net Assets Statement contains errors or has not been prepared in accordance with Asset Value Report, then Seller shall, within 30 days after the Agreed Proceduresdelivery of the Closing Date Balance Sheet and Net Asset Value Report, Buyer may deliver to Seller a give Purchaser written notice of objection such dispute (an "Accounting Dispute Notice") setting forth in reasonable detail each of the items in dispute. If no later than thirty (Accounting Dispute Notice is given to Purchaser within such 30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of period, the Closing Date Net Assets Statement Asset Value as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its deliveryAsset Value Report shall be deemed to be final and binding upon all the parties hereto. In the event that the Parties are unable an Accounting Dispute Notice is given to resolve an Objection Purchaser within the sixtysuch 30-day period, Seller and Purchaser shall attempt to resolve in good faith and by mutual agreement the items in dispute within 15 days after the delivery of such Accounting Dispute Notice to Purchaser. Failing agreement on all items in dispute within such 15-day resolution period, Purchaser and Seller shall submit such items in dispute for resolution to the Designated Accounting Firm. The Designated Accounting Firm shall be instructed to resolve such disputed items, based solely on written presentations by Purchaser and Seller and not by independent review, and to deliver a written report to the parties hereto upon such disputed items (the "DAF Report") in accordance with Section 11.3, all within 15 days after the submission of such disputed items to it. The DAF Report shall follow be (i) within the arbitration procedures range of proposals established for such dispute by Purchaser and Seller and (ii) deemed to be an agreement between Seller and purchaser with respect to the issues in dispute, and upon the delivery of the DAF Report to Purchaser and Seller, the Closing Date Net Asset Value as set forth in Section 3.3the DAF Report shall be deemed to be final, conclusive and binding upon all the parties hereto. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection The fees and all expenses of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and Designated Accounting Firm incurred in connection with the resolution of all other disputes a dispute pursuant to Section 2.3(b) shall be borne equally by Purchaser and Seller. (d) If the Closing Date Net Asset Value (as deemed to be final and binding pursuant to Section 2.3(b)) is less than the Target Net Asset Value, then the principal amount payable under the Promissory Note shall be reduced by the Arbitrator.amount by which the

Purchase Price Adjustment. (a) Within Promptly after the Closing Date, and in any event not later than sixty (60) days following the Closing Date, Sellers shall prepare and deliver to Purchaser for its review a statement (the “Closing Statement”) of the Working Capital as of the Closing Date. The Closing Statement shall be prepared in a manner consistent with Exhibit A; Purchaser shall give Sellers and its Representatives reasonable access, during normal business hours and upon reasonable notice, to the books and records, and appropriate personnel of the Conveyed Entities and Purchaser for purposes of the preparation of the Closing Statement in accordance with this Section 2.4(a) (and during the periods contemplated by this Section 2.4(a)). Purchaser shall instruct its employees (including the Transferred Employees) and Representatives to cooperate with, and promptly respond to all reasonable requests and inquiries of, Sellers and their Representatives. (b) Purchaser shall complete its review of the Closing Statement within thirty (30) days after the delivery thereof to Purchaser. In connection with the foregoing, Sellers shall give Purchaser and its Representatives reasonable access, during normal business hours and upon reasonable notice, to the books and records, and appropriate personnel of Sellers and their Affiliates solely for purposes of its review of such Closing DateStatement. Sellers shall instruct their employees and Representatives that were responsible for preparation of the Closing Statement to cooperate with, Seller and promptly respond to all reasonable requests and inquiries of, Purchaser and its Representatives, and, upon execution of a customary access letter if required by Sellers’ outside accountants, Purchaser and its Representatives shall prepare have reasonable access, upon reasonable notice, to all relevant work papers, schedules, memoranda and deliver other documents prepared by Sellers or their Representatives (including its outside accountants) to Buyer the extent such materials have been prepared by Sellers or their Representatives and relate to the preparation of the Closing Statement. Promptly following completion of its review (but in no event later than ten (10) Business Days following the conclusion of the thirty (30) day period), Purchaser shall submit to Sellers a statement letter regarding its concurrence or disagreement with the accuracy of the Closing Statement; provided that, if Purchaser submits a letter of disagreement disputing any items set forth in the Closing Statement (the such letter, a “Net Assets StatementClosing Statement Dispute Notice”) setting forth ), such Closing Statement Dispute Notice will specify (i) the sum item or items of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment Closing Statement with which Purchaser disagrees and the cashbasis therefor, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on adjustments that Purchaser proposes to be made to the Closing Date Statement and (“iii) the specific amount of such disagreement and all supporting documentation and calculations; and provided, further, that Purchaser may only submit a Closing Net Assets”)Statement Dispute Notice to the extent that (i) Purchaser claims Sellers did not prepare the Closing Statement in accordance with Section 2.4(a) and/or (ii) Purchaser’s proposed calculation will result in an adjustment to the Purchase Price. The Net Assets If Purchaser delivers a letter stating its concurrence with the Closing Statement or if Purchaser does not deliver a Closing Statement Dispute Notice within ten (10) Business Days following the conclusion of such thirty (30) day period, the Closing Statement shall be preparedfinal and binding upon the Parties. (c) Following timely and proper delivery of a Closing Statement Dispute Notice, if any, Sellers and Purchaser shall attempt in good faith to resolve promptly any disagreement as to the computation of any item or items to which there was disagreement as set forth in the Closing Statement Dispute Notice (such items, the “Closing Statement Disputed Items”), and any item or items set forth in the Closing Net Assets Statement as to which there is no disagreement shall be calculateddeemed agreed by the Parties. If the Parties cannot reach a resolution of any Closing Statement Disputed Items within fifteen (15) days (or longer, in accordance as mutually agreed by the Parties) after timely and proper delivery of a Closing Statement Dispute Notice by Sellers, then Sellers and Purchaser shall submit any such Closing Statement Disputed Items to the Accountant for determination. Each of Sellers and Purchaser shall execute a reasonably acceptable engagement letter, if requested to do so by the Accountant, and shall provide the Accountant with all information and documentation within its possession or control that the agreed procedures and accounting practices set forth on Schedule 3.2(a) (Accountant requests for making its determination as to the “Agreed Procedures”) and the net book value Closing Statement Disputed Items. The determination of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records Accountant with respect to the Inventory. For illustration purposes, a Net Assets any Closing Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than Disputed Items shall be completed within thirty (30) days after the date on which Seller delivered appointment of the Net Assets Accountant and shall be determined in accordance with this Agreement and be final and binding upon the Parties. Each of Sellers and Purchaser shall have an opportunity to submit to the Accountant written memoranda setting forth their positions with respect to any Closing Statement to Buyer, which notice Disputed Items. The Accountant shall specify the nature of each dispute and the basis therefor (adopt a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection position within the thirty-day period will range of positions submitted by Sellers and Purchaser with respect to any Closing Statement Disputed Item. The Accountant’s determination regarding any Closing Statement Disputed Item shall be deemed to be Buyer’s acceptance of based solely on whether Sellers included such Closing Statement Disputed Item in or excluded such Closing Statement Disputed Item from the Net Assets Closing Statement or calculated such Closing Statement Disputed Item, as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day periodcase may be, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b2.4(a); . The Working Capital as finally determined in accordance with this Section 2.4 shall be referred to as the “Closing Date Working Capital” for all purposes hereunder. The fees, costs, and expenses of the Accountant incurred with respect to this Section 2.4 shall be shared as follows: (i) if the Accountant resolves all of the Closing Statement Disputed Items in favor of Purchaser’s position (the Closing Date Working Capital so determined is referred to herein as the “Low Value”), then Sellers shall be obligated to pay for all of the fees and expenses of the Accountant; (ii) if Buyer timely gives a Net Assets Objection and the Accountant resolves all of the disputed items are resolved by mutual agreement Closing Statement Disputed Items in favor of Sellers’ position (the Closing Date Working Capital so determined is referred to herein as the “High Value”), then Purchaser shall be obligated to pay for all of the Parties, fees and expenses of the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputesAccountant; or and (iii) if any disputed items are submitted the Accountant neither resolves all of the Closing Statement Disputed Items in favor of Purchaser’s position nor resolves all of the Disputed Items in favor of Sellers’ position (the Closing Date Working Capital so determined is referred to herein as the “Actual Value”), Sellers shall be responsible for such fraction of the fees and expenses of the Accountant for the Closing Date Working Capital equal to (x) the difference between the High Value and the Actual Value over (y) the difference between the High Value and the Low Value, for the Closing Date Working Capital and Purchaser shall be responsible for the remainder of the fees and expenses of the Accountant. (d) If Closing Date Working Capital: (i) is equal to or greater than Sixty Three Million Eight Hundred Thousand Dollars ($63,800,000) (the “Lower Working Capital Limit”) and is equal to or less than Sixty Four Million Two Hundred Thousand Dollars ($64,200,000) (the “Upper Working Capital Limit”), then no adjustments will be made to the Arbitrator for resolutionPurchase Price in respect of Working Capital; or (ii) exceeds the Upper Working Capital Limit, then Purchaser shall be obligated to pay to Sellers the Net Assets Statementamount by which Closing Date Working Capital exceeds the Upper Working Capital Limit; or (iii) is less than the Lower Working Capital Limit, then Sellers shall be obligated to repay to Purchaser the amount by which the Lower Working Capital Limit exceeds Closing Date Working Capital. (e) Any payments to be made pursuant to this Section 2.4 shall be made by wire transfer of immediately available funds to the account designated in writing by Purchaser or Sellers, as amendedthe case may be, if necessary, to reflect any resolution of any disputes by agreement within five (5) Business Days after the determination of the Parties and the resolution of all other disputes Closing Date Working Capital in accordance with this Section 2.4. Any payment required to be made pursuant to this Section 2.4 shall be considered by the ArbitratorParties as an adjustment to the Purchase Price.

Purchase Price Adjustment. (a) Within thirty (30) days after As an adjustment to the Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Net Assets Statement”) setting forth Initial Purchase Price, (i) if the sum of Settlement Amount is greater than zero, the Accounts Receivable Purchaser shall pay to the Seller such Settlement Amount in the manner provided in clause (net of reservesc) or (e), Business-related prepaidsas the case may be, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus this Section 3.01; or (ii) if the sum of Settlement Amount is less than zero, the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of Seller shall pay to the close of business on Purchaser the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book absolute value of such Settlement Amount in the Inventory and Iteris GmbH inventory shall be computed based upon manner provided in clause (d) or (e), as the quantities case may be, of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)this Section 3.01. (b) If Buyer reasonably believes that Payment of the Net Assets Statement contains errors Settlement Amount shall be in cash or has not been prepared in accordance with validly issued shares of Common Stock (“Payment Shares”), as the Agreed ProceduresPurchaser shall elect, Buyer may deliver to Seller a written notice of objection which binding election shall be made no later than thirty (30) days after the date on which second Business Day following the Valuation Completion Date and communicated to the Seller delivered in writing; provided that if the Net Assets Statement Purchaser fails to Buyermake such an election in the manner contemplated hereunder, which notice the Purchaser shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance have elected settlement in cash; and provided further that the Purchaser shall not have the right to elect delivery of the Net Assets Statement Settlement Amount or receipt of the absolute value of the Settlement Amount in Payment Shares pursuant to this Section 3.01 if: (i) the representations and warranties made by the Purchaser to the Seller in Section 5.01 are not true and correct in all material respects as of the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth date the Purchaser makes such election; or (ii) in the Net Assets Objection within sixty (60) days after its delivery. In event the event that Settlement Amount shall be payable by the Parties are unable Purchaser to resolve an Objection within the sixty-day periodSeller, the parties shall follow Purchaser has taken any action that would make unavailable either (A) the arbitration procedures exemption set forth in Section 3.34(2) of the Securities Act for the sale of any Payment Shares by the Purchaser to the Seller or (B) an exemption from the registration requirements of the Securities Act reasonably acceptable to the Seller for resales of Payment Shares by the Seller. For the avoidance of doubt, upon the Purchaser’s making an election to receive or to deliver Payment Shares pursuant to this Section 3.01(b), the Purchaser shall be deemed to make the representations and warranties in Section 5.01 hereof as if made on the date of the Purchaser’s election. (c) As used hereinSubject to Section 3.01(b), if the Settlement Amount shall be payable by the Purchaser to the Seller: (i) Notwithstanding any election by the Purchaser to make payment in Payment Shares, at any time prior to the time the Seller (or any affiliate of the Seller) has contracted to resell such Payment Shares, the term “Final Net Assets Statement” means Purchaser may deliver in lieu of such Payment Shares an amount in cash equal to the Settlement Amount, in the manner set forth in Section 3.01(e). (ii) If the Purchaser elects to pay any Settlement Amount in Payment Shares, then on the Settlement Date, the Purchaser shall deliver to the Seller a number of Payment Shares equal to the quotient of (A) such Settlement Amount divided by (B) the Private Placement Price (determined in accordance with the Private Placement Procedures contained in Annex A hereto). (d) Subject to Section 3.01(b), if the absolute value of the Settlement Amount shall be payable by the Seller to the Purchaser and the Purchaser elects to receive the absolute value of the Settlement Amount in Payment Shares, then (i) the Net Assets Statement if Buyer does Seller shall, beginning on the first Trading Day following the later of (A) the Valuation Completion Date or (B) the date that Purchaser communicates its election to the Seller, continuing on each succeeding Trading Day and ending on the Trading Day when the Seller shall have satisfied its obligations under this clause (d) (the “Seller Payment Share Purchase Period”), purchase (subject to the provisions of Section 4.01 and Section 4.02 hereof) shares of Common Stock with an aggregate value equal to such Settlement Amount (which value shall, for each such share, be deemed to equal (x) 10b-18 VWAP on the Trading Day on which such share was purchased by the Seller plus (y) the Settlement Commission and which for the avoidance of doubt shall not deliver a Net Assets Objection in accordance with Section 3.2(b); be determined on the basis of the Seller’s actual purchase price) and (ii) if Buyer timely gives a Net Assets Objection and all the Seller shall deliver such shares of Common Stock to the Purchaser on the settlement dates relating to such purchases. (e) If the Purchaser elects to receive the absolute value of the disputed items are resolved Settlement Amount or to pay the Settlement Amount in cash, then payment of such Settlement Amount shall be made by mutual agreement wire transfer of immediately available U.S. dollar funds on the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the ArbitratorSettlement Date.

Purchase Price Adjustment. (a) Within thirty (30) As soon as practicable, but no later than 30 days after the Closing Date, Seller the Sellers’ Representative shall prepare and deliver to the Buyer a statement (proposed calculation of the Purchase Price and the components thereof. The proposed calculations described in the previous sentence shall collectively be referred to herein from time to time as the “Net Assets StatementPurchase Price Calculations”) setting forth (i) the sum . The Purchase Price Calculations shall be accompanied by a certificate signed by an authorized officer of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and Sellers’ Representative certifying that the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) information set forth in the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, Purchase Price Calculations was calculated in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, good faith in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value this Agreement. The Buyer shall cause each of the Inventory Companies to make their financial records reasonably available to the Sellers’ Representative so that the Sellers’ Representative may perform and Iteris GmbH inventory complete the Purchase Price Calculations and in the event that the Buyer does not provide any materials reasonably requested by the Sellers’ Representative within five days of request therefor (or such shorter period as may remain in such 30-day period), such 30-day period shall be computed based upon extended by one day for each additional day required for the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records Sellers’ Representative to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right fully respond to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)such request. (b) If the Buyer reasonably believes does not give written notice of dispute (a “Purchase Price Dispute Notice”) to the Sellers’ Representative within 30 days of receiving the Purchase Price Calculations, the Purchase Price Calculations will be deemed to be agreed by the Sellers and the Buyer provided, however, that (A) in the event that the Net Assets Statement contains Sellers’ Representative does not provide any materials reasonably requested by the Buyer within five days of request therefor (or such shorter period as may remain in such 30-day period), such 30-day period shall be extended by one day for each additional day required for the Sellers’ Representative to fully respond to such request, and (B) the Purchase Price Dispute Notice may include only objections based on (x) noncompliance with the standards set forth in this Section 2.04 for the preparation of the Purchase Price Calculations or (y) mathematical errors or has not been prepared in the calculation of the Purchase Price Calculations. The Purchase Price Dispute Notice shall be accompanied by a certificate signed by the Buyer certifying that the information set forth in the Purchase Price Dispute Notice was calculated in good faith in accordance with this Agreement. (c) If the Agreed ProceduresBuyer gives a Purchase Price Dispute Notice to the Sellers’ Representative (which Purchase Price Dispute Notice must set forth, in reasonable detail, the items and amounts in dispute and all other items and amounts not so disputed shall be deemed final), the Buyer may deliver and the Sellers’ Representative shall use commercially reasonable efforts to Seller a written notice of objection resolve the dispute by no later than thirty the date which is 10 Business Days following receipt of the applicable Purchase Price Dispute Notice from the Buyer (30“Dispute Settlement Date”), commencing on the date the Buyer receives the applicable Purchase Price Dispute Notice from the Sellers’ Representative and all such discussions related thereto shall (unless otherwise agreed by the Buyer and the Sellers’ Representative) be governed by Rule 408 of the Federal Rules of Evidence and any applicable similar state rule. If the Sellers’ Representative and the Buyer do not agree upon a final resolution with respect to such disputed items by the Dispute Settlement Date, then the remaining items in dispute shall be submitted immediately to an independent accounting firm mutually acceptable to the Buyer and the Sellers’ Representative. If the Buyer and the Sellers’ Representative are unable to agree on the choice of an accounting firm within ten Business Days after the Dispute Settlement Date, then the Buyer and the Sellers’ Representative shall select an internationally recognized independent accounting firm by lot (after excluding their respective regularly used accounting firms). Any accounting firm so agreed to (the “Accounting Firm”) shall be required to render a determination of the applicable dispute within 45 days after referral of the matter to such Accounting Firm, which determination must be in writing and must set forth, in reasonable detail, the basis therefor; provided that the Accounting Firm may (i) only consider those items and amounts as to which the Sellers’ Representative and the Buyer have disagreed within the time periods and on the terms specified above and (ii) only make adjustments based on noncompliance with the standards set forth in this Agreement for the determination of the Purchase Price. The determination made by the Accounting Firm with respect to the remaining disputed items shall not exceed or be less than the amounts proposed by the Sellers’ Representative and the Buyer, as the case may be. The terms of appointment and engagement of the Accounting Firm shall be as agreed upon between the Sellers’ Representative and the Buyer, and any associated engagement fees shall initially be borne 50% by the Sellers and 50% by the Buyer; provided that such fees shall ultimately be allocated in accordance with Section 2.04(d). The determination of such Accounting Firm shall be conclusive and binding for all purposes of this Agreement. The Sellers’ Representative shall revise the Purchase Price Calculations as appropriate to reflect the resolution of any objections thereto pursuant to this Section 2.04(c), and, as revised, such Purchase Price Calculations shall be deemed to set forth the final Purchase Price, in each case, for all purposes hereunder (including, without limitation, the determination of the Actual Adjustment). (d) In the event the Sellers’ Representative and the Buyer submit any unresolved objections to the Accounting Firm for resolution as provided in Section 2.04(c), the responsibility for the fees and expenses of the Accounting Firm shall be as follows: (i) if the Accounting Firm resolves all of the remaining objections in favor of the Buyer’s position (the Purchase Price so determined is referred to herein as the “Low Value”), then all of the fees and expenses of the Accounting Firm shall be paid by the Sellers; (ii) if the Accounting Firm resolves all of the remaining objections in favor of the Sellers’ Representative’s position (the Purchase Price so determined is referred to herein as the “High Value”), then the Buyer shall be responsible for all of the fees and expenses of the Accounting Firm; and (iii) if the Accounting Firm neither resolves all of the remaining objections in favor of the Buyer’s position nor resolves all of the remaining objections in favor of the Sellers’ Representative’s position (the Purchase Price so determined is referred to herein as the “Actual Value”), then that fraction of the fees and expenses of the Accounting Firm equal to (x) the difference between the High Value and the Actual Value over (y) the difference between the High Value and the Low Value shall be paid by the Sellers, and the Buyer shall be responsible for the remainder of the fees and expenses of the Accounting Firm. (e) If the Actual Adjustment is a positive amount, the Buyer shall pay to the Sellers’ Representative (for distribution to LJCB Holdings for payment in turn to Keybridge Capital Limited to the account set forth in Section 2.03(a)(ii) the Keybridge Adjustment Amount (as defined in the Deed of Settlement and Release) and the remainder of the Actual Adjustment Amount to each applicable Seller according to its respective Seller Purchase Price Percentage) an amount equal to such positive amount, by wire transfer or delivery of immediately available funds, in each case, within three Business Days after the date on which Seller delivered the Net Assets Statement Purchase Price is finally determined pursuant to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in this Section 3.32.04. (cf) As used hereinIf the Actual Adjustment is a negative amount, then within three Business Days after the date on which the Purchase Price is finally determined pursuant to this Section 2.04, the term “Final Net Assets Statement” means (i) Buyer and the Net Assets Statement if Sellers’ Representative shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver to the Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all an amount equal to the absolute value of such negative amount from the PPA Escrow Account. If the absolute value of the disputed items are resolved by mutual agreement Actual Adjustment exceeds the PPA Escrow Amount, then each of the PartiesSellers shall deliver its respective Seller Purchase Price Percentage of such excess amount to the Buyer within three Business Days after the date on which the Purchase Price is finally determined pursuant to this Section 2.04. (g) If any funds are remaining in the PPA Escrow Account following the Actual Adjustment Payment Date, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted Buyer and the Sellers’ Representative shall promptly and expeditiously deliver joint written instructions to the Arbitrator for resolution, Escrow Agent instructing the Net Assets Statement, as amended, if necessary, Escrow Agent to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitratordeliver such funds to each applicable Seller according to each respective Seller Purchase Price Percentage.

Purchase Price Adjustment. (a) Within thirty (30) calendar days after the Closing Date, Seller the Buyer shall prepare and deliver to Buyer the Sellers’ Representative a statement (the “Net Assets Statement”) setting forth of the Closing Working Capital prepared in accordance with the Accounting Principles. The Buyer and the Sellers acknowledge that no adjustments shall be made to the Base Amount. (b) The Statement shall become final and binding upon the parties after the fifteenth (15th) calendar day following the date on which the Statement is received by the Sellers’ Representative, unless the Sellers’ Representative delivers written notice of its disagreement with the Statement (a “Notice of Disagreement”) to the Buyer on or prior to such date. Any Notice of Disagreement shall (i) specify in reasonable detail the nature of any disagreement so asserted and (ii) only include good faith disagreements based on Closing Working Capital not being calculated in accordance with the Accounting Principles. (c) If a Notice of Disagreement is received by the Buyer on or prior to the deadline stated in Section 2.3(b) above, then the Statement (as revised in accordance with this sentence) shall become final and binding upon the Sellers and the Buyer on the earlier of (i) the sum of date the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment Sellers’ Representative and the cash, accounts receivable (net Buyer resolve in writing any differences they have with respect to the matters specified in the Notice of reserves), prepaids, inventory (net of reserves) Disagreement and equipment of Iteris GmbH minus (ii) the sum date any disputed matters are finally resolved in writing by the Accounting Firm pursuant to this Section 2.3. During the fifteen (15) calendar day period following the delivery of a Notice of Disagreement, the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, Sellers’ Representative and the Closing Net Assets Buyer shall be calculatedseek in good faith to resolve in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement. (d) If at the end of such fifteen (15) calendar day period the Sellers’ Representative and the Buyer have not resolved in writing the matters specified in the Notice of Disagreement, the Sellers’ Representative and the Buyer shall submit to an independent accounting firm (the “Accounting Firm”) for arbitration, in accordance with the agreed procedures and accounting practices standards set forth on Schedule 3.2(a) (in this Section 2.3, only such matters as are specified in the “Agreed Procedures”) Notice of Disagreement that remain in dispute. The Accounting Firm shall be Deloitte & Touche or, if such firm is unable or unwilling to act, such other nationally recognized independent public accounting firm as shall be agreed upon by the Sellers’ Representative and the net book value Buyer in writing. The Sellers’ Representative and the Buyer shall use reasonable efforts to cause the Accounting Firm to render a written decision resolving the matters submitted to the Accounting Firm within thirty (30) calendar days of the Inventory receipt of such submission; provided, that the Accounting Firm shall not render a written decision at any time that the Sellers’ Representative shall have made reasonable information requests in accordance with Section 2.3(f) below that have not been resolved in a manner reasonable under the circumstances, and Iteris GmbH inventory the Sellers’ Representative shall be computed permitted, prior to the Accounting Firm rendering its written decision, to update its written submission to the Accounting Firm to take into account the information ultimately obtained thereby by delivery of such updated written submission to the Accounting Firm not later than ten (10) calendar days after receipt of the information ultimately obtained thereby. The scope of the disputes to be resolved by the Accounting Firm shall be limited to fixing mathematical errors in the Statement and determining whether the items in dispute in the Statement were determined in accordance with the Accounting Principles and the Accounting Firm is not to make any other determination, including any determination as to whether the Base Amount or Working Capital Estimate are correct. The Accounting Firm’s decision shall be based solely on written submissions by the Sellers’ Representative and the Buyer and their respective Representatives and not by independent review and shall be final and binding on all of the parties hereto. The Accounting Firm may not assign a value greater than the greatest value for such item claimed by either party or a value smaller than the smallest value for such item claimed by either party. Judgment may be entered upon the quantities of Inventory and Iteris GmbH inventory on hand as determination of the Closing Date as determined through a physical inventory conducted by Seller on or before Accounting Firm in any court having jurisdiction over the fifth day following party against which such determination is to be enforced. The fees and expenses of the Closing Date, the results of which Accounting Firm incurred pursuant to this Section 2.3(d) shall be adjusted from borne pro rata as between the Sellers, on the one hand, and the Buyer’s and Seller’s books and records , on the other hand, in proportion to reflect the Inventory and Iteris GmbH inventory as final allocation made by such Accounting Firm of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect disputed items weighted in relation to the Inventory. For illustration purposesclaims made by the Sellers’ Representative and the Buyer, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes such that the Net Assets prevailing party pays the lesser proportion of such fees, costs and expenses. The dispute resolution mechanics set forth in this Section 2.3 shall be the exclusive dispute resolutions mechanics for determining any Notice of Disagreement hereunder and the matters contemplated thereby, including, without limitation, any Notice of Disagreement concerning whether the Statement contains errors or has not been was prepared in accordance with the Agreed ProceduresAccounting Principles, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes indemnifications provisions set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable Article X and Article XI hereof shall not apply to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3any such dispute. (ce) As used hereinFor the purposes of this Agreement, the term “Final Net Assets StatementWorking Capital” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection Closing Working Capital as finally agreed or determined in accordance with Section 3.2(b2.3(b), (c) or (d), as applicable. If the Final Working Capital exceeds the Working Capital Estimate, the Buyer shall, within five (5) Business Days after the Final Working Capital is determined, make payment by wire transfer of immediately available funds to the Sellers in accordance with their respective Adjustment Amount Transaction Percentage in the amount of any such excess; provided that the maximum amount payable by Buyer to the Sellers based on the Final Working Capital shall not exceed $2,500,000. If the Working Capital Estimate exceeds the Final Working Capital, the parties shall, within five (ii5) if Business Days after the Final Working Capital is determined, deliver joint written instructions to the Escrow Agent to release by wire transfer of immediately available funds to the Buyer timely gives a Net Assets Objection and all from the Escrow Fund an amount equal to any such excess in accordance with the terms of the disputed items are resolved by mutual agreement of Escrow Agreement; provided, that the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted maximum payment owing to the Arbitrator for resolution, Buyer based upon the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the ArbitratorFinal Working Capital shall not exceed $2,500,000.

Purchase Price Adjustment. (a) No less than five (5) Business Days prior to the Closing Date, the Seller Representative shall prepare and deliver to Purchaser (i) a projected unaudited consolidated balance sheet of the Company and the Subsidiaries as of 12:01 AM (Pacific time) on the Closing Date, prepared in accordance with (I) GAAP and (II) accounting policies applied by the Company for purposes of preparing its consolidated financial statements for the year ended December 31, 2014 (with any conflicts between GAAP and the policies set forth in the preceding clause (II) to be resolved in favor of GAAP), without reflecting any actual or anticipated adjustments or effects arising from the transactions contemplated hereby (the “Estimated Closing Balance Sheet”), and (ii) a closing statement setting forth in reasonable detail a calculation, on the basis of the Estimated Closing Balance Sheet, of Assumed Liabilities (the “Estimated Assumed Liabilities”) and Closing Indebtedness (the items specified in the preceding clauses (i) and (ii) collectively, the “Estimated Closing Balance Sheet Documents”). The Estimated Closing Balance Sheet Documents shall be subject to Purchaser’s review. In reviewing such items, Purchaser shall have the right to review the work papers, schedules, memoranda and other documents Sellers and/or the Company prepared or reviewed in preparing the Estimated Closing Balance Sheet Documents and thereafter will have access, during normal business hours, to all relevant Books and Records, all to the extent Purchaser reasonably requires them to complete its review of the Estimated Closing Balance Sheet Documents. In the event that Purchaser does not agree with the Estimated Closing Balance Sheet Documents or any portion thereof, Sellers shall consider any comments or changes proposed by Purchaser in good faith and Sellers and Purchaser shall negotiate in good faith to resolve the disputed items; provided that, for the avoidance of doubt, none of the failure to include in the Estimated Closing Balance Sheet Documents any comments or changes proposed by Purchaser, Purchaser’s acceptance of the Estimated Closing Balance Sheet Documents, and the consummation of Closing shall constitute an acknowledgement by Purchaser of the accuracy of the Estimated Closing Balance Sheet Documents or limit or otherwise affect Purchaser’s rights and remedies under this Agreement, including Purchaser’s right to include such comments or changes in the Final Closing Balance Sheet Documents. (b) Not later than 90 days after the Closing Date, Purchaser shall deliver to the Seller Representative (i) an unaudited consolidated balance sheet of the Company and the Subsidiaries as of 12:01 AM (Pacific time) on the Closing Date, prepared in accordance with (I) GAAP and (II) accounting policies applied by the Company for purposes of preparing its consolidated financial statements for the year ended December 31, 2014 (with any conflicts between GAAP and the policies set forth in the preceding clause (II) to be resolved in favor of GAAP), without reflecting any actual or anticipated adjustments or effects arising from the transactions contemplated hereby (the “Final Closing Balance Sheet”), and (ii) a closing statement setting forth in reasonable detail a calculation, on the basis of the Final Closing Balance Sheet, of Assumed Liabilities (the “Final Assumed Liabilities”) (the items specified in the preceding clauses (i) and (ii) collectively, the “Final Closing Balance Sheet Documents”). (c) The Final Closing Balance Sheet Documents shall be subject to the Seller Representative’s review. In reviewing such items, the Seller Representative shall have the right to review the work papers, schedules, memoranda and other documents Purchaser prepared or reviewed in preparing the Final Closing Balance Sheet Documents and thereafter will have access, during normal business hours and upon reasonable advance notice, to all relevant Books and Records, all to the extent the Seller Representative reasonably requires them to complete its review of the Final Closing Balance Sheet Documents. Within 30 days after its receipt of the Final Closing Balance Sheet Documents, the Seller Representative shall notify Purchaser whether, based on such review, it has any objections to the calculation of the Final Assumed Liabilities (an “Objection Notice”). Unless the Seller Representative delivers to Purchaser within such 30-day period an Objection Notice, the Final Assumed Liabilities shall be final and binding. (d) If the Seller Representative delivers an Objection Notice, then (i) for 20 days after Purchaser receives such Objection Notice, Purchaser and the Seller Representative shall use their commercially reasonable efforts to agree on the calculation of the disputed amounts and (ii) lacking such agreement, the matter shall be referred to an independent nationally-recognized accounting firm as may be mutually agreed upon by Purchaser and the Seller Representative (the “Arbitrating Accountants”). The Arbitrating Accountants shall be directed to render a written report to the Seller Representative and Purchaser on the unresolved disputed items as soon as practicable (and in no event later than thirty (30) days after the Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Net Assets Statement”) setting forth (i) the sum submission of the Accounts Receivable (net of reservesdispute to the Arbitrating Accountants), Business-related prepaidsto resolve only those unresolved disputed items set forth in the Objection Notice, Inventory (net not to make any determination of reserves) and Equipment a disputed amount that is outside the range of the proposed amounts submitted by Purchaser and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty ExpensesSeller Representative, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, to make any determinations solely in accordance with the agreed procedures terms and accounting practices set forth on Schedule 3.2(a) (provisions of this Agreement. If unresolved disputed items are submitted to the “Agreed Procedures”) Arbitrating Accountants, the Seller Representative and Purchaser shall each furnish to the net book value Arbitrating Accountants such work papers, schedules and other documents and information relating to the unresolved disputed items as the Arbitrating Accountants may reasonably request. The determination of the Inventory and Iteris GmbH inventory Arbitrating Accountants shall be computed based upon the quantities of Inventory final and Iteris GmbH inventory binding on hand as of the Closing Date as determined through a physical inventory conducted by Purchaser and Sellers and not subject to collateral attack for any reason other than manifest error or fraud. The Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s Representative and Seller’s books and records Purchaser each agree to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or use its representatives shall have the right respective commercially reasonable efforts to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance cooperate with the Agreed Procedures, Buyer may deliver Arbitrating Accountants and to Seller a written notice of objection cause the Arbitrating Accountants to resolve any dispute no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance submission of the Net Assets Statement as dispute to the Final Net Assets StatementArbitrating Accountants in accordance with this Agreement. The Parties Of the fees, costs and expenses of the Arbitrating Accountants, Purchaser, on the one hand, and Sellers jointly and severally, on the other hand, shall attempt in good faith bear a fraction equal to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); absolute value of the difference between the Post-Closing Adjustment that would have been payable based on the submission of such party and the Post-Closing Adjustment based on the determination of the Arbitrating Accountants divided by (ii) if Buyer timely gives a Net Assets Objection and all the absolute value of the disputed items are resolved by mutual agreement difference between the Post-Closing Adjustment that would have been payable based on the submission of Purchaser and the Post-Closing Adjustment that would have been payable based on the submission of the PartiesSeller Representative. For illustrative purposes only, should the Post-Closing Adjustment payable based on the submission of Purchaser be $80, the Net Assets StatementPost-Closing Adjustment payable based on the submission of the Seller Representative be $100 and the Post-Closing Adjustment payable based on the determination of the Arbitrating Accountants be $95, as amendedPurchase would bear 75% (($95 — $80) / ($100 - $80)) and Sellers would bear 25% (($100-$95) / ($100 - $80)) of the fees, if necessary, to reflect such resolution costs and expenses of all disputes; or the Arbitrating Accountants. (iiie) if any disputed items are submitted If the amount equal to the Arbitrator Estimated Assumed Liabilities minus the Final Assumed Liabilities as finally determined hereunder (the “Post-Closing Adjustment”) is greater than $0 (zero), then Purchaser shall pay to the Seller Representative (for resolutionthe benefit of Sellers) an amount equal to the Post-Closing Adjustment. If the Post-Closing Adjustment is less than $0 (zero), then the Net Assets Statement, as amended, if necessary, Seller Representative shall (on behalf of Sellers) pay to reflect any resolution of any disputes by agreement Purchaser an amount equal to the absolute value of the Parties and the resolution Post-Closing Adjustment. Each payment under this Section 2.04(e) shall be made within five Business Days after such final determination by wire transfer of all other disputes immediately available funds to a bank account specified by the Arbitratorrecipient.

Purchase Price Adjustment. (a) Not later than three Business Days before the Closing Date, the Seller shall provide the Buyers by notice with the Seller’s good-faith estimate of the Net Working Capital, based upon the accounting books and records of the Company (the “Estimated Net Working Capital”), and all underlying documentation supporting the Estimated Net Working Capital. If the Estimated Net Working Capital is greater than $0, then the Initial Purchase Price shall be increased by the amount of such excess. If the Estimated Net Working Capital is less than $0, then the Initial Purchase Price shall be decreased by the amount of such deficit. (b) Within thirty (30) 60 days after the Closing Date, Seller shall the Buyers will prepare and deliver to Buyer a statement (the “Net Assets Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance calculation of the Net Assets Statement as Working Capital. Buyers will provide copies and otherwise make available to Seller and its representatives the Final Net Assets Statement. The Parties shall attempt work papers and back-up materials used in good faith to reach agreement resolving all disputes set forth in calculating the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3Working Capital. (c) As used hereinIf the Seller has any good faith objections to the Buyers’ calculation of the Net Working Capital, then it must deliver a detailed written statement describing its objections to the Buyers within 20 Business Days after the Buyers deliver their calculation of the Net Working Capital to the Seller. If the Seller does not object to the Buyers’ calculation of Net Working Capital (and any adjustments resulting therefrom) within such 20 Business Day period, then the Seller shall be deemed to have accepted the Buyers’ calculation thereof and any amounts due shall be paid pursuant to clause (d) below. If the Seller does object in a timely manner, the term “Final Net Assets Statement” means Parties will make a diligent, good faith effort to resolve all such objections. Any payment due pursuant to clause (id) below shall be paid upon resolution of such objections whether between the Parties or by the national accounting firm as set forth below. If the Parties do not resolve all objections to Buyers’ calculation of the Net Assets Statement if Buyer does Working Capital within 10 Business Days after the Buyers receive the Seller’s statement of objections, then the Parties will select a mutually acceptable, nationally-recognized accounting firm (which may not deliver be the regular outside accounting firms of any Party) to resolve any remaining objections. If the Buyers and the Seller do not agree upon the choice of an accounting firm, they will select a Net Assets Objection in accordance with Section 3.2(bnationally-recognized accounting firm by lot (after excluding their respective regular outside accounting firms); (ii) if Buyer timely gives a Net Assets Objection . The Buyers will collectively pay 50%, and all the Seller will pay 50%, of the costs and expenses of any accounting firm so used. The Buyers and the Seller will jointly instruct the accounting firm to compute the disputed items are resolved as soon as practicable, and the determination made by mutual agreement such accounting firm will be set forth in writing and will be conclusive and binding upon the Parties. The amount of the Parties, Net Working Capital as agreed to by the Buyers and the Seller or as determined by the accounting firm constitutes the Net Assets Statement, as amended, if necessary, to reflect such resolution Working Capital for purposes of all disputes; or clause (iiid) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitratorbelow.

Purchase Price Adjustment. (ai) Within thirty (30) As soon as practicable, but in no event later than 60 days after following the Closing Date, Seller MHE shall prepare a combined and deliver to Buyer a statement (the “Net Assets Statement”) setting forth (i) the sum consolidated balance sheet of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand Companies as of the Closing Date as determined through (the "Closing Balance Sheet") and a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results calculation of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory Net Assets as of the Closing DateDate based on the Closing Balance Sheet (collectively, the "Closing Financial Data"). Buyer The Closing Balance Sheet and calculation of Net Assets shall be prepared on a basis consistent with the methods, principles, practices and policies employed in the preparation and presentation of the Audited Financial Statements and in accordance with Exhibit M. (ii) During the preparation of the Closing Financial Data, and the period of any review or its dispute within the contemplation of this Section 2(d), MHE shall (A) provide Investor, HarnCo and their authorized representatives shall have the right to observe the physical inventory and shall have with full access to all books relevant books, records, work-papers and records employees of the Companies and their Subsidiaries, and (B) cooperate fully with respect Investor, HarnCo and their authorized representatives, including the provision on a timely basis of all information necessary or useful. (iii) MHE shall deliver a copy of the Closing Financial Data to Investor and HarnCo promptly after it has been prepared. After receipt of the Closing Financial Data, Investor and HarnCo shall have 30 days to review the Closing Financial Data, together with the work-papers used in the preparation thereof. Unless Investor or HarnCo delivers written notice to MHE on or prior to the Inventory30th day after their receipt of the Closing Financial Data stating that it has objections to the Closing Financial Data (and setting forth the details of its calculation of disputed items), Investor and HarnCo shall be deemed to have accepted and agreed to the Closing Financial Data. For illustration purposesIf Investor or HarnCo so notifies MHE of its objections to the Closing Financial Data, a Net Assets Statement then Investor and HarnCo shall, within 30 days (or such longer period as of June 30they may agree) following such notice (the "Resolution Period"), 2011 is included in Schedule 3.2(aattempt to resolve their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on all Parties (and MHE). (biv) If Buyer reasonably believes that Any amounts remaining in dispute at the Net Assets Statement contains errors or has not been prepared in accordance with conclusion of the Agreed Procedures, Buyer may deliver Resolution Period ("Unresolved Changes") shall be submitted to Seller a written notice nationally recognized independent public accounting firm jointly selected by the independent public accounting firms of objection no later than thirty HarnCo and Investor (30such firm being referred to as the "Neutral Auditors") within 10 days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance expiration of the Net Assets Statement as the Final Net Assets StatementResolution Period. The Parties agree to execute, if requested by the Neutral Auditors, a reasonable engagement letter. All fees and expenses relating to the work, if any, to be performed by the Neutral Auditors shall attempt be borne pro rata by HarnCo and MHE in good faith proportion to reach agreement resolving all disputes the allocation of the dollar amount of the Unresolved Changes made by the Neutral Auditors such that the prevailing party pays a lesser proportion of the fees and expenses. The Neutral Auditors shall act as an arbitrator to determine, based on the provisions of this Section 2(d), only the Unresolved Changes. The Neutral Auditors' determination of the Unresolved Changes shall be made within 45 days of the submission of the Unresolved Changes thereto, shall be set forth in a written statement delivered to HarnCo and Investor and shall be final, binding and conclusive on all Parties (and MHE). The term "Adjusted Closing Balance Sheet," as used in this Agreement, shall mean the Net Assets Objection within sixty definitive Closing Balance Sheet agreed to (60or deemed agreed to) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in by HarnCo and Investor under Section 3.3. (c2(d)(iii) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amendedor, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items Unresolved Changes are submitted to the Arbitrator for resolutionNeutral Auditors, the Net Assets Statementsuch definitive Closing Balance Sheet, as amended, if necessary, adjusted to reflect any resolution of any disputes by agreement the determination of the Parties and the resolution of all other disputes by the ArbitratorNeutral Auditors under this Section 2(d)(iv).

Purchase Price Adjustment. (a) Within thirty (30) 10 days after the Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Net Assets Statement”) setting forth (i) the sum closing balance sheet of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case Division as of the close of business on the Closing Date (“the "Closing Net Assets”Balance Sheet"). The Net Assets Statement Closing Balance Sheet shall be prepared, and fairly present the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand items listed thereon as of the Closing Date on a basis consistent with the accounting principles, practices, procedures and policies that were used in preparing the August 31, 1997 Balance Sheet, except that the Closing Balance Sheet shall reflect (i) a proper accrual under FAS 106, (ii) a corporate accrual for salaried vacation and holidays relating to Employees (as determined through hereinafter defined), and (iii) the results of a physical inventory conducted to be taken by Seller on or before the fifth day following the Closing Dateat October 31, the results of which shall be adjusted from Buyer’s 1997 consistent with its past practices, with Buyer and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right entitled to observe the such physical inventory and shall review all ledgers and supporting information for the financial statements, and have full access to all books and records with respect the cooperation of Seller's accounting personnel. Buyer shall have a period of 10 days after delivery of the Closing Balance Sheet to review it and make any objections it may have in writing to Seller. If no written objections are made by Buyer within such ten-day period, then the InventoryClosing Balance Sheet shall be final and binding on the parties hereto. For illustration purposesIf Buyer delivers written objections to Seller within such ten-day period, then the parties shall have an additional five business days within which to resolve any disputed matters. If they are unable to do so, the specific matters in dispute shall be submitted to a Net Assets Statement Big Six independent accounting firm (other than Ernst & Young L.L.P. and Price Waterhouse L.L.P.) as may be approved by Seller and Buyer, which firm shall render its opinion as to such matters as expeditiously as possible and in any event within 10 days of June 30submission. Based on such opinion, 2011 is included such independent accounting firm will then send to Seller and Buyer its determination on the specified matters in Schedule 3.2(a)dispute, which determination shall be final and binding on the parties hereto. The fees and expenses of such independent accounting firm shall be borne one-half by Seller and one-half by Buyer. (b) If Buyer reasonably believes that In the Net Assets Statement contains errors or has not been prepared in accordance with event "Total Proprietary Interest," as shown on the Agreed ProceduresClosing Balance Sheet, Buyer may deliver to is less than $23,414,502, the Purchase Price shall be reduced dollar-for-dollar by the amount by which $23,414,502 exceeds "Total Proprietary Interest," and Seller a written notice shall promptly pay the amount of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement such difference to Buyer, which notice shall specify together with interest thereon from the nature Closing Date to the date of each dispute and the basis therefor (such payment at a “Net Assets Objection”). Failure by Buyer rate per annum equal to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery8%. In the event that the Parties are unable to resolve an Objection within the sixty-day period"Total Proprietary Interest" exceeds $23,414,502, the parties Purchase Price shall follow be increased dollar-for-dollar by the arbitration procedures set forth in Section 3.3amount by which $23,414,502 is less than "Total Proprietary Interest," and Buyer shall promptly pay the amount of such difference to Seller, together with interest thereon from the Closing Date to the date of such payment at a rate per annum equal to 8%. (c) As used herein, Seller agrees to reduce the term “Final Net Assets Statement” means Purchase Price in an amount equal to (i) the Net Assets average of the accumulated benefit obligation and the projected benefit obligation, in each case determined for a continuing plan and as defined for financial statement disclosure purposes under Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); of Financial Accounting Standards No. 87 as of the Closing Date using actuarial assumptions to be mutually agreed upon by Seller and Buyer, less (ii) if Buyer timely gives a Net Assets Objection the assets to be transferred as contemplated in Section 7.2, and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or less (iii) $150,000; provided, however, that there shall be no such reduction in the Purchase Price if any disputed items are submitted to the Arbitrator for resolutionamount computed in the preceding clauses (i), the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties (ii) and the resolution of all other disputes by the Arbitrator(iii) is less than zero.

Purchase Price Adjustment. (a) Within thirty As promptly as practicable, but no later than ten (3010) days after the Closing Date, Purchaser shall cause to be prepared and delivered to Seller shall prepare and deliver to Buyer a closing statement (the “Net Assets Closing Statement”) setting forth (i) the sum Purchaser’s calculation of the Accounts Receivable (net of reserves), Business-related prepaids, New Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) Amount (the “Agreed ProceduresClosing New Inventory Amount”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) Purchaser shall permit Seller to review all accounting records and all work papers and computations used by Purchaser in the preparation of the Closing Statement. If Buyer reasonably believes Seller disagrees with Purchaser’s calculation of any item on the Closing Statement delivered pursuant to Section 3.4(a), Seller may, within ten (10) days after delivery of the Closing Statement, deliver a notice to Purchaser stating that Seller disagrees with such calculation and specifying in reasonable detail those items or amounts as to which Seller disagrees and the Net Assets basis therefore. Seller shall be deemed to have agreed with all other items and amounts contained in the Closing Statement contains errors or and the calculation of Closing New Inventory Amount for which a notice of disagreement has not been prepared in accordance with the Agreed Procedures, Buyer may deliver delivered by Seller to Seller Purchaser within such ten (10) day period. (c) If a written notice of objection no later than thirty disagreement shall be duly delivered pursuant to Section 3.4(b), Seller and Purchaser shall, during the ten (3010) days after following such delivery (the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets ObjectionReconciliation Period”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith , use their commercially reasonable efforts to reach agreement resolving all disputes set forth on the disputed items or amounts in order to determine, as may be required, the Net Assets Objection within sixty Closing New Inventory Amount. If during such period, Seller and Purchaser are unable to reach such agreement with respect to the Closing New Inventory Amount, they shall promptly thereafter cause a independent audit firm of international reputation mutually agreed upon by the Parties (60) days after its delivery. In the event that or if the Parties are unable to resolve agree upon an Objection independent audit firm within five (5) days of the sixty-day periodend of the Reconciliation Period, the parties independent audit firm of international reputation selected by the American Arbitration Association at the request of either Party (it being understood that such request by a Party shall follow preclude a later request by the arbitration procedures set other Party)) (an “Independent Auditor”) to review this Agreement and the disputed items or amounts for the purpose of calculating the Closing New Inventory Amount (it being understood that in making such calculation, the Independent Auditor shall be functioning as an expert). Each of Seller and Purchaser agree that it shall not engage, or agree to engage the Independent Auditor to perform any services other than as the Independent Auditor pursuant hereto until the Closing New Inventory Amount has been finally determined pursuant to this Section 3.4. Each Party agrees to execute, if requested by the Independent Auditor, a reasonable engagement letter. In making such calculation, the Independent Auditor shall consider only those items or amounts in the Closing Statement and Purchaser’s calculation of Closing New Inventory Amount as to which Seller has disagreed in its notice of disagreement duly delivered pursuant to Section 3.4(b). In making its determination, the Independent Auditor shall not, as to any item, assign an amount that is higher than the highest amount or lower than the lowest amount requested by Seller or Purchaser, as applicable. The Independent Auditor shall deliver to Seller and Purchaser, as promptly as practicable (but in any case no later than twenty (20) days from the date of engagement of the Independent Auditor), a report setting forth such calculation. Such report shall be final and binding upon Seller and Purchaser. The Independent Auditor shall determine the allocation of the cost of its review and report based on the inverse of the percentage its determination (before such allocation) bears to the total amount of the total items in Section 3.3dispute as originally submitted to the Independent Auditor, as applicable. For example, should the items in dispute total in amount to $1,000 and the Independent Auditor awards $600 in favor of Seller’s position, 60% of the costs of its review would be borne by Purchaser and 40% of the costs would be borne by Seller. (cd) As used hereinThe Parties shall, and shall cause their respective Representatives to, cooperate and assist in the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all preparation of the disputed items are resolved by mutual agreement Closing Statement and the calculation of the PartiesClosing New Inventory Amount and in the conduct of the review referred to in this Section 3.4, including making available, to the Net Assets Statement, as amended, if extent necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolutionbooks, the Net Assets Statementrecords, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties work papers and the resolution of all other disputes by the Arbitratorpersonnel.

Purchase Price Adjustment. (a) Within thirty In the event that circumstances exist that require the parties to negotiate in good faith cooperative arrangements under Section 2.12 or potential amendments to this Agreement pursuant to Sections 8.5 and 9.5 (30) days dealing with possible subsequent transfers of Transferred Assets after the Closing Datein the event of certain injunctions) or potential amendments to the Management Agreement referred to in Section 2.15, Seller shall prepare and deliver or to Buyer a statement (negotiate in good faith equitable adjustments in the “Net Assets Statement”) setting forth (i) Purchase Price pursuant to the sum provisions of the Accounts Receivable foregoing Sections, or the provisions of Section 8.6 (net respecting the condition of reservestitle to interests in real property) (Sections 2.12, 2.15, 8.5, 8.6 and 9.5 being collectively referred to as the "Adjustment Sections"), Business-related prepaidsthen and in any of such events, Inventory (net of reserves) and Equipment such negotiations, and the cashresolution of disagreements arising therefrom, accounts receivable (net shall be conducted in accordance with the provisions of reserves)this Section 2.14. The parties shall negotiate such cooperative arrangements, prepaids, inventory (net of reserves) potential amendments and equipment of Iteris GmbH minus (ii) equitable adjustments in the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, Purchase Price in each case as of the close of business on the good faith prior to any scheduled Closing Date (“as may be extended by mutual agreement of the parties), and, in connection with an adjustment to the Purchase Price, shall also negotiate appropriate amendments to the Allocation Schedule arising therefrom, provided that any adjustment in the Purchase Price shall be consistent with the original Allocation Schedule. If the parties are unable to agree by the day prior to such scheduled Closing Net Assets”Date, then such scheduled Closing Date (and the Termination Date, if necessary) shall be extended for up to 15 business days to provide for the opportunity to resolve such disagreement pursuant to the provisions of this Section 2.14. On the day the Closing would have occurred but for the absence of agreement between the parties, each party shall designate an individual (who may not be a present or former officer, director, partner or employee of the party or of any present or former investment banker, accounting firm, law firm or attorney regularly used by the party) to mediate such disagreement, and advise the other party in writing of the identity of such individual, which advice shall be accompanied by a list of up to ten suggested neutral individuals to serve as a third mediator. The mediators originally designated by each party shall promptly confer about the selection of a third mediator from such lists, and within five business days following the originally scheduled Closing Date (or Termination Date, as the case may be), the originally designated mediators shall agree upon and (subject to availability) select the third mediator from the lists submitted by the parties or otherwise, provided that if the originally designated mediators cannot agree upon a third mediator by such date, the third mediator shall be designated by the Alternative Dispute Resolution Service of NHLA/AAHA, Inc. The three mediators so selected are herein referred to as the "Panel". Within two business days following the designation of the third mediator, each party shall submit to the Panel, in writing, its proposed cooperative arrangements, amendments to this Agreement, amendments to the Management Agreements and/or equitable adjustments in the Purchase Price in the absence of any such cooperative arrangements or amendments, except that the parties need only submit their proposed adjustments to the Purchase Price (and proposed amendments to the Allocation Schedule) in the case of disagreements about adjustments for certain acquisitions and modifications under Section 2.12(b), or imperfections of title under Section 8.6). The Net Assets Statement Such proposals shall be preparedmaterially in accordance with the last proposals made by such party to the other party during the course of the aforementioned good faith negotiations between the parties. The parties shall additionally submit such memoranda, arguments, briefs and evidence in support of their respective positions, and in accordance with such procedures, as a majority of the Closing Net Assets shall be calculatedPanel may determine. Within seven business days following the designation of the third mediator, the Panel shall, by majority vote, select the proposed cooperative arrangements, amendments or adjustments of the Purchase Price, as the case may be, proposed by one of the parties, it being agreed that the Panel may modify such proposal in any way which is not otherwise inconsistent with the terms of this Agreement. Thereafter, the parties shall, subject to the terms and conditions of this Agreement, consummate the Transactions on the basis of such selected cooperative arrangements, amendments or adjustments at a mutually agreeable time and place or places, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value provisions of the Inventory and Iteris GmbH inventory Section 2.13, which shall be computed based upon no later than the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth 15th business day following the originally scheduled Closing DateDate or such later date as the parties may agree upon. Subject to the foregoing, the results Panel may determine the issues in dispute following such procedures, consistent with the language of which this Agreement, as it deems appropriate to the circumstances and with reference to the amounts in issue. No particular procedures are intended to be imposed upon the Panel, it being the desire of the parties that any such disagreement shall be adjusted from Buyer’s resolved as expeditiously and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory inexpensively as reasonably practicable. No member of the Closing Date. Buyer or its representatives Panel shall have the right to observe the physical inventory and shall have full access to all books and records with respect any liability to the Inventory. For illustration purposesparties in connection with service on the Panel, a Net Assets Statement and the parties shall provide such indemnities to the members of the Panel as of June 30, 2011 is included in Schedule 3.2(a)they shall request. (b) If Buyer reasonably believes Notwithstanding the foregoing, or any other provisions of this Agreement, unless the parties otherwise agree, no adjustment to the Purchase Price (except in connection with an adjustment made pursuant to Section 2.15) shall be made which exceeds, individually or in the aggregate of all such adjustments, 50% of the original Purchase Price, it being agreed that if the Net Assets Statement contains errors or has conditions to consummation of the Transactions are otherwise met but for Purchase Price adjustments contemplated by the Adjustment Sections in excess of such percentage, then the conditions to consummation of the Transactions shall be deemed not to have been prepared in accordance with the Agreed Proceduresmet. In such event, Buyer may deliver shall be entitled to Seller a written notice refund of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute Execution Fee and accrued interest thereon and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will parties shall be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3have been released from their obligations under Sections 10.3 and 10. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.

Purchase Price Adjustment. (a) Within thirty (30) days after 1.2.1 At the Closing DateClosing, Seller Shareholders shall prepare and deliver to Buyer DoveBid a statement (the “Net Assets Statement”) setting forth (i) the sum balance sheet of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case Company as of the close latest practicable date prior to the Closing Date but in any event dated as of a date no earlier than five (5) business on days prior to the Closing Date (“the "Closing Net Assets”Balance Sheet") prepared in accordance with United States generally accepted accounting principles ("GAAP"), together with a list indicating all accrued expenses and liabilities of the Company as of the same date, as determined in accordance with GAAP (the "Closing Liabilities Schedule"). The Net Assets Statement shall be prepared, Closing Balance Sheet and the Closing Net Assets Liabilities Schedule shall reflect an accrued liability of NLG 45,000 (the "Litigation Accrual") with respect to legal fees and expenses to be calculated, incurred by the Company in accordance connection with the agreed procedures and accounting practices set forth on Schedule 3.2(aOutstanding Litigation (as defined in Section 8.2). Within fourteen (14) (the “Agreed Procedures”) and the net book value days of the Inventory and Iteris GmbH inventory Closing, Shareholders shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records deliver to reflect the Inventory and Iteris GmbH inventory DoveBid an audited balance sheet as of the Closing Date. Buyer or its representatives shall have , together with a list indicating all accrued expenses and liabilities of the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement Company as of June 30the Closing Date, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been each case prepared in accordance with GAAP (the Agreed Procedures, Buyer may deliver to Seller a written notice "Post-Closing Financial Statements"). 1.2.2 In the event that the aggregate book value of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance stockholders' equity of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt Company, determined in good faith to reach agreement resolving all disputes accordance with GAAP, set forth in on the Net Assets Objection within sixty Closing Balance Sheet (60such amount, the "Closing Stockholders' Equity") days after its deliveryis less than the amount of NLG 355,000, the Closing Payment shall be reduced by one Dutch Guilder for each Dutch Guilder that Closing Stockholders' Equity is less than the amount of NLG 355,000. In the event that the Parties are unable to resolve an Objection within amount of cash of the sixty-day periodCompany, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection determined in accordance with Section 3.2(b); GAAP, set forth on the Closing Balance Sheet (iisuch amount, the "Closing Cash") is less than the amount of NLG 280,000, the Closing Payment shall be reduced by one Dutch Guilder for each Dutch Guilder that the Closing Cash is less than the amount of NLG 280,000, provided that if Buyer timely gives Closing -------- ---- Stockholders' Equity is less than the amount of NLG 355,000 as a Net Assets Objection and all result of the disputed items are resolved amount of Closing Cash being less than NLG 280,000 and the Closing Payment has already been reduced by mutual agreement such deficit amount as provided in the foregoing sentence, there shall be no further adjustment to the Closing Payment as a result of such lesser amount of Closing Cash. 1.2.3 In the event of any reduction in the Closing Payment as provided above, the aggregate Purchase Price shall be appropriately adjusted and such reduced or increased aggregate consideration shall constitute the "Purchase Price" for all purposes under this Agreement. 1.2.4 The account payable of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted Company to the Arbitrator for resolution, Shareholders set forth on the Net Assets Statement, as amended, if necessary, Closing Balance Sheet (up to reflect any resolution a maximum of any disputes by agreement of NLG 442,483) (the Parties and the resolution of all other disputes by the Arbitrator."Shareholders' Payable") shall be paid

Purchase Price Adjustment. (a) Within thirty sixty (3060) days after the Closing Date, Seller the Buyer shall prepare and deliver to Buyer the Seller a preliminary statement (the “Net Assets Preliminary Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves)Net Working Capital, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case determined as of the close effective time of business on the Closing Date and in accordance with GAAP (the “Closing Date Net AssetsWorking Capital”). The Seller and its Affiliates shall provide the Buyer and its representatives with full access at all reasonable times and on reasonable advance notice to such personnel and books, records and other materials of the Seller to the extent they are reasonably necessary for the preparation of, or relate to the matters covered by, the Preliminary Statement, Final Statement and Closing Date Net Assets Working Capital. (b) The Seller shall have thirty (30) days to review the Preliminary Statement from the date of its receipt thereof (the “Review Period”). If the Seller objects to any aspect of the Preliminary Statement, then the Seller must deliver a written notice of objection (the “Objection Notice”) to the Buyer on or prior to the expiration of the Review Period. The Objection Notice shall specify in reasonable detail any adjustment to the Preliminary Statement proposed by the Seller and the basis therefor, including the specific items proposed to be adjusted and the specific Dollar amount of each such proposed adjustment and an explanation of how such proposed adjustment was calculated. If the Seller delivers an Objection Notice to the Buyer prior to the expiration of the Review Period in accordance with this Section 3.4(b), the Buyer and the Seller shall, for a period of fifteen (15) days thereafter (the “Resolution Period”), attempt in good faith to resolve the matters properly contained therein, and any written resolution, signed by each of the Buyer and the Seller, as to any such matter shall be preparedfinal, binding, conclusive and non-appealable for all purposes hereunder. Except to the extent properly challenged in an Objection Notice as provided in this Section 3.4(b), or in the event the Seller does not deliver an Objection Notice to the Buyer in accordance with this Section 3.4(b) prior to the expiration of the Review Period, the Seller shall be deemed to have agreed to the Preliminary Statement in its entirety, which Preliminary Statement or undisputed portions thereof (as the case may be) shall be final, binding, conclusive and non-appealable for all purposes hereunder. (c) If, at the conclusion of the Resolution Period, the Buyer and the Closing Net Assets Seller have not reached an agreement with respect to all disputed matters properly contained in the Objection Notice, then within ten (10) days thereafter, the Buyer and the Seller shall be calculatedsubmit for resolution such matters remaining in dispute to PricewaterhouseCoopers LLC, or if such firm is unavailable or unwilling to so serve, to a mutually acceptable nationally recognized independent accounting firm (the “Neutral Auditor”). Each of the Seller and the Buyer agrees to execute, if requested by the Neutral Auditor, an engagement letter reasonably satisfactory to such Party. The Neutral Auditor shall act as an arbitrator to resolve (based solely on the written submissions of the Buyer and the Seller and not by independent review) only those matters properly included in the Objection Notice and still in dispute at the end of the Resolution Period. The Buyer and the Seller shall direct the Neutral Auditor to render a reasoned written resolution of all such disputed matters, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Dateforegoing, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than within thirty (30) days after its engagement or such other period agreed upon by the date on which Buyer and the Seller. The resolution of the Neutral Auditor shall be set forth in a written statement delivered to each of the Buyer and the Seller delivered and shall be final, binding, conclusive and non-appealable for all purposes hereunder. The Preliminary Statement, once modified and/or agreed to in accordance with Section 3.4(b) or this Section 3.4(c), shall become the Net Assets Statement to “Final Statement.” (d) All fees and expenses of the Neutral Auditor shall be borne equally by the Seller and the Buyer, which notice and each of them shall specify promptly advance to the nature Neutral Auditor, upon its request, such Party’s share of each such fees and expenses. Except as provided in the preceding sentence, all other costs and expenses incurred by the Parties in connection with resolving any dispute hereunder before the Neutral Auditor shall be borne by the Party incurring such cost and expense. (e) If the basis therefor (a “Closing Date Net Assets Objection”)Working Capital as stated on the Final Statement exceeds $22,400,000, then the outstanding principal amount of the Note shall be increased by an amount equal to the excess of such Closing Date Net Working Capital over $22,400,000. Failure by Buyer If the Closing Date Net Working Capital as stated on the Final Statement is less than $21,800,000, then an amount equal to deliver a the excess of $21,800,000 over such Closing Date Net Assets Objection within the thirty-day period will Working Capital shall be applied as an offset against, and shall be deemed to be Buyer’s acceptance a prepayment of, the outstanding principal amount of the Net Assets Statement as the Final Net Assets StatementNote. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means Any (i) increase of the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); outstanding principal amount of the Note or (ii) if Buyer timely gives a Net Assets Objection and all offset against, or deemed prepayment of, the outstanding principal amount of the disputed items are resolved by mutual agreement of the Parties, the Net Assets StatementNote, as amendedapplicable, if necessary, pursuant to reflect such resolution of all disputes; or (iii) if any disputed items are submitted this Section 3.4 will be treated by the Parties as an adjustment to the Arbitrator for resolutionPurchase Price. If the Closing Date Net Working Capital as stated on the Final Statement is greater than or equal to $21,800,000 and less than or equal to $22,400,000, then there shall be no adjustment to the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the ArbitratorPurchase Price.

Purchase Price Adjustment. (a) Within thirty ninety (3090) days after the Closing DateClosing, Seller shall prepare and deliver to Buyer a written statement (the “Net Assets Working Capital Adjustment Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance together with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records supporting work papers with respect to the Inventory. For illustration purposescalculation of the amounts set forth therein, a Net Assets Statement which reflects the Working Capital as of June 30the Effective Date for Bison LLC. Seller agrees to cooperate with Buyer in connection with the preparation of the Working Capital Adjustment Statement and related information, 2011 is included in Schedule 3.2(a)and shall provide to Buyer and Buyer’s representatives such books, records, information, and access to such of Bison LLC’s or its Affiliates’ employees and properties during normal business hours, as may be reasonably requested from time to time by Buyer or its representatives. (b) Buyer may dispute the Working Capital Adjustment Statement and the items reflected therein; provided, however, that Buyer shall notify Seller in writing of any disputed amounts, and provide a reasonably detailed description of the basis of such dispute, within ninety (90) days after Buyer’s receipt of the Working Capital Adjustment Statement. In the event of such a dispute, Buyer and Seller shall attempt to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the Parties. If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver and Seller are unable to Seller reach a resolution of any such differences within ninety (90) days after Seller’s receipt of Buyer’s written notice of objection no later than thirty dispute, Buyer and Seller shall submit the amounts remaining in dispute for determination and resolution to the Independent Accounting Firm, which shall be instructed to determine and report to the Parties, within ninety (3090) days after such submission, a resolution of such remaining disputed amounts, and such resolution shall be final, binding and conclusive on the date on which Seller delivered Parties hereto with respect to the Net Assets Statement to remaining amounts disputed. The fees and disbursements of the Independent Accounting Firm shall be shared equally by Buyer, which notice shall specify on the nature one hand, and Seller, on the other hand. For the avoidance of each dispute doubt, the Working Capital Adjustment Statement and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will amounts reflected thereon shall be deemed to be Buyer’s acceptance modified to the extent of any changes thereto that become final, binding and conclusive on the Parties based on mutual agreement or a determination of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt Independent Accounting Firm in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in accordance with this Section 3.31.03(b). (c) As used herein, Within five (5) Business Days after the term “Final Net Assets Statement” means earliest to occur of (i) a mutual written agreement of Buyer and Seller with respect to the Net Assets Statement Working Capital Adjustment Statement, (ii) the termination of the ninety (90) day period described in Section 1.03(b) if Buyer does not deliver provide a Net Assets Objection notice of dispute within such period as provided therein and (iii) the final determination of all such disputed amounts in accordance with Section 3.2(b1.03(b); , (iiA) if Buyer timely gives a Net Assets Objection and all Working Capital as of the disputed items are resolved by mutual agreement Effective Date exceeds the Estimated Working Capital, Buyer shall pay Seller forty-five percent (45%) of the Partiesamount of such excess, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or and (iiiB) if any disputed items are submitted Working Capital as of the Effective Date is less than the Estimated Working Capital, Seller shall pay to Buyer forty-five percent (45%) of the amount of such deficiency. All payments made pursuant to the Arbitrator previous sentence shall be paid together with interest thereon for resolutionthe period commencing on the Effective Date through the date of payment, calculated at the Net Assets StatementPrime Rate in effect on the Closing Date, as amended, if necessary, to reflect any resolution in cash by wire transfer of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitratorimmediately available funds.

Purchase Price Adjustment. (ai) Within thirty (30) Not later than 120 days after the Closing Date, Seller Purchaser shall prepare and deliver to Buyer the Representative a statement (the “Net Assets Closing Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case Working Capital as of the close Closing, the Company Debt as of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be preparedClosing, the Severance Obligations as of the Closing, and the Closing Net Assets shall be calculated, Purchase Price as adjusted by the foregoing in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value Section 1.2, together with a consolidated balance sheet of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand Company as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the and all relevant backup materials, in detail reasonably acceptable to Representative. The Pre-Closing Date, the results of which Statement and such consolidated balance sheet shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with IFRS and Spanish GAAP. From the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance delivery of the Net Assets Closing Statement until such time as the Final Net Assets Statement. The Parties Closing Statement and final Purchase Price, as adjusted, shall attempt in good faith have been finally determined pursuant to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day periodthis Section 1.3, the parties Representative and his accountants (at the expense of the Stockholders) shall, upon reasonable notice and during normal business hours, be permitted to discuss with Purchaser and its accountants the Closing Statement and shall follow be provided complete and accurate copies of, and have reasonable access (including electronic access, to the arbitration procedures set forth in Section 3.3extent reasonably available) upon reasonable notice at reasonable times during normal business hours to the work papers and supporting records of Purchaser and its accountants so as to allow the Representative and his accountants to verify the accuracy of the Closing Statement. (cii) As used hereinIf the Representative disputes the Closing Statement, the term Representative shall notify Purchaser in writing (the “Final Net Assets Statement” means (iDispute Notice”) of the Net Assets amount, nature and basis of such dispute, within 30 days after delivery of the Closing Statement if Buyer does not deliver a Net Assets Objection and such disagreement shall be resolved in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or 1.4. (iii) if any disputed items are submitted Immediately upon the earlier to occur of (A) the Arbitrator expiration of the 30 day period for resolution, giving the Net Assets Statement, as amendedDispute Notice, if necessaryno such notice is given, or (B) notification by the Representative to reflect any resolution of any disputes by agreement of the Parties and Purchaser that no such notice will be given, or (C) the resolution of all other disputes disputes, if any, pursuant to Section 1.4, any adjustments to the Purchase Price shall be paid as follows: (1) if the final Purchase Price as adjusted to reflect the Working Capital, the Company Debt and the Severance Obligations set forth on the Closing Statement exceeds the Estimated Purchase Price, then Purchaser will pay such excess to the Stockholders in the proportions provided in Exhibit G or (2) if the final Purchase Price as adjusted to reflect the Working Capital, the Company Debt and the Severance Obligations set forth on the Closing Statement is less than the Estimated Purchase Price, then such amount will be released to Purchaser from the Bank Account. Following payment of the amounts contemplated by the Arbitratorimmediately preceding sentence, if any, the funds remaining in the Bank Account will be released to the Representative for delivery to the Stockholders in the proportions provided in Exhibit G and the Bank Account will be terminated.

Purchase Price Adjustment. Sellers and Buyers shall jointly, within sixty (a60) Within thirty (30) calendar days after the Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Net Assets Statement”) setting forth (i) the sum a consolidated balance sheet of Sellers as of the Accounts Receivable (net of reserves)Closing Date, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum a consolidating balance sheet of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case Sellers as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be preparedDate, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a(iii) (the “Agreed Procedures”) and the net book value a balance sheet of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand each Seller as of the Closing Date as determined through a physical inventory conducted by Seller on or before (the fifth day following "Closing Balance Sheets"). For Purchase Price adjustment considerations, the Closing DateBalance Sheets shall be prepared on a consistent basis with the accounting practices and procedures applied by Sellers in the preparation of the Interim Balance Sheet and, for purposes of this Section 3.01(b), in the absence of manifest error (which shall not include any matters relating to practices and procedures applied by Sellers in preparing the Interim Balance Sheet), the results of which only adjustments to accounting reserves and accruals reflected therein shall be adjusted from Buyer’s and Seller’s books and records those made to reflect changes in such reserves and accruals between the Inventory date of the Interim Balance Sheet and Iteris GmbH inventory as the date of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its deliveryBalance Sheet. In the event that of a dispute between the Parties are unable to resolve an Objection parties regarding the preparation of the Closing Balance Sheets, which dispute cannot be reconciled by the mutual agreement of the parties within fifteen (15) business days after one of the sixty-day periodparties has notified the other party thereof, the parties shall follow together select a mutually acceptable Big Six public accounting firm (which shall be unrelated to, and not in any manner affiliated with, either Buyers or Sellers or Parent or their respective shareholders, officers, or Affiliates, and not currently or within the arbitration procedures two-year period employed or engaged by either Buyers or Sellers or Parent or their respective shareholders, officers, or Affiliates), which firm shall make an independent determination of the disputed item or items consistent with the criteria set forth in this Section 3.3. 3.01(b). Such independent determination shall (cin the absence of fraud, bad faith, undue influence, or the like, or manifest error) As used hereinbe final and binding on all of the parties hereto. All fees, the term “Final Net Assets Statement” means costs and expenses incurred in retaining such independent accounting firm shall be paid in equal shares by Buyers and Sellers. Within ten (10) calendar days after (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); completion of mutually agreed upon Closing Balance Sheets or (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of dispute relating thereto submitted to an independent Big Six public accounting firm, whichever the Parties and case may be, the resolution of all other disputes following Purchase Price Adjustment shall be paid by the Arbitrator.parties:

Purchase Price Adjustment. (a) Within seventy-five (75) days following the Closing Date, Seller shall deliver to Buyer an unaudited consolidated statement (the “Preliminary Closing Net Working Capital Statement”) of the Net Working Capital of the Company and its Subsidiaries immediately prior to the Closing (calculated after giving effect to the elimination of inter-company, Income Tax and cash (including written checks in transit) accounts pursuant to Section 4.9(b)) (the “Preliminary Net Working Capital”), together with a statement detailing the calculation thereof consistent with Section 2.3(a) of the Company Disclosure Letter, prepared by Seller in accordance with GAAP. (b) Buyer shall provide Seller and its Representatives reasonable access to, and permit them to make copies of, during normal business hours and upon reasonable notice, all relevant work papers, schedules, memoranda and other documents, including working papers of its accountants (subject to such accountants’ customary access terms), and to any of Buyer’s employees and Representatives, to the extent reasonably necessary for Seller to prepare the Preliminary Closing Net Working Capital Statement, and Buyer shall, and shall cause its employees and Representatives to, cooperate reasonably with Seller and its Representatives in connection therewith. Buyer agrees that following the Closing it shall not take any actions with respect to the books, records and other documents on which the Preliminary Closing Net Working Capital Statement is to be based that would hinder the ability of Seller or its Representatives to prepare the Preliminary Closing Net Working Capital Statement. (c) Buyer shall, within thirty (30) days after the delivery by Seller of the Preliminary Closing DateNet Working Capital Statement, complete its review of the Preliminary Net Working Capital reflected in the Preliminary Closing Net Working Capital Statement. Seller shall prepare provide Buyer and deliver its Representatives reasonable access to, and permit them to Buyer a statement make copies of, during normal business hours and upon reasonable notice, all relevant work papers, schedules, memoranda and other documents, including working papers of its accountants (the “Net Assets Statement”) setting forth (i) the sum subject to such accountants’ customary access terms), prepared by Seller or its Representatives in connection with its preparation of the Accounts Receivable (net Preliminary Closing Net Working Capital Statement and/or its calculation of reserves)Preliminary Net Working Capital, Business-related prepaidsand to any of Seller’s employees and Representatives, Inventory (net of reserves) and Equipment and to the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum extent reasonably necessary for Buyer to complete its review of the Accounts Payable, reserve for Warranty ExpensesPreliminary Closing Net Working Capital Statement, and accounts payable Seller shall, and accrued expenses of Iteris GmbHshall cause its employees and Representatives to, cooperate reasonably with Buyer and its Representatives in each case as of the close of business on the Closing Date connection therewith. (“d) The Preliminary Closing Net Assets”). The Net Assets Working Capital Statement shall be preparedbinding and conclusive upon, and deemed accepted by, Buyer unless Buyer shall have notified Seller in writing within thirty (30) days after delivery of the Preliminary Closing Net Assets shall Working Capital Statement of any good faith objection thereto, which objection can only be calculatedthat Preliminary Net Working Capital, as reflected in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Preliminary Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing DateNet Working Capital Statement, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with this Agreement or contains mathematical errors on its face (the Agreed Procedures“Dispute Notice”); provided, that Buyer may not deliver more than one Dispute Notice and may not amend its Dispute Notice once it has been delivered to Seller. The Dispute Notice shall set forth each item that Buyer disputes, a description of the basis on which Buyer disputes each item and the specific adjustments to the amount of each item which Buyer believes should be made. Any items not disputed in a valid Dispute Notice shall be deemed to have been accepted by Buyer. Except as outlined above, Buyer may agrees that it shall not object to or otherwise challenge the amount of the Preliminary Net Working Capital. (e) In the event that Buyer shall deliver a Dispute Notice to Seller, Buyer and Seller a written notice shall cooperate in good faith to resolve such dispute as promptly as practicable and, upon such resolution, if any, any adjustments to the Preliminary Closing Net Working Capital Statement and Preliminary Net Working Capital shall be made in accordance with the agreement of objection no later than Buyer and Seller. If Buyer and Seller are unable to resolve any such dispute within thirty (30) days after (or such longer period as Buyer and Seller shall mutually agree in writing) of Buyer’s delivery of such Dispute Notice, such dispute shall be resolved by the date Independent Accounting Firm. The Independent Accounting Firm shall determine, based solely on which presentations by Buyer and Seller delivered the Net Assets Statement to Buyerand their respective Representatives, and not by independent review, which notice review shall specify be limited by the nature of each standards set forth in Section 2.3(f), and shall render a written report as to the dispute and the basis therefor (a “resulting calculation of Preliminary Net Assets Objection”)Working Capital. Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance The written report of the Net Assets Statement as Independent Accounting Firm shall be conclusive and binding upon the Final Net Assets Statement. The Parties parties. (f) In resolving any disputed item, the Independent Accounting Firm: (i) shall attempt be bound by the principles set forth in good faith this Section 2.3, (ii) shall limit its review to reach agreement resolving all disputes matters specifically set forth in the Dispute Notice, (iii) shall further limit its review to whether the Preliminary Net Assets Objection within sixty Working Capital was calculated in accordance with this Agreement, and (60iv) days after its deliveryshall not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. In The fees, costs, and expenses of the event Independent Accounting Firm shall be borne (x) by Buyer in the proportion that the Parties aggregate dollar amount of such disputed items so submitted that are unable unsuccessfully disputed by Buyer (as finally determined by the Independent Accounting Firm) bears to resolve an Objection within the sixty-day period, aggregate dollar amount of such items so submitted and (y) by Seller in the proportion that the aggregate dollar amount of such disputed items so submitted that are successfully disputed by Buyer (as finally determined by the Independent Accounting Firm) bears to the aggregate dollar amount of such items so submitted. Whether any dispute is resolved by agreement among the parties or by the Independent Accounting Firm, changes to the Preliminary Closing Net Working Capital Statement shall follow be made hereunder only for items as to which Buyer has taken exception in the arbitration procedures set forth in Section 3.3Dispute Notice. (cg) As used hereinThe Independent Accounting Firm shall be instructed to use commercially reasonable efforts to render the decision within thirty (30) days following the submission of such matters to the Independent Accounting Firm, and, in any case, as promptly as practicable after such submission. Buyer and Seller shall use commercially reasonable efforts to cause the term “Final Independent Accounting Firm to render the decision within such time period. The Preliminary Closing Net Assets Statement” means Working Capital Statement and the Preliminary Net Working Capital, (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); no Dispute Notice has been timely delivered by Buyer, as originally submitted by Seller or (ii) if Buyer a Dispute Notice has been timely gives a Net Assets Objection and all of the disputed items are resolved delivered by mutual agreement of the Parties, the Net Assets StatementSeller, as amended, if necessary, determined pursuant to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by such dispute in accordance with this Section 2.3, shall be, respectively, the Arbitrator“Final Net Working Capital Statement” and the “Final Net Working Capital.”

Purchase Price Adjustment. If the Buyer and the Sellers are unable to mutually agree on the Estimated Purchase Price pursuant to Section 2.1(c), then within ten (10) days following the Closing Date the Buyer shall provide the Sellers Representative written notice of the components of the Purchase Price to which the Buyer objects and its proposed calculation of such components (the “Objection Notice”); provided, however, that (a) Within the Buyer shall only be entitled to object to any component of the Purchase Price to the extent it objected to such component pursuant to Section 2.1(c). For purposes of clarity, the Parties acknowledge and agree that the Buyer shall not be permitted to object to (i) the Purchase Price unless the Buyer objected to the Purchase Price prior to the Closing pursuant to Section 2.1(c) and (ii) any component of the Purchase Price (A) that the Buyer did not object to prior to the Closing pursuant to Section 2.1(c) or (B) to which the Buyer and the Sellers reached an agreement pursuant to Section 2.1(c). The Buyer and the Sellers shall be deemed to have agreed upon all items and amounts that are not disputed by the Buyer in the Objection Notice. The Parties shall use reasonable efforts to resolve in good faith during the thirty (30) days after the Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Net Assets Statement”) setting forth (i) the sum following delivery of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each Objection Notice any dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth properly asserted in the Net Assets Objection within sixty (60) days after its deliveryNotice. In the event that If the Parties are unable to resolve any disputed items within thirty (30) days following delivery of the Objection Notice, the disagreement may be submitted for resolution to a firm of independent accountants of national standing to which the Buyer and the Sellers agree (the “Independent Accountants”), which firm shall make a final and binding determination as to only those components of the Purchase Price in dispute with respect to this Section 2.5 on a timely basis and promptly shall notify the Parties in writing of its resolution. The Independent Accountants shall not have the power to modify or amend any term or provision of this Agreement or modify previously agreed to items among the Parties. The costs and expenses of the Independent Accountants shall be allocated between the Parties based upon the percentage which the portion of the contested amount not awarded to each Party bears to the amount actually contested by such Party, as determined by the Independent Accountants. If the Buyer does not provide an Objection Notice within the sixty-day period, time period and in the parties shall follow the arbitration procedures manner set forth in this Section 3.3. (c) As used herein2.5, the term “Final Net Assets Statement” means (i) Estimated Purchase Price Purchase Price set forth in the Net Assets Estimated Purchase Price Statement if shall be final and binding on the Parties for all purposes hereunder. If the Purchase Price paid by the Buyer does not deliver a Net Assets Objection in accordance with pursuant to Section 3.2(b2.3(a)(i); (ii) if Buyer timely gives a Net Assets Objection and all , exceeds the Purchase Price that would have been paid had the amounts of the disputed items are resolved components determined by mutual agreement the Independent Accountants been used to determine the Purchase Price, the Sellers shall (by wire transfer of immediately available funds in U.S. Dollars to such account or accounts specified by the Buyer to the Sellers concurrently with the delivery of the PartiesObjection Notice) pay the Buyer, the Net Assets Statement, as amended, if necessary, an amount equal to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitratorexcess.

Purchase Price Adjustment. (a) Within thirty As soon as ------------------------- practicable, but in no event later than 60 days following the Valuation Date, Sellers shall prepare a statement of adjusted working capital of the Business as of the Valuation Date (30including the notes thereto, the "Valuation Date Statement"). The Valuation Date Statement ------------------------ shall present the net amount of the current assets of the Business that are Purchased Assets less the current liabilities of the Business that are Assumed Liabilities plus, from the Financial Statements Date to the Valuation Date, the investment in fixed assets (other than investments resulting from the purchase of (A) assets subject to capitalized leases on the books of Sellers or (B) production equipment under operating leases) less (i) the net proceeds from the disposal of any fixed assets of the Business and (ii) the replacement cost of any fixed assets of the Business included in the Purchased Assets that, from the Financial Statements Date to the Valuation Date, are lost, damaged beyond repair or destroyed (the "Net Working Capital Amount") -------------------------- and shall be prepared with respect to such items on a basis consistent with the Financial Statements. Notwithstanding the foregoing, the Valuation Date Statement shall not include any interest-bearing debt, any capitalized lease on the books of Sellers or any operating lease of production equipment providing for annual lease payments in excess of $100,000. (b) During the preparation of the Valuation Date Statement and the period of any dispute within the contemplation of this Section 3.2, Buyer shall (i) provide Sellers and Sellers' authorized representatives with access to the books, records, facilities, employees and accountants of the Business, (ii) provide Sellers as promptly as practicable after the Closing Date (but in no event later than 30 days after the Closing Date) with normal month-end closing financial information for the period ending on the Valuation Date and (iii) cooperate with Sellers and Sellers' authorized representatives, Seller shall prepare and deliver to Buyer including the provision on a statement (the “Net Assets Statement”) setting forth (i) the sum timely basis of all information necessary or useful in connection with Sellers' preparation of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Valuation Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not Sellers shall deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all copy of the Valuation Date Statement, together with the work papers used in the preparation thereof, to Buyer promptly after it has been prepared and in no event later than 60 days after the Closing Date. After receipt of the Valuation Date Statement, Buyer shall have 60 days to review the Valuation Date Statement, together with the work papers used in the preparation thereof. Unless Buyer delivers written notice to Sellers on or prior to the 60th day after Buyer's receipt of the Valuation Date Statement specifying all disputed items are resolved and the basis therefor, Buyer shall be deemed to have accepted and agreed to the Valuation Date Statement. If Buyer so notifies Sellers of its objection to the Valuation Date Statement, Sellers and Buyer shall, within 30 days following such notice (the "Resolution Period"), attempt to resolve ----------------- their differences and any resolution by mutual agreement them as to any disputed amounts shall be final, binding and conclusive. (d) At the conclusion of the PartiesResolution Period, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are amounts remaining in dispute shall be submitted to Deloitte & Touche (the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator."Neutral Auditors"

Purchase Price Adjustment. (a) Within thirty The Purchase Price shall be subject to adjustment after the Closing Date as specified in this Section 2.04. (30b) As soon as practicable after the expiration of 180 days following the Closing Date (but in no event later than 210 calendar days following the Closing Date), Purchaser shall prepare and deliver to Seller a statement (the "Closing Date Current Assets Statement") setting forth the value of the Current Assets for purposes of the Purchase Price after application of the discounts set forth in Section 2.02 (the "Closing Date Current Assets"), which will be determined in accordance with the procedures set forth in the Accounting Procedures attached as Exhibit E and GAAP. The Closing Date Current Assets Statement shall be prepared based on Seller's books and records as of the Closing Date and shall be verified by review by, and shall be accompanied by the statement thereon of, Ernst & Young L.L.P., accountants of Purchaser ("Purchaser's Accountants"), stating that the Closing Date Current Assets have been determined in accordance with the Accounting Procedures. Seller and Purchaser agree that the physical inventory of Seller's Inventory shall be conducted on the Closing Date in accordance with the procedures set forth in the Disclosure Statement. During the preparation of the Closing Date Current Asset Statement by Purchaser and the period of any dispute provided for in Section 2.04(d), Purchaser shall provide Seller and Deloitte & Touche LLP ("Seller's Accountants") access to the books, records, facilities and employees of Purchaser (or the applicable subsidiary on site), and, if agreed by Purchaser's Accountants, the work papers of Purchaser's Accountants, and Purchaser shall cooperate fully with Seller's Accountants, in each case to the extent required by Seller and Seller's Accountants in order to review the Closing Date Current Assets Statement and to investigate the basis for any such dispute. (c) Subject to the limitations set forth in Section 2.04(d), if Purchaser has not received a notice of dispute from Seller in accordance with Section 2.04(d) within 30 Business Days after the date of receipt by Seller of the Closing Date Current Assets Statement: (i) If the value of the Closing Date Current Assets shown on the Closing Date Current Asset Statement is less than the amount of the applicable Purchase Price component applicable to the Current Assets, Seller shall pay to Purchaser, as an adjustment to the Purchase Price, an amount equal to such difference; and (ii) If the value of the Closing Date Current Assets shown on the Closing Date Current Assets Statement is greater than the amount of the applicable Purchase Price component applicable to the Current Assets, Purchaser shall pay to Seller, as an adjustment to the Purchase Price, an amount equal to such excess; provided that the adjustment does not result in a purchase price which exceeds the maximum price set forth in Section 2.02 for either Inventory or Accounts Receivable. (iii) Notwithstanding any provision to the contrary, if the Purchaser has not collected $1,500,000 from the Accounts Receivable by 210 days after the Closing Date, the 581510.1 Seller shall prepare pay the Purchaser the difference between the Purchaser's collections and deliver $1,500,000 within five (5) business days of request. Purchaser agrees to Buyer a statement use commercially reasonable efforts to collect all Accounts Receivable by such date and to apply collections first to the Accounts Receivable before application to accounts receivable generated after Closing. All payments to be made under this subsection (c) shall be made by wire transfer of immediately available funds to an account designated by the “Net Assets Statement”) setting forth receiving party. (i) the sum of the Accounts Receivable (net of reservesIf not disputed by Seller in accordance with this Section 2.04(d), Business-related prepaidsthe Closing Date Current Assets Statement delivered by Purchaser to Seller shall be final, Inventory (net of reserves) binding and Equipment and conclusive on the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business parties hereto. Seller may dispute any amounts reflected on the Closing Date (“Closing Net Assets”). The Net Current Assets Statement Statement, provided, however, that Seller shall be preparednotify Purchaser and Purchaser's Accountants in writing of each disputed item, specifying, if known, the amount thereof in dispute and the Closing Net Assets shall be calculatedsetting forth, in accordance with detail, the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value basis for such dispute, within 30 Business Days of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as Seller's receipt of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Current Assets Statement. The Parties In the event of such a dispute, each of Seller and Purchaser shall attempt negotiate in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty reconcile their differences. (60ii) days after its delivery. In the event that the Parties If Purchaser and Seller are unable to resolve reach a resolution, leaving in dispute amounts the net effect of which in the aggregate would change the Closing Date Current Assets, Purchaser and Seller shall submit the items remaining in dispute that Seller shall be entitled to dispute by the terms of this Section 2.04(d) for resolution to the Charlotte, North Carolina office of Arthur Anderson, LLP or suc▇ ▇▇▇▇r independent accounting firm as may be mutually acceptable to Seller and Purchaser (the "Independent Accounting Firm"), which shall, within 30 Business Days of such submission, determine and report to Seller and Purchaser upon such remaining disputed items, and such report shall have the legal effect of an Objection within arbitral award and shall be final, binding and conclusive on Seller and Purchaser. The fees and disbursements of the sixty-day period, Independent Accounting Firm shall be allocated between Seller and Purchaser in the parties shall follow same proportion that the arbitration procedures set forth in Section 3.3aggregate amount of such remaining disputed items so submitted to the Independent Accounting Firm that is unsuccessfully disputed by each such party (as finally determined by the Independent Accounting Firm) bears to the total amount of such remaining disputed items so submitted. (ciii) As used hereinAny amount that is payable under Section 2.04(c), including, without limitation any portion thereof that is subject to a dispute resolved under this Section 2.04(d) shall be paid by Seller or Purchaser, as the term “Final Net Assets Statement” means (i) case may be, by wire transfer in immediately available funds, within five Business Days following the Net Assets Statement if Buyer does not deliver a Net Assets Objection resolution of such dispute and in an amount in accordance with such resolution. (e) In acting under this Agreement, Seller's Accountants, Purchaser's Accountants and the Independent Accounting Firm shall be entitled to the privileges and immunities of arbitrators. (f) Any payment required to be made by Seller or Purchaser pursuant to Section 3.2(b); (ii2.04(c) if Buyer timely gives a Net Assets Objection and all shall bear interest from the Closing Date through the date of payment on the basis of the disputed items are resolved by mutual agreement average of the Parties, daily rate of interest publicly announced by The Chase Manhattan Bank from time to time as its base rate from the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted Closing Date to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution date of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitratorsuch payment.

Purchase Price Adjustment. (a) Within thirty (30) 60 days after the Closing Date, Seller Parent shall prepare and deliver to Buyer Purchaser a statement prepared in accordance with this Section 1.04 (the “Net Assets Statement”) ), setting forth Net Debt (ias defined in Section 1.04(d)) the sum as of the Accounts Receivable Closing (net of reserves), Business-related prepaids, Inventory (net of reserves“Closing Net Debt”) and Equipment and the cash, accounts receivable Working Capital (net of reservesas defined in Section 1.04(d), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net AssetsWorking Capital”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that During the Net Assets 60-day period following Purchaser’s receipt of the Statement, Purchaser and its independent auditors shall be permitted to review the working papers relating to the Statement. The Statement contains shall become final and binding upon the parties on the 60th day following delivery thereof, unless Purchaser gives written notice of its disagreement with the Statement (a “Notice of Disagreement”) to Seller prior to such date. Any Notice of Disagreement shall (i) specify in reasonable detail the nature of any disagreement so asserted and (ii) only include disagreements based on mathematical or factual errors or has based on Closing Net Debt or Closing Working Capital not been prepared being calculated in accordance with this Section 1.04. If a Notice of Disagreement is received by Seller in a timely manner, then the Agreed Procedures, Buyer may deliver to Statement (as revised in accordance with this sentence) shall become final and binding upon Seller a written notice and Purchaser on the earlier of objection no later than thirty (30A) days after the date on which Seller delivered and Purchaser resolve in writing any differences they have with respect to the Net Assets Statement to Buyer, which notice shall specify matters specified in the nature Notice of each dispute Disagreement and (B) the basis therefor (a “Net Assets Objection”)date any disputed matters specified in the Notice of Disagreement are finally resolved in writing by the Accounting Firm. Failure by Buyer to deliver a Net Assets Objection within During the thirty30-day period will be deemed to be Buyer’s acceptance following the delivery of the Net Assets Statement as the Final Net Assets Statement. The Parties a Notice of Disagreement, Seller and Purchaser shall attempt seek in good faith to reach agreement resolving all disputes set forth resolve in writing any differences that they may have with respect to the matters specified in the Net Assets Objection within sixty (60) days after Notice of Disagreement. During such period Seller and its deliveryauditors shall have access to the working papers of Purchaser’s auditors prepared in connection with the Notice of Disagreement. In At the event that the Parties are unable to resolve an Objection within the sixtyend of such 30-day period, Seller and Purchaser shall submit to an independent accounting firm (the “Accounting Firm”) for arbitration any and all matters that remain in dispute and that were properly included in the Notice of Disagreement. The Accounting Firm shall be Deloitte & Touche LLP or, if such firm is unable or unwilling to act, such other nationally recognized independent public accounting firm as shall be agreed upon by the parties hereto in writing. The Accounting Firm shall follow be instructed to render its determination of all matters submitted to it within 30 days following submission. Judgment may be entered upon the arbitration procedures set forth determination of the Accounting Firm in any court having jurisdiction over the party against which such determination is to be enforced. The fees and expenses of the Accounting Firm incurred pursuant to this Section 3.31.04 shall be borne 50% by Seller and 50% by Purchaser. The fees and disbursements of Seller’s independent auditors incurred in connection with their review of the Statement and of any Notice of Disagreement shall be borne by Seller, and the fees and disbursements of Purchaser’s independent auditors incurred in connection with their review of the Statement and any Notice of Disagreement shall be borne by Purchaser. (c) As used hereinThe Purchase Price shall be (i)(A) decreased by the absolute amount of Closing Net Debt, if Closing Net Debt is a negative number, or (B) increased by the term “Final absolute amount of Closing Net Assets Statement” means (i) the Debt, if Closing Net Assets Statement if Buyer does not deliver Debt is a Net Assets Objection in accordance with Section 3.2(b); positive number, and (ii) (A) increased by the amount by which Closing Working Capital exceeds $116,000,000 (the “WC Amount”) or (B) decreased by the amount by which Closing Working Capital is less than the WC Amount (the Purchase Price as so increased or decreased shall hereinafter be referred to as the “Adjusted Purchase Price”). If the Closing Date Amount is less than the Adjusted Purchase Price, Purchaser shall, and if Buyer timely gives a Net Assets Objection the Closing Date Amount is more than the Adjusted Purchase Price, Seller shall, within three business days after the Statement becomes final and all binding on the parties, make payment by wire transfer in immediately available funds of the disputed items are resolved amount of such difference, together with interest thereon at a rate equal to the rate of interest from time to time announced publicly by mutual agreement Citibank, N.A., as its prime rate, calculated on the basis of the Partiesactual number of days elapsed divided by 365, from the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted Closing Date to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution date of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitratorpayment.

Purchase Price Adjustment. (a) Within thirty As promptly as reasonably practicable (30but no later than ninety (90) days after the Closing Dateend of calendar year 2025), Seller shall prepare will cause to be prepared and deliver delivered to Buyer in good faith (i) a statement report of the Base Insurance Policies Gross Written Premiums prepared consistent with the preparation of the audited financial statements of the relevant ▇▇ ▇▇▇▇▇▇▇ (b) As promptly as practicable after December 31, 2027 (but not later than ninety (90) days thereafter), Buyer shall deliver a report to Seller (the “Net Assets StatementRenewal Rights Report”) prepared by Buyer in good faith and in a manner consistent with the preparation of the audited financial statements of the relevant RR Buyer setting forth (i) the sum a list of the Accounts Receivable (net of reserves)Replacement Policies first issued by RR Buyer under each RR Agreement during the period starting on the date hereof and ending on December 31, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus 2027; (ii) the sum Gross Written Premium paid or payable (whether payable in full at inception or pursuant to a payment schedule) to RR Buyer in respect of the Accounts Payablefirst issuance by the applicable RR Buyer of such Replacement Policies (such amount, reserve for Warranty Expenses, the “Aggregate Renewed Premiums”); and accounts payable and accrued expenses (iii) a list of Iteris GmbH, in each case as Rejected Policies. If the Aggregate Renewed Premiums are less than eighty percent (80%) of the close Adjusted Base Insurance Policies Gross Written Premiums, then Seller shall (or shall cause ▇▇ ▇▇▇▇▇▇▇ to) reimburse a portion of business on the Closing Date Purchase Price to Buyer (“Closing Net Assets”)or the applicable RR Buyer) in an aggregate amount equal to Clawback Adjustment Amount. The Net Assets Statement “Clawback Adjustment Amount” shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand determined as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means follows: (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); If Aggregate Renewed Premiums equal or exceed eighty percent (ii80%) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the PartiesAdjusted Base Insurance Policies Gross Written Premiums, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or Clawback Adjustment Amount shall be zero dollars (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator$0).

Purchase Price Adjustment. (a) Within thirty (30) 60 days after the Closing Date, Seller shall the Purchaser will prepare and deliver to Buyer the Sellers' Representative a statement (the “Net Assets Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case Working Capital as of the close of business on the Closing Date (“Closing Net Assets”the "AQF CLOSING STATEMENT"), which shall be prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), treating AQF as a separate entity and using the same methodologies and principles as those used in the preparation of AQF's unaudited consolidated balance sheet as of September 30, 1999 as delivered to the Purchaser (the "OFFER BALANCE SHEET"), consistently applied. The Net Assets Purchaser shall cause AQF and its respective employees to provide the Sellers and their independent auditors on-site access at all reasonable times to the personnel, properties, books and records of AQF until final resolution of all matters in dispute under this Section 1.3. (b) During the 30-day period following the date of the Sellers' Representative receipt of the AQF Closing Statement, the Sellers will be permitted to review the working papers of the Purchaser relating to the AQF Closing Statement. The AQF Closing Statement shall be preparedwill become final and binding upon the parties on the thirtieth day following the date of delivery thereof, unless the Sellers' Representative delivers a written notice (the "NOTICE") to the Purchaser prior to such thirtieth day which specifies in reasonable detail the amount by which and the reasons it believes particular line items in the AQF Closing Net Assets shall be calculated, Statement either contain mathematical errors or were not prepared in accordance with the agreed procedures methodology specified in the first sentence of Section 1.3(a) and accounting practices Section 1.3(e). The Notice shall not specify any basis for disagreement with the AQF Closing Statement other than as set forth in the preceding sentence. (c) If the Sellers' Representative delivers a Notice in accordance with Section 1.3(b), then the Purchaser and the Sellers' Representative shall, during the 30-day period beginning on Schedule 3.2(a) the date of the Purchaser's receipt of the Notice, seek in good faith to resolve in writing any differences which they may have with respect to the matters specified in the Notice. If the Purchaser and the Sellers' Representative are unable to resolve all of the Sellers' Representative objections within such 30-day period, then such unresolved objections shall be submitted to the New York office of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP (the “Agreed Procedures”"THIRD PARTY ACCOUNTANT") for review and final and binding resolution of any and all matters which remain in dispute and which were properly included in the Notice. The Purchaser and the net book value Sellers' Representative shall use reasonable efforts to cause the Third Party Accountant to render a decision resolving the matters in dispute within 45 days following the submission of such matter to the Third Party Accountant for decision following such briefing and other procedures as the Third Party Accountant shall establish. The fees and expenses of the Inventory and Iteris GmbH inventory Third Party Accountant shall be computed based upon borne by the quantities non-prevailing party as determined by the Third Party Accountant. (d) Within ten days after (x) the AQF Closing Statement becomes final pursuant to Section 1.3(b), (y) the Purchaser and the Sellers' Representative reach agreement pursuant to Section 1.3(c) or (z) the Third Party Accountant renders its final decision pursuant to Section 1.3(c), a final adjustment to the Purchase Price will be made as follows: If the Working Capital of Inventory and Iteris GmbH inventory on hand AQF as of the Closing Date as finally determined through pursuant to Section 1.3(b) or (c) ("FINAL WORKING CAPITAL") exceeds Estimated Working Capital, then (x) the Purchaser will pay to the Sellers and the Trust the amount of such excess, as follows: to each of the Nutcracker Trustee, HB L.P. and Alberta Ltd, 30% of such excess and to each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and the Trust, 5% of such excess, and (y) the Working Capital Escrow Amount will be released to the Sellers and the Trust in accordance with the terms of the Escrow Agreement. If it is finally determined that Estimated Working Capital exceeds Final Working Capital, then (x) the Purchaser shall collect, in accordance with the terms of the Escrow Agreement, from the Escrow Subaccount (as defined in the Escrow Agreement) of each Seller and the Trust the amount of such excess as follows: from the Escrow Subaccount of each of the Nutcracker Trustee, HB L.P. and Alberta Ltd, 30% of such excess and from the Escrow Subaccount of each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and the Trust, 5% of such excess, and (y) any remaining amount of the Working Capital Escrow Amount will be released to the Sellers and the Trust in accordance with the terms of the Escrow Agreement. If it is finally determined that Estimated Working Capital is equal to Final Working Capital, then the Working Capital Escrow Amount will be released to the Sellers and the Trust in accordance with the terms of the Escrow Agreement. (e) For purposes of Sections 1.2(b) and 1.3, "Working Capital" means, as of a physical inventory conducted by Seller on or before the fifth day following the Closing Datespecified date, the results amount by which (i) the current assets of which shall be adjusted from Buyer’s AQF exceed or are less than (ii) its current liabilities determined in accordance with GAAP, treating AQF as a separate entity and Seller’s books using the same methodologies and records principles as were used in the preparation of the Offer Balance Sheet, consistently applied, and without giving effect to reflect the Inventory and Iteris GmbH inventory Purchaser's acquisition of AQF, PROVIDED that the calculation of Working Capital as of the Closing Date. Buyer or its representatives Date shall have give effect to (x) the right to observe cancellation of the physical inventory Options and shall have full access to all books and records with respect payment to the Inventoryholders thereof pursuant to Section 1.2(c), (y) the lapse of restrictions applicable to Shares held by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, and (z) any expenses paid in cash at or prior to the Closing pursuant to Section 8.5, assuming for the purpose of the foregoing clauses (x) and (y) that all amounts in the Escrow Account (other than any amounts released to the Purchaser pursuant to Section 1.3(d)) are paid to the Sellers and the Trust. For illustration purposesthe avoidance of doubt, a Net Assets Statement the calculation of Working Capital as of June 30, 2011 is included in Schedule 3.2(a). the Closing Date shall reflect the Tax benefit (bexcluding any withholding tax liability) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance arising out of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes items set forth in the Net Assets Objection within sixty foregoing clauses (60x) days after its delivery. In and (y) and shall, in any event, exclude the event that Tax benefit arising out of the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures item set forth in Section 3.3. the foregoing clause (z). The parties agree that the adjustment contemplated by Sections 1.2(b) and (c) As used hereinand 1.3(a) - (e) is intended only to reflect the change, if any, in Working Capital from September 30, 1999 to and including the term “Final Net Assets Statement” means (i) Closing Date. The scope of the Net Assets Statement if Buyer does not deliver a Net Assets Objection disputes to be resolved by the Third Party Accountant is limited to whether such calculations were done in accordance with Section 3.2(b); (ii) if Buyer timely gives GAAP, treating AQF as a Net Assets Objection separate entity and all using the same methodologies and principles as were used in the preparation of the disputed items are resolved by mutual agreement Offer Balance Sheet, consistently applied, and without giving effect to the Purchaser's acquisition of AQF, and whether there were mathematical errors in the Parties, the Net Assets AQF Closing Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution Third Party Accountant is not to make any other determination, including any determination as to whether Working Capital as of all other disputes by the ArbitratorSeptember 30, 1999 was in fact $12,148,000.

Purchase Price Adjustment. (a) Within thirty ninety (3090) days after the Closing Date, Seller Buyer shall prepare and deliver to Buyer the Seller Parties a statement (the “Net Assets Statement”) ), setting forth Buyer’s good faith determination of (i) the sum of the Accounts Receivable (net of reserves)CapEx Amount, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum amount of Indebtedness, (iii) the amount of the Accounts Payable, reserve for Warranty Company Expenses, (iv) Closing Working Capital and accounts payable and accrued expenses of Iteris GmbHthe resulting Working Capital Overage, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be preparedif any, or Working Capital Underage, if any, and (v) the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)Adjusted Purchase Price. (b) If The Statement shall become final and binding upon the Parties on the thirtieth (30th) day following the date on which the Statement was delivered to the Seller Parties, unless the Seller Parties deliver a written notice of their disagreement with the Statement to Buyer reasonably believes that prior to such thirtieth (30th) day describing (i) which items on the Net Assets Statement contains errors or has have not been prepared in accordance with this Agreement, (ii) the Agreed Proceduresbasis for the Seller Parties’ disagreement with the calculation of such items and (iii) the Seller Parties’ proposed dollar amount for each item in dispute (a “Notice of Disagreement”). If a Notice of Disagreement is received by Buyer prior to such thirtieth (30th) day, then the Statement (as revised in accordance with this sentence) shall become final and binding upon the Seller Parties and Buyer may deliver to on the earlier of (A) the date the Seller Parties and Buyer resolve, evidenced by a written notice instrument duly executed by the Seller Parties and Buyer, any differences they have with respect to the matters specified in the Notice of objection no later than Disagreement and (B) the date any disputed matters are finally resolved in a written decision by the Accounting Firm. During the thirty (30)-day period following the delivery of a Notice of Disagreement, the Seller Parties and Buyer shall seek in good faith to resolve any differences that they may have with respect to the matters specified in the Notice of Disagreement. If at the end of such thirty (30)-day period the Seller Parties and Buyer have not resolved, evidenced by a written instrument duly executed by the Seller Parties and Buyer, the matters specified in the Notice of Disagreement, the Seller Parties and Buyer shall submit to a regional or national certified public accounting firm mutually agreed between the Parties in writing (the “Accounting Firm”), for resolution, in accordance with the standards set forth in this Section 2.4, only matters that remain in dispute and corresponding numerical positions, as the same may be revised from those contained in the Statement or Notice of Disagreement (each, a “Disputed Item”). Buyer and the Seller Parties shall use commercially reasonable efforts to cause the Accounting Firm to render a written decision fully resolving all matters submitted to the Accounting Firm within thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as receipt of such submission, but in no event shall the Final Net Assets Statement. The Parties shall attempt in good faith permit the Accounting Firm to reach agreement fail to render a written decision fully resolving all disputes set forth in matters submitted to the Net Assets Objection Accounting Firm within sixty (60) days after its deliveryof the receipt of such submission. In The scope of the event that disputes to be resolved by the Parties are unable Accounting Firm shall be limited to resolve correcting mathematical errors and determining whether the items in dispute were determined in accordance with this Agreement, and the Accounting Firm shall act as an Objection within expert, not as an arbitrator, in resolving the sixty-day periodDisputed Items, and any proceeding before the parties Accounting Firm shall follow the arbitration procedures be an expert determination. Other than those determinations set forth in the preceding sentence, the Accounting Firm is not to make any other determination. The Accounting Firm’s decision shall be based solely on written submissions by the Seller Parties and B▇▇▇▇ and their respective Representatives and not by independent review and shall be final and binding on all of the Parties. The Accounting Firm may not assign a value greater than the greatest value for such Disputed Item claimed by either Party or smaller than the smallest value for such Disputed Item claimed by either Party. Buyer and the Seller Parties agree that the Accounting Firm’s determination under this Section 3.32.4(b) shall be binding on the Parties and enforceable as an arbitral award, and that judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the Party against which such determination is to be enforced. The fees, costs and expenses of the Accounting Firm incurred pursuant to this Section 2.4 shall be borne pro rata as between the Seller Parties, on the one hand, and Buyer, on the other hand, in proportion to the final allocation made by such Accounting Firm of the Disputed Items weighted in relation to the claims made by the Seller Parties, on the one hand, and Buyer, on the other hand, such that the prevailing Party pays the lesser proportion of such fees, costs and expenses. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection The Adjusted Purchase Price shall be calculated as finally agreed or determined in accordance with Section 3.2(b2.4(b). (d) No later than five (5) Business Days after the Adjusted Purchase Price is determined: (i) If the Adjusted Purchase Price as determined pursuant to the foregoing clause (c) exceeds the Preliminary Purchase Price: (A) the Purchase Price shall be increased (any such increase, the “Seller’s Adjustment Amount”) by the amount of such excess; and (B) Buyer shall make payment of the Seller’s Adjustment Amount by wire transfer of immediately available funds to Sellers to an account directed by S▇▇▇▇▇▇ in writing. (ii) if If the Preliminary Purchase Price exceeds the Adjusted Purchase Price as determined pursuant to the foregoing clause (c): (A) the Purchase Price shall be decreased (any such decrease, the “Buyer timely gives Adjustment Amount”) by the amount of such excess; and (B) the Seller Parties shall jointly and severally pay to Buyer the amount of such excess by wire transfer of immediately available funds to the account(s) designated by B▇▇▇▇ in writing. If a Net Assets Objection and all Buyer Adjustment Amount is due to Buyer, then Buyer shall be entitled, but not obligated, to recover any such amount due from the Seller Parties under this Agreement by setting off such amount against the Employment Agreement. Buyer shall provide notice of the disputed items are resolved exercise of such right of set off to the Seller Parties. The exercise of such right of set off by mutual agreement B▇▇▇▇ will not constitute a breach of this Agreement. Neither the exercise nor the failure to exercise such right of set off will constitute an election of remedies or limit Buyer in any manner in the enforcement of any other remedies that may be available to it. (e) During the period of time from and after the Closing Date through the final determination of the PartiesAdjusted Purchase Price, and payment of the Seller’s Adjustment Amount or the Buyer Adjustment Amount (as applicable), in accordance with this Section 2.4, each Party shall afford to the other Party and its Representatives reasonable access during normal business hours upon reasonable advance written notice to the books and records and personnel (including any accountants, counsel or financial advisers of the applicable Party) used in the preparation of the Statement or the Notice of Disagreement; provided, however, that to the extent that any work papers or similar documents prepared by accountants of Buyer, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; Company or (iii) if any disputed items their respective Affiliates are submitted to the Arbitrator for resolutionrequested, the Net Assets StatementSeller Parties shall execute and deliver any non-reliance or other agreements as may be requested by such accountants prior to receiving such information; and provided, as amendedfurther, if necessarythat Buyer, the Company or their respective Affiliates shall not be obligated to reflect provide any resolution of any disputes by agreement of the Parties and the resolution of all information subject to attorney-client privilege, attorney work product protection or other disputes by the Arbitratorsimilar protection.

Purchase Price Adjustment. (a) Within thirty (30) days after After the Closing DateClosing, Seller shall prepare a special purpose statement of the operating profit of the Business for the period from January 1, 1997 through December 31, 1997 in accordance with the basis of accounting set forth in a footnote to such financial statement (the "Special Purpose 1997 Financial Statement"). To the extent necessary for Seller to prepare the Special Purpose 1997 Closing Financial Statement, Buyer shall provide Seller and its accountants full access to the books and records included in the Assets, to any other information in Buyer's possession or control after Closing and to Buyer's employees. Seller will cause its independent public accountants, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, to audit the Special Purpose 1997 Financial Statement in accordance with Generally Accepted Auditing Standards and to issue their auditors' report thereon. Seller will deliver to Buyer the Special Purpose 1997 Financial Statement, together with the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ audit report in draft form, within 50 calendar days after Closing. At the same time, Seller will deliver to Buyer a statement certificate of an officer of Seller in the form set forth as Exhibit D hereto (the “Net Assets "Certificate") containing a representation and warranty that the 1997 Special Purpose Financial Statement”) setting , taken in its entirety, has been prepared on a basis consistent in all material respects with the Sterno Profit and Loss Statement for the year ended 1996 that is set forth as Attachment A to Schedule 3.2 of this Agreement (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”"1996 Sterno Profit & Loss Statement"). The Net Assets Statement shall Certificate will be prepared, and delivered by Seller only for the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices purpose set forth on Schedule 3.2(ain Section 2.5(c) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Datebelow. Buyer or its representatives shall have a 9-calendar day period to review the right Special Purpose 1997 Financial Statement to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes confirm that the Net Assets Statement contains errors or it has not been prepared in accordance with the Agreed Proceduresfirst sentence of this Section 2.5(a). In connection with such review, Buyer may deliver and its accountants shall have the right to review the worksheets and other back-up documentation relating to the preparation of the Special Purpose 1997 Financial Statement and the auditors' work papers thereon, to consult with representatives of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Seller a in connection therewith and to review books and records of Seller relevant to the preparation of the Special Purpose Financial Statement. If, within such 9-day period, Buyer has not given Seller written notice of an objection no later than thirty to such statement, then the Special Purpose 1997 Financial Statement shall be final, binding and conclusive on the parties. If Buyer asserts, in good faith, that the Special Purpose 1997 Financial Statement has not been prepared as described in the first sentence of Section 2.5(a), it must notify Seller in writing in reasonable detail of the issues it disputes (30the "Disputed Issues") days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirtysuch 9-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statementperiod. The Parties shall attempt in good faith If Buyer and Seller are unable to reach agreement resolving all disputes regarding the Disputed Issues within 5 calendar days after the giving of such notice by Buyer, then the Disputed Issues shall be submitted to Deloitte & Touche LLP, independent public accountants, or such other reputable independent accounting firm as the parties may agree (the "Accountants") for resolution, the Accountants to act as experts and not as arbitrators. The review by the Accountants will be limited to the Disputed Issues. It is expressly agreed by the parties that any issues relating to the consistency of the Special Purpose 1997 Financial Statement with the 1996 Sterno Profit & Loss Statement as represented in the Certificate will not be submitted to the Accountants for resolution. If one or more Disputed Issues are submitted to the Accountants for resolution: (i) each party will furnish to the Accountants the work papers relating to the Disputed Issues and will be afforded the opportunity to present to the Accountants any material relating to the determination and to discuss the determination with the Accountants, (ii) the determination of the Disputed Issues by the Accountants, as set forth in a written notice delivered by the Net Assets Objection Accountants to both parties will be final, binding and conclusive on the parties; and (iii) Buyer and Seller shall each bear 50% of the fees of the Accountants for such determination. The parties will instruct the Accountants to deliver their written determination no later than the tenth calendar day after the Disputed Issues are submitted to the Accountants. Upon delivery of such written determination, the Special Purpose 1997 Financial Statement, adjusted in accordance with such determination, shall be final, binding and conclusive on the parties. The time periods for preparation, review and dispute resolution regarding the 1997 Special Purpose Financial Statement set forth in this Section 2.5(a) are intended to permit Seller to finalize the financial statements to be prepared by it pursuant to Section 5.1(a)(ii) for filing by Parent with the Securities and Exchange Commission without any dispute regarding the 1997 Special Purpose Financial Statement pending between the parties. Buyer acknowledges that Seller shall not be required to finalize and deliver the financial statements referred to in Section 5.1(a)(ii) while any such dispute is pending. Buyer agrees that any confidential information obtained by it regarding businesses of Seller other than the Business pursuant to the review and dispute resolution procedures set forth above in this Section 2.5(a) shall be subject to the confidentiality provisions of Section 9.10 of the Transition Agreement. (i) If the 1997 operating profit of the Business as shown on the Special Purpose 1997 Financial Statement is less than $10,297,000, then Seller shall pay to Buyer as an adjustment to the Purchase Price an amount equal to 6.4 multiplied by the difference between $10, 297,000 and such 1997 operating profit, together with interest on such amount at the rate of 7% from the Closing Date to the date paid (the "Purchase Price Adjustment"). The amount of the Purchase Price Adjustment, if any, shall be deemed final, binding and conclusive at the same time as the Special Purpose 1997 Financial Statement is deemed final, binding and conclusive pursuant to Section 2.5(a). A Purchase Price Adjustment, if any, shall become due and payable within sixty (60) two business days after its deliveryit has become final, binding and conclusive, provided, however, Seller's obligation to pay such Purchase Price Adjustment shall be deemed satisfied if either Buyer or Seller has requested distribution of the Escrow Funds to Buyer in the amount of the Purchase Price Adjustment in accordance with the terms and conditions of the Escrow Agreement referred to in Section 2.5(d) below. In Notwithstanding the event that foregoing, if any Purchase Price Adjustment payable by Seller to Buyer pursuant to Section 2.5(b)(i) exceeds the Parties are unable amount contained in the Escrow Account, Seller shall remain obligated to resolve an Objection pay such excess to Buyer within two business days after such Purchase Price Adjustment is deemed final, binding and conclusive pursuant to this Section 2.5. (ii) If the sixty-day period1997 operating profit of the Business as shown on the Special Purpose 1997 Financial Statement is greater than or equal to $10,297,000, then Seller shall not be obligated to pay any amount as Purchase Price Adjustment to Buyer. (iii) If Seller pays a Purchase Price Adjustment to Buyer pursuant to Section 2.5(b)(i) above, the parties shall follow the arbitration procedures deductible set forth in Section 3.39.2(b) for indemnification claims by Buyer under this Agreement shall be increased by the amount of such adjustment. (c) As used hereinBuyer's sole and exclusive remedy for any breach of the representation and warranty set forth in the Certificate regarding consistency of the Special Purpose 1997 Financial Statement and the 1996 Sterno Profit & Loss Statement will be pursuant to the indemnification provisions of Article IX, including without limitation the survival limitations and deductibility provisions set forth therein, provided, however, to the extent Buyer has received a Purchase Price Adjustment under Section 2.5(b)(i), it shall not be allowed to recover again under Article IX with respect to the same underlying circumstances or assertions. In addition, Buyer agrees it shall not have a claim for indemnification for breach of the representation and warranty set forth in the Certificate to the extent any such claim relates to allocated costs of the Business that are not relevant to Buyer's ongoing operation of the Business because, for example, Buyer will operate the Business in a different manner, because Buyer's cost structure regarding such items will be different, or for similar reasons. (d) At Closing, Buyer shall deposit $5,000,000 of the Purchase Price (the "Escrow Funds") into an escrow account (the "Escrow Account") maintained with a mutually agreed upon independent escrow agent (the "Escrow Agent"). Such Escrow Funds will be held for, and interest earned in such Escrow Funds will be paid to, the term “Final Net Assets Statement” means Escrow Agent for distribution to Seller or Buyer as specified in an escrow agreement substantially in the form of Exhibit C hereto (ithe "Escrow Agreement") to be executed by Buyer, Seller and the Net Assets Statement Escrow Agent. Seller and Buyer agree that the Escrow Account shall be used to satisfy any obligations of Seller set forth in Section 2.5(b)(i), and, if Buyer does and to the extent that not deliver a Net Assets Objection all the Escrow Funds are used to satisfy obligations of Seller pursuant to Section 2.5(b)(i), shall be released by the Escrow Agent to Seller in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all the terms of the disputed items are resolved Escrow Agreement. Notwithstanding the foregoing, if any Purchase Price Adjustment payable by mutual agreement Seller to Buyer pursuant to Section 2.5(b)(i) exceeds the amount contained in the Escrow Account, Seller shall remain obligated to pay such excess to Buyer within two business days after such Purchase Price Adjustment is deemed final, binding and conclusive pursuant to this Section 2.5. 5. Section 5.18 of the Parties, the Net Assets Statement, Purchase Agreement is hereby amended and restated to read in its entirety as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.follows:

Purchase Price Adjustment. The Preliminary Purchase Price shall be subject to adjustment according to this Section 2.5. (a) At least three (3) business days prior to the Closing Date, the Company shall deliver to the Buyer an estimated balance sheet as of the opening of business on the Closing Date (the "Estimated Closing Date Balance Sheet") and a good faith written estimate of the Net Working Capital Amount and the cash of the Company as of the opening of business on the Closing Date (respectively, the "Estimated Closing Date Net Working Capital Amount" and the "Estimated Closing Date Cash"). For purposes of the estimate of the amount of cash, such estimate shall reflect (i) a deduction from any cash balance in an amount equal to the aggregate amount of all drafts, checks and wire transfers issued on accounts of the Company and its Subsidiaries that remain outstanding and uncleared as of such time and date, and (ii) an addition to any cash balance in an amount equal to the aggregate amount of all drafts, checks and wire transfers that have been received by the Company and its Subsidiaries as of such time and date but that have either not been cashed or not been cleared. The Estimated Closing Date Balance Sheet, the Estimated Closing Date Net Working Capital Amount and the Estimated Closing Date Cash shall be prepared in accordance with Schedule 1.1(a) (which will exclude transaction related items) and GAAP, including the accounting principles, practices and methodologies specified and described on Schedule 1.1(b), and using the same accounting principles, practices and methodologies, consistently applied, that were used to prepare the December 31, 2003 Balance Sheet, and, at the Company's election, may be based on the Company's most recent regularly prepared balance sheet for the end of the month immediately preceding the month in which the Closing actually occurs; provided, that, whether or not required by GAAP, any "Swedish Social Tax" or other Tax payable by the Company or to be paid by the Company on behalf of holders of Company Options who reside outside the United States (other than any Taxes for withholding), as a result of the transactions contemplated by this Agreement, will be included as an accrual on the Estimated Closing Date Balance Sheet. Solely for purposes of the Estimated Closing Date Balance Sheet and the Final Closing Date Balance Sheet, the Buyer hereby approves and agrees to the application of GAAP as set forth on Schedule 1.1(b). If the Estimated Closing Date Net Working Capital Amount is greater than the December 31, 2003 Net Working Capital Amount, the Preliminary Purchase Price shall be increased by such amount. If the Estimated Closing Date Net Working Capital Amount is less than the December 31, 2003 Net Working Capital Amount, the Preliminary Purchase Price shall be reduced by such amount. The Company will also deliver to the Buyer, at least five (5) business days prior to the Closing Date, a certificate setting forth an estimate of the Company and Shareholder Transaction Expenses as of the Closing Date. (b) Within thirty sixty (3060) days after the Closing Date, Seller shall the Buyer will prepare and deliver to Buyer the Shareholders' Representative a statement (the “Net Assets Statement”) setting forth (i) the sum balance sheet of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case Company as of the close opening of business on the Closing Date (“the "Final Closing Date Balance Sheet"), including a calculation of the Net Assets”). The Net Assets Statement shall be prepared, Working Capital Amount and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value cash of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand Company as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date(respectively, the results of which "Closing Date Net Working Capital Amount" and the "Closing Date Cash"). The Final Closing Date Balance Sheet shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.Schedule 1.1

Purchase Price Adjustment. (aA) Within The parties acknowledge that the Purchase Price was determined based upon the Sellers' best good faith estimate that the One Year EBITDA (as hereinafter defined) to be derived during the twelve (12) month period commencing on the first day of the calendar month following the calendar month in which the Closing occurs (the last day thereof being referred to herein as the "DETERMINATION DATE" and such period being the "DETERMINATION PERIOD") from the Business multiplied by five (5x) would be at least $31,400,000. Accordingly, if (x) the actual One Year EBITDA multiplied by five (5x) is less than (y) Sellers' aforesaid estimate of at least $31,400,000, then the parties agree that the Purchase Price shall be reduced by such deficiency; provided, however, that the reduction in Purchase Price pursuant to this Section 2.5 shall not exceed an amount equal to (x) $14,360,000 minus (y) the portion of the RSI Purchase Amount paid by Sellers after the date hereof. (B) As soon as practicable, but in no event later than ninety (90) days after the Determination Date, Buyer shall deliver to Sellers a statement (the "EBITDA CALCULATION STATEMENT") showing the One Year EBITDA (the "EBITDA CALCULATION"). Buyer shall provide the Sellers copies of, or access to the work papers and similar materials used in connection with the preparation of the EBITDA Calculation Statement. Sellers shall have thirty (30) days following their receipt of the EBITDA Calculation Statement within which to deliver to Buyer a written notice of objection thereto (an "OBJECTION NOTICE"), which Objection Notice shall (x) set forth Sellers' determination of the EBITDA Calculation and (y) specify in reasonable detail Sellers' basis for objection, in which case the parties shall meet and in good faith attempt to resolve any disagreements within thirty (30) days after the Closing Date, Seller shall prepare and deliver delivery to Buyer a statement (the “Net Assets Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves)Objection Notice. If the parties are unable to resolve such disagreements within such time period, Business-related prepaidsthe disagreements shall be referred to the Settlement Accountants, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum determination of the Accounts Payable, reserve for Warranty ExpensesSettlement Accountants shall be final and binding on the parties hereto, and accounts payable shall not be subject to further review, challenge, or adjustment, absent fraud. The Settlement Accountants shall be directed to use their best efforts to reach a determination not more than forty-five (45) days after such referral. The costs and accrued expenses of Iteris GmbHthe services of the Settlement Accountants shall be borne by the party against whom the Settlement Accountants shall rule; provided that if the Settlement Accountants shall not clearly rule against any party, then such costs and expenses shall be borne equally by Sellers, on the one hand, and Buyer, on the other hand. The failure by Sellers to deliver an Objection Notice within such thirty (30)-day period shall constitute the Sellers' acceptance of the EBITDA Calculation, which shall thereupon become conclusive and binding on all parties hereto, and shall not be subject to further review, challenge, or adjustment, absent fraud. (C) If the Purchase Price is decreased as provided in each case this Section 2.5, the amount of the decrease shall be paid promptly by Sellers to Buyer, and in any event by no later than the third day after the amount of such decrease shall be finally determined. Such payment shall be made first by offsetting against the Contingent Payment in accordance with Section 2.1(c) above, then to the extent necessary, by return of shares of IHS Stock (valued as of the close of business on the Closing Determination Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(aSection 2.4(a) above) and/or cash (the “Agreed Procedures”) as determined by Sellers and the net book value Shareholders in their sole and absolute discretion); provided, however, that in no event shall Sellers select a combination that will have the result that Buyer shall have paid less than sixty percent (60%) of the Inventory and Iteris GmbH inventory shall Purchase Price (excepting therefrom the amount be computed based upon which the quantities of Inventory and Iteris GmbH inventory on hand as cash portion of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as Purchase Price is increased in respect of the Closing Date. Buyer or its representatives shall have unpaid portion of the right to observe the physical inventory and shall have full access to all books and records RSI Purchase Amount in accordance with respect Section 2.1(a) above) by delivery of shares of IHS Stock (except that Sellers may make such payment with a greater percentage of shares of IHS Stock to the Inventory. For illustration purposes, a Net Assets Statement as extent that Sellers are returning shares of June 30, 2011 is IHS Stock previously delivered to them or the Escrowee in respect of any previous increase in Purchase Price to the extent that such shares increased the percentage of such shares included in Schedule 3.2(asuch Purchase Price increase to a percentage greater than sixty percent (60%)). (bD) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice For purposes of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used hereinthis Agreement, the term “Final Net Assets Statement” means "ONE YEAR EBITDA" shall mean the sum of (ix) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); fifty percent (ii50%) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement Aggregate Joint Contract EBITDA (hereinafter defined) for the Determination Period plus (y) one hundred percent (100%) of the Parties, Existing Contract EBITDA (hereinafter defined) for the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the ArbitratorDetermination Period.

Purchase Price Adjustment. (a) Within thirty Subject to Section 7.02(c), Buyer shall prepare and deliver to Seller, within sixty (3060) days after the Closing Date (as defined in Section 3.01), but in any event no later than ninety (90) days after the Closing Date, Seller shall prepare and deliver to Buyer a statement (the “of Net Assets Statement”(as defined below) setting forth (i) the sum of the Accounts Receivable Acquired Companies (net of reservesas defined in Section 4.03(a), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following immediately preceding the Closing Date, the results of which shall be adjusted from audited by Buyer’s 's independent public accountants (the "Buyer's Auditors," and such audited statement of Net Assets, the "Closing Net Asset Statement"). The Closing Net Asset Statement shall be prepared in accordance with GAAP (as defined in Section 4.07), consistently applied, and on a basis consistent with the preparation of, and employing the principles and methodologies used in preparing, the interim statement of assets and liabilities attached hereto as Schedule 2.03, which schedule shall include a description in reasonable detail of Seller’s books and records to reflect 's methodologies employed in the Inventory and Iteris GmbH inventory as preparation of such interim statement; it being understood that if there is a conflict between the Closing Date. Buyer principles or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included methodologies in Schedule 3.2(a)2.03 and GAAP, GAAP shall prevail. (b) During the period of review of the Closing Net Asset Statement and the period of any dispute under this Section 2.03, Buyer shall give Seller, Seller's independent public accountants (the "Seller's Auditors") and Seller's representatives timely access during normal business hours to the books and records of the Acquired Companies, including the working papers, trial balances and similar materials of the Acquired Companies, as Seller and Seller's Auditors shall reasonably request. (c) Seller may dispute the Closing Net Asset Statement by notifying Buyer in writing setting forth, in reasonable detail to the extent possible, the basis for such dispute ("Seller's Dispute Notice") within thirty (30) days following its receipt of the Closing Net Asset Statement. If no Seller's Dispute Notice is received prior to the expiration of such thirty (30)-day period, the Closing Net Asset Statement shall be final, binding and conclusive on the parties. (d) In the event of a dispute with respect to the Closing Net Asset Statement, Buyer and Seller shall attempt to reconcile their differences and reach agreement with respect thereto. (e) If Buyer reasonably believes that and Seller are unable to reach agreement on a resolution within thirty (30) days following Buyer's receipt of the Net Assets Statement contains errors or has not Seller's Dispute Notice, then a nationally-recognized firm of independent certified public accountants designated by agreement between Seller and Buyer (the "Accounting Firm") shall be jointly appointed by the parties to resolve such dispute promptly. The Accounting Firm shall be instructed to make a determination only as to each of the items in dispute, which determination shall be (i) in writing, (ii) furnished to Buyer and Seller as soon as practicable after the items in dispute have been prepared referred to the Accounting Firm, but in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection any event no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.Accounting Firm's appointment,

Purchase Price Adjustment. (a) Within thirty one hundred twenty (30120) days after the Closing DateClosing, Seller Buyer, at its expense, shall prepare and cause KPMG Peat Marwick LLP to deliver to Buyer a statement the Sellers an audited balance sheet and related statements of income, retained earnings and cash flows for USTC's fiscal year ended December 31, 1997 (the “Net Assets Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves"1997 Financial Statements"), Business-related prepaids, Inventory (net and for the portion of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business USTC's 1998 fiscal year ending on the Closing Date (“the "Closing Net Assets”Date Financial Statements"). The Net Assets Statement , all of which financial statements shall be prepared, and the Closing Net Assets shall be calculated, prepared in accordance with the agreed procedures and generally accepted accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) principles and the net book value rules and regulations of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities Securities Exchange Commission applicable to financial reporting of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(apublic companies ("GAAP"). (b) If Buyer reasonably believes that The Sellers shall have forty-five (45) days from delivery of the Net Assets Statement contains errors or has not been prepared in accordance with 1997 Financial Statements and the Agreed ProceduresClosing Date Financial Statements (collectively, Buyer may deliver the "Financial Statements") to Seller a raise any objection thereto by delivery of joint written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt setting forth such objections in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its deliveryreasonable detail. In the event that the Parties are unable Sellers shall fail to resolve an Objection so deliver such written objections with respect to any of the Financial Statements within the sixtysuch 45-day period, then any such Financial Statements in respect of which no such objection is so delivered shall be deemed final and binding on the parties parties. In the event that any such objections are so delivered, Buyer and Sellers' Rep shall follow attempt, in good faith, to resolve such objections and, if unable to do so within fifteen (15) days of delivery of such objections, shall, within five (5) business days thereafter designate a nationally recognized firm of independent public accountants, mutually satisfactory to Buyer and Sellers' Rep (the arbitration procedures set forth in Section 3.3. (c) As used herein"Independent Accountants"). In the event that Buyer and Sellers' Rep are unable to agree on the Independent Accountants within such 5-business day period, the term “Final Net Assets Statement” means Independent Accountants shall be designated jointly by the independent accountants of Buyer and USTC within three (i3) business days thereafter. The Independent Accountants shall resolve all remaining objections to the Net Assets Statement if Buyer does not deliver a Net Assets Objection Financial Statements made by the Sellers in accordance with Section 3.2(b); herewith within forty-five (ii45) if Buyer timely gives a Net Assets Objection and all days from their date of the disputed items are resolved by mutual agreement designation. The determination of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.the

Purchase Price Adjustment. (a) Within thirty (30) days after Except to the Closing Dateextent accounted for in the adjustments to the Cash Consideration and Share Consideration made under Section 2.3(b), Seller shall prepare the Base Purchase Price reflects and deliver to Buyer a statement (the “Net Assets Statement”) setting forth Parties agree and covenant that (i) Buyer shall be entitled to the sum value of all production of Hydrocarbons from or attributable to the Accounts Receivable Properties from and after the Effective Time (net of reservesand all products and proceeds attributable thereto), Business-related prepaidsand to all other income, Inventory (net of reserves) and Equipment and the cashproceeds, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expensesreceipts, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records credits earned with respect to the InventoryTarget Interests at or after the Effective Time, and (ii) Seller shall be entitled to the value of all production of Hydrocarbons from or attributable to the Properties prior to the Effective Time (and all products and proceeds attributable thereto), and to all other income, proceeds, receipts, and credits earned with respect to the Target Interests prior to the Effective Time. For illustration purposes“Earned” and “incurred,” as used in this Agreement, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared shall be interpreted in accordance with the Agreed ProceduresGAAP and ▇▇▇▇▇ Standards. For purposes of allocating production (and accounts receivable with respect thereto), Buyer may deliver to Seller a written notice of objection no later than thirty under this Section 2.3(a), (30A) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice liquid Hydrocarbons shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of “from or attributable to” the Net Assets Statement as Leases, Units, and ▇▇▇▇▇ when they pass through the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in pipeline connecting into the Net Assets Objection within sixty (60) days after its delivery. In storage facilities into which they are transported from the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes lands covered by the Arbitratorapplicable Lease, Unit, or Well, or if there are no storage facilities, when they pass through the lease automatic custody transfer (“LACT”) meter or similar meter at the entry point into the pipelines through which they are transported from such lands, and (B) gaseous Hydrocarbons shall be deemed to be “from or attributable to” the Leases, Units, and ▇▇▇▇▇ when they pass through the delivery point sales meters, custody transfer meters, or other gas flow or volume meters at the entry point into the pipelines through which they are transported from such lands. Seller shall utilize reasonable interpolative procedures to arrive at an allocation of production when exact meter readings (including gas production meters or sales meters) or gauging and strapping data is not available.

Purchase Price Adjustment. (a) As soon as reasonably practicable following the Closing Date, and in no event more than 90 days after the Closing Date, Purchaser, at its expense, shall prepare and deliver to Sellers, a statement of Working Capital (as defined in Section 2.4(f) below) as of the Closing Date, which provides reasonable detail with respect to the various components thereof (the “Closing Statement”) and is prepared in accordance with Sections 2.4(f) and 2.4(g) below. (b) Within thirty (30) days after receipt of the Closing DateStatement, Seller shall prepare and Sellers will deliver to Buyer Purchaser a written statement describing its questions or objections (if any) to the “Net Assets Closing Statement”) setting . If Sellers do not raise any questions or objections within such period, the Working Capital as set forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, will become final and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value binding upon all of the Inventory parties. If Sellers do raise any such questions or objections, Purchaser, Sellers and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties their respective accountants shall attempt in good faith to reach agreement resolving resolve such matters within 30 days after receipt of the same by Purchaser, and if unable to do so, Purchaser and Sellers shall refer all remaining disputes concerning the Closing Statement to a mutually agreeable nationally recognized independent accounting firm (the “Independent Accounting Firm”) which shall be instructed to resolve such disputes within 30 days after the referral of such disputes to such firm or as soon as reasonably practicable thereafter. Purchaser and Sellers will make available to the Independent Accounting Firm at reasonable times and upon reasonable notice at any time during the pendency of any dispute under this Section 2.4(b), the work papers, back-up materials and any other relevant information used in preparing the Closing Statement, as the case may be. Purchaser and Sellers shall have the right to meet jointly with the Independent Accounting Firm during this period and to present their respective positions. The Independent Accounting Firm shall act as experts and not as arbitrators, and shall make its determination only on evidence brought to it by the parties, and shall not conduct an audit. The determination of Working Capital by the Independent Accounting Firm shall be set forth in writing and will be conclusive and binding upon the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3parties. (c) As Sellers and their accountants and other representatives will be provided, from and after the Closing, with access to any material used herein, by the term “Final Net Assets Statement” means (i) Purchaser to prepare the Net Assets Closing Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all any other materials that are part of the disputed items are resolved Acquired Assets reasonably deemed necessary by mutual agreement the Sellers in evaluating the Closing Statement and the determination of Working Capital, which access will be provided upon reasonable notice, during normal business hours and at the principal offices of the PartiesPurchaser during the evaluation of the Closing Statement by Sellers or the pendency of any dispute under Section 2.4(b) above. Until any such dispute is resolved, Purchaser will keep the Net Assets Statement, as amendedmaterials deemed necessary by the Sellers to analyze the Closing Statement and Working Capital in the principal business office of Purchaser or, if necessarysuch office is moved, in a location reasonably convenient to reflect such resolution of all disputes; Sellers (or (iii) if any disputed items are submitted to in the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement offices of the Parties and the resolution of all other disputes by the ArbitratorIndependent Accounting Firm).

Purchase Price Adjustment. (ai) Within thirty As promptly as possible, but in any event within sixty (3060) days after the Closing Date, Buyer will deliver to Seller its good faith calculations of the amount by which the Cash-Like Items of the Business as of the Calculation Time is greater or less than the Debt-Like Items of the Business as of the Calculation Time ("Buyer Closing BS Differential"), along with reasonable documentation and schedules to support the calculations contained therein. The Buyer Closing BS Differential shall prepare be prepared in a manner consistent with the definitions of "Cash-Like Items" and "Debt-Like Items" and solely in the manner set forth in Schedule 1.02(v). Buyer's calculations of these amounts shall not include or take into account any changes to the specific assets and liabilities included as line items in Schedule 1.02(v) (whether or not arising from or resulting as a consequence of the transactions contemplated by this Agreement) or changes due to events or circumstances occurring or arising following the Closing (but not the facts or circumstances underlying such events to the extent they existed prior to the Closing). In preparing its calculation of Buyer Closing BS Differential, Buyer shall not, and is not permitted to, (A) introduce different judgments, adjustments, accounting methods, policies, conventions, principles, practices, procedures, classifications or estimation methodologies (other than those used in preparing the Estimated BS Differential) or (B) introduce or otherwise include any categories, classes or types of liabilities or other accounts or line items, or adjustments to any of the foregoing, not reflected on Schedule 1.02(v). If Buyer fails to timely deliver its Buyer Closing BS Differential pursuant to Section 1.02(d)(i), then Seller's estimate of each item set forth in the Estimated Closing Consideration shall become final, binding and non-appealable by the Parties. (ii) If Seller has any objections to the Buyer Closing BS Differential, Seller will deliver to Buyer a statement setting forth its objections thereto (an “Objections Statement”), which statement will identify in reasonable detail those items and amounts to which Seller objects (the “Net Assets Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net AssetsDisputed Matters”). The Net Assets If an Objections Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records is not delivered to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than within thirty (30) days after timely delivery of the date on which Seller delivered Buyer Closing BS Differential, the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period Closing BS Differential will be deemed to be Buyer’s acceptance of final, binding and non-appealable by the Net Assets Statement as the Final Net Assets StatementParties. The Parties Seller and ▇▇▇▇▇ shall attempt negotiate in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty for a period of thirty (6030) days after its delivery. In delivery of the event that the Parties are unable Objections Statement to resolve an Objection the Disputed Matters. (iii) If the Seller and Buyer do not reach a final resolution within the sixtysuch 30-day period, either Seller or Buyer may submit any unresolved Disputed Matters (the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b"Remaining Disputed Matters"); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.

Purchase Price Adjustment. (a) Within thirty In consideration of the sale, conveyance, transfer and assignment of the Shares to Buyer, Buyer shall pay Stockholders the following (30the "Purchase Price"): (i) at the Closing, the sum of $3,000,000 shall be payable by wire transfer, pursuant to the wire transfer instructions attached as Schedule -------- 2(a)(i), to be allocated among Stockholders in accordance with the percentages ------- set forth opposite each Stockholders name on Schedule 4(a); ------------- (ii) the sum of $1,000,000 shall be payable by delivery as soon as practicable after the Closing of certificates evidencing that number of shares of common stock of Parent (the "Common Shares") representing a value of $1,000,000, based on the average of the closing price of the Common Shares for the twenty business days immediately preceding the Closing Date, to be allocated among Stockholders in accordance with the percentages set forth opposite each Stockholder's name Schedule 4(a); and ------------- (iii) the sum of $750,000 shall be payable by wire transfer to the bank and account designated by Stockholders in writing, to be allocated among Stockholders in accordance with the percentages set forth opposite each Stockholders name on Schedule 4(a), ten (10) days after the final determination ------------- of the Closing Tangible Net Worth (as defined herein). (b) It is the intention of the parties that Corporation's Net Worth (as hereinafter defined) at the Closing (the "Closing Tangible Net Worth") be equal to or greater than $2,000,000. If the Closing Tangible Net Worth is determined to be less than $2,000,000, any such deficiency shall be paid by Stockholders to Buyer by wire transfer of immediately available funds to the bank and account designated by Buyer in writing, (A) if no amounts or items shown on the Tangible Net Worth Statement (as hereinafter defined) have been disputed as provided herein, within 10 days after delivery to Stockholders of the Tangible Net Worth Statement, and (B) if any amounts or items shown on the Tangible Net Worth Statement have been disputed, within 10 business days following the resolution of all such disputed amounts or items as provided herein. As used in this Agreement, the term "Tangible Net Worth" means the amount by which the sum of the book value of the assets (excluding goodwill and other intangible assets) of Corporation exceeds the sum of the book value of the liabilities of Corporation, calculated in accordance with generally accepted accounting principles ("GAAP"), consistently applied. Within ninety 90 days following the Closing Date, Seller Stockholders and Stockholders' independent public accountants shall prepare and deliver to Buyer a statement setting forth the Closing Tangible Net Worth (the “"Tangible Net Assets Worth Statement”) setting forth (i) "). During such period of 90 days, Buyer shall provide Stockholders and Stockholders' accountants reasonable access during normal business hours, upon reasonable advance notice, to the sum books and records of Corporation; provided, however, that Stockholders -------- ------- shall schedule such access through an authorized representative of Buyer and in such a way as to avoid material disruption of the Accounts Receivable (net normal business of reserves), Business-related prepaids, Inventory (net Corporation. For a period of reserves) and Equipment and 60 days after the cash, accounts receivable (net date of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum delivery to Buyer of the Accounts PayableTangible Net Worth Statement, reserve for Warranty ExpensesStockholders shall provide Buyer and Buyer's accountants reasonable access during normal business hours, upon reasonable advance notice, to the work papers used by Stockholders and accounts payable and accrued expenses of Iteris GmbH, Stockholders' accountants in each case as preparing the Tangible Net Worth Statement. Unless Buyer notifies Stockholders in writing within 60 days after delivery to Buyer of the close of business Tangible Net Worth Statement that Buyer disputes one or more amounts or items shown on the Closing Date (“Closing Tangible Net Assets”). The Worth Statement, the Tangible Net Assets Worth Statement shall be preparedfinal, conclusive and binding on the parties hereto. If Buyer notifies Stockholders in writing within 60 days after delivery to Buyer of the Tangible Net Worth Statement that Buyer disputes one or more amounts or items shown on the Tangible Net Worth Statement, then Buyer and Stockholders shall promptly thereafter meet in good faith to attempt to resolve any and all such disputed amounts or items. If Buyer and Stockholders are unable to agree upon a resolution of any disputed amount within 15 days after receipt by Buyer of Stockholders' notice regarding the existence of such disputed amount or item, then such disputed amount or item shall be resolved by an independent nationally recognized accounting firm, selected by mutual agreement of Buyer and Stockholders, which is not then providing, and has not provided during the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following one- year period immediately preceding the Closing Date, the results services to any of which shall be adjusted from (i) Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as , or any of the Closing Dateits affiliates or (ii) Corporation, or any of its affiliates ( "Independent Accountants"). Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties Stockholders are unable to resolve an Objection within agree on mutually acceptable Independent Accountants during the sixty-15 day periodperiod referred to in the immediately preceding sentence, the parties then such Independent Accountants shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved be selected by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such Buyer's independent public accountant and Stockholders' independent public accountant. The resolution of all disputes; or (iii) if any such disputed amounts and items are submitted to by the Arbitrator for resolutionIndependent Accountants shall be final, conclusive and binding upon the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement parties. The fees and expenses of the Parties Independent Accountants shall be borne equally by Buyer and the resolution of all other disputes by the ArbitratorStockholders.

Purchase Price Adjustment. (a) Within thirty (30) 90 days after following the Closing Date, Seller Buyer shall prepare and deliver to Buyer a statement Seller its calculation (the “Net Assets Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall to be prepared, and the Closing Net Assets shall be calculated, made in accordance with the agreed procedures terms of Section 1.2) of the Cash Obligation Liabilities Excess Amount (if any), the Cash Amount and accounting practices set forth on Schedule 3.2(a) the Accrued Unfunded Pension Liability (the “Agreed ProceduresProposed Closing Statement” and, in its final and binding form after resolution of any disputes pursuant to this Section 1.4(a), the “Actual Closing Statement”) and the net book value adjusted Closing Purchase Price resulting from the Proposed Closing Statement, together with a copy of all supporting work papers (including schedules, memoranda and other documents) utilized in the preparation of the Inventory Proposed Closing Statement and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as calculation of the Closing Date as determined through Purchase Price, and Seller shall have a physical inventory conducted by Seller on or before period of 30 days (the fifth day following “Objection Period”) after delivery of the Proposed Closing DateStatement in which to provide written notice to Buyer of any objections thereto (the “Objection Notice”), setting forth the results specific item of the Proposed Closing Statement to which each such objection relates and the basis for each such objection in reasonable detail. The Proposed Closing Statement and the resulting Closing Purchase Price shall be adjusted from Buyer’s deemed to be accepted by Seller, and Seller’s books shall become final and records to reflect binding on the Inventory and Iteris GmbH inventory as parties, on the later of the expiration of the Objection Period or the date on which all objections have been resolved by the parties or the Accountant (as defined below) pursuant to this Section 1.4(a). If Seller gives any such Objection Notice within the Objection Period, then Seller and Buyer shall attempt in good faith to resolve any dispute concerning the item(s) subject to such Objection Notice as soon as practicable. If Seller and Buyer do not resolve any dispute arising in connection with the Proposed Closing Date. Buyer or its representatives Statement within the time period specified below, such dispute shall have be resolved in accordance with the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included procedures set forth in Schedule 3.2(a)Section 1.4(b) below. (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has and Seller have not been prepared in accordance with the Agreed Procedures, Buyer may deliver able to Seller resolve a written notice of objection no later than thirty (30) dispute within 30 days after the date on which Seller delivered of delivery of the Net Assets Statement to BuyerObjection Notice, which notice shall specify 30 day period may be extended by written agreement of Buyer and Seller (such period, as it may be extended, the nature of each dispute and the basis therefor (a “Net Assets ObjectionInitial Resolution Period”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow submit such dispute to, and such dispute shall be resolved fully, finally and exclusively by a mutually agreeable nationally recognized independent accounting firm (the “Accountant”). The fees and expenses of Accountant incurred in the resolution of such dispute shall be borne equally by Buyer and Seller. Buyer and Seller shall use their respective reasonable best efforts to cause the Accountant to issue a written determination to Seller and Buyer as promptly as practicable, but in any event within 30 days, following the date on which the Proposed Closing Statement is delivered to the Accountant, with such determination based on the written submissions and other information requested by the Accountant related to the disputed items that have been submitted by the parties to the Accountant, as to whether and to what extent (if any) the Proposed Closing Statement and resulting adjustment in the Closing Purchase Price require adjustment. The parties shall instruct the Accountant to, and shall use their respective best efforts to cause the Accountant to, make its determination in a manner consistent with Section 1.2(c) hereof. Such written determination shall provide a written explanation in reasonable detail of each such required adjustment, including the basis therefor. All negotiations pursuant to this Section 1.4(b) shall be treated as compromise and settlement negotiations for purposes of Rule 408 of the Federal Rules of Evidence and comparable state rules of evidence, and all negotiations, submissions to the Accountant, and arbitration proceedings under this Section 1.4(b) shall be treated as confidential information. The Accountant shall be bound by a mutually agreeable confidentiality agreement. The procedures set forth of this Section 1.4(b) are exclusive and the determination of the Accountant shall be final, non-appealable and binding on the parties. The decision rendered pursuant to this Section 1.4(b) may be filed as a judgment in any court of competent jurisdiction. Either party may seek specific enforcement or take other necessary legal action to enforce any decision under this Section 1.4(b). The other party’s only defense to such a request for specific enforcement or other legal action shall be fraud by or on the part of the Accountant. Absent such fraud, such other party shall reimburse the party seeking enforcement for its Third Party Expenses (as defined in Section 3.311.2 hereof) related to such enforcement. (c) As used hereinPromptly after the Actual Closing Statement, the term Adjustments and the resulting Closing Purchase Price calculated with reference thereto become final and binding on the parties under subsections (a) and (b) of this Section 1.4, the Estimated Closing Purchase Price shall be recalculated by giving effect to such final and binding amounts (as recalculated, the “Final Net Assets Statement” means Closing Purchase Price”). (i) If the Net Assets Statement if Estimated Closing Purchase Price is greater than the Final Closing Purchase Price, Seller shall pay to Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); within one business day by wire transfer of immediately available funds, the amount by which the Estimated Closing Purchase Price exceeds the Final Closing Purchase Price. (ii) if If the Estimated Closing Purchase Price is less than the Final Closing Purchase Price, Buyer timely gives a Net Assets Objection and all shall pay to Seller within one business day by wire transfer of the disputed items are resolved by mutual agreement of the Partiesimmediately available funds, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to amount by which the Arbitrator for resolution, Final Closing Purchase Price exceeds the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the ArbitratorEstimated Closing Purchase Price.

Purchase Price Adjustment. Within sixty (a) Within thirty (3060) days after the Closing ------------------------- Date, Seller shall the Buyer will prepare and deliver to Buyer the Seller a statement balance sheet (the “Net "Closing Date Balance Sheet") which shall reflect the Acquired Assets Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case -------------------------- Assumed Liabilities as of the close of business on the Closing Date. For purposes of the Closing Date Balance Sheet, the Acquired Assets and the Assumed Liabilities will be given carrying values in accordance with GAAP applied on a basis substantially similar to the basis used in preparing the Financial Statements attached to this Agreement as Exhibit F (“Closing Net Assets”provided such basis complied with GAAP). The Without limitation of the foregoing, the Closing Date Balance Sheet shall (i) reflect the historical cost (less appropriate reserves) of the Acquired Assets as determined in accordance with GAAP, (ii) include an adequate inventory reserve as determined in accordance with GAAP based upon a physical inspection by the Buyer's independent accountants of the inventory included in the Acquired Assets, (iii) include an adequate allowance for doubtful accounts as determined in accordance with GAAP with respect to the accounts receivable included in the Acquired Assets reflecting the Buyer's experience in collecting such accounts between the Closing Date and the date on which the Closing Date Balance Sheet is completed, and (iv) include a reserve for warranty claims (including $30,000 for completion of the Seller's contractual obligations in respect of the "KORDI contracts" as described in (S) 3(u) below) equal to the $105,000.00 for all such potential claims. To the extent that the difference between (i) the Acquired Assets and (ii) the Assumed Liabilities as shown on the Closing Date Balance Sheet (the "Net Assets Statement Asset Value") is less than $2,093,127.00 (the "Agreed --------------- ------ Net Asset Value"), then the Purchase Price shall be preparedreduced on a dollar for --------------- dollar basis by the amount of such difference. To the maximum extent practicable, and the Closing Net Assets amount of any such difference shall be calculated, deducted from the Escrow Amount and promptly returned by the Escrow Agent to the Buyer in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)Escrow Agreement. (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.

Purchase Price Adjustment. The Purchase Price shall be subject to adjustment following the Closing as follows: (a) Within thirty (30) As soon as practicable, but in no event later than 60 calendar days after the Closing Date, Seller the Buyer shall prepare and deliver to the Sellers’ Representative the Closing Balance Sheet. The Closing Balance Sheet shall be accompanied by a report setting forth a calculation of the Net Working Capital and Unrestricted Cash, in each case, based on the Company’s consolidated financial results as set forth in the Closing Balance Sheet (the Closing Balance Sheet together with such report, collectively, the “Buyer’s Report”). During the preparation of the Buyer’s Report by the Buyer and the period of any dispute with respect to the application of this Section 3.1(a), each party shall cooperate with the others to the extent reasonably requested by such parties to prepare the Closing Balance Sheet or to investigate the basis for any dispute, as applicable. The Buyer’s Report shall be examined by the Sellers’ Representative, and the Sellers’ Representative shall, not later than 30 calendar days after receipt of the Buyer’s Report, render a statement report thereon (the “Net Assets Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net AssetsBalance Sheet Report”). The Net Assets Statement Closing Balance Sheet Report shall be preparedlist those items, if any, to which the Sellers’ Representative takes exception and the Sellers’ Representative’s proposed adjustment. If the Sellers’ Representative fails to deliver to the Buyer the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value Balance Sheet Report within 30 calendar days following receipt of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing DateBuyer’s Report, the results of which Sellers’ Representative shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance have accepted the Closing Balance Sheet for the purposes of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted adjustment to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.Purchase Price under Section 3.1

Purchase Price Adjustment. (a) Within thirty (30) days after The Company shall deliver to Buyer, at least three Business Days prior to the Closing Date, Seller shall prepare and deliver to Buyer a statement of the Company (the “Net Assets Estimated Closing Statement”) ), certified by an officer of the Company, setting forth in reasonable detail the Company’s good faith estimates of (i) the sum Closing Net Working Capital Amount (the “Estimated Net Working Capital Amount”), including a calculation of Current Assets and Current Liabilities (in each case, with each of the Accounts Receivable (net of reservesline items used in such calculation and the entries in the Company’s general ledger from which such line items are derived), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum Closing Date Cash (the “Estimated Closing Date Cash”), (iii) the Closing Indebtedness (the “Estimated Closing Indebtedness”), (iv) Transaction Expenses (the “Estimated Transaction Expenses”), (v) the number of Shares outstanding as of the Accounts PayableEffective Time and (vi) based on such estimates described in the foregoing clauses (i) through (v), reserve for Warranty Expenses, a calculation of the Closing Merger Consideration and accounts payable and accrued expenses of Iteris GmbHthe Per Share Consideration, in each case as case, with reasonable supporting detail therefor sufficient to allow Buyer to independently calculate such amounts (including an itemized list of the close of business on the Closing Date (“Closing Net Assets”components thereof). The Net Assets Statement , and such estimates shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed ProceduresAccounting Principles and consistent with Section 2.8(h). The Estimated Net Working Capital Amount, the Estimated Closing Date Cash, the Estimated Closing Indebtedness and the Estimated Transaction Expenses shall, subject to Section 2.8(b), be used to calculate the Closing Merger Consideration and the Per Share Consideration, and shall be subject to adjustment as set forth in this Section 2.8. (b) Within two Business Days of the Company’s delivery of the Estimated Closing Statement, if Buyer acting in good faith has any objections with respect to one or more line items on the Estimated Closing Statement so delivered, then Buyer may deliver to Seller the Company a written notice of objection no later than thirty statement describing its objections in reasonable detail (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets ObjectionPre-Closing Dispute Notice”). Failure by Buyer and the Company shall use their respective good faith efforts to deliver a Net Assets Objection within the thirty-day period will be deemed resolve any dispute with respect to be Buyer’s acceptance any of the Net Assets line items on the Estimated Closing Statement as prior to the Final Net Assets Statementanticipated Closing Date. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in If Buyer and the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties Company are unable to resolve an Objection within all disputes with respect to any of the sixtyline items on the Estimated Closing Statement prior to the anticipated Closing Date, then the Estimated Closing Statement as originally delivered pursuant to Section 2.8(a) and, if applicable, as revised following mutual agreement between Buyer and the Company on any disputes, shall constitute the Estimated Closing Statement for all purposes under this Agreement. Buyer’s election to not deliver a Pre-day periodClosing Dispute Notice, or to not dispute any amount included in, or component of any such amount included in, the parties Estimated Closing Statement in any Pre-Closing Dispute Notice or any agreed upon adjustments to the Estimated Closing Statement, shall follow not limit, or have any effect on, Buyer’s rights pursuant to Section 2.8(b) to conduct a review of the arbitration procedures set forth in Section 3.3Closing Net Working Capital Amount, Closing Date Cash, the Closing Indebtedness, Transaction Expenses and the number of Shares outstanding as of the Effective Time, and to deliver the Closing Date Schedule based on such review. (c) As used hereinsoon as reasonably practicable, but no later than 75 days following the term “Final Net Assets Statement” means Closing Date, Buyer shall, at its expense, (i) cause to be prepared a statement (the “Closing Date Schedule”) setting forth in reasonable detail Buyer’s good faith calculation of the Closing Net Assets Statement if Working Capital Amount, Closing Date Cash, the Closing Indebtedness, Transaction Expenses and the number of Shares outstanding as of the Effective Time, in each case without giving effect to the transactions occurring at the Closing or any purchase accounting or similar adjustments resulting from the consummation of the transactions contemplated by this Agreement, and, based on such amounts, Buyer’s calculation of the Purchase Price, the Closing Merger Consideration and the Per Share Consideration and (ii) deliver to the Stockholder Representative the Closing Date Schedule, together with a certificate of Buyer does not deliver a Net Assets Objection confirming that the Closing Date Schedule was prepared in good faith and in accordance with this Section 3.2(b2.8(b); (ii) if Buyer timely gives a . The Closing Date Schedule, including the Closing Net Assets Objection Working Capital Amount, Closing Date Cash, Closing Indebtedness and all of Transaction Expenses, shall be prepared in accordance with the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties Agreed Accounting Principles and the resolution of all other disputes by the Arbitratorconsistent with Section 2.8(h).

Purchase Price Adjustment. The Adjustment (as defined below) ------------------------- will be determined as follows: (a) Within Cambridge and Seller agree that the Final Cash Purchase Price shall be determined as follows: (i) Twenty-Seven Million Five Hundred Sixty Thousand Dollars ($27,560,000); (iii) plus any amount that (A) Actual Total Accounts Receivable Amount less Actual Trade Accounts Payable amount exceeds (B) $10,600,000 or -- minus any that (A) $10,600,000 exceeds (B) the Actual Total Accounts Receivables Amount less the Actual Trade Accounts Payable Amount, as the case may be. (b) As promptly as possible following the Closing Time, but in any event within thirty (30) days after following the Closing DateTime, Seller shall prepare and deliver to Buyer Cambridge a closing statement (the “Net Assets "Closing Statement”") setting forth (i) for the sum of the Actual Non-Tooling Accounts Receivable (net of reserves)Amount, Business-related prepaids, Inventory (net of reserves) and Equipment the Actual Total Accounts Receivable Amount and the cashActual Trade Accounts Payable Amount (collectively, accounts receivable (net of reserves), prepaids, inventory (net of reservesthe "Actual Receivable and Payable Items") and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”)Time. The Net Assets Closing Statement shall be preparedprepared in accordance with the GenCorp Accounting Principles and, and to the Closing Net Assets shall be calculatedextent not described in the GenCorp Accounting Principles, in accordance with GAAP consistently applied (for purposes of this Section 2.07 collectively referred to as the agreed procedures and accounting practices set forth on Schedule 3.2(a) ("Accounting Principles"). Cambridge shall give Seller access to the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of data necessary to prepare the Closing Date as determined through a physical inventory conducted by Statement and provide Seller on or before with the fifth day following the Closing Date, the results reasonable assistance of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as Cambridge's employees in connection therewith. Representatives of the Closing Date. Buyer or its representatives Cambridge shall have the right to observe participate with the physical inventory representatives of Seller in the process of preparing the Closing Statement and shall have full access to all books data, schedules and records work papers used by Seller in preparing the Closing Statement. Cambridge shall have the right to have the Closing Statement audited and Seller shall reasonably cooperate with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included Cambridge and Cambridge's accountants in Schedule 3.2(a)conducting such audit. (bc) If Buyer reasonably believes that The Closing Statement shall become final and binding upon Cambridge unless on or before the Net Assets (30th) day after Cambridge's receipt of the Closing Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may Cambridge shall deliver to Seller a written notice of its objection to the amount of any Actual Receivable and Payable Item on the Closing Statement, together with proposed changes thereto and the reasons for such changes; provided, however, that the only objection to the Closing Statement which Cambridge may make is whether the Closing Statement accurately reflects, in accordance with the Accounting Principles used to prepare the Closing Statement, the book value or book amount of the Actual Receivable and Payable Items included thereon. Cambridge may not object to any other matter pertaining to the Closing Statement. All matters on which no notice of objection is given shall be deemed final and binding. In no event may Cambridge submit a notice of objection which suggests a change in the Closing Statement of less than $100,000 in the aggregate. (d) If Cambridge issues a notice of objection, Seller and Cambridge shall meet and attempt to resolve the dispute within fifteen (15) days following Cambridge's notice of objection. If the parties resolve all or some of the matters in dispute within such fifteen (15) day period then the parties shall prepare and sign an Adjusted Closing Statement reflecting such agreement which shall be deemed final and binding. As to matters which remain in dispute after such fifteen (15) day period ("Unresolved Matters"), the Closing Statement shall be deemed final unless Cambridge shall within ten (10) days after the end of such fifteen (15) day period request that the Closing Statement be reviewed by the Accounting Firm. (e) Cambridge shall give notice of its request for review by the Accounting Firm to Seller in writing and shall within ten (10) days after such notice submit a written statement of its position to the Accounting Firm and to Seller. Seller may within ten (10) days of Cambridge submitting its written statement to the Accounting Firm respond to such written statement with its own written statement. The Accounting Firm shall consider both written statements as it performs its duties. The authority of the Accounting Firm in reviewing the Closing Statement shall be limited to determining whether, as to the Actual Receivable and Payable Items included within the Unresolved Matters, the Closing Statement accurately reflects, in accordance with the Accounting Principles used to prepare the Closing Statement, the book value or book amount of such Actual Receivable and Payable Items. The Accounting Firm shall not have the authority to review or make a determination with respect to any matter except the Actual Receivable and Payable Items included within Unresolved Matters, it being understood that the Accounting Firm shall not be retained to conduct its own independent audit or review, but rather shall be retained only to resolve specific differences between Seller and Cambridge within the range of such difference and consistent with the Accounting Principles. The Accounting Firm may request that each of the parties provide it additional information in connection with its review of the Unresolved Matters. The parties shall require the Accounting Firm to complete its review not later than thirty the thirtieth (3030th) day following the submission of the matter to the Accounting Firm. Cambridge and Seller shall bear the fees and expenses of review by the Accounting Firm in the same proportion as the ratio of each parties' position is to the final determination by the Accounting Firm, as determined by the Accounting Firm, whose determination shall be final and binding on the parties. (f) The Accounting Firm shall prepare a report of any adjustments to such Actual Receivable and Payable Items it deems necessary so that such Actual Receivable and Payable Items are reflected on the Closing Statement in accordance with the Accounting Principles. Such report shall contain an explanation of any such adjustment and a description of why the Accounting Principles required such adjustment. Promptly after its completion, the Accounting Firm shall provide such report to Seller and Cambridge. Seller shall incorporate all such adjustments into the Closing Statement within fifteen (15) days after receipt of such adjustments, which shall thereupon become the Adjusted Closing Statement and which shall be final and binding upon Cambridge and Seller. (g) Within ten (10) days after the date on which Seller delivered the Net Assets Closing Statement to Buyer, which notice shall specify or the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Adjusted Closing Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection becomes final in accordance with this Section 3.2(b2.07 (such tenth day being referred to herein as the "Settlement Date"); (ii, Seller shall pay to Cambridge the amount, if any, by which the Final Cash Purchase Price Capital Amount is less than the Estimated Cash Purchase Price or Cambridge shall pay to Seller the amount, if any, by which the Final Cash Purchase Price is more than the Estimated Cash Purchase Price, together with, in either case, interest from the Closing Time on the amount paid under this Section 2.07(g) if Buyer timely gives a Net Assets Objection and all calculated at an annual rate equal to the prime rate as publicly announced by Citibank, N.A., New York, New York as of the disputed items are resolved by mutual agreement of Closing Time (any amount so paid under this Section 2.07(h) the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator"Adjustment").

Purchase Price Adjustment. (a) Within thirty ninety (3090) days after the Closing Date, Seller Pfizer shall prepare and deliver to Buyer Purchaser a statement (the “Net Assets Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum Working Capital of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand Business as of the Closing Date as determined through a physical inventory conducted by Seller on or before (the fifth day following the Closing Date, the results of which "Working Capital Statement"). The Working Capital Statement shall be adjusted from Buyer’s unaudited and Seller’s books and records to reflect shall state the Inventory and Iteris GmbH inventory Working Capital of the Business as of the Closing Date, taking into account any transfers made pursuant to Section 2.3(d) and the settlement of any Liabilities referred to in Section 2.6(e) after the Closing Date, which for the purposes of the Working Capital Statement shall be deemed to have been settled on the Closing Date at the amount settled. Buyer or its representatives Purchaser shall have the right to observe the physical inventory and shall have full provide Pfizer with access to all books the books, records, and records with respect personnel of the Business necessary for Pfizer to prepare the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)Working Capital Statement. (b) If Buyer reasonably believes Purchaser may dispute the amounts reflected on the line items of the Working Capital Statement (a "Disputed Item"), but only (i) on the basis that an entry contained on such Working Capital Statement is based on facts or occurrences arising solely between the Net Assets date of the unaudited financial statements described on Schedule 1.1(b) hereto and the date of the Working Capital Statement, (ii) an entry contained on such Working Capital Statement contains errors was not made in a manner consistent with the unaudited financial statements attached hereto as Schedule 1.1(b), (iii) a Disputed Item does not reflect, or has not been prepared made in accordance a manner consistent with, the provisions of this Agreement, and (iv) to the extent the amount disputed with respect to any one Disputed Item exceeds $1,000,000 and all such Disputed Items exceed $5,000,000 in the Agreed Proceduresaggregate; provided, Buyer may deliver to Seller a written notice however, the Purchaser shall notify Pfizer in writing of objection no later than each Disputed Item, and specify the amount thereof in dispute and the basis therefor, within thirty (30) days after receipt of the date on which Seller delivered the Net Assets Statement Working Capital Statement. The failure by Purchaser to Buyer, which provide a notice shall specify the nature of each dispute and the basis therefor Disputed Items to Pfizer within such thirty (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-30) day period will be deemed to be Buyer’s constitute Purchaser's acceptance of all the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth items in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3Working Capital Statement. (c) As used hereinIf a notice of Disputed Items shall be timely delivered pursuant to subclause (b) above, Pfizer and the Purchaser shall, during the ten (10) Business Days following the date of such delivery (the "Resolution Period"), negotiate in good faith to resolve the Disputed Items. If, during such Resolution Period, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items parties are resolved by mutual agreement of the Partiesunable to reach agreement, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties Pfizer and the resolution of Purchaser shall refer all unresolved Disputed Items to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co., or any other disputes "big six" independent accounting firm as Pfizer and Purchaser shall mutually agree upon (the "Independent Accountant"). The Independent Accountant shall make a determination with respect to each unresolved Disputed Item within fifteen (15) days after its engagement by the Arbitrator.Pfizer and Purchaser to resolve such Disputed Items, which determination shall be made in accordance

Purchase Price Adjustment. It is understood and agreed that Seller's Net Current Assets (aas hereinafter defined) Within thirty will be not less than zero as of the Closing. For purposes hereof, Net Current Assets means the net book value, as of the Closing, of all Current Assets (30as hereinafter defined) days after included in the Closing DatePurchased Assets, Seller shall prepare and deliver to Buyer a statement less all Current Liabilities (as hereinafter defined) included in the “Net Assumed Liabilities. For purposes of the foregoing, Current Assets Statement”) setting forth means all (i) the sum of the Accounts Receivable inventory; (net of reserves), Business-related prepaids, Inventory (net of reservesii) and Equipment and the cash, accounts receivable (net of reservesallowance for doubtful accounts), prepaids, inventory ; and (net of reservesiii) and equipment of Iteris GmbH minus cash or cash equivalents. Current Liabilities means all (i) trade payables; (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and liabilities under Assumed Contracts accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date Closing; and (“Closing Net Assets”)iii) refund obligations. The Net Assets Statement shall be preparedAs soon as practicable, and in any event within 30 days, following the Closing Net Assets Closing, Buyer and Seller shall be calculatedjointly prepare (and in the absence of agreement, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP shall prepare) a statement (the “Agreed Procedures”"Closing Statement") setting forth Seller's Current Assets and Current Liabilities and showing the net book value computation of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand Net Current Assets as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its deliveryClosing. In the event that the Parties Net Current Assets shown on such Closing Statement are unable to resolve an Objection within the sixty-day periodless than zero, the parties Purchase Price shall follow be reduced dollar-for- dollar by the arbitration procedures set forth in Section 3.3. amount of any such deficit. Any such reduction will be effected solely by means of a cancellation of Escrow Shares (cas hereinafter defined) As used hereinhaving a market value equal to the dollar amount of the applicable reduction. For purposes of the foregoing, the term “Final Net Assets Statement” means (i) market value of such Escrow Shares shall be an amount per share equal to the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all closing sale price of the disputed items are resolved by mutual agreement Common Stock on the date of the Parties, Closing on the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or principal market on which the Common Stock is then traded (iii) if any disputed items are submitted to currently the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the ArbitratorNasdaq SmallCap Market).

Purchase Price Adjustment. (a) Within thirty sixty (3060) days after the Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Net Assets Statement”) setting forth (i) the sum of assets and liabilities of the Accounts Receivable Business (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment including only the Assets transferred to Buyer pursuant hereto and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reservesAssumed Liabilities) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Business Day immediately preceding the Closing Date (“the "Closing Net Assets”Statement of Assets and Liabilities"). The Net Closing Statement of Assets and Liabilities will be in a format comparable to the Balance Sheet. Buyer shall cooperate with Seller in connection with, and shall furnish to Seller all such information as Seller may reasonably require, in the preparation of the Closing Statement of Assets and Liabilities. Except as set forth in Schedule 2.5(a), the Closing Statement of Assets and Liabilities: (i) shall be prepared, and the Closing Net Assets shall be calculated, prepared in accordance with the agreed procedures books and accounting practices records of Seller; (ii) shall fairly present the financial position of the Business; (iii) shall utilize the same methodologies for determining foreign currency exchange rates as were used in the preparation of the Balance Sheet; (iv) shall utilize the same estimation methodologies used for determining EACs as were used in the preparation of the Balance Sheet, with EACs updated to reflect changes in facts and circumstances (including the matters set forth on in Schedule 3.2(a4.7) (occurring subsequent to the “Agreed Procedures”EACs referred to in Schedule 2.5(a) and prior to the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as date of the Closing Date Statement of Assets and Liabilities; (v) shall not include any assets held in trust for the benefit of any participants in any of Seller's pension plans; and (vi) except as determined through may be otherwise specified in Schedule 2.5(a), shall be prepared in accordance with GAAP consistently applied using the same accounting methods, policies, practices and procedures, with consistent classifications and estimation methodologies as were used in the preparation of the Financial Statements, and will not include any changes in assets or liabilities as a physical inventory conducted by Seller on result of purchase accounting adjustments arising from or before resulting as a consequence of the fifth day following transactions contemplated hereby. In the event that the Closing DateDate does not occur at a financial week or month end for accounting purposes, the results parties shall agree on mutually acceptable roll forward or roll back procedures. Buyer shall cause the employees of which shall be adjusted from Buyer’s and Seller’s books and records the Business to reflect assist Seller in the Inventory and Iteris GmbH inventory as preparation of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory Statement of Assets and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)Liabilities. (b) If Buyer reasonably believes that Each party shall provide the other party and its representatives with reasonable access to books and records and relevant personnel during the preparation of the Estimated Closing Net Assets and the Closing Statement contains errors or has not been prepared in accordance with of Assets and Liabilities and the Agreed Proceduresresolution of any disputes that may arise under this Section 2.5. (c) Within sixty (60) days after delivery of the Closing Statement of Assets and Liabilities, Buyer may deliver dispute all or any portion Seller's calculation of the Closing Net Assets or as described on the Closing Statement of Assets and Liabilities by giving written notice (a "Notice of Disagreement") to the Seller setting forth in reasonable detail the basis for any such dispute (any such dispute being hereinafter called a "Disagreement"), identify the specific items involved and the dollar amount of each such disagreement and provide reasonable supporting documentation for each such Disagreement. The parties shall promptly commence good faith negotiations with a view to resolving all such Disagreements. If Buyer does not provide a Notice of Disagreement to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-sixty (60) day period will as set forth in this subsection (d), Buyer shall be deemed to be have accepted as final such Closing Statement of Assets and Liabilities in the form delivered to it by Seller. Additionally, after the sixty (60) day period referred to above, Buyer may not introduce any new Disagreement with respect to an item in the Closing Statement of Assets and Liabilities or increase the amount of a Disagreement. Similarly, a Disagreement by Buyer does not provide Seller any right to introduce any changes to the calculation of Closing Net Assets; provided that nothing herein shall prevent Seller from asserting or Buyer from opposing any offset that may result from an item in Buyer’s acceptance 's Notice of Disagreement. During the sixty (60) day period of its review, Buyer shall have reasonable 14 access to any documents, schedules or workpapers used in the preparation of the Net Closing Statement of Assets Statement as the Final Net Assets Statement. The Parties shall attempt and Liabilities. (d) Buyer and Seller agree to negotiate in good faith to reach agreement resolving resolve any such Disagreement. If Buyer and Seller are unable to resolve all disputes set forth in the Net Assets Objection Disagreements properly identified by Buyer pursuant to Section 2.5(c) within sixty (60) days after its delivery. In delivery to Seller of written notice of such Disagreement, then, within thirty (30) days thereafter, Buyer and Seller shall jointly select an arbiter from one of the event "Big 5" accounting firms that is not the Parties independent auditor of either Buyer or Seller; if Buyer and Seller are unable to resolve select such an Objection arbiter within the sixty-day such time period, the parties American Arbitration Association shall follow make such selection (the person so selected shall be referred to herein as the "Accounting Arbitrator"). The Disagreement shall be submitted for final and binding arbitration procedures to the Accounting Arbitrator so selected for a resolution of such Disagreement in accordance with the terms of this Agreement. The Accounting Arbitrator will only consider those items and amounts set forth in Section 3.3the Closing Statement of Assets and Liabilities as to which Buyer and Seller have disagreed within the time periods and on the terms specified above and must resolve the matter in accordance with the terms and provisions of the Agreement. The Accounting Arbitrator shall deliver to Buyer and Seller, as promptly as practicable and in any event within one hundred and twenty (120) days after its appointment, a written report setting forth the resolution of any such disagreement determined in accordance with the terms of the Agreement. The Accounting Arbitrator shall select as a resolution the position of either Buyer or Seller for each item of disagreement and may not impose an alternative resolution. The Accounting Arbitrator shall make its determination based solely on presentations and supporting material provided by the parties and not pursuant to any independent review. The determination of the Accounting Arbitrator shall be final and binding upon Buyer and Seller. The fees, expenses and costs of the Accounting Arbitrator shall be borne one-half by Buyer and one-half by Seller. (ce) As used herein, If the term “Final Closing Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection as finally determined in accordance with this Section 3.2(b); (ii) 2.5 are less than the Estimated Closing Net Assets, the Purchase Price shall be decreased on a dollar-for-dollar basis by the amount of such shortfall, and if Buyer timely gives a the Closing Net Assets Objection are greater than the Estimated Closing Net Assets, the Purchase Price shall be increased on a dollar-for-dollar basis by the amount of such excess. If any adjustment under this Section 2.5 results in a reduction in the Purchase Price, Seller shall pay to Buyer the amount of such reduction, and all if any adjustment results in an increase in the Purchase Price, Buyer shall pay to Seller the amount of such increase, in each case, by wire transfer of immediately available funds to an account designated by the party receiving payment within five (5) Business Days after the final determination of the disputed items are resolved by mutual agreement amount of such reduction or increase in Purchase Price, plus interest on the Parties, amount of such reduction or increase from the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted Closing Date to the Arbitrator for resolutiondate of such payment thereof at the per annum rate equal to the rate announced by Citibank, N.A. in the Net Assets Statement, City of New York as amended, if necessary, to reflect any resolution of any disputes by agreement of its base rate in effect on the Parties and the resolution of all other disputes by the ArbitratorClosing Date.

Purchase Price Adjustment. (ai) Within thirty ten (3010) days after Business Days following the Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Net Assets Inventory Statement”) setting forth (i) the sum Seller’s determination of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum value of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case Inventory transferred to Buyer as of the close Closing (including, for the avoidance of business doubt, any Inventory retained by Seller or any Selling Affiliate on behalf of Buyer pursuant to the Transition Services Agreement) (as of 11:59 P.M., local time in each jurisdiction where the Inventory is located, on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(aDate) (the “Agreed ProceduresClosing Inventory”) and a calculation of the net book amount, if any, payable pursuant to Section 1.3(g). In connection with the preparation of the Inventory Statement, Buyer shall (A) assist, and shall cause its Affiliates to assist, Seller, its accountants, advisors and other representatives in its preparation of the Inventory Statement and (B) afford to Seller, its accountants, advisors and other representatives, reasonable access during normal business hours to the personnel, properties, books and records of the Business to the extent relevant to the preparation of the Inventory Statement (including any taking and preparing of physical counts of Inventory). For purposes of this Section 1.3, the value of the Inventory and Iteris GmbH inventory shall transferred to Buyer will be computed based upon determined by reference to the quantities price for each component of Closing Inventory and Iteris GmbH inventory as set forth on hand as Section 2.22 of the Closing Date as determined through a physical inventory conducted Seller Disclosure Letter and shall include only Inventory that (A) has been approved and released by Seller or such applicable Selling Affiliate appointed qualified person in compliance with applicable Laws, (B) has an unexpired shelf life of not less than nine (9) months, or solely for the Product SKUs set forth on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as Section 1.3(b)(i) of the Closing Date. Buyer Seller Disclosure Letter, an unexpired shelf life of not less than eighteen (18) months, and (C) has not been damaged, recalled and/or incorrectly packaged or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)labelled. (bii) If Buyer reasonably believes that For the Net Assets Statement contains errors or has not been prepared in accordance with purposes of clarification only, Seller is retaining all Pre-Closing Accounts Payable and Pre-Closing Accounts Receivable and the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days only Purchase Price adjustment after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period Closing will be deemed to be Buyer’s acceptance the adjustment of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith Inventory pursuant to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in this Section 3.31.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.

Purchase Price Adjustment. (a) Within thirty As promptly as practicable, but in any event within ninety (3090) days after the Closing Date, Seller Parent shall prepare and deliver to Buyer the Equityholder Representative a written statement (the “Net Assets Purchase Price Adjustment Statement”) setting forth in reasonable detail Parent’s good faith calculation of (i1) the sum of Closing Cash, the Accounts Receivable (net of reserves)Closing Net Working Capital, Business-related prepaids, Inventory (net of reserves) and Equipment the Closing Indebtedness and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Transaction Expenses, and accounts payable and accrued expenses (2) Parent’s determination of Iteris GmbHthe Aggregate Closing Merger Consideration based on the foregoing clause (1), together with reasonably detailed supporting calculations, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be preparedcase, and the Closing Net Assets shall be calculated, determined in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)this Agreement. (b) If Buyer Following the delivery of the Purchase Price Adjustment Statement, for purposes of this Section 2.8, Parent shall provide the Equityholder Representative and its Representatives with reasonable access at reasonable times to the Business Records, work papers and other documents that were used in, or are relevant to, the preparation of the Purchase Price Adjustment Statement, internal and external accountants, and relevant personnel of the Company Group to verify the accuracy of such amounts, all to the extent reasonably believes requested by the Equityholder Representative; provided that the Net Assets Equityholder Representative and its representatives shall maintain the confidentiality of any such information furnished pursuant to this Section 2.8(b) and, solely with respect to the Equityholder Representative’s receipt of workpapers of Parent’s and the Company Group’s external accountants, shall have entered into any customary access letters as may be reasonably required by such of Parent’s or the Company Group’s external accounting advisors. (c) If the Equityholder Representative disagrees with the calculation of any of the items set forth in the Purchase Price Adjustment Statement, the Equityholder Representative shall notify Parent in writing of such disagreement (an “Objection Dispute”) within forty-five (45) days after receipt of the Purchase Price Adjustment Statement contains errors by the Equityholder Representative (such period, the “Review Period”). The Objection Dispute shall set forth the basis for the Equityholder Representative’s dispute or has objections and the specific adjustments (including dollar amounts) to the Purchase Price Adjustment Statement that the Equityholder Representative believes in good faith should be made. Any amount, determination or calculation contained in the Purchase Price Adjustment Statement and not been prepared specifically disputed in a timely delivered Objection Dispute shall be final, conclusive and binding on the Parties. If the Equityholder Representative fails to deliver written notice of an Objection Dispute to Parent on or prior to the last day of the Review Period, the Purchase Price Adjustment Statement shall be deemed final and binding on the Parties for purposes of this Agreement. (d) If the Equityholder Representative delivers a notice of an Objection Dispute pursuant to Section 2.8(c), Parent and the Equityholder Representative shall negotiate in good faith to resolve any Objection Dispute and any resolution agreed to in writing by Parent and the Equityholder Representative shall be final and binding upon the Parties for purposes of this Agreement. If Parent and the Equityholder Representative are unable to resolve all Objection Disputes within twenty (20) days of delivery of written notice of such Objection Disputes by the Equityholder Representative to Parent, then the disputed matters shall, at the request of either the Equityholder Representative or Parent, be referred for final determination to Deloitte (the “Accounting Arbitrator”) as promptly as practicable following the end of such twenty (20) day period; provided, that any communications between the Equityholder Representative and Parent (or their respective Representatives) during the aforementioned twenty (20) day period shall be considered settlement discussions pursuant to the Federal Rule of Evidence 408 and similar state rules and the Accounting Arbitrator will be instructed to disregard any evidence of such communications in its consideration of the Objection Disputes. If such firm is unable to serve, Parent and the Equityholder Representative shall jointly select an Accounting Arbitrator from an accounting firm of national standing. If Parent and the Equityholder Representative are unable to agree upon an Accounting Arbitrator within such time period, then the Accounting Arbitrator shall be an accounting firm of national standing designated by the American Arbitration Association in New York, New York; provided, that the Accounting Arbitrator shall not have served as auditor for, or provided any other services to, Parent or the Company or their respective Subsidiaries. Parent and the Equityholder Representative each agree to promptly sign an engagement letter, in commercially reasonable form, as may reasonably be required by the Accounting Arbitrator. The Accounting Arbitrator shall act as an expert, not as an arbitrator, and its decision shall be limited to the positions taken on those items and amounts set forth on the Purchase Price Adjustment Statement and the Objection Dispute as to which Parent and the Equityholder Representative have disagreed within the applicable time periods and on the terms specified in Section 2.8(c) and this Section 2.8(d) and must resolve all unresolved Objection Disputes in accordance with the Agreed Procedures, Buyer may terms and provisions of this Agreement. The Accounting Arbitrator shall deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute Parent and the basis therefor Equityholder Representative, as promptly as practicable (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt and in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection any event within sixty (60) days days) after its deliverysubmission by Parent and the Equityholder Representative of the written presentations and written responses specified in the engagement letter with the Accounting Arbitrator, a written report setting forth the resolution of any unresolved Objection Disputes determined in accordance with the terms herein. The Accounting Arbitrator’s determination shall be based solely on the definitions and other applicable provisions of this Agreement, and any such submissions specified in the engagement letter, and not on independent review of the Accounting Arbitrator. Neither Parent nor the Equityholder Representative shall have any ex parte communications with the Accounting Arbitrator relating to this Section 2.8 or this Agreement. In the event that the Parties are unable to resolve an Objection within the sixty-day periodresolving any disputed item, the parties Accounting Arbitrator shall follow be bound by the arbitration procedures principles set forth in this Section 3.32.8 and shall not assign a value to any item greater than the greatest value for such item claimed by either Parent or the Equityholder Representative or less than the smallest value for such item claimed by either Parent or the Equityholder Representative. Such report shall be final and binding upon all of the Parties for purposes of this Agreement, absent manifest error by the Accounting Arbitrator or fraud. The fees, expenses and costs of the Accounting Arbitrator shall be borne by Parent and the Equityholder Representative, respectively, in the proportion that the aggregate dollar amount of the disputed items submitted to the Accounting Arbitrator by such Party that are unsuccessfully disputed by such Party (as finally determined by the Accounting Arbitrator) bears to the aggregate dollar amount of disputed items submitted by Parent and the Equityholder Representative. The Parties agree that the Accounting Arbitrator’s decision may be enforced as an arbitration award in any court of competent jurisdiction. (ce) As used hereinUpon the written agreement of Parent and the Equityholder Representative or the decision of the Accounting Arbitrator, or if the Equityholder Representative fails to deliver written notice of an Objection Dispute on or prior to the last day of the Review Period as provided in Section 2.8(c), the term Purchase Price Adjustment Statement, as modified pursuant to the written agreement of Parent and the Equityholder Representative or the decision of the Accounting Arbitrator, as applicable, shall be deemed to be the final Purchase Price Adjustment Statement for purposes of this Section 2.8 (the “Final Purchase Price Adjustment Statement”) and shall be deemed to be final and binding on the Parties for purposes of this Agreement. The Closing Cash, the Closing Net Assets Working Capital, the Closing Indebtedness, the Transaction Expenses, each as shown on the Final Purchase Price Adjustment Statement” means , shall be referred to as the “Final Closing Cash”, the “Final Closing Net Working Capital”, the “Final Closing Indebtedness”, and the “Final Transaction Expenses”, respectively. For purposes of this Agreement, (i) the “Final Closing Net Assets Statement if Buyer does not deliver Working Capital Adjustment Amount” means the amount equal to the Final Closing Net Working Capital, minus the Target Net Working Capital (which may be a Net Assets Objection in accordance with Section 3.2(b); positive or negative number) and (ii) if Buyer timely gives the “Final Aggregate Closing Merger Consideration” means (1) the Base Amount, plus (2) the Final Closing Cash, plus (3) the Final Closing Net Working Capital Adjustment Amount (whether such amount is a Net Assets Objection positive number or a negative number (and all for the avoidance of doubt, in the case of a negative number, with the addition of such negative number pursuant to this clause (3) having the same arithmetic result as the subtraction of the disputed items are resolved by mutual agreement absolute value of such negative number)), minus (4) the PartiesFinal Closing Indebtedness, minus (5) the Net Assets StatementFinal Transaction Expenses, as amendedminus (6) the Adjustment Escrow Amount, if necessaryminus (7) the Equityholder Representative Expense Amount, to reflect such resolution of all disputes; or minus (iii8) the Aggregate Preferred Stock Closing Accrued Value, minus (9) if any disputed items are submitted to the Arbitrator for resolutionAggregate Preferred Option Closing Accrued Value, plus (10) the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the ArbitratorAggregate Option Exercise Price.

Purchase Price Adjustment. (a) Within thirty (30) days On or as soon as practicable after the Closing Date, Seller shall prepare and deliver to Buyer a statement balance sheet (the “Net Assets StatementPreliminary Closing Balance Sheet”) setting forth as of the Closing Date on the same basis and applying the same accounting principles, policies and practices that were used in preparing the Financial Statements taking into account the Purchased Assets and none of the Excluded Assets. (i) The Preliminary Closing Balance Sheet shall be binding and conclusive upon, and deemed accepted by, Buyer unless the sum Buyer shall have notified Seller in writing of any objections with respect to the balances for accounts receivable, inventory, fixed assets and/or prepaid items set forth therein within five (5) days after receipt thereof. During the five (5)-day period after Buyer’s receipt of the Accounts Receivable Preliminary Closing Balance Sheet and, as applicable, thereafter, Seller shall make the work papers and back-up materials used in preparing the Preliminary Closing Balance Sheet insofar as they pertain to accounts receivable, inventory, fixed assets and prepaid items, as well as the personnel of Seller with knowledge regarding any underlying matters, available to Buyer at reasonable times and upon reasonable notice. Any written notice of the Buyer shall (net 1) specify in reasonable detail each item on the Preliminary Closing Balance Sheet that the Buyer disputes and (2) include a summary of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus Buyer’s reasons for such dispute. (ii) Disputes between Buyer and Seller relating to the sum Preliminary Closing Balance Sheet that cannot be resolved by them within ten (10) days after receipt by Seller of the Accounts Payablenotice referred to in Section 2.7(a)(i) above may be referred no later than twenty (20) days after such receipt for decision (at the request of either Buyer or Seller) to an independent nationally recognized accounting firm mutually agreeable to Buyer and Seller to decide the matter (the “Auditor”). Prior to referring the matter to the Auditor, reserve for Warranty ExpensesBuyer and Seller shall agree on the procedures to be followed by the Auditor (including procedures with regard to presentation of evidence). Such procedures shall not alter the accounting practices, principles and policies to be applied to the Preliminary Closing Balance Sheet, which shall be those required by this Agreement. If Buyer and Seller are unable to agree upon procedures before the end of fifteen (15) days after referral of the dispute to the Auditor, then the Auditor shall establish such procedures giving due regard to the intention of the Parties to resolve disputes as quickly, efficiently and inexpensively as possible, which procedures may, but need not, be those proposed by either of Buyer or Seller. Buyer and Seller shall then submit evidence in accordance with the procedures established, and the Auditor shall decide the dispute in accordance therewith. The Auditor’s decision on any matter referred to it shall be final and binding on Seller and Buyer. The fee of the Auditor shall be borne by Seller, on the one hand, and Buyer, on the other hand, in equal portions, unless the Auditor decides, based on its determination with respect to the reasonableness of the respective positions of Buyer and Seller, that the fee shall be bome in unequal proportions. Asset Purchase Agreement - HME Wireless Inc.DOC 8 (iii) The Preliminary Closing Balance Sheet shall become final and binding upon Buyer and Seller upon the earlier of: (1) the failure by the Buyer to object thereto within the period permitted under Section 2.7(a)(i) above; (2) the agreement between Buyer and Seller with respect thereto; or (3) the decision by the Auditor with respect to any disputes under Section 2.7(a)(ii) above. As adjusted, if applicable, pursuant to such agreement or such decision, the Preliminary Closing Balance Sheet, when final and binding, is referred to herein as the “Final Closing Balance Sheet.” (b) The Purchase Price will be adjusted downward on a dollar-for-dollar basis (i) for every dollar by which the accounts payable receivable as reflected on the Final Closing Balance Sheet are less than $450,000 and accrued expenses (ii) for every dollar by which the amount of Iteris GmbHinventory as reflected on the Final Closing Balance Sheet (including advanced payments on such inventory) is less than $350,000, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, determined in accordance with Section 2.7a). (c) No later than the agreed procedures and accounting practices set forth on Schedule 3.2(a5th day after the Final Closing Balance Sheet becomes final, as described in Section 2.7(a)(iii), Buyer shall pay to Seller the Holdback less the amount, if any, by which the Purchase Price is adjusted downward in accordance with Section 2.7(b) (the “Agreed ProceduresPurchase Price Adjustment”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (bd) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within Purchase Price Adjustment exceeds the sixty-day periodHoldback, the parties shall follow amount by which the arbitration procedures set forth Purchase Price Adjustment exceeds the Holdback will be paid by Seller to Buyer not later than the 5th day after Final Closing Balance Sheet becomes final, as described in Section 3.32.7(a)(iii). (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.

Purchase Price Adjustment. (a) Within thirty (30) five days after the Closing Date, Seller shall prepare and deliver to Buyer Purchaser the Statement of Adjustments, which shall set forth the Current Assets, the Capital Expenditure Amount and the Current Liabilities, including all adjustments as required in a statement (the “Net Assets Statement”) setting forth (i) the sum year-end closing of the Accounts Receivable (net of reserves)books, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum together with Seller's good faith determination of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)Purchase Price Adjustment. (b) If Buyer reasonably believes During the 30 days after Seller delivers the Statement of Adjustments, Seller shall permit Purchaser full access to Seller's and, with respect to the Business, Ball's books and records, as well as their respective working papers and the working papers of their respective accountants or other representatives, relating to the Statement of Adjustments for the purpose of determining whether the Current Assets and the Current Liabilities are properly and correctly reflected on the Statement of Adjustments. Unless Purchaser earlier provides written notice to Seller specifying in reasonable detail error(s) in the Statement of Adjustments or an item or items reflected therein that the Net Assets Statement contains errors or Seller has not been prepared treated properly or correctly (a "Notice of Disagreement"), ---------------------- 30 days after Seller delivers the Statement of Adjustments, the Statement of Adjustments shall become final and binding. If a Notice of Disagreement is received by Seller in compliance with the foregoing, then the Statement of Adjustments and the determination of the Purchase Price Adjustment (as revised in accordance with clause (x) or (y) below) shall become final and binding upon the parties on the earliest of (x) the date the parties hereto resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement or (y) the date all matters in dispute are finally resolved in writing by the Accounting Firm (as defined below). During the 30 days following delivery of a Notice of Disagreement, Purchaser and Seller shall seek in good faith to resolve in writing any differences which they may have with respect to the matters specified in the Notice of Disagreement. During such period, Seller shall be permitted to review Purchaser's books and records and working papers relating to the Notice of Disagreement. At the end of such 30-day period, Purchaser and Seller shall submit to a mutually satisfactory independent accounting firm (the "Accounting Firm") for review and resolution of --------------- all matters which remain in dispute which were included in the Notice of Disagreement, and the Accounting Firm shall make a final determination of the Statement of Adjustments and the Purchase Price Adjustment in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute guidelines and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in this Agreement. If Purchaser and Seller are unable to mutually agree on an Accounting Firm, Purchaser and Seller shall select a "big-six" Accounting Firm by lot (after excluding one big-six accounting firm selected by each of Purchaser and Seller). The Statement of Adjustments and the Purchase Price Adjustment as determined in accordance with this Section 3.32.6 shall become final and binding on the parties on the date the Accounting Firm delivers its final resolution in writing to the parties (which final resolution shall be delivered not more than 45 days following submission of such disputed matters). The fees and expenses of the Accounting Firm shall be shared equally by Purchaser and Seller. (c) As used hereinFor purposes of preparing the Statement of Adjustments and determining the Purchase Price Adjustment, Purchaser and Seller shall jointly take a physical count of all the term “Final Net Assets Statement” means Inventory as of 12:01 a.m. on the Closing Date, conducted and valued in accordance with Seller's past practices and procedures. (d) Within one business day after the Statement of Adjustments becomes final and binding on the parties, (i) if the Net sum of Current Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); plus the ---- Capital Expenditure Amount exceeds the sum of the Current Liabilities plus $11.0 ---- million, Purchaser shall pay to Seller by wire transfer of immediately available funds an amount equal to the difference, and (ii) if Buyer timely gives a Net Assets Objection and all the sum of the disputed items are resolved Current Liabilities plus $11.0 million exceeds the Current Assets plus the Capital ---- ---- Expenditure Amount, Seller shall pay to Purchaser by mutual agreement wire transfer of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted immediately available funds an amount equal to the Arbitrator for resolutiondifference, which amount, in either case, shall be the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator."Purchase Price Adjustment". -------------------------

Purchase Price Adjustment. (ai) Within thirty Attached as Schedule 2(e) is a statement (30the “Estimated Closing Statement”) setting forth Seller’s good faith estimate of Working Capital (the “Estimated Working Capital”) as of the Effective Time, which amounts shall be used to determine the calculation of the Purchase Price, Net Purchase Price and payments to be made pursuant to Section 2(b) at the Closing. (ii) As promptly as practicable, but in any event within 75 days after the Closing Date, Buyer will cause to be prepared and delivered to Seller shall prepare and deliver to Buyer a draft statement (the “Net Assets Draft Closing Statement”) ), setting forth Buyer’s determination of Working Capital with the same (ior greater) level of detail as set forth in the sum of the Accounts Receivable Estimated Closing Statement. Seller shall cooperate with Buyer and provide whatever information or documentation in Seller’s possession, custody or control and where applicable (net of reserves)if at all) such access to its personnel, Business-related prepaids, Inventory (net of reserves) during normal business hours and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbHin a manner that does not materially disrupt Seller’s business, in each case as that is reasonably requested by Buyer in order to prepare the Draft Closing Statement or to participate in the dispute resolution process set forth in this Section 2(e). (iii) Buyer shall, and shall cause Target to, provide whatever information or documentation in the possession, custody or control of Buyer and/or Target and such access to their personnel, during normal business hours and in a manner that does not disrupt Buyer’s business, in each case that is reasonably requested by Seller in order to enable Seller to confirm or dispute the accuracy of the close of business information set forth on the Draft Closing Date (“Closing Net Assets”Statement following the delivery thereof to Seller or to participate in the dispute resolution process set forth in this Section 2(e). If Seller disagrees with the computation of Working Capital reflected on the Draft Closing Statement, then Seller may, within 30 days after receipt of the Draft Closing Statement, deliver a written notice (an “Objection Notice”) to Buyer setting forth Seller’s calculation of such items. The Net Assets Objection Notice shall state in reasonable detail (to the extent then known by Seller) Seller’s disagreement with the information set forth on the Draft Closing Statement and the basis therefor. If an Objection Notice is not delivered within such 30-day time period, then the amount of Working Capital set forth in the Draft Closing Statement shall be preparedconclusive and binding upon the Parties. If an Objection Notice is delivered and it does not object to one or more of the amount of Working Capital, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices as set forth on Schedule 3.2(athe Draft Closing Statement, then the item(s) for which no objection as made (except to the extent otherwise arising out of the items in dispute between the Parties) shall be conclusive and binding upon the Parties. (iv) If an Objection Notice is delivered within such 30-day time period, Buyer and Seller shall, during the 20 Business Days following the receipt by Buyer of such notice, use their reasonable efforts to reach agreement on the disputed items or amounts, but if they do not obtain a final resolution within such 20-day period, then Buyer and Seller will jointly retain ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP (unless another accounting firm is mutually agreed to in writing between Buyer and Seller prior to such time) (the “Agreed ProceduresAccounting Firm”) ), to resolve any remaining disagreements. Buyer and Seller shall direct the Accounting Firm to render a determination within 30 Business Days of its retention and the net book value Parties and their respective employees shall cooperate with the Accounting Firm during its engagement. The Accounting Firm shall consider only those items in dispute. The Accounting Firm’s determination shall (A) be based on the definitions of Working Capital and related terms set forth in this Agreement, and (B) be conclusive and binding upon the Parties. The Accounting Firm’s determination of the Inventory matters raised in the applicable Objection Notice cannot be more favorable to Buyer than the related amount reflected in the Draft Closing Statement nor more favorable to Seller than the related amount reflected in the applicable Objection Notice. The fees and Iteris GmbH inventory shall expenses of the Accounting Firm will be computed allocated between Buyer and Seller, based upon the quantities of Inventory and Iteris GmbH inventory on hand as percentage which the portion of the Closing Date as matters raised in the applicable Objection Notice not awarded to such party bears to the amount actually contested by such party. For example, if Seller claims that the appropriate adjustments are, in the aggregate, $1,000 greater than the amount determined through a physical inventory conducted by Buyer and if the Accounting Firm ultimately resolves such matters by awarding to Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as $300 of the Closing Date. $1,000 contested, then the fees, costs and expenses of the Accounting Firm will be allocated 30% (i.e., $300 ÷ $1,000) to Buyer or its representatives shall have and 70% (i.e., $700 ÷ $1,000) to Seller. (v) The final determination of Working Capital pursuant to this Section 2(e) (the right “Working Capital Adjustment”) is not intended to observe the physical inventory be used to adjust for any breaches of representations and shall have full access to all books and records warranties set forth in this Agreement with respect to the Inventory. For illustration purposesFinancial Statements, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that for which the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures indemnification provisions set forth in Section 3.36(b) shall be the sole and exclusive remedy (except in the case of Fraud). (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.

Purchase Price Adjustment. (a) Within At least five (5) Business Days prior to the Closing Date, the Sellers will prepare and deliver to the Buyer a good‑faith estimate of the Closing Purchase Price (the “Estimated Purchase Price”), including, but not limited to, an estimate of the Closing Working Capital (the “Estimated Closing Working Capital”), and the Buyer will have the right to review and approve such estimates (such approval not to be unreasonably withheld). (b) As promptly as practicable after the Closing, but in no event later than ninety (90) days after the Closing Date, the Buyer will prepare and deliver to the Sellers Representative a statement (the “Closing Statement”) setting forth the Buyer’s calculation of the Closing Purchase Price, including each of the components thereof, as of 12:01 a.m. Pacific Time on the Closing Date. (c) The Estimated Purchase Price and Closing Statement will be prepared, and the Closing Purchase Price will be determined, in accordance with the accounting methods, policies, practices, procedures, conventions, categorizations, definitions, principles, judgments, assumptions, techniques or estimation methods with respect to financial statements, their classification or presentation or otherwise (including with respect to the nature of accounts, level of reserves or level of accruals) that are set forth in Exhibit C. (d) The Buyer will (i) permit Roccat and its Representatives to have reasonable access to the documents (including work papers, schedules, financial statements, memoranda, etc.) pertaining to or used in connection with the preparation of the Closing Statement and the Buyer’s calculation of the Closing Purchase Price and provide Roccat with copies thereof (as reasonably requested by Roccat and subject to the entry into customary confidentiality and non-reliance agreements) and (ii) provide Roccat and its Representatives reasonable access to the Buyer’s employees and advisors. If Roccat disagrees with any part of the Buyer’s calculation of the Closing Purchase Price as set forth on the Closing Statement, Roccat will, within sixty (60) days after the receipt of the Closing Statement, notify the Buyer in writing of such disagreement by setting forth the Sellers Representative’s calculation of the Closing Purchase Price, including each of the components thereof, and describing in reasonable detail the basis for such disagreement (an “Objection Notice”). If an Objection Notice is delivered to the Buyer, then the Buyer and Roccat will negotiate in good faith to resolve their disagreements with respect to the computation of the Closing Purchase Price. In the event that the Buyer and Roccat are unable to resolve all such disagreements within thirty (30) days after the Closing DateBuyer’s receipt of such Objection Notice, Seller shall prepare the Buyer and deliver Roccat will submit such remaining disagreements to Ernst & Young, or if Ernst & Young is unavailable, such other valuation firm of national repute reasonably acceptable to the Buyer a statement and Roccat (the “Net Assets StatementValuation Firm”). (e) setting forth (i) The Valuation Firm will make a final and binding determination with respect to the sum computation of the Accounts Receivable (net of reserves)Closing Purchase Price, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum including each of the Accounts Payablecomponents thereof, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, to the extent such amounts are in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculateddispute, in accordance with the agreed guidelines and procedures and accounting practices set forth on Schedule 3.2(a) (in this Agreement and in Exhibit C. The Buyer and Roccat will cooperate with the “Agreed Procedures”) Valuation Firm during the term of its engagement and will use commercially reasonable efforts to cause the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records Valuation Firm to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to resolve all books and records remaining disagreements with respect to the Inventorycomputation of the Closing Purchase Price, including each of the components thereof, as soon as practicable. For illustration purposesThe Valuation Firm will consider only those items and amounts in the respective calculations of the Closing Purchase Price of the Buyer and Roccat, including each of the components thereof, that are identified as being items and amounts to which the Buyer and Roccat have been unable to agree. In resolving any disputed item, the Valuation Firm may not assign a Net Assets Statement as value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. The Valuation Firm’s determination of June 30the Closing Purchase Price, 2011 is including each of the components thereof, will be based solely on written materials submitted by the Buyer and Roccat (i.e., not on independent review) and on the definitions included in Schedule 3.2(a)herein. The determination of the Valuation Firm will be conclusive and binding upon the parties hereto and will not be subject to appeal or further review. (bf) If Buyer reasonably believes that The costs and expenses of the Net Assets Statement contains errors or has not been prepared Valuation Firm in accordance with determining the Agreed ProceduresClosing Purchase Price, Buyer may deliver to Seller a written notice including each of objection no later than thirty (30) days after the date on which Seller delivered components thereof, will be borne by the Net Assets Statement to Buyer, which notice shall specify on the nature of each dispute one hand, and the basis therefor Sellers, on the other hand, based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party. For example, if the Buyer claims the Closing Purchase Price is one thousand euros (a “Net Assets Objection”). Failure €1,000) less than the amount determined by the Sellers, and the Sellers contest only five hundred euros (€500) of the amount claimed by the Buyer, and if the Valuation Firm ultimately resolves the dispute by awarding the Buyer to deliver a Net Assets Objection within three hundred euros (€300) of the thirty-day period five hundred euros (€500) contested, then the costs and expenses of the Valuation Firm will be deemed allocated sixty percent (60%) (i.e., 300 ÷ 500) to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth Sellers, in the Net Assets Objection within sixty aggregate, and forty percent (6040%) days after its delivery(i.e., 200 ÷ 500) to the Buyer. In Prior to the event that the Parties are unable to resolve an Objection within the sixty-day periodValuation Firm’s determination of Closing Purchase Price, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement Buyer, on the one hand, and the Sellers, on the other hand, will each pay fifty percent (50%) of any retainer paid to the Valuation Firm and (ii) during the engagement of the Valuation Firm, the Valuation Firm will ▇▇▇▇ fifty percent (50%) of the total charges to each of the Buyer, on the one hand, and the Sellers, on the other hand. In connection with the Valuation Firm’s determination of Closing Purchase Price, the Valuation Firm will also determine, pursuant to the terms of the first and second sentences of this Section 1.5(f), and taking into account all fees and expenses already paid by each of the Buyer, on the one hand, and the Sellers, on the other hand, as of the date of such determination, the allocation of its fees and expenses between the Buyer and the Sellers, which such determination will be conclusive and binding upon the parties hereto. (g) Within five (5) Business Days after the Closing Purchase Price, including each of the components thereof, is finally determined pursuant to this Section 1.5: (i) if the Closing Purchase Price as finally determined pursuant to this Section 1.5 is less than the Estimated Purchase Price, then the Buyer does not deliver and the Sellers will cause the Escrow Agent to: (A) pay to the Buyer a Net Assets Objection in accordance with Section 3.2(bportion of the Adjustment Escrow Amount (the “Buyer Adjustment Amount”) equal to such deficiency (and if the Adjustment Escrow Fund is insufficient, the Buyer may elect (at its sole discretion) to require that the Sellers or Stockholders pay the remainder of such deficiency), have the Sellers cause the Escrow Agent to pay the remainder of such deficiency from the Indemnification Escrow Amount or collect the remainder of such deficiency from the Holdback Amount (or some combination thereof), and (B) pay to the Sellers the amount (if any) by which the amount of the Adjustment Escrow Amount is greater than the Buyer Adjustment Amount; and (ii) if Buyer timely gives a Net Assets Objection and all the Closing Purchase Price as finally determined pursuant to this Section 1.5 is greater than the Estimated Purchase Price (the amount of the disputed items are resolved by mutual agreement of the Partiessuch deficiency, the Net Assets Statement“Seller Adjustment Amount”), then (A) the Buyer will pay to the Sellers the Seller Adjustment Amount, and (B) the Buyer and the Sellers will cause the Escrow Agent to pay to the Sellers the Adjustment Escrow Amount. All payments to be made pursuant to this Section 1.5 will (x) be treated by all parties for tax purposes as adjustments to the Closing Purchase Price and (y) be made by wire transfer of immediately available funds to the account(s) designated by the Buyer or the Sellers, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitratorapplicable.

Purchase Price Adjustment. (a) Within thirty (30) days after the The Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Net Assets Statement”) setting forth (i) the sum Statement of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculateddeemed final for the purposes of this Section 2.07 upon the earliest of (x) the failure of the Seller to notify the Purchaser of a dispute within 30 Business Days of the Purchaser’s delivery of the Closing Statement of Net Assets to the Seller, (y) the resolution of all disputes, pursuant to Section 2.07(b)(ii), by the Seller’s Accountants and the Purchaser’s Accountants and (z) the resolution of all disputes, pursuant to Section 2.07(b)(ii), by the Independent Accounting Firm. Within three Business Days of the Closing Statement of Net Assets being deemed final, a Purchase Price adjustment shall be made as follows: (i) In the event that the Net Book Value reflected on the Reference Statement of Net Assets exceeds the Net Book Value reflected on the Closing Statement of Net Assets, then the Purchase Price shall be adjusted downward in accordance with an amount equal to such excess and the agreed procedures Seller shall pay the amount of such excess to the Purchaser by wire transfer in immediately available funds. (ii) In the event that the Net Book Value reflected on the Closing Statement of Net Assets exceeds the Net Book Value reflected on the Reference Statement of Net Assets, then the Purchase Price shall be adjusted upward in an amount equal to such excess and accounting practices the Purchaser shall pay the amount of such excess to the Seller by wire transfer in immediately available funds. (iii) The Purchase Price shall be adjusted downward by an amount equal to the aggregate of the adjustments set forth on Schedule 3.2(aSection 2.07(c)(iii) (the “Agreed Procedures”) and the net book value of the Disclosure Schedule, as applied to the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as set forth on the Closing Statement of Net Assets as determined through a physical inventory conducted by Seller on or before in accordance with Section 2.07(c)(iii) of the fifth day following Disclosure Schedule (the “Unadjusted Closing Date, the results of which Inventory Amount”). (iv) The Purchase Price shall be adjusted from Buyer’s and Seller’s books and records upward by an amount equal to reflect eighty percent (80%) of the Unadjusted Closing Inventory and Iteris GmbH inventory Amount of the Private Label Inventory on hand as of the Closing. (v) The Purchase Price shall be adjusted upward by an amount equal to the book value, as of the Closing Date. Buyer or its representatives shall have , of the right to observe the physical inventory and shall have full access to all books and records with respect Receivables attributable to the Inventory. For illustration purposesGM/HBC Business, which are excluded from the Closing Statement of Net Assets, net of a Net Assets Statement as discount for uncollectible accounts in the amount of June 30, 2011 is included in Schedule 3.2(a)$301,000. (bvi) If Buyer reasonably believes that The Purchase Price shall be adjusted upward by an amount equal to the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3Purchased Stores Cash Amount. (cvii) As used herein, The Purchase Price shall be adjusted upward by $25,000 to reflect the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all value of the disputed items are resolved by mutual agreement of IBM Computer transferred from the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted Seller to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, Purchaser pursuant to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the ArbitratorSection 2.01(a)(xiii).

Purchase Price Adjustment. (a) For the purposes of clarification only, Seller is retaining all accounts payable and accounts receivable with respect to each Country Unit arising out of the operation and conduct of the Business before the Applicable Closing Date for such Country Unit and the only purchase price adjustment with respect to changes in the working capital of the Business after any Closing will be the adjustments pursuant to this Section 2.04. (b) Within thirty (30) 120 days after the Applicable Closing Date, Seller shall prepare and deliver to Buyer a statement in the form of Schedule 2.04(b) (in its draft form, the “Price Adjustment Statement”), setting forth its calculation as of the Applicable Closing Date of the actual (i) Closing Inventory for such applicable Country Units and (ii) only in the case of the Principal Closing Date, the Prepaid Tax Amount (the “Net Assets Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net AssetsFinal Prepaid Tax Amount”). The Net Assets Statement To the extent that the Closing Inventory, with respect to the applicable Country Unit (once final and binding pursuant to the provisions of Section 2.04(f)) is greater than the applicable Inventory Target, with respect to such applicable Country Units, or less than the applicable Inventory Target, with respect to such applicable Country Units, the Purchase Price shall be preparedadjusted as described in Section 2.04(f) below. To the extent that the Final Prepaid Tax Amount (once final and binding pursuant to the provisions of this Section 2.04) is greater than the Estimated Prepaid Tax Amount or less than the Estimated Prepaid Tax Amount, the Purchase Price shall be adjusted as described in Section 2.04(g) below. (c) In connection with the preparation of each Price Adjustment Statement, Buyer shall (A) assist, and shall cause its Affiliates to assist, Seller, its accountants, advisors and other representatives in its preparation of each Price Adjustment Statement and (B) afford to Seller, its accountants, advisors and other representatives, reasonable access during normal business hours to the Closing Net Assets shall be calculatedpersonnel, properties, books and records of the Business in accordance with the agreed procedures possession of Buyer or its Affiliates (and accounting practices set forth on Schedule 3.2(aits and their accountants, subject to executing customary access letters) to the extent relevant to the preparation of any Price Adjustment Statement (including any taking and preparing of physical counts of Inventory). For purposes of this Section 2.04, the “Agreed Procedures”) and the net calculation of book value of the Inventory will be determined in a manner consistent with Seller’s inventory and Iteris GmbH inventory shall be computed based upon other relevant accounting policies used in the quantities of Inventory and Iteris GmbH inventory on hand as preparation of the Closing Date 2015/2016/2017 Draft Financial Statements, as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Dateset forth in Schedule 2.04(c) (collectively, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a“Accounting Policies”). (bd) Each Price Adjustment Statement shall become final and binding upon the parties on the 30th day following receipt thereof by Buyer unless Buyer gives written notice of its disagreement (a “Notice of Disagreement”) to Seller on or prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature and amount of any disagreement so asserted. If a timely Notice of Disagreement is received by Seller, then the relevant Price Adjustment Statement (as revised in accordance with clause (x) or (y) below) shall become final and binding upon the parties on the earlier of (x) the date the parties hereto resolve in writing any differences they have with respect to any matter specified in the Notice of Disagreement or (y) the date any matters in dispute are resolved in writing by an accounting firm (in accordance with the procedure set forth in this Section 2.04) selected by Seller and Buyer reasonably believes or, if the parties are unable to agree, an independent accounting firm selected by Seller’s and Buyer’s independent accounting firms (such firm, the “Accounting Firm”). (e) Buyer and Seller acknowledge and agree that the Net Assets dispute resolution provisions set forth in Section 11.12 shall not apply to any dispute described in this Section 2.04. During the 30-day period immediately following the delivery of a Notice of Disagreement, Seller and Buyer shall seek in good faith to resolve in writing any differences they may have with respect to any matter specified in the Notice of Disagreement. At the end of such 30-day period, Seller and Buyer shall submit for review and resolution by the Accounting Firm any and all matters which remain in dispute and which were included in the Notice of Disagreement, and the Accounting Firm shall make a final determination in writing of the values set forth on the relevant Price Adjustment Statement contains errors or has not been (and shall use such determination to prepare the relevant final Price Adjustment Statement), which determination shall be binding on the parties; provided, however, that the scope of such determination by the Accounting Firm shall be limited to: (i) those matters that remain in dispute and that were included in the Notice of Disagreement, (ii) whether, for each calculation of Inventory and the Prepaid Tax Amount, such calculation was prepared in accordance with this Section 2.04, and specifically, whether, in the Agreed Procedurescase of Inventory, Buyer may deliver the Accounting Policies were used, and (iii) whether there were mathematical errors in the relevant Price Adjustment Statement, and the Accounting Firm is not authorized or permitted to Seller make any other determination. The parties shall jointly request that the Accounting Firm render a written notice of objection no later than thirty (30) days after decision resolving the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes matters set forth in the Net Assets Objection this Section 2.04(e) within sixty (60) 30 days after its deliverysuch submission. In Without limiting the event that generality of the Parties are unable to resolve an Objection within the sixty-day periodforegoing, the parties Accounting Firm is not authorized or permitted to make any determination as to the accuracy of Section 3.06 or any other representation or warranty in this Agreement or as to compliance by Seller or any of its Affiliates with any of the covenants in this Agreement (other than this Section 2.04). The relevant Price Adjustment Statement shall follow become final and binding on Buyer and Seller on the arbitration procedures set forth date the Accounting Firm delivers in writing the relevant final Price Adjustment Statement to the parties. The fees and expenses of the Accounting Firm pursuant to this Section 3.32.04 shall be borne one-half each by Buyer and Seller. (cf) As used herein, If the term “Final Net Assets Statement” means (i) Price Adjustment Statement discloses that the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all book value of the disputed items are resolved by mutual agreement applicable Closing Inventory exceeds the applicable Inventory Target, then the amount of such excess shall be added on a dollar-for-dollar basis to the Purchase Price. If the Price Adjustment Statement discloses that the book value of the Partiesapplicable Closing Inventory is less than the applicable Inventory Target, then the Net Assets Statement, as amended, if necessary, to reflect Purchase Price shall be reduced on a dollar-for-dollar basis by the amount of such resolution deficit. If the Price Adjustment Statement discloses that the book value of all disputes; or (iii) if any disputed items are submitted the applicable Closing Inventory is equal to the Arbitrator for resolutionapplicable Inventory Target, then there shall be no adjustment to the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement Purchase Price in respect of the Parties and Applicable Closing. (g) If the resolution Price Adjustment Statement discloses that the Final Prepaid Tax Amount exceeds the Estimated Prepaid Tax Amount, then the amount of all other disputes such excess shall be added on a dollar-for-dollar basis to the Purchase Price. If the Price Adjustment Statement discloses that the Final Prepaid Tax Amount is less than the Estimated Prepaid Tax Amount, then the Purchase Price shall be reduced on a dollar-for-dollar basis by the Arbitrator.amount of such

Purchase Price Adjustment. (a) Within The Parties agree that the Purchase Price is to be calculated based on the Companies having working capital equal to the average of the sum of the total consolidated current accounts receivable of the Companies, minus the sum of the total consolidated current accounts payable of the Companies, for the trailing twelve month period prior to the Closing Date (the “Working Capital”). The Parties hereby agree that amounts charged on credit cards for business expenses associated with the Companies are ordinary business expenses and shall be included in accounts payable for all purposes, included in calculating Working Capital. For the avoidance of doubt, the Excluded Assets and the Indebtedness shall be excluded from the calculations of Working Capital. Notwithstanding the foregoing, as the accounting to accurately determine the Working Capital as of the Closing Date will not be available until after the Closing Date, the Parties agree to do the following: (i) no later than ten (10) days prior the “Due Diligence Expiration Date” (as hereinafter defined) the Parties shall prepare and attach hereto as Schedule 1.4(a) (A) the Working Capital methodologies, principles and procedures (the “Working Capital Methodologies”), (B) establish a calculation of working capital equal to the average of the sum of the total consolidated current accounts receivable of the Companies, minus the sum of the total consolidated current accounts payable of the Companies, for the trailing twelve (12) month period from September 30, 2021 to September 30, 2022, which shall be calculated using the Working Capital Methodologies (the “Target Working Capital”), and (C) a calculation of the Excluded Assets, the Excluded Liabilities, the Closing Indebtedness, and the Purchase Price (subject to adjustment as set forth in Section 1.4(a)(ii) below), which shall be a condition of Closing; (ii) on or before sixty (60) days after the Closing (the “Working Capital Delivery Date”), Buyer shall prepare in good faith and deliver to the Shareholders’ Representative a certificate (the “Purchase Price Adjustment Certificate”) executed by an executive officer of Buyer setting forth in reasonable detail, the Working Capital as of the Closing Date (the “Closing Working Capital”), and B▇▇▇▇’s calculation of the Purchase Price adjustment based on the difference between the Closing Working Capital and the Target Working Capital (the “Purchase Price Adjustment”). If Buyer does not deliver the Purchase Price Adjustment Certificate on or before the Working Capital Delivery Date, the Target Working Capital shall be deemed to be the Closing Working Capital, unless Buyer notifies the Shareholders’ Representative, in writing, prior to the Working Capital Delivery Date, that additional time is required to prepare the Purchase Price Adjustment Certificate due to the unavailability of certain information from the Shareholders’ Representative for a period of time prior to the Closing Date, and such written notice identifies the necessary information to complete the Purchase Price Adjustment Certificate. The Closing Working Capital shall be calculated using the Working Capital Methodologies. Simultaneously with the delivery of the Purchase Price Adjustment Certificate, Buyer shall provide to the Shareholders’ Representative all work papers and other information reasonably required by the Shareholders’ Representative to evaluate such calculations, and shall provide the Shareholders’ Representative with reasonable access to Buyer’s financial personnel who were responsible for the preparation of the same in order for the Shareholders’ Representative to discuss and evaluate such calculations, work papers and information. The Shareholders’ Representative shall have thirty (30) days after receipt by the Shareholders’ Representative of the Purchase Price Adjustment Certificate to accept or object to the Closing Working Capital calculation. If the Shareholders’ Representative does not timely object to the Closing Working Capital calculation within such thirty (30) day period, the Closing Working Capital calculation shall be deemed accepted; (iii) If the Shareholders’ Representative delivers written notice to Buyer within thirty (30) days after receipt by the Shareholders’ Representative of the Purchase Price Adjustment Certificate stating that the Shareholders object to the Closing Working Capital calculation, the Parties shall submit the issues remaining in dispute to their respective accountants to resolve. In the event that the accountants cannot resolve, each accountant will submit a list of five (5) independent accountants to resolve this matter. The first names that match on the lists shall be appointed to resolve the issues remaining in dispute (the “Independent Accountants”) for resolution of the dispute, which Independent Accountants shall have not represented or been engaged by B▇▇▇▇ or the Shareholders prior to the submission of the dispute, and the Parties hereby agree that neither shall be permitted to engage such Independent Accountants for a period of five (5) years after the date of the submission of the dispute. If issues are submitted to the Independent Accountants for resolution, (i) the Independent Accountants shall use the same methodologies, principles and procedures as set forth on Schedule 1.4(a); (ii) each Party shall furnish or cause to be furnished to the Independent Accountants such work papers and other documents and information relating to the disputed issues as the Independent Accountants may request and are available to that Party and shall be afforded the opportunity to present to the Independent Accountants any material relating to the disputed issues and to discuss the issues with the Independent Accountants; (iii) the determination by the Independent Accountants, as set forth in a notice to be delivered by the Independent Accountants to the Shareholders and Buyer within thirty (30) days after the submission to the Independent Accountants of the issues remaining in dispute, shall be final, binding and conclusive on the Parties; and (iv) the fees and expenses of the Independent Accountants will be paid by Shareholders, on the one hand, and Buyer, on the other hand, based upon the percentage that the amount actually contested but not awarded to the Shareholders or Buyer, respectively, bears to the aggregate amount actually contested by the Shareholders and Buyer; and (iv) Within ten (10) business days after the Purchase Price Adjustment is finally determined: (A) In the event that the Closing DateWorking Capital is greater than the Target Working Capital, Seller the Buyer shall prepare pay to the Shareholders by wire transfer of immediately available funds to accounts designated by the Shareholders’ Representative the difference between the Closing Working Capital and the Target Working Capital; (B) In the event that the Closing Working Capital is less than the Target Working Capital, the Shareholders’ Representative and the Buyer shall deliver to Buyer a statement the Closing Agent “Joint Written Instructions” (as hereinafter defined) in accordance with Section 9.12 directing the Closing Agent to release from the Indemnification Escrow the difference between the Closing Working Capital and the Target Working Capital (the “Net Assets Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net AssetsPurchase Price Deficiency”). The Net Assets Statement In the case that the Purchase Price Deficiency is greater than the Indemnification Escrow, the Shareholders shall be prepared, pay to the Buyer the difference between the Purchase Price Deficiency and the Closing Net Assets shall be calculated, in accordance with Indemnification Escrow by wire transfer of immediately available funds to an account designated by the agreed procedures and accounting practices set forth on Schedule 3.2(aBuyer; and (C) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which The Purchase Price Allocation shall be adjusted from Buyer’s based on the Purchase Price Adjustment using the same methodologies, principles and Seller’s books and records procedures as used to reflect determine the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)Purchase Price Allocation. (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice The provisions of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice this Section 1.4 shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3survive Closing. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.

Purchase Price Adjustment. (a) Within thirty (30) As promptly as practicable but in any event within 45 days after following the Closing Date, the Seller shall prepare and deliver to the Buyer a statement (an unaudited statement, substantially in the “Net Assets Statement”) form of Schedule 2.4, setting forth (i) the sum of current assets included in the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) Acquired Assets and Equipment and current liabilities included in the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case Assumed Liabilities as of the close of business on at the Closing Date (“the "Closing Net Assets”Statement"). The Net Assets Closing Statement shall be preparedprepared (including, without limitation, the taking of inventory) using the same accounting methods, policies, practices and procedures, with consistent classification, judgments, and estimation methodology, as used in the preparation of the Financial Statements, except that the Closing Net Assets Statement shall be calculatednot include (i) any current Tax assets or any current Tax liabilities, in accordance with or (ii) any LIFO reserve or any intercompany profit on inventory reserve, except to the agreed procedures and accounting practices set forth extent included on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value balance sheet of the Inventory Seller as at September 30, 2000. In preparing the Closing Statement, (x) storeroom inventory and Iteris GmbH spare parts will be determined on the day immediately preceding the Closing Date and (y) all inventory shall be computed valued based upon on the quantities lower of Inventory and Iteris GmbH inventory on hand as market value or the Seller's cost of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)such inventory. (b) If The Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) shall have 15 days after receiving the date on which Seller delivered the Net Assets Closing Statement to Buyeraccept the Closing Statement or to object to all or any part of the Closing Statement, which notice setting forth the bases for its objections. If the Buyer does not notify the Seller in writing of any objections to the Closing Statement within such 15 days, the Closing Statement shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance final, conclusive and binding upon the Parties. If the Buyer notifies the Seller in writing of any objections to the Net Assets Closing Statement as within such 15 days, the Final Net Assets Statement. The Parties shall attempt negotiate in good faith to reach agreement resolving all disputes set forth in resolve such objections. If such objections are resolved within 15 days following the Net Assets Objection Seller's receipt of written notice of the (i) to review the Closing Statement and the Buyer's objections and (ii) to prepare a revised Closing Statement based upon its review and deliver such revised Closing Statement to the Buyer and the Seller within sixty (60) 30 days after of the date of its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3retention. (c) As used hereinIf the Arbiter is retained, the term “Final Net Assets Closing Statement delivered by the Arbiter to the Buyer and the Seller shall be deemed to be final, conclusive and binding upon the Parties, absent manifest error. The fees, costs and expenses of the Arbiter shall be borne equally by the Buyer and the Seller. The Arbiter shall make available to the Buyer and the Seller its work papers generated in connection with the preparation or review of the Closing Statement” means . (id) If the Net Assets Statement if Purchase Price exceeds the Preliminary Amount, the Buyer does not deliver a Net Assets Objection shall pay to the Seller the dollar amount of the Purchase Price Adjustment in accordance with the provisions of paragraph (e) of this Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator2.

Purchase Price Adjustment. (a) Within thirty As promptly as practicable following the Closing, Peat Marwick LLP (30"Peat Marwick") shall complete certain agreed upon procedures set forth in Schedule 2.3(a) for the purpose of rendering its report that the Asset Value as of the Determination Date and the amounts referenced on the Closing Cash Payment Adjustment Certificate (together, the "Closing Calculation"), as prepared and presented by the Sellers at the Closing, with such adjustments, if any, as may required in order to render such report, as well as the Settlement Certificate, have been prepared in accordance with GAAP (as applicable), are accurate and complete, and that each of the Asset Value and Settlement Certificate has been calculated in accordance with the procedures set forth in Schedule 2.3(a) and the formula set forth in Schedule 2.1(a) hereof, respectively. The Closing Calculation, with such adjustments, if any, as Peat Marwick may require in order to render its report, is hereinafter referred to as the "Certified Closing Calculation". Peat Marwick shall deliver such calculation to Purchaser and the Sellers as promptly as practicable, but in no event later than 120 days after the Closing Date, Seller shall prepare and deliver to Buyer a statement (. All expenses of Peat Marwick in connection with the “Net Assets Statement”) setting forth (i) the sum preparation of the Accounts Receivable Certified Closing Calculation pursuant to this subsection (net of reserves), Business-related prepaids, Inventory (net of reservesa) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted borne by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a).Purchaser; (b) If Buyer reasonably believes that the Net Assets Statement contains errors Sellers or has not been prepared in accordance Purchaser disagrees with the Agreed ProceduresCertified Closing Calculation as delivered pursuant to Section 2.3(a) hereof, Buyer then, within 30 days after Peat Marwick's delivery thereof, either or both of the Sellers on the one hand and Purchaser on the other hand may deliver a notice to Seller a written the other and to Peat Marwick of such disagreement and setting forth such disagreeing party's calculation of the Closing Calculation. Any such notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice disagreement shall specify those items or amounts as to which the nature of each dispute Sellers or Purchaser disagrees, and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within Sellers or Purchaser, as the thirty-day period will case may be, shall be deemed to have agreed with all other items and amounts contained in the Certified Closing Calculation; (c) If a notice of disagreement shall be Buyer’s acceptance of timely delivered pursuant to Section 2.3(b) hereof, the Net Assets Statement as parties shall, during the Final Net Assets Statement. The Parties shall attempt in good faith 30 days following such delivery, use their reasonable best efforts to reach agreement resolving all disputes set forth on the disputed items or amounts in order to determine, as may be required, the Net Assets Objection within sixty (60) days after its deliveryamount of Closing Calculation. In the event that the Parties are unable to resolve an Objection within the sixty-day If, during such period, the parties are unable to reach such agreement, they shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amendedpromptly thereafter cause Ernst & Young or, if necessarysuch firm declines to act in such capacity, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.such

Purchase Price Adjustment. (a) Within thirty sixty (3060) days after the Closing Date, Seller Buyer shall prepare and deliver to Buyer Seller a statement (the “Net Assets Statement”) setting forth (i) the sum balance sheet of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) Acquired Assets and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum Assumed Liabilities of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case Business as of the close of business on the Closing Date (“"Closing Net Assets”Balance Sheet"). The Net Assets Statement Closing Balance Sheet shall be prepared, and the Closing Net Assets shall be calculated, prepared in accordance with GAAP applied on a basis consistent with the agreed procedures December Balance Sheet. In addition, there shall be no changes to the methodologies and accounting practices set forth assumptions used to prepare the reserves and contract estimates reflected on Schedule 3.2(a) (the “Agreed Procedures”) Closing Balance Sheet as compared to the methodologies and assumptions used to prepare the December Balance Sheet. Buyer shall also prepare a proposed statement of the net book value assets of the Inventory and Iteris GmbH inventory shall Business to be computed based upon transferred to Buyer hereunder using the quantities of Inventory and Iteris GmbH inventory on hand as procedures used in the preparation of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from December Balance Sheet ("Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a's Proposed Calculations"). (b) If Within thirty (30) days after receipt of the Closing Balance Sheet, Seller shall notify Buyer reasonably believes that the Net Assets Statement contains errors of its agreement or has not been prepared in accordance disagreement with the Agreed ProceduresClosing Balance Sheet and the accuracy of any of Buyer's Proposed Calculations; provided, that Seller may only dispute the Closing Balance Sheet and Buyer's Proposed Calculations to the extent that they are inaccurate or deviate from the requirements of paragraph (a) above. During such period, Buyer may deliver shall afford Seller and its representatives reasonable access to any of the Business' books, records and work papers, personnel, facilities and accountants necessary to enable Seller a written notice and its representatives to review the Closing Balance Sheet and Buyer's Proposed Calculations. If Seller disputes any aspect of objection no later than the Closing Balance Sheet or the amount of any of the Buyer's Proposed Calculations, then Seller shall have the right to direct its independent accountants, at Seller's expense, to review and test the Closing Balance Sheet. Seller's representatives or accountants shall complete their review and test within thirty (30) days after the date on which Seller delivered disputes Buyer's Proposed Calculations. If Seller and its independent accountants, after such review and test, still disagree with Buyer's Proposed Calculations, and Buyer does not accept Seller's proposed alternative calculation (the Net Assets Statement to Buyer"Seller's Proposed Calculations"), which notice shall specify the nature of each dispute and the basis therefor then, within thirty (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (6030) days after the date Buyer disputes Seller's Proposed Calculations, Seller and Buyer shall select a third nationally recognized independent accounting firm (the "Independent Accounting Firm") to resolve the remaining disputed items (the "Remaining Disputed Items") by conducting its deliveryown review and test of the Closing Balance Sheet and thereafter selecting either Seller's Proposed Calculation of the Remaining Disputed Items or Buyer's Proposed Calculation of the Remaining Disputed Items or an amount in between the two. In the event The Independent Accounting Firm shall be instructed (i) that the Parties scope of its review shall be limited solely to the Remaining Disputed Items, (ii) that it shall accept the Closing Balance Sheet and Buyer's Proposed Calculations except to the extent that they are unable inaccurate or deviate from the requirements of paragraph (a) above, and (iii) that it is to resolve an Objection use every reasonable effort to complete such assignment and deliver copies of such opinion and, if required, revised Closing Balance Sheet to Buyer and Seller within thirty (30) days following the sixty-day period, date such Remaining Disputed Items are referred to it. Buyer and Seller agree that they shall be bound by the parties determination of the Remaining Disputed Items by the Independent Accounting Firm. The fees and expenses of the Independent Accounting Firm shall follow the arbitration procedures set forth in Section 3.3be paid jointly by Buyer and Seller. (c) As used hereinUpon the determination pursuant to paragraph (b) above as to the definitive Closing Balance Sheet and the net assets of the Business to be transferred to Buyer hereunder as of the Closing Date ("Closing Net Assets"), the term “Final Net Assets Statement” means Purchase Price shall be either (i) increased by the amount, if any, by which the Closing Net Assets is greater than the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); Requirement or (ii) decreased by the amount, if Buyer timely gives a any, by which the amount of the Closing Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, is less than the Net Assets StatementRequirement (the "Adjustment"); provided, as amendedhowever, in no event will any upward Adjustment exceed Five Hundred Thousand Dollars ($500,000). If the Purchase Price is increased, Buyer shall pay such amount to Seller, and if necessarythe Purchase Price is decreased, Seller shall pay such amount to reflect Buyer. Any such resolution payment shall be made in cash or same day funds within ten (10) days after the determination of all disputes; or the Adjustment pursuant to paragraph (iiib) if any disputed items are submitted above. Any such payment shall bear interest from the Closing Date to the Arbitrator for resolution, date preceding payment at a rate equal to the Net Assets Statement, "Prime Rate" as amended, if necessary, set forth from time to reflect any resolution of any disputes by agreement of time in The Wall Street Journal "Money Rates" column from the Parties and Closing Date to the resolution of all other disputes by the Arbitratordate preceding payment.

Purchase Price Adjustment. (a) Within thirty No later than three (303) days after Business Days prior to the Closing Date, Seller the Company shall prepare and deliver to Buyer the Purchaser a statement (written estimate, dated the “Net Assets Statement”) date of its delivery, setting forth a good faith estimate by the Company of (i) the sum Net Working Capital of the Accounts Receivable Group Companies and the Blocker Companies as of the close of business on the Closing Date, calculated without giving effect to the Transaction (net of reservesthe “Estimated Net Working Capital”), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum Group Companies’ and the Blocker Companies’ Indebtedness (including, but not limited to, the Blocker Company Indebtedness) as of immediately prior to the Accounts PayableClosing (the “Estimated Indebtedness”), reserve for Warranty Expenses, (iii) the Group Companies’ and accounts payable the Blocker Companies’ Cash and accrued expenses of Iteris GmbH, in each case Cash Equivalents as of the close of business on the Closing Date (the “Closing Net AssetsEstimated Cash and Cash Equivalents”). The Net Assets Statement shall be prepared, (iv) the Group Companies’ and the Blocker Companies’ Transaction Expenses as of immediately prior to the Closing Net Assets shall be calculated(the “Estimated Transaction Expenses”) and (v) an updated Waterfall Spreadsheet that sets forth the amount payable at the Closing to each Seller, such amounts to reflect any adjustment to the Gross Purchase Price pursuant to this Section 2.3(a), all in reasonable detail prepared in accordance with the agreed procedures and accounting practices Accounting Principles and, with respect to the calculation of the Net Working Capital, in a manner consistent with the illustration set forth on Schedule 3.2(a) (in Exhibit A. For the “Agreed Procedures”) and the net book value sake of clarity, any item that is accounted for in one of the Inventory and Iteris GmbH inventory foregoing clauses (i) through (iv) shall not be computed based upon accounted for in any other clause (i) through (iv). Exhibit A sets forth, for illustrative purposes only, the quantities calculation of Inventory and Iteris GmbH inventory on hand Net Working Capital as if the Closing occurred as of November 1, 2013 (using data as of the close of business on October 31, 2013). For purposes of calculating Net Working Capital, (A) whether or not the date as of which Net Working Capital is required to be calculated hereunder coincides with a fiscal quarter-end of the Group Companies or the Blocker Companies, Net Working Capital shall be calculated using customary fiscal quarter-end close procedures for the preparation thereof, including procedures with respect to accruals and adjustments, and (B) the results of the physical inventory of the Group Companies described in Section 7.17 shall have been reflected in the Company’s inventory as of the date of such physical inventory. The Purchaser shall be entitled to review, comment on and request reasonable changes to the estimate of the Estimated Net Working Capital, Estimated Cash and Cash Equivalents, Estimated Indebtedness and Estimated Transaction Expenses, and Company shall cooperate with the Purchaser in connection therewith and consider the Purchaser’s proposed changes to the estimated statements in good faith. If the Estimated Net Working Capital is less than the Target Net Working Capital Amount, then the Gross Purchase Price payable on the Closing Date shall be reduced by the amount of such deficiency. If the Estimated Net Working Capital is greater than the Target Net Working Capital Amount, then the Gross Purchase Price payable on the Closing Date shall be increased by the amount of such difference. Any increase or decrease to the Gross Purchase Price pursuant to this Section 2.3(a) shall be referred to herein as determined through a physical inventory conducted by Seller on or before the fifth day following “Estimated Closing Net Working Capital Adjustment Amount”. (b) As promptly as practicable, but no later than seventy-five (75) calendar days after the Closing Date, the results Purchaser shall cause to be prepared and delivered to the Sellers’ Representative a closing statement certified by the Chief Financial Officer of which shall be adjusted from Buyerthe Purchaser (the “Closing Statement”) setting forth the Purchaser’s calculation of (i) the Net Working Capital of the Group Companies and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory Blocker Companies as of the close of business on the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect , calculated without giving effect to the Inventory. For illustration purposesTransaction (“Closing Net Working Capital”), a Net Assets Statement (ii) the Group Companies’ and the Blocker Companies’ Indebtedness (including, but not limited to, the Blocker Company Indebtedness) as of June 30immediately prior to the Closing (the “Closing Indebtedness”), 2011 is included (iii) the Group Companies’ and the Blocker Companies’ Cash and Cash Equivalents as of the close of business on the Closing Date (the “Closing Cash and Cash Equivalents”) and (iv) the Group Companies’ and the Blocker Companies’ Transaction Expenses as of immediately prior to the Closing (the “Closing Transaction Expenses” and, together with the Closing Net Working Capital, the Closing Indebtedness and the Closing Cash and Cash Equivalents, the “Closing Adjustments”), all in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been reasonable detail prepared in accordance with the Agreed ProceduresAccounting Principles and, Buyer with respect to the calculation of the Net Working Capital, in a manner consistent with the illustration set forth in Exhibit A. For the sake of clarity, any item that is accounted for in one of the foregoing Closing Adjustments shall not be accounted for in any other Closing Adjustment, and the results of the physical inventory of the Group Companies described in Section 7.17 shall be updated as of the Closing in accordance with the Group Companies’ past practices to account for any change in the Group Companies’ inventory between the date of such physical inventory and the Closing Date. (c) If the Sellers’ Representative disagrees with the Purchaser’s calculation of any or all of the Closing Adjustments set forth in the Closing Statement, the Sellers’ Representative may, within forty-five (45) calendar days after the Sellers’ Representative’s receipt of the Closing Statement, deliver a notice executed by the Sellers’ Representative to the Purchaser disagreeing with such calculation and setting forth the Sellers’ Representative’s calculation of such amount. During such forty-five (45) day period, the Purchaser and the Company shall on a timely basis provide to the Sellers’ Representative and its authorized representatives, upon reasonable notice, reasonable access to all records (and financial staff of the Purchaser and the Company who were involved in the preparation of the Closing Statement) and the Company’s outside accountants and their work papers and other documents used in preparing the Closing Statement. If the Sellers’ Representative fails to object in writing to the calculation of all or any portion of the Closing Adjustments within such forty-five (45) calendar day period, the Sellers’ Representative will be deemed conclusively to have agreed to all or such portion of that calculation and that calculation or portion thereof shall be final and binding upon the Purchaser and the Sellers. (d) If a notice of disagreement is delivered pursuant to Section 2.3(c), the Sellers’ Representative and the Purchaser shall, during the thirty (30) calendar days following such delivery (or such longer period as they may mutually agree), use their commercially reasonable efforts to reach agreement on the disputed items or amounts in order to determine the Closing Adjustments. During such thirty (30) day period, the Purchaser and the Company shall on a timely basis provide to the Sellers’ Representative and its authorized representatives, upon reasonable notice, reasonable access to all records (and financial staff of the Purchaser and the Company who were involved in the preparation of the Closing Statement) and the Company’s outside accountants and their work papers and other documents used in preparing the Closing Statement. If, after such thirty (30) day period, the Sellers’ Representative and the Purchaser are unable to reach an agreement, the Sellers’ Representative or the Purchaser may request that the dispute be resolved by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP (the “Accounting Referee”) or, if such firm is unable or unwilling to act, such other nationally recognized independent public accounting firm (other than Deloitte Touche Tohmatsu Limited, KPMG International Cooperative, PricewaterhouseCoopers LLP, Ernst & Young Americas LLC or any of their Affiliates) as shall be agreed upon in writing by the Sellers’ Representative and the Purchaser or, if no such agreement can be reached, the Sellers’ Representative and the Purchaser shall, within ten (10) days thereof, each select a candidate that satisfies the foregoing criteria and the two candidates shall promptly select a third candidate that satisfies the foregoing criteria who shall be appointed as Accounting Referee in lieu of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, in which case each such party shall submit materials in support of their position to the Accounting Referee who shall review this Agreement and the disputed items or amounts for the purpose of resolving the disputed Closing Adjustments. The Accounting Referee shall deliver to Seller a written notice of objection the Sellers’ Representative and the Purchaser, as promptly as practicable (but in any case no later than thirty (30) calendar days after from the date on which Seller delivered of engagement of the Net Assets Statement to BuyerAccounting Referee), which notice shall specify a report setting forth its calculation of the nature final amount of each dispute of the Closing Adjustments which shall not be less or more (as applicable) than the amount of each Closing Adjustment shown in the Closing Statement nor less or more (as applicable) than the amount thereof shown in the Sellers’ Representative’s calculation delivered pursuant to Section 2.3(c) and shall be limited to the matters which the Sellers’ Representative disputed in its calculation delivered pursuant to Section 2.3(c). Such report shall be final and binding upon the Sellers and the basis therefor Purchaser. The fees and costs of the Accounting Referee shall be payable (a “Net Assets Objection”i) by the Sellers (in proportion to their respective Pro Rata Percentage). Failure , on the one hand and (ii) by Buyer the Purchaser, on the other hand, on the basis, for each such party, of the percentage which the portion of the contested amount not awarded to deliver a Net Assets Objection within each party bears to the thirty-day period will be deemed amount actually contested by such party (as specified in the supporting materials that each of the Purchaser and Sellers’ Representative furnished to be Buyer’s acceptance the Accounting Referee), as determined by the Accounting Referee. (e) The Sellers’ Representative, the Purchaser, the Group Companies and the Blocker Companies shall, and shall cause their respective representatives to, cooperate and assist in the preparation of the Closing Statement, the calculation of the Closing Adjustments and in the conduct of the review referred to in Section 2.3(d), including, without limitation, making available as necessary relevant books, records, work papers and personnel. (f) Upon determination of the Net Assets Statement as Closing Adjustment Amount: (A) if the Final amount of the Net Assets Statement. The Parties Closing Adjustment Amount is a positive number, the Gross Purchase Price shall attempt in good faith be increased by the absolute value of the Net Closing Adjustment Amount, and the Purchaser shall pay such amount to reach agreement resolving all disputes set forth the Sellers in the manner provided in Section 2.3(g); or (B) if the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day periodClosing Adjustment Amount is a negative number, the parties Gross Purchase Price shall follow be decreased by the arbitration procedures set forth absolute value of the Net Closing Adjustment Amount, and such amount shall be paid to the Purchaser, to the extent available, from the Escrow Amount, in the manner provided in Section 3.32.3(g). (cg) As used herein, Any payment pursuant to Section 2.3(f) shall be made within five (5) Business Days after the term “Final Net Assets Statement” means Closing Adjustment Amount has been determined: (i) In the Net Assets Statement if Buyer does not deliver case of any payment due from the Purchaser to the Sellers pursuant to Section 2.3(f), to the extent that the Purchaser has insufficient funds, Post shall fund the Purchaser with a Net Assets Objection cash payment equal to such amount, which the Purchaser shall thereafter pay to the Sellers by wire transfer of immediately available funds to the account(s) designated in writing by each Seller in accordance with Section 3.2(b); the Waterfall Spreadsheet. (ii) if Buyer timely gives a Net Assets Objection and all In the case of any payment due from the disputed items are resolved by mutual agreement of Sellers to the PartiesPurchaser, the Net Assets Statement, as amended, if necessary, Sellers’ Representative and the Purchaser shall jointly instruct the Escrow Agent to reflect such resolution of all disputes; or (iii) if any disputed items are submitted release the payment due to the Arbitrator for resolution, Purchaser from the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the ArbitratorEscrow Amount.

Purchase Price Adjustment. (a) Within thirty As soon as practicable, but in any event prior to August 13, 1999, GenTek and the Seller shall jointly prepare and finalize the audited balance sheet of the Company at June 30, 1999 (the "Company June 30 Balance Sheet"), the audited balance sheet of the Company and its Subsidiaries at June 30, 1999, prepared on a consolidated basis (the "Consolidated June 30 Balance Sheet", and together with the Company June 30 Balance Sheet, the "June 30 Balance Sheets"), and the audited statement of income of the Company, and the audited statement of income of the Company and its Subsidiaries prepared on a consolidated basis, for the six-month period ended on June 30, 1999, each prepared in accordance with GAAP (other than any required notes or appendices) applied on a basis consistent with the Historical Financial Statements, which financial statements shall be accompanied by audit opinions of KPMG Deutsche Treuhard-Gesellschaft GmbH and Deloitte & Touche GmbH. (b) In the event GenTek and the Seller in good faith are unable to agree upon the June 30 Balance Sheets by August 13, 1999, each of GenTek and the Seller shall deliver to the Accounting Arbitrator and the other party, in writing on or prior to such date, its reasons for each disputed item and the amount thereof in dispute. The Accounting Arbitrator shall, no later than three days after prior to the Closing Date, determine and report to GenTek and the Seller its determination of each disputed item, and such determination and report shall prepare be final and deliver binding on the parties hereto and be used to Buyer a statement (finalize the “Net Assets Statement”) setting forth (i) the sum June 30 Balance Sheets. The fees and expenses of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment Accounting Arbitrator shall be borne equally by the Buyer and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”)Seller. The Net Assets Statement Accounting Arbitrator shall be prepared▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or if such firm is not available, an independent accounting firm mutually acceptable to the Buyer and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means The Purchase Price shall be adjusted as follows: (i) (A) If the Company June 30 Net Assets Statement Debt is greater than the Company May 31 Net Debt, the Purchase Price shall be reduced by an amount equal to such excess, and (B) if Buyer does not deliver a the Company May 31 Net Assets Objection in accordance with Section 3.2(b)Debt is greater than the Company June 30 Net Debt, the Purchase Price shall be increased by an amount equal to such excess; provided there shall be no adjustment pursuant to this clause (i) unless the difference between the Company June 30 Net Debt and the Company May 31 Net Debt exceeds 5% of the Company May 31 Net Debt; (A) If the Consolidated June 30 Net Debt is greater than the Consolidated May 31 Net Debt, the Purchase Price shall be reduced by an amount equal to such excess, and (B) if the Consolidated May 31 Net Debt is greater than the Consolidated June 30 Net Debt, the Purchase Price shall be increased by an amount equal to such excess; provided there shall be no adjustment pursuant to this clause (ii) if Buyer timely gives a unless the difference between the Consolidated June 30 Net Assets Objection Debt and all the Consolidated May 31 Net Debt exceeds 5% of the disputed items are resolved by mutual agreement of the Parties, the Consolidated May 31 Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or Debt; (iii) (A) If the Company June 30 Net Equity is greater than the Company May 31 Net Equity, the Purchase Price shall be increased by an amount equal to such excess, and (B) if the Company May 31 Net Equity is greater than the Company June 30 Net Equity, the Purchase Price shall be reduced by an amount equal to such excess; provided there shall be no adjustment pursuant to this clause (iii) unless the difference between the Company June 30 Net Equity and the Company May 31 Net Equity exceeds 5% of the Company May 31 Net Equity; and (iv) (A) If the Consolidated June 30 Net Equity is greater than the Consolidated May 31 Net Equity, the Purchase Price shall be increased by an amount equal to such excess, and (B) if the Consolidated May 31 Net Equity is greater than the Consolidated June 30 Net Equity, the Purchase price shall be reduced by an amount equal to such excess; provided there shall be no adjustment pursuant to this clause (iv) unless the difference between the Consolidated June 30 Net Equity and the Consolidated May 31 Net Equity exceeds 5% of the Consolidated May 31 Net Equity; provided that (x) in giving effect to any disputed items are submitted adjustment pursuant to clauses (i) through (iv), the effects of double-counting or other duplications of adjustments shall be eliminated and (y) there shall be no adjustment to the Arbitrator for resolution, Purchase Price under this Section 1.3(c) unless the Net Assets Statement, as amended, if necessary, aggregate net amount of all adjustments pursuant to reflect any resolution of any disputes by agreement clauses (i) through (iv) exceeds 5% of the Parties and the resolution of all other disputes by the ArbitratorPurchase Price.

Purchase Price Adjustment. (a) Within thirty Promptly after the Closing Date, and in any event not later than sixty (3060) days after following the Closing Date, Seller shall prepare and deliver to Buyer Purchaser for its review a statement (the “Net Assets Closing Statement”) setting forth Seller’s good faith calculation of each of (i) the sum of the Accounts Receivable (net of reserves)Closing Working Capital, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of Closing Cash, (iii) the Accounts Payable, reserve for Warranty Expenses, Debt Adjustment Amount and accounts payable and accrued expenses of Iteris GmbH, (iv) the Aggregate Purchase Price (the “Estimated Aggregate Purchase Price”) (in each case as of the close of business on the Closing Date (“Closing Net Assets”case, together with reasonable supporting documentation). The Net Assets Closing Statement shall be prepared, prepared in a manner consistent with Exhibit A and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)Exhibit A1. (b) If Buyer Each of Purchaser and Seller shall give the other Party and its Representatives reasonable access during normal business hours to the premises, books and records, and appropriate personnel of the Business, the Conveyed Companies, Purchaser, Seller and their respective Affiliates, as applicable, reasonably believes that requested by such other Party for purposes of the Net Assets preparation or review of the Closing Statement contains errors or has not been prepared in accordance with this ‎Section 2.9. (c) For the Agreed Procedures, Buyer may deliver to Seller a written notice avoidance of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute doubt and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance solely as an illustration of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes methodology set forth in this ‎Section 2.9, Exhibit A1 sets forth a calculation of how Base Working Capital was derived. Purchaser shall instruct its employees (including the Net Assets Objection Transferred Employees) and Representatives to cooperate with, and promptly and completely respond to all reasonable requests and inquiries of, Seller and its Representatives, and Seller and its Representatives shall have reasonable access, upon reasonable notice, to all relevant schedules, memoranda and other documents prepared by Purchaser or its Representatives (including its outside accountants) to the extent such materials have been prepared by Purchaser or its Representatives and relate to the calculation of the Closing Working Capital and/or the Closing Cash and/or the Debt Adjustment Amount in any respect (with all such information treated as Purchaser Confidential Information subject to ‎Section 5.18). Seller shall instruct its employees and Representatives to cooperate with, and promptly and completely respond to all reasonable requests and inquiries of, Purchaser and its Representatives, and Purchaser and its Representatives shall have reasonable access, upon reasonable notice, to all relevant schedules, memoranda and other documents prepared by Seller or its Representatives (including its outside accountants) to the extent such materials have been prepared by Seller or its Representatives and relate to the calculation of the Closing Working Capital and/or the Closing Cash and/or the Debt Adjustment Amount in any respect (with all such information subject to ‎Section 5.18). (d) Each Party and their respective accountants and financial and other advisors may make reasonable inquiries of the other Party and/or such other Party’s accountants regarding questions concerning or disagreements with the Closing Statement arising in the course of their preparation and review. Purchaser shall complete its review of the Closing Statement within sixty (60) days after the delivery thereof to Purchaser. Promptly following completion of its deliveryreview (but in no event later than the conclusion of the sixty (60) day period), Purchaser may submit to Seller a letter regarding its concurrence or disagreement with the accuracy of the Closing Statement; provided that any such letter must specify (i) the items of the Closing Statement with which Purchaser disagrees, (ii) the adjustments that Purchaser proposes to be made to the Closing Statement (each, a “Disputed Item”) and (iii) the specific amount of such disagreement and supporting documentation and calculations; and provided, further, that Purchaser may only disagree with the Closing Statement to the extent Purchaser claims Seller did not prepare the Closing Statement in a manner consistent with this Agreement and the policies and principles set forth on Exhibit A and Exhibit A1. In If Purchaser does not deliver a letter disagreeing with the event that accuracy of the Parties are unable to resolve an Objection within Closing Statement before the sixty-conclusion of such sixty (60) day period, the Closing Statement shall be final and binding upon the Parties and Purchaser shall be deemed to have agreed with all items and amounts contained in the Closing Statement. If Purchaser does deliver such a letter, following such delivery, Seller and Purchaser shall attempt in good faith to resolve promptly any disagreement as to the computation of any item in the Closing Statement. Any items as to which there is no disagreement shall be deemed agreed. If a resolution of such disagreement has not been effected within fifteen (15) days (or longer, as mutually agreed by the Parties) after delivery of such letter, then Seller and Purchaser shall submit any unresolved Disputed Item to the Accountant for determination. The parties shall follow request that the arbitration procedures set forth in Section 3.3. determination of the Accountant with respect to any such Disputed Item be completed within thirty (c30) As used herein, days of submission of such Disputed Item to the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection Accountant and shall be determined in accordance with Section 3.2(b); (ii) if Buyer timely gives this Agreement and be final and binding upon Seller and Purchaser. The parties shall instruct the Accountant to adopt a Net Assets Objection position within the range of positions submitted by Seller and all Purchaser with respect to any Disputed Item. The Accountant’s determination regarding any Disputed Item shall be based solely on whether Seller included such Disputed Item in or excluded such Disputed Item from the Closing Statement or calculated such Disputed Item, as the case may be, in a manner consistent with the policies and principles set forth on Exhibit A and Exhibit A1. The Closing Working Capital as finally determined in accordance herewith shall be referred to as the “Final Closing Working Capital.” The Closing Cash as finally determined in accordance herewith shall be referred to as the “Closing Cash Amount.” The Debt Adjustment Amount as finally determined in accordance herewith shall be referred to as the “Final Debt Adjustment Amount.” The fees, costs, and expenses of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, Accountant shall be shared as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.follows:

Purchase Price Adjustment. (a) Within thirty Promptly (30no later than ninety (90) days after the Closing Date) following the Closing Date, Seller shall prepare and deliver to Buyer the Parties a consolidated statement (the “of Net Assets Statement”) setting forth (i) of Seller and the sum Canberra Affiliates with respect to the Canberra Business, inclusive of the Accounts Receivable (net of reserves)Selling Joint Affiliates' Assets, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close end of business on the Closing Date (“Closing Net Assets”together, the "CLOSING DATE STATEMENT OF NET ASSETS"). The Net Assets Closing Date Statement shall be prepared, and the Closing of Net Assets shall be calculatedprepared on a basis consistent with the Most Recent Statement of Net Assets whether or not any changes in GAAP have occurred. Buyer shall cooperate with Seller, as reasonably requested by Seller, in accordance connection with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as preparation by Seller of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results Statement of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)Assets. (b) If, within forty-five (45) days following delivery of the Closing Date Statement of Net Assets, Buyer has not given Seller notice of its objection to the Closing Date Statement of Net Assets (such notice must contain a statement of the basis of Buyer's objection), then the Closing Date Statement of Net Assets shall be final and shall constitute the "FINAL STATEMENT OF NET ASSETS" under this Agreement. If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written gives such notice of objection objection, after good faith efforts by the Parties for no later less than thirty (30) days after the date delivery of the notice of objection to resolve any dispute, the issues in dispute will be submitted to Deloitte & Touche LLP for resolution (so long as Deloitte & Touche LLP is not rendering material services to, nor serving as the auditor of either Party, failing which, the Parties shall agree on which Seller delivered a mutually acceptable accountant) (the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”"ACCOUNTANTS"). Failure by Buyer If issues in dispute are submitted to deliver a Net Assets Objection within the thirty-day period Accountants for resolution, (i) each Party will furnish to the Accountants such workpapers and other documents and information relating to the disputed issues as the Accountants may request and are available to that Party (or its independent public accountants), and will be deemed afforded the opportunity to be Buyer’s acceptance of present to the Net Assets Statement Accountants any material relating to the determination and to discuss the determination with the Accountants; (ii) the determination by the Accountants, as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in a notice delivered to both Parties by the Net Assets Objection Accountants within sixty (60) days after its delivery. In of the event date that the dispute is first submitted to the Accountants (or such later date as mutually agreed in writing by Buyer and Seller), will be binding and conclusive on the Parties are unable to resolve an Objection within and the sixty-day period, resulting statement of net assets prepared by the parties Accountants shall follow constitute the arbitration procedures set forth in Section 3.3"FINAL STATEMENT OF NET ASSETS" under this Agreement; and (iii) Buyer and Seller will each bear 50% of the fees of the Accountants for such determination. (c) As used herein, The Purchase Price shall be reduced by the term “Final Net Assets Statement” means (i) amount by which the Net Assets as reflected on the Most Recent Statement if Buyer does not deliver a of Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, exceeds the Net Assets Statement, as amended, if necessary, to reflect such resolution reflected on the Final Statement of all disputes; or (iii) if any disputed items are submitted to Net Assets. The Purchase Price shall be increased by the Arbitrator for resolution, amount by which the Net Assets Statement, as amended, if necessary, reflected on the Final Statement of Net Assets exceeds the Net Assets as reflected on the Most Recent Statement of Net Assets. Any adjustment to reflect any resolution the Purchase Price under this Section 2.4 shall be promptly paid by wire transfer of any disputes by agreement of the Parties and the resolution of all other disputes immediately available funds as instructed by the ArbitratorParty entitled to such payment, and in no event shall such payment be made later than five (5) Business Days after the date that the Final Statement of Net Assets is determined under Section 2.4(b) of this Agreement.

Purchase Price Adjustment. (a) Within thirty ninety (3090) days after the Closing Date, Seller Buyer shall prepare and deliver to Buyer the Seller Parties a statement (the “Net Assets Statement”) ), setting forth Buyer’s good faith determination of (i) the sum of the Accounts Receivable (net of reserves)CapEx Amount, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum amount of Indebtedness, (iii) the amount of the Accounts Payable, reserve for Warranty Company Expenses, (iv) Closing Working Capital and accounts payable and accrued expenses of Iteris GmbHthe resulting Working Capital Overage, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be preparedif any, or Working Capital Underage, if any, and (v) the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)Adjusted Purchase Price. (b) If The Statement shall become final and binding upon the Parties on the thirtieth (30th) day following the date on which the Statement was delivered to the Seller Parties, unless the Seller Parties deliver a written notice of their disagreement with the Statement to Buyer reasonably believes that prior to such thirtieth (30th) day describing (i) which items on the Net Assets Statement contains errors or has have not been prepared in accordance with this Agreement, (ii) the Agreed Proceduresbasis for the Seller Parties’ disagreement with the calculation of such items and (iii) the Seller Parties’ proposed dollar amount for each item in dispute (a “Notice of Disagreement”). If a Notice of Disagreement is received by Buyer prior to such thirtieth (30th) day, then the Statement (as revised in accordance with this sentence) shall become final and binding upon the Seller Parties and Buyer may deliver to on the earlier of (A) the date the Seller Parties and Buyer resolve, evidenced by a written notice instrument duly executed by the Seller Parties and Buyer, any differences they have with respect to the matters specified in the Notice of objection no later than Disagreement and (B) the date any disputed matters are finally resolved in a written decision by the Accounting Firm. During the thirty (30)-day period following the delivery of a Notice of Disagreement, the Seller Parties and Buyer shall seek in good faith to resolve any differences that they may have with respect to the matters specified in the Notice of Disagreement. If at the end of such thirty (30)-day period the Seller Parties and Buyer have not resolved, evidenced by a written instrument duly executed by the Seller Parties and Buyer, the matters specified in the Notice of Disagreement, the Seller Parties and Buyer shall submit to P▇▇▇▇▇ M▇▇▇▇, P.C., a Michigan professional corporation, or, if such Person refuses to accept such appointment, another nationally recognized certified public accounting firm mutually agreed between the Parties in writing (the “Accounting Firm”), for resolution, in accordance with the standards set forth in this Section 2.4, only matters that remain in dispute and corresponding numerical positions, as the same may be revised from those contained in the Statement or Notice of Disagreement (each, a “Disputed Item”). Buyer and the Seller Parties shall use commercially reasonable efforts to cause the Accounting Firm to render a written decision fully resolving all matters submitted to the Accounting Firm within thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as receipt of such submission, but in no event shall the Final Net Assets Statement. The Parties shall attempt in good faith permit the Accounting Firm to reach agreement fail to render a written decision fully resolving all disputes set forth in matters submitted to the Net Assets Objection Accounting Firm within sixty (60) days after its deliveryof the receipt of such submission. In The scope of the event that disputes to be resolved by the Parties are unable Accounting Firm shall be limited to resolve correcting mathematical errors and determining whether the items in dispute were determined in accordance with this Agreement, and the Accounting Firm shall act as an Objection within expert, not as an arbitrator, in resolving the sixty-day periodDisputed Items, and any proceeding before the parties Accounting Firm shall follow be an expert determination under the arbitration procedures Law governing expert determination and appraisal proceedings. Other than those determinations set forth in the preceding sentence, the Accounting Firm is not to make any other determination. The Accounting Firm’s decision shall be based solely on written submissions by the Seller Parties and B▇▇▇▇ and their respective Representatives and not by independent review and shall be final and binding on all of the Parties. The Accounting Firm may not assign a value greater than the greatest value for such Disputed Item claimed by either Party or smaller than the smallest value for such Disputed Item claimed by either Party. Buyer and the Seller Parties agree that the Accounting Firm’s determination under this Section 3.32.4(b) shall be binding on the Parties and enforceable as an arbitral award, and that judgment may be entered upon the determination of the Accounting Firm in any court having jurisdiction over the Party against which such determination is to be enforced. The fees, costs and expenses of the Accounting Firm incurred pursuant to this Section 2.4 shall be borne pro rata as between the Seller Parties, on the one hand, and Buyer, on the other hand, in proportion to the final allocation made by such Accounting Firm of the Disputed Items weighted in relation to the claims made by the Seller Parties, on the one hand, and Buyer, on the other hand, such that the prevailing Party pays the lesser proportion of such fees, costs and expenses. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection The Adjusted Purchase Price shall be calculated as finally agreed or determined in accordance with Section 3.2(b2.4(b). (d) No later than five (5) Business Days after the Adjusted Purchase Price is determined: (i) If the Adjusted Purchase Price as determined pursuant to the foregoing clause (c) exceeds the Preliminary Purchase Price: (A) the Purchase Price shall be increased (any such increase, the “Seller’s Adjustment Amount”) by the amount of such excess; and (B) Buyer shall make payment of the Seller’s Adjustment Amount by wire transfer of immediately available funds to Seller to an account directed by S▇▇▇▇▇ in writing. (ii) If the Preliminary Purchase Price exceeds the Adjusted Purchase Price as determined pursuant to the foregoing clause (c): (A) the Purchase Price shall be decreased (any such decrease, the “Buyer Adjustment Amount”) by the amount of such excess; and (B) the Seller Parties shall jointly and severally pay to Buyer the amount of such excess by wire transfer of immediately available funds to the account(s) designated by B▇▇▇▇ in writing. If a Buyer Adjustment Amount is due to Buyer, then Buyer shall be entitled, but not obligated, to recover any such amount due from the Seller Parties under this Agreement by setting off such amount against the Earnout Amount, if any, and the Contingent Payment Amount, if any. Buyer timely gives a Net Assets Objection and all shall provide notice of the disputed items are resolved exercise of such right of set off to the Seller Parties. The exercise of such right of set off by mutual agreement B▇▇▇▇ will not constitute a breach of this Agreement. Neither the exercise nor the failure to exercise such right of set off will constitute an election of remedies or limit Buyer in any manner in the enforcement of any other remedies that may be available to it. (e) During the period of time from and after the Closing Date through the final determination of the PartiesAdjusted Purchase Price, and payment of the Seller’s Adjustment Amount or the Buyer Adjustment Amount (as applicable), in accordance with this Section 2.4, each Party shall afford to the other Party and its Representatives reasonable access during normal business hours upon reasonable advance written notice to the books and records and personnel (including any accountants, counsel or financial advisers of the applicable Party) used in the preparation of the Statement or the Notice of Disagreement; provided, however, that to the extent that any work papers or similar documents prepared by accountants of Buyer, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; Company or (iii) if any disputed items their respective Affiliates are submitted to the Arbitrator for resolutionrequested, the Net Assets StatementSeller Parties shall execute and deliver any non-reliance or other agreements as may be requested by such accountants prior to receiving such information; and provided, as amendedfurther, if necessarythat Buyer, the Company or their respective Affiliates shall not be obligated to reflect provide any resolution of any disputes by agreement of the Parties and the resolution of all information subject to attorney-client privilege, attorney work product protection or other disputes by the Arbitratorsimilar protection.

Purchase Price Adjustment. (a) Within thirty At least three (303) days after Business Days prior to the Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Net Assets Statement”) setting forth its good faith estimate of (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand Working Capital as of the Closing Date as determined through a physical inventory conducted by Seller on or before (the fifth day following "Estimated Net Working Capital Amount"), (ii) the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory Inventories as of the Closing Date. Date (the "Estimated Inventory Amount"), (iii) the Indebtedness of the Business to be assumed by Buyer or its representatives shall have (the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement "Assumed Indebtedness") as of June 30the Closing Date (the "Estimated Assumed Indebtedness") and (iv) the Excess Amount and the Schedule of Consigned Inventory and the components of each such item prepared in accordance with GAAP, 2011 is included on a basis consistent with the Financial Statements and the Accounting Methodologies and, in Schedule 3.2(athe case of the Estimated Net Working Capital Amount and Estimated Inventory Amount, subject to Section 2.5(e). Seller's calculation of the Estimated Net Working Capital Amount and Estimated Assumed Indebtedness shall be used in determining the Estimated Cash Purchase Price for purposes of Section 2.4. (b) If Buyer reasonably believes that The Base Cash Purchase Price shall be (i) (x) increased, if the Estimated Net Assets Statement contains errors Working Capital Amount exceeds the Benchmark, by an amount equal to such excess, or has not been prepared in accordance with (y) decreased, if the Agreed ProceduresBenchmark exceeds the Estimated Net Working Capital Amount, Buyer may deliver by an amount equal to Seller a written notice of objection no later than thirty such excess and (30ii) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure decreased by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance any amount of the Net Assets Statement as Estimated Assumed Indebtedness (to the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth extent not included in the calculation of the Estimated Net Assets Objection within Working Capital Amount). (c) Within sixty (60) days after its delivery. In the event that Closing Date, Buyer shall prepare and deliver to Seller a statement (the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set "Adjustment Statement") which sets forth in Section 3.3. (c) As used herein, reasonable detail the term “Final Net Assets Statement” means calculation of (i) the Net Assets Working Capital as of the Closing Date (the "Preliminary Net Working Capital Amount"), (ii) the Inventories of the Business as of the Closing Date (the "Preliminary Inventory Amount"), (iii) the Assumed Indebtedness as of the Closing Date (the "Preliminary Assumed Indebtedness"), and (iv) the Excess Amount and a Schedule of Consigned Inventory as of the Closing Date (the "Preliminary Consignment Items"), in each case, from the books and records of the Business. The Adjustment Statement shall be prepared in accordance with GAAP, on a basis consistent with the Financial Statements, and the Accounting Methodologies and, in the case of the Preliminary Net Working Capital Amount and the Preliminary Inventory Amount, subject to Section 2.5(e). Seller agrees to cooperate with Buyer in connection with the preparation of the Adjustment Statement and related information, and shall provide to Buyer such books, records and information as may be reasonably requested by Buyer from time to time in connection with its preparation of the Adjustment Statement. (d) The amount of Inventory as of the Closing Date set forth in the Adjustment Statement shall be based on the Inventory set forth in the Closing Inventory Report to the extent such items of Inventory are covered by the Physical Inventory Count, together with changes in Inventory from the date of the Physical Inventory Count referred to in Section 2.6 below in relation to the Closing Date and net of any required inventory reserves (with such reserves being calculated on the same bases as the Adjustment Statement). (e) The amount of Inventories used in the calculation of the Current Assets, Estimated Net Working Capital, Preliminary Net Working Capital, Final Net Working Capital, Estimated Inventory Amount, Preliminary Inventory Amount and the Final Inventory Amount shall not exceed the Inventory Benchmark applicable for the time period in which the Closing Date occurs. (f) If Seller disagrees with the determination of the Preliminary Net Working Capital Amount, Preliminary Inventory Amount, the Preliminary Assumed Indebtedness or the Preliminary Consignment Items, Seller shall notify Buyer in writing of such disagreement within the thirty (30) Business Day period immediately following the delivery of the Adjustment Statement, which notice shall describe the specific nature of any such disagreement and provide reasonable supporting documentation for such disagreement. During the thirty (30) Business Day period of its review, Seller shall have reasonable access to any documents, schedules or work papers used in the preparation of the Adjustment Statement. Seller agrees that any failure by it to notify Buyer in writing of any such disagreement prior to end of the thirty (30) Business Day period immediately following the delivery of the Adjustment Statement shall be deemed to be an acceptance by Seller of the Adjustment Statement and shall constitute a complete waiver of any right of Seller to dispute such Adjustment Statement and Buyer's calculation of the Preliminary Net Working Capital Amount, Preliminary Inventory Amount, the Preliminary Assumed Indebtedness and the Preliminary Consignment Items for purposes of this Agreement. (g) Buyer and Seller agree to negotiate to resolve any such disagreement regarding the determination of the Preliminary Net Working Capital Amount, Preliminary Inventory Amount, the Preliminary Assumed Indebtedness or the Preliminary Consignment Items, and any resolution of such disagreement agreed to in writing by Buyer and Seller shall be final and binding upon the parties and their successors and assigns. If Buyer and Seller are unable to resolve such disagreement identified by Seller pursuant to Section 2.5(f) within the thirty (30) Business Day period after delivery to Buyer of written notice of such disagreement by Seller, then the disputed matters shall be referred for final determination to the Settlement Accountant. (h) Each of Buyer and Seller shall provide a written submission of their positions on each item in dispute within fifteen (15) days of the appointment of the Settlement Accountant, with a copy to the other party. The Settlement Accountant shall consider only those items and amounts as to which Buyer and Seller have disagreed within the time periods and on the terms specified above and shall resolve the matter in accordance with the terms and provisions of this Agreement, including Section 2.5(e). The Settlement Accountant shall consider only the written submissions provided by Buyer and Seller pursuant to this paragraph (f) and shall not conduct any independent investigation or review. The Settlement Accountant is expressly limited to the selection of either Seller's or Buyer's position on a disputed item or a position in between the positions of Seller or Buyer based upon written submissions of Buyer and Seller and it shall thus select as a resolution for each disputed matter the position of either Buyer or Seller or a position in between the positions of Seller or Buyer, and the Settlement Accountant may not impose an alternative resolution outside those bounds. The Settlement Accountant shall deliver to Buyer and Seller, as promptly as practicable and in any event within forty-five (45) days after its appointment, a written report setting forth the resolution of each disputed matter and its determination of the Preliminary Net Working Capital Amount, Preliminary Inventory Amount, the Preliminary Assumed Indebtedness and/or the Preliminary Consignment Items determined in accordance with the terms of this Agreement. Such report shall be final, non-appealable and binding upon the parties to the fullest extent permitted by Applicable Law and may be enforced in any court having competent jurisdiction. The forty-five (45) day period for delivering the written report may be extended by the mutual written consent of the parties or for good cause shown by the Settlement Accountant at its sole discretion. The fees, expenses and costs of the Settlement Accountant shall be borne one-half by Buyer and one-half by Seller. (i) (i) (a) If no dispute notice has been timely delivered by Seller pursuant to Section 2.5(f), the Preliminary Net Working Capital Amount, as originally submitted by Buyer, or (b) if Buyer does not deliver a dispute notice has been timely delivered by Seller pursuant to Section 2.5(f), the Preliminary Net Assets Objection Working Capital Amount, as determined pursuant to the resolution of such dispute in accordance with Section 3.2(b2.5(g) or (h); , shall be the "Final Net Working Capital Amount", (ii) (a) if Buyer no dispute notice has been timely gives a Net Assets Objection and all of the disputed items are resolved delivered by mutual agreement of the PartiesSeller pursuant to Section 2.5(f), the Net Assets StatementPreliminary Inventory Amount, as amendedoriginally submitted by Buyer, or (b) if necessarya dispute notice has been timely delivered by Seller pursuant to Section 2.5(f), the Preliminary Inventory Amount, as determined pursuant to reflect such the resolution of all disputes; such dispute in accordance with Section 2.5(g) or (h), shall be the "Final Inventory Amount", (iii) (a) if any disputed items are submitted no dispute notice has been timely delivered by Seller pursuant to the Arbitrator for resolutionSection 2.5(f), the Net Assets StatementPreliminary Assumed Indebtedness, as amendedoriginally submitted by Buyer, or (b) if necessarya dispute notice has been timely delivered by Seller pursuant to Section 2.5(f), the Preliminary Assumed Indebtedness, as determined pursuant to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes such dispute in accordance with Section 2.5(g) or (h), shall be the "Final Assumed Indebtedness", and (iv) (a) if no dispute notice has been timely delivered by Seller pursuant to Section 2.5(f), the ArbitratorPreliminary Consignment Items, as originally submitted by Buyer, or (b) if a dispute notice has been timely delivered by Seller pursuant to Section 2.5(f), the Preliminary Consignment Items, as determined pursuant to resolution of such dispute in accordance with Section 2.5(g) or (h), shall be the "Final Consignment Items".

Purchase Price Adjustment. Immediately prior to Closing, the Company shall provide KIT with a final version of Schedule 2.3(e) (awhich will include, without limitation, a list of all Third Party Expenses and all other Liabilities payable at Closing) Within thirty (30) days after the Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Net Assets Known Pre-Closing Liabilities Statement”) setting ). The Known Pre-Closing Liabilities Statement shall be subject to Purchaser’s reasonable approval, which approval shall not be unreasonably withheld or delayed. The Base Purchase Price payable at the Closing shall be decreased by the amount set forth on the Known Pre-Closing Liabilities Statement and increased by an amount equal to the sum of (i) the sum of the Accounts Receivable (net of reserves)Company’s cash and liquid investments, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) current and collectible accounts receivables, (iii) billed but collectible revenues related to completed work and (iv) short-term inventory (at current depreciated value) (such adjusted amount, the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net AssetsAdjusted Base Purchase Price”). The Net Assets Statement With the exception of the ▇▇▇▇▇▇ Claim which shall be prepared, and the Closing Net Assets shall be calculated, subject to settlement in accordance with Section 5.6, KIT agrees to remit payments (in immediately available funds or, if agreed upon by a creditor, shares of KIT common stock) and/or reach a settlement agreement with each of the agreed procedures and accounting practices entities set forth on Schedule 3.2(a2.3(e) 75 days from Closing (it being understood and agreed that the “Agreed Procedures”Assumed Liabilities on Schedule 2.3(e) will be paid by KIT in accordance with their terms and, if due and payable at Closing, will be paid by KIT by no later than the 40-days after the First Anniversary. Notwithstanding whether an Assumed Liability is listed on Schedule 2.3(e) and the net book value requirements of the Inventory and Iteris GmbH inventory prior sentence, if such Assumed Liability is also listed on either Schedule 2.3(f) or Schedule 2.3(g), then KIT agrees that it shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as pay or otherwise enter into a settlement agreement for each of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes Assumed Liabilities set forth in Schedule 2.3(f) by 4th January 2012; and for the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures Assumed Liabilities set forth in Schedule 2.3(g) within 7 Business Days of Closing. Each entity set forth on Schedule 2.3(e) and Schedule 2.3(f) and Schedule 2.3(g) is an intended third party beneficiary of this Agreement, and any shares issued to such entities by KIT pursuant to this Section 3.32.6(g) will be registered for re-sale by KIT (through the filing of a registration statement which KIT will file and have declared effective as soon as practically possible after KIT has filed its Annual Report on Form 10-K for the year ended December 31, 2011 with the U.S. Securities and Exchange Commission in March 2011). (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.

Purchase Price Adjustment. (ai) Within thirty five (305) days after Business Days following the Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Net Assets Inventory Statement”) setting forth (i) the sum Seller’s determination of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum value of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case Inventory transferred to Buyer as of the close Closing (as of business 11:59 P.M., local time, on the Closing Date Date) (the “Closing Net AssetsInventory”), Seller’s determination of Prepaid Inventory transferred to Buyer as of the Closing (as of 11:59 P.M., local time, on the Closing Date) and a calculation of the amount, if any, payable pursuant to clause (g) of this Section 1.3. The Net Assets Statement In connection with the preparation of the Inventory Statement, Buyer shall be prepared(A) assist, and shall cause its Affiliates to assist, Seller, its accountants, advisors and other representatives in its preparation of the Closing Net Assets shall Inventory Statement and (B) afford to Seller, its accountants, advisors and other representatives, reasonable access during normal business hours to the personnel, properties, books and records of the Business to the extent relevant to the preparation of the Inventory Statement (including any taking and preparing with Buyer’s participation of physical counts of Inventory). For purposes of this Section 1.3, the value of the Inventory transferred to Buyer will be calculated, in accordance with determined by reference to the agreed procedures price for each Product and accounting practices other type or item of Inventory as set forth on Schedule 3.2(a1.3 to this Agreement shall include only Inventory that (A) has been approved and released by Seller or such applicable Selling Affiliate appointed qualified person in compliance with applicable Laws, (B) has an unexpired shelf life of not less than twelve (12) months, or such lesser period as may be agreed by Buyer and Seller on a Product-by-Product basis, (C) has not been damaged, recalled and/or incorrectly packaged or labeled and (D) consists of active pharmaceutical ingredients, spare parts, raw materials, containers, packaging and packaging supplies and work-in-process. (ii) For the “Agreed Procedures”) purposes of clarification only, Seller is retaining all Pre-Closing Accounts Payable and Pre-Closing Accounts Receivable and the net book value only Purchase Price adjustment after the Closing will be the adjustment of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Prepaid Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records pursuant to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)this Section 1.3. (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.

Purchase Price Adjustment. (a) Within thirty As promptly as practicable and in any event within ninety (3090) days after the Closing Date, Seller Buyer shall prepare and deliver to Buyer the Sellers a statement (the “Net Assets Closing Statement”) setting forth in reasonable detail its good faith calculation of (i) the sum of the Accounts Receivable (net of reserves)Net Working Capital, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum Closing Indebtedness, (iii) the aggregate Attributable Subsidiary Value, (iv) the Transaction Expenses, (v) the Pipeline Acquisition Costs, (vi) the Cash Amount, (vii) the Closing Target Net Working Capital, (viii) the CapEx Adjustment and (ix) the resulting calculation of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbHPurchase Price, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, prepared in accordance with the agreed procedures and accounting practices definitions set forth on Schedule 3.2(a) (the “Agreed Procedures”) in this Agreement and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records together with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)reasonable supporting documentation. (b) The Sellers shall have forty-five (45) days following delivery of the Closing Statement to review and either accept or dispute the Closing Statement and the calculations set forth therein, during which time Buyer will provide the Sellers and their accountants reasonable access, during normal business hours and upon reasonable notice, to (x) review the financial books and records of the Acquired Companies, any of the Acquired Companies’ accountants’ work papers related to the calculation of amounts in the Closing Statement (subject to the execution of any customary and reasonable access letters that such accountants may require in connection with the review of such work papers), and (y) the employees and other representatives of Buyer and the Acquired Companies who were responsible for the preparation of the Closing Statement to respond to questions relating to the preparation of the Closing Statement and the calculation of the items thereon, in each case, to allow the Sellers to determine the accuracy of Buyer’s calculation of the items set forth on the Closing Statement. If the Sellers dispute any amounts reflected on the Closing Statement, they shall deliver to Buyer reasonably believes a statement setting forth its objections thereto, setting forth, in reasonable detail, the basis for such dispute, the dollar amounts involved and the Sellers’ calculation of the adjustments to the Closing Statement that the Net Assets Sellers believe should be made, within forty-five (45) days of delivery of the Closing Statement contains errors or has not been prepared in accordance with to the Agreed Procedures, Buyer may deliver to Seller a Sellers (such written notice of objection no later than objection, the “Objection Statement”). If an Objection Statement is not delivered to Buyer within the time period required by the preceding sentence, then the Closing Statement (as delivered by Buyer to the Sellers), as modified to include any changes agreed to by the Sellers and Buyer, shall be final, binding and non-appealable by the parties hereto. (c) If the Sellers timely deliver an Objection Statement to Buyer, the Sellers and Buyer shall negotiate in good faith to resolve any objections made by the Sellers but if they do not reach a final resolution within thirty (30) days (or such longer period as may be agreed by the Sellers and Buyer) after the delivery of the Objection Statement, the Sellers and Buyer shall submit the items remaining in dispute for final resolution to the Accountants for final arbitration. Promptly following the submission of the items in dispute to the Accountants, and in any event within ten (10) Business Days following such submission, each of Buyer and the Sellers shall submit to the Accountants (and the other party) all documentary materials and analyses that Buyer or the Sellers, as the case may be, believes to be relevant to a resolution of the disputed items set forth in the Objection Statement. The Accountants shall render their determination of all disputed items submitted for resolution within thirty (30) days after receipt of all submissions by ▇▇▇▇▇ and the date Sellers to the Accountants, and such determination shall be final, binding and non-appealable absent bad faith or manifest error. The Accountants shall determine in a manner consistent with the requirements of this Agreement (including the Accounting Principles and the definitions set forth in this Agreement), based solely on which Seller delivered written presentations and written submissions by ▇▇▇▇▇ and the Net Assets Sellers, and not by independent review, whether those items identified by the Sellers on the Objection Statement that were submitted to the Accountants, and any resulting adjustments, were properly calculated in accordance with the terms of this Agreement (including the Accounting Principles). In resolving any disputed item, the Accountants may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. The fees of the Accountants shall be borne by ▇▇▇▇▇ and the Sellers in inverse proportion as each shall prevail in respect of the dollar amount of disputed items so submitted (as finally determined by the Accountants). (d) No later than ten (10) Business Days after the Purchase Price has been finally determined in accordance with this Section 2.9, the parties agree to the following payments (if any): (i) If the Purchase Price is greater than the Estimated Purchase Price, Buyer shall pay (or cause to be paid) to the Sellers in respect to their respective Pro Rata Portion an amount equal to the amount of such excess. (ii) If the Purchase Price is less than the Estimated Purchase Price, the Sellers shall pay (or cause to be paid) to Buyer, which notice shall specify in each case in accordance with their respective Pro Rata Portions, an amount equal to the nature amount of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3such deficit. (ce) As used herein, Any payment to be made pursuant to this Section 2.9 shall be made by wire transfer of immediately available funds to an account (or accounts) specified in writing by the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets StatementSellers or Buyer, as amended, if necessary, applicable. (f) The Sellers and Buyer agree to reflect such resolution of all disputes; or (iii) if treat any disputed items are submitted payment made pursuant to this Section 2.9 as an adjustment to the Arbitrator Purchase Price for resolutionfederal, the Net Assets Statementstate, local and non-U.S. Tax purposes except as amended, if necessary, to reflect any resolution of any disputes otherwise required by agreement of the Parties and the resolution of all other disputes by the ArbitratorLaw.

Purchase Price Adjustment. (a) No later than five (5) Business Days prior to the Closing Date, Sellers shall cause to be prepared and delivered to Purchaser a certificate of an officer of Sellers setting forth Sellers’ good faith estimates of the Net Working Capital as of the Closing (the “Estimated Net Working Capital”), which shall be prepared in a manner consistent with past practice and using the same accounting methods, principles, policies, practices, procedures, classifications, judgments, estimation methodologies and accounting standards as were utilized in the preparation of the Interim Balance Sheet. (b) The Initial Purchase Price shall be increased, if the Estimated Net Working Capital exceeds the Reference Net Working Capital, by an amount equal to the amount of such excess, or decreased, if the Reference Net Working Capital exceeds the Estimated Net Working Capital, by an amount equal to such excess (such net increase or decrease to the Initial Purchase Price, the “Closing Adjustment”). (c) Within sixty (60) days following the Closing Date, Purchaser shall deliver to Sellers a calculation by Purchaser of the Net Working Capital as of the Closing Date (the “Preliminary Net Working Capital”), which shall be prepared in a manner consistent with past practice and using the same accounting methods, principles, policies, practices, procedures, classifications, judgments, estimation methodologies and accounting standards as were utilized in the preparation of the Interim Balance Sheet. (d) Sellers shall have forty-five (45) days following receipt the calculation of the Preliminary Net Working Capital to review such calculation and notify Purchaser in writing of any dispute regarding the calculations (a “Dispute Notice”), specifying the reasons therefor in reasonable detail. (e) In the event that Sellers deliver a Dispute Notice to Purchaser, Purchaser and Sellers shall cooperate in good faith to resolve such dispute as promptly as practicable and, upon such resolution, if any, any adjustments to the Preliminary Net Working Capital shall be made in accordance with the agreement of Purchaser and Sellers and shall be conclusive and binding on Purchaser and Sellers. If Purchaser and Sellers are unable to resolve any such dispute within fifteen (15) Business Days of Sellers’ delivery of such Dispute Notice (or any such longer period as Purchaser and Sellers shall mutually agree in writing), such dispute shall be resolved by the Independent Accounting Firm, and such determination shall be final and binding on the parties. The Independent Accounting Firm shall consider only those items and amounts as to which Purchaser and Sellers have disagreed within the time periods and on the terms specified above, and may rely only upon information submitted to it by Purchaser and Sellers. The Independent Accounting Firm shall be instructed to use reasonable best efforts to deliver to Purchaser and Sellers a written report setting forth the resolution of each disputed matter within thirty (30) days of submission of the Preliminary Net Working Capital to it and, in any case, as promptly as practicable after such submission. Any expenses relating to the engagement of the Independent Accounting Firm in respect of its services pursuant to this Section 2.5(e) shall initially be shared equally by Purchaser and Sellers; provided, however, that all fees and expenses relating to the foregoing work by the Independent Accounting Firm shall ultimately be borne by Purchaser and Sellers in inverse proportion as they may prevail on the matters resolved by the Independent Accounting Firm, which proportionate allocation also will be determined by the Independent Accounting Firm and be included in the Independent Accounting Firm’s written report. (f) The Preliminary Net Working Capital, (A) if no Dispute Notice has been timely delivered by Sellers, as originally submitted by Purchaser, or (B) if a Dispute Notice has been timely delivered by Sellers, as determined pursuant to the resolution of such dispute in accordance with Section 2.5(e), shall be the “Final Net Working Capital.” (g) If the Final Capital Adjustment exceeds the Closing Adjustment, Purchaser shall pay the amount of such excess to Sellers, pro rata in accordance the portion of the Purchase Price payable to each such Person as set forth in Section 2.3. If the Closing Adjustment exceeds the Final Capital Adjustment, Sellers shall pay the amount of such excess to Purchaser. Purchaser shall, or Sellers shall, as the case may be, within five (5) Business Days after the determination of the Final Capital Adjustment, make such payment to Sellers or Purchaser, as the case may be, by wire transfer in immediately available funds. (h) In addition to the foregoing, the parties agree that, in the event the consent from the counterparty to the assignment to the Surviving Corporation of THRG’s rights under the Contract identified on Schedule 2.5(h) (the “First Identified Contract”) in connection with the transactions contemplated hereby is not obtained prior to the Closing without any modifications to the terms of the First Identified Contract that pertain to pricing, discounts, rebates, purchasing commitments, duration, termination, payment terms or delivery terms, or that otherwise adversely affect the value thereof, then the Initial Purchase Price shall be reduced at the Closing in an amount equal to 80% of the Aggregate Cost Differential attributable to the Replacement Contract as determined by the Independent Accounting Firm; provided, however, that in no event shall the reduction to the Initial Purchase Price at the Closing pursuant to this Section 2.5(h) exceed $15,000,000. For purposes of this Section 2.5(h): (i) “Replacement Contract” means either (x) the First Identified Contract as amended or otherwise modified in connection with obtaining the consent of the counterparty thereto and consistent with this Section 2.5(h) or (y) if there shall not be a Replacement Contract under clause (x), the Contract entered into by Purchaser or one of its Affiliates in order for the Surviving Corporation to obtain the same or similar product provided pursuant to the First Identified Contract from and after the Closing, which shall have a term of at least twelve (12) months; and (ii) “Aggregate Cost Differential” means the excess of (x) the present value of the aggregate cost under the Replacement Contract to obtain over the period identified on Schedule 2.5(h) the quantities of the product provided pursuant to the First Identified Contract that are identified on Schedule 2.5(h) over (y) the present value of the aggregate cost to obtain over such period such quantities under the First Identified Contract, which present value, in each case, shall be calculated by the Independent Accounting Firm as set forth on and using the assumptions identified on Schedule 2.5(h). The parties agree that the First Identified Contract may not be amended to become the Replacement Contract unless Purchaser shall have consented in writing to the terms of such Replacement Contract in its sole discretion. Notwithstanding any provisions herein to the contrary, in the event that (A) at least ten Business Days prior to the Closing Date, Seller shall prepare Sellers notify Purchaser in writing of a proposal to amend the pricing, discount and/or rebate terms, but no other terms, and deliver to Buyer provide a statement (the “Net Assets Statement”) setting forth (i) the sum copy of the Accounts Receivable proposed amendment to the First Identified Contract, which the counterparty thereto is prepared to accept, (net of reservesB) Purchaser fails or refuses to consent to such amended terms by written notice to Sellers at least five Business Days prior to the Closing Date and (C) Purchaser fails to enter into an alternate Replacement Contract prior to the Closing with a lower Aggregate Cost Differential, the Replacement Contract shall be deemed to be the First Identified Contract as it would have been amended pursuant to the proposal referred to in clause (A), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH. In addition, in each case as of the close of business event that on the Closing Date (“Closing Net Assets”). The Net Assets Statement Purchaser or any of its Affiliates shall be prepared, a party to any purchasing contracts or arrangements pursuant to which Purchaser or any of its Affiliates is entitled to purchase and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon supplier is required or otherwise willing to provide the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect product provided pursuant to the Inventory. For illustration purposes, First Identified Contract that are identified in paragraph II of Schedule 2.5(h) in addition to such quantities as Purchaser and its Affiliates reasonably anticipate purchasing thereunder during the same periods that are unrelated to the Business at a Net Assets Statement as lower aggregate cost (net of June 30, 2011 is included in Schedule 3.2(a). all applicable discounts and rebates) than the aggregate cost (bnet of all applicable discounts or rebates) If Buyer reasonably believes that to purchase such products under the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor First Identified Contract (a “Net Assets ObjectionLower Cost Alternative”). Failure by Buyer , then, for the purposes of determining any adjustment to deliver a Net Assets Objection within the thirty-day period will Initial Purchase Price pursuant to this Section 2.5(h), the Lower Cost Alternative shall be deemed to be Buyer’s acceptance of the Net Assets Statement as Replacement Contract and the Final Net Assets Statement. The Parties applicable price thereunder shall attempt be, in good faith to reach agreement resolving all disputes the case where the Lower Cost Alternative is a single contract, the price set forth in such contract (net of all applicable discounts and rebates), or, in the Net Assets Objection within sixty case where the Lower Cost Alternative is more than one contract, a price calculated by determining the weighted average of the price under such contracts (60net of all applicable discounts and rebates) days after its deliverybased on the quantity applied to each such contract. In the event there is to be an adjustment to the Initial Purchase Price pursuant to this Section 2.5(h), Purchaser shall certify in writing to Sellers on the Closing Date that no Lower Cost Alternative exists or shall provide to the Independent Accounting Firm such information as it may require to determine any adjustment to the Initial Purchase Price pursuant to this Section 2.5(h); it being understood and agreed that the Parties are unable to resolve an Objection within Independent Accounting Firm shall maintain the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3confidence of such information and use it only for calculating any such adjustment. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.

Purchase Price Adjustment. (a) Within thirty (30) 60 days after the Closing Date, Principal Seller shall prepare and deliver to Buyer Purchaser a statement (the “Net Assets "Closing Statement”) "), setting forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case Working Capital as of the close of business on the Closing Date (“"Closing Net Assets”Working Capital"). The Net Assets Statement Purchaser shall be preparedassist, and shall cause the Closing Net Assets shall be calculatedAcquired Subsidiaries to assist, Principal Seller and its advisors, including its independent auditors, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as preparation of the Closing Date as determined through a physical inventory conducted by Statement and shall provide Principal Seller on or before the fifth day following the Closing Dateand its advisors, the results of which shall be adjusted from Buyer’s including its independent auditors, with (i) all reasonably requested Records and Seller’s books and records of each Acquired Subsidiary and (ii) access at all reasonable times to reflect the Inventory personnel and Iteris GmbH inventory as properties of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposesAcquired Business, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)each case for such purpose. (b) If Buyer During the 30-day period following Purchaser's receipt of the Closing Statement, Purchaser and its advisors, including its independent auditors, shall be permitted to review the working papers of Principal Seller and, if applicable, of Principal Seller's independent auditors relating to the Closing Statement, provided that Purchaser and its advisors, including its independent auditors, have executed all release letters reasonably believes that requested by Principal Seller's independent auditors in connection therewith. The Closing Statement shall become final and binding upon the Net Assets Statement contains errors or has not been prepared in accordance with parties on the Agreed Procedures30th day following delivery thereof, Buyer may deliver to Seller a unless Purchaser gives written notice of objection no later its disagreement with the Closing Statement (the "Notice of Disagreement") to Principal Seller prior to such date. Purchaser may only deliver one Notice of Disagreement to Principal Seller, and Purchaser and its affiliates shall not raise any disagreements with the Closing Statement other than thirty the disagreements set forth in the Notice of Disagreement, nor shall Purchaser or any of its affiliates adjust or change any disagreement set forth in the Notice of Disagreement. The Notice of Disagreement shall (30i) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify in reasonable detail the nature of each dispute disagreement so asserted, (ii) only include disagreements based on mathematical errors or based on Closing Working Capital not being calculated in accordance with this Section 1.07 and the basis therefor (iii) be accompanied by a “Net Assets Objection”certificate of Purchaser that it has complied with Section 1.07(e). Failure If the Notice of Disagreement is received by Buyer Principal Seller in a timely manner, then the Closing Statement (as revised in accordance with this sentence) shall become final and binding upon Principal Seller and Purchaser on the earlier of (A) the date Principal Seller and Purchaser resolve in writing any differences they have with respect to deliver a Net Assets Objection within the thirtymatters specified in the Notice of Disagreement and (B) the date any disputed matters are finally resolved in writing by the Accounting Firm (as defined below). During the 30-day period will be deemed to be Buyer’s acceptance following the delivery of the Net Assets Statement as the Final Net Assets Statement. The Parties Notice of Disagreement, Principal Seller and Purchaser shall attempt seek in good faith to reach agreement resolving all disputes set forth resolve in the Net Assets Objection within sixty (60) days after its delivery. In the event writing any differences that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance they may have with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted respect to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.matters specified in the

Purchase Price Adjustment. The Aggregate Purchase Price will be subject to adjustment (hereinafter referred to as the "Purchase Price Adjustment") in accordance with the following provisions of this Section 1.3, which adjustment will be determined as follows: (a) Within It is the expectation of the parties hereto that the aggregate current assets of the Companies (on a combined basis) (excluding any deferred initial direct costs, including marketing costs) ("Current Assets") shall be equal to or exceed the aggregate liabilities of the Companies (on a combined basis) (excluding (i) deferred rent, except to the extent such deferred rent exceeds $125,000, (ii) mortgage and asset based indebtedness, except to the extent such indebtedness exceeds $3,500,000, (iii) the Seller Debt, and (iv) the Corporate Withholding Taxes) ("Liabilities"), as shown on the individual balance sheets of each of the Companies (collectively, the "Closing Balance Sheets"), as of the Closing Date. The difference, if any, between Current Assets and Liabilities is referred to herein as "Net Current Assets". The determinations made in this Section 1.3 shall be made on an accrual basis in accordance with United States generally accepted accounting principles ("GAAP") using the same accounting methods, policies, practices and procedures with consistent classification, judgments and estimation methodology as were used by each Company in preparing their Balance Sheets to the extent such accounting methods, policies, practices and procedures are in accordance with GAAP. The Closing Balance Sheets shall be prepared by Sellers' Representative and delivered to Buyer within seventy-five (75) days after the Closing. (b) During the thirty (30) day period following the Buyer's receipt of the Closing Balance Sheets, the Buyer and its independent accountants shall at the Buyer's expense be permitted to review, and the Sellers' Representative shall make available to the Buyer, the supporting schedules, analyses, working papers and other documentation of the Sellers' Representative relating to the Closing Balance Sheets and to ask questions, receive answers and request such other data and information from each of them as shall be reasonable under the circumstances. The Closing Balance Sheets shall become final and binding upon the parties on the business day following the thirtieth (30th) day following delivery thereof, unless the Buyer gives written notice of its disagreement with the Closing Balance Sheets (such notice, a "Notice of Disagreement") to the Sellers' Representative prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so asserted, and the Buyer shall make available all supporting schedules, analyses, working papers and other documentation. The Buyer shall be deemed to have agreed with all items and amounts included in the calculation of Net Current Assets delivered pursuant to Section 1.3(a) except such items that are specifically disputed in the Notice of Disagreement. During the fifteen (15) day period following the delivery of a Notice of Disagreement that complies with the preceding paragraph or such longer period as the Sellers' Representative and the Buyer shall mutually agree, the Sellers' Representative and the Buyer shall seek in good faith to resolve in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement, and in the event the Sellers' Representative and the Buyer are able to reach such resolution then the Net Current Assets, so agreed by them in writing shall be deemed to be final. If, at the end of such fifteen (15) day period (or such longer period as mutually agreed between the Sellers' Representative and the Buyer), the Sellers' Representative and the Buyer have not so resolved such differences, the Sellers' Representative and the Buyer shall submit the dispute for resolution to Pricewaterhouse Coopers LLP (the "Arbiter"), for review and resolution of any and all matters which remain in dispute and which were properly included in the Notice of Disagreement in accordance with this Section 1.3. The Sellers' Representative and the Buyer shall use reasonable efforts to cause the Arbiter to render a decision resolving the matters in dispute within thirty (30) days after following the submission of such matters to the Arbiter, or such longer period as the Sellers' Representative and the Buyer shall mutually agree. The Sellers' Representative and the Buyer agree that the determination of the Arbiter shall be final and binding upon the parties and that judgment may be entered upon the determination of the Arbiter in any court having jurisdiction over the party against which such determination is to be enforced; provided, that the scope of the disputes to be resolved by the Arbiter is limited to only such items included in the Closing DateBalance Sheets that the Buyer has properly disputed in the Notice of Disagreement. The Arbiter shall determine, Seller based solely on presentations by the Buyer and the Sellers' Representative and their respective representatives, and not by independent review, only those issues in dispute specifically set forth in the Notice of Disagreement and shall prepare the Final Closing Balance Sheets (as defined in Section 1.3(c)) and deliver render a written report as to Buyer a statement (the “dispute and the resulting calculation of Net Current Assets Statement”) setting forth which shall be conclusive and binding upon the parties. In resolving any disputed item, the Arbiter: (i) shall be bound by the sum of the Accounts Receivable (net of reserves)principles set forth in this Section 1.3, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) shall limit its review to matters specifically set forth in the sum Notice of Disagreement and (iii) shall not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. The fees, costs, and expenses of the Accounts PayableArbiter (x) shall be borne by the Buyer in the proportion that the aggregate dollar amount of such disputed items so submitted that are unsuccessfully disputed by the 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 Sellers in the proportion that the aggregate dollar amount of such disputed items so submitted that are successfully disputed by the Buyer (as finally determined by the Arbiter) bears to the aggregate dollar amount of such items so submitted. Whether any dispute is resolved by agreement among the parties or by the Arbiter, reserve changes to the Closing Balance Sheets shall be made hereunder only for Warranty Expensesitems as to which the Buyer has taken exception in the Notice of Disagreement. The fees and expenses of the Sellers' Representative incurred in connection with the preparation of the Closing Balance Sheets and review of any Notice of Disagreement shall be borne by the Sellers, and accounts payable the fees and accrued expenses of Iteris GmbH, the Buyer's independent accountants incurred in each case connection with their review of the Closing Balance Sheets shall be borne by the Buyer. (c) Upon final determination of the aggregate Net Current Assets of the Companies as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which Aggregate Purchase Price shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means follows: (i) the Net Aggregate Purchase Price shall be decreased dollar for dollar by the amount, if any, by which Current Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); reflected on the Final Closing Balance Sheets are less than Liabilities reflected on the Final Closing Balance Sheets and (ii) the Aggregate Purchase Price shall be increased dollar for dollar by the amount, if Buyer timely gives a Net any, by which Current Assets Objection and all of reflected on the disputed items Final Closing Balance Sheets are resolved by mutual agreement of greater than Liabilities reflected on the PartiesFinal Closing Balance Sheets. For purposes hereof, the Net Assets Statement, as amended, "Final Closing Balance Sheets" means (x) the Closing Balance Sheets if necessary, no Notice of Disagreement with respect thereto is duly and timely delivered pursuant to reflect such resolution of all disputes; Section 1.3(b) or (iiiy) if any disputed items are submitted to the Arbitrator for resolutionsuch a Notice of Disagreement is so delivered, the Net Assets Statement, Closing Balance Sheets as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes agreed by the ArbitratorSellers' Representative and Buyer pursuant to Section 1.3(b) or (z) if such Notice of Disagreement is so delivered and in the absence of such agreement, the Final Closing Balance Sheets as prepared by the Arbiter pursuant to Section 1.3(b).

Purchase Price Adjustment. (a) At least three Business Days prior to the Closing Date, the Seller Representative shall deliver to Buyer a funds flow statement setting forth (A) Sellers’ good faith estimates of the Net Working Capital of the Company as of the Closing (the “Estimated Net Working Capital”), the Closing Indebtedness (the “Estimated Closing Indebtedness”) and Seller Transaction Expenses (the “Estimated Seller Transaction Expenses”), (B) on the basis of the foregoing, a calculation of the Estimated Unit Purchase Price, (C) all payments due pursuant to the LTIP, whether at or after the Closing, including the identity of each recipient of each such payment (the “Specified LTIP Payments”), and (D) each payment to be made at the Closing, including the identity and wire instructions for each payment recipient, and the amount of payment to be made to each recipient (the “Funds Flow Statement”). (b) Within thirty (30) 90 days after the Closing Date, Seller shall prepare and ▇▇▇▇▇ will deliver to Buyer Seller Representative a statement (the “Net Assets Post-Closing Statement”) setting forth (i) the sum that includes an unaudited consolidated balance sheet of the Accounts Receivable Company as of the Closing prepared in accordance with GAAP, applied consistently with the NWC Accounting Principles, and a written determination of the Net Working Capital of the Company as of the Closing (net of reservesthe “Final Net Working Capital”), Businessthe Closing Indebtedness, the Seller Transaction Expenses, the Final Unit Purchase Price calculated using the foregoing amounts, in reasonably detailed and explanatory form and together with supporting documents and information that Buyer has utilized in connection with the making of such determination. Following delivery of the Post-related prepaidsClosing Statement, Inventory (net of reserves) and Equipment Buyer and the cashCompany shall provide Seller Representative and its representatives with reasonable access to the books, accounts receivable (net of reserves)records, prepaidswork papers, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum personnel of the Accounts Payable, reserve for Warranty Expenses, Company and accounts payable and accrued expenses of Iteris GmbHother items reasonably requested, in each case as for the purpose of enabling Seller Representative to review Buyer’s calculation and preparation of the close Post-Closing Statement; provided that such access shall occur during normal business hours, with reasonable notice and in a manner that does not unreasonably interfere with the conduct of the business of the Company. Seller Representative may dispute any amount or item on the Post- Closing Date Statement by delivering to Buyer a written notice of dispute (the “Post-Closing Net AssetsStatement (c) If Seller Representative timely delivers a Post-Closing Statement Dispute Notice to Buyer in accordance with Section 2.5(b), Buyer and Seller Representative shall attempt to reconcile their differences, and any resolution by them as to any such disputes shall be final, binding and conclusive on Buyer and Sellers. If ▇▇▇▇▇ and Seller Representative are unable to resolve any such dispute within 15 days of ▇▇▇▇▇’s receipt of the Post-Closing Statement Dispute Notice from Seller Representative, either Buyer or Seller Representative shall be permitted to engage (on behalf of Buyer and Seller Representative) FORVIS, LLP (the “Independent Accountant”), acting as an expert and not as an arbitrator, to resolve any remaining items in dispute. Within five business days of such engagement, ▇▇▇▇▇ and Seller Representative shall submit to the Independent Accountant (and the other party) all documentary materials and analyses that Buyer or Seller Representative, as the case may be, believes to be relevant to a resolution of the dispute set forth in the Post-Closing Statement Dispute Notice, but excluding any work papers of independent certified public accountants. The Net Assets Statement Independent Accountant shall be preparedinstructed by the party that engaged such Independent Accountant to, within 45 days after such engagement, make a determination in accordance with standards provided herein and deliver to Buyer and Seller Representative a written report (the “Final Post-Closing Statement Report”) containing the Independent Accountant’s determination of the disputed matters that were so submitted to it and of the Final Net Working Capital, the Positive NWC Adjustment Amount, if any, the Negative NWC Adjustment Amount, if any, the Closing Indebtedness, the Seller Transaction Expenses, the and Final Unit Purchase Price (and only such matters) and such determination shall be within the range of calculations provided by ▇▇▇▇▇ and Seller Representative. The determination of the Independent Accountant that is contained in the Final Post-Closing Statement Report shall be final, binding and conclusive on Buyer and Sellers. The fees and costs of the Independent Accountant shall be payable by ▇▇▇▇▇, on the one hand, and Sellers, on the other hand, based upon the percentage which the portion of the aggregate disputed amount not awarded to each party bears to the aggregate amount actually contested by such party, as determined by the Independent Accountant. For example, if Sellers timely submit a dispute notice for $1,000, and if Buyer contests only $500 of such amount, and the Closing Net Assets Independent Accountant ultimately resolves the dispute by awarding Sellers $300 of the $500 contested, then the costs and expenses of the Independent Accountant will be allocated 60% (i.e., 300/500) to Buyer and 40% (i.e., 200/500) to Sellers. All other costs, fees and expenses incurred by the parties in connection with resolving such dispute shall be calculatedborne by the party incurring such cost and expense. (d) Within five business days after the final determination of the Final Unit Purchase Price pursuant to this Section 2.5: (i) If the Final Unit Purchase Price, as finally determined pursuant to this Section 2.5, is greater than the Estimated Unit Purchase Price (such difference, the “Underpayment Amount”), then (A) Buyer and Seller shall jointly instruct the Escrow Agent to disburse the balance of the Adjustment Escrow Account to Seller Representative (for further distribution to the Sellers), and (B) Buyer shall pay to Sellers, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Datetheir Pro Rata Shares, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect an amount in cash equal to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a)Underpayment Amount. (bii) If the Final Unit Purchase Price, as finally determined pursuant to this Section 2.5, is less than the Estimated Unit Purchase Price (such difference, the “Overpayment Amount”), then: (A) if the Overpayment Amount is less than the Adjustment Escrow Amount, then Buyer reasonably believes that and Seller Representative shall jointly instruct the Net Assets Statement contains errors or has not been prepared Escrow Agent to (1) disburse to Buyer from the Adjustment Escrow Account an amount in accordance with cash equal to the Agreed Procedures, Buyer may deliver Overpayment Amount and (2) disburse to Seller a written notice of objection no later than thirty Representative (30for further distribution to the Sellers) days the remaining balance in the Adjustment Escrow Account after the date on which disbursement to Buyer described in the preceding clause (1); (B) if the Overpayment Amount is more than the Adjustment Escrow Amount, then (1) Buyer and Seller delivered Representative shall jointly instruct the Net Assets Statement Escrow Agent to Buyer, which notice shall specify disburse to Buyer the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance entire balance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day periodAdjustment Escrow Account, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.and

Purchase Price Adjustment. The Estimated Purchase Price and the Adjusted Purchase Price shall be determined as follows: (a) At least two Business Days before the Closing, Seller 1 will deliver to Buyer a statement calculating the Estimated Net Working Capital. The Estimated Net Working Capital will be used to calculate the Estimated Purchase Price. (b) Within thirty (30) 60 days after the Closing Date, Seller Buyer shall prepare and deliver the Closing Statement to Seller 1. The Closing Statement shall be prepared on a basis consistent with the accounting principles, practices, policies and methods expressly set forth on Schedule 1.5 and, to the extent not specifically detailed on Schedule 1.5, the accounting principles, practices, policies and procedures required or permitted by GAAP and applied in preparing the 2013 Baseline Financial Statements underlying the 2013 Audited Financial Statements. At the request of Seller 1, Buyer shall deliver to Seller 1 or its advisors the work papers used by Buyer to prepare the Closing Statement. (c) Seller 1 shall deliver to Buyer, within 45 days after Buyer’s delivery of the (d) If Seller 1 objects to the Closing Statement and any such objections are not resolved by Seller 1 and Buyer within 45 days after Seller 1’s delivery to Buyer of Seller 1’s objection statement pursuant to Section 1.5(c), Buyer and Seller 1 shall promptly (1) jointly prepare and sign a statement (the “Net Assets Statement”) setting forth (iA) those objections (if any) that Buyer and Seller 1 have resolved and the resolution of such objections and (B) those objections that remain unresolved and (2) engage the Neutral Accountant to resolve such unresolved objections, including entering into a customary engagement letter with the Neutral Accountant in which the scope of the Neutral Accountant’s engagement is specified in reasonable detail that is consistent with this Agreement. Buyer shall deliver promptly to the Neutral Accountant the work papers used by Buyer to prepare the Closing Statement and to determine the basis of any unresolved objection by Buyer described in the preceding sentence, and Seller 1 shall deliver promptly to the Neutral Accountant the work papers used by Seller 1 to prepare the objection statement described in Section 1.5(c) and to determine the basis of any unresolved objection by Seller 1 described in the preceding sentence. Each of Buyer and Seller 1 shall provide to the Neutral Accountant any information of such Party that the Neutral Accountant reasonably requests for purposes of resolving such unresolved objections. Buyer and Seller 1 shall instruct the Neutral Accountant that (x) the sum scope of its review and authority shall be limited to resolving such unresolved objections based solely on the Accounts Receivable provisions of this Agreement and on written submissions and presentations by Buyer and Seller 1 (net or their respective Representatives) provided to Neutral Accountant in accordance herewith, and not on independent review by the Neutral Accountant, (y) the Neutral Accountant’s resolution of reserves), Business-related prepaids, Inventory (net each unresolved objection shall be within the range for such unresolved objection defined by the amount of reservessuch item proposed by Buyer in its Closing Statement delivered pursuant to Section 1.5(b) and Equipment the amount of such item proposed by Seller 1 in Sellers’ statement of objections delivered pursuant to Section 1.5(c) and (z) the Neutral Accountant shall issue, within 60 days of its engagement, a ruling that sets forth (1) the resolution of each such unresolved objection and (2) the Closing Statement and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbHAdjusted Purchase Price, in each case as reflecting the Neutral Accountant’s resolution of the close of business on the Closing Date (“Closing Net Assets”)such unresolved objections. The Net Assets Statement shall be prepared, resolution by the Neutral Accountant of such unresolved objections and the Closing Net Assets Statement and the Adjusted Purchase Price giving effect to the Neutral Accountant’s resolution shall be calculatedfinal, in accordance conclusive and binding upon the Parties and each Party agrees that it will not make any claim with regard to the agreed Neutral Accountant’s decision or ask for a review by any Governmental Entity or otherwise. The procedures and accounting practices set forth on Schedule 3.2(ain this Section 1.5(d) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records for resolving disputes with respect to the Inventory. For illustration purposesClosing Statement shall be the sole and exclusive method for resolving any such disputes, except that this Section 1.5(d) shall not prohibit any Party from instituting litigation to enforce the Neutral Accountant’s determination of the Closing Statement and the Adjusted Purchase Price in a Net Assets Statement as court of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared competent jurisdiction in accordance with Section 12.11. Buyer and Seller 1 shall share equally the Agreed Proceduresfees and expenses of the Neutral Accountant for its services under this Section 1.5(d). (e) If the Adjusted Purchase Price is less than the Estimated Purchase Price, Buyer may deliver then Seller 1 shall pay to Seller a written notice Buyer, by wire transfer of objection no later than thirty (30) days immediately available funds, within three Business Days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith Closing Statement is finally determined pursuant to reach agreement resolving all disputes set forth in this Section 1.5, an amount equal to the Net Assets Objection within sixty difference of (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (iA) the Net Assets Estimated Purchase Price minus (B) the Adjusted Purchase Price. If the Adjusted Purchase Price is greater than the Estimated Purchase Price, then Buyer shall pay to Seller 1, by wire transfer of immediately available funds, within three Business Days after the date on which the Final Closing Statement if Buyer does not deliver a Net Assets Objection is finally determined pursuant to this Section 1.5, an amount equal to the difference of (A) the Adjusted Purchase Price minus (B) the Estimated Purchase Price. Payment in accordance with this Section 3.2(b); (ii1.5(e) if Buyer timely gives a Net Assets Objection shall be the sole and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement exclusive remedy of the Parties for disputes regarding the Estimated Net Working Capital and the resolution Actual Net Working Capital, and Article VI shall not apply to any such dispute in respect of all other disputes by the Arbitratordetermination of Estimated Net Working Capital and the Actual Net Working Capital.

Purchase Price Adjustment. (a) Within sixty (60) days after the Closing, the Seller shall prepare and deliver to the Buyer a written statement, together with supporting work papers with respect to the calculation of the amounts set forth therein (the "Adjustment Statement"), which reflects (i) the Capital Expenditures Adjustment Amount, (ii) the Working Capital Adjustment Amount and (iii) the Cash Adjustment Amount (the sum of such amounts as set forth on the Adjustment Statement shall be the "Adjustment Amount"). The items reflected in the Adjustment Amount shall be determined in accordance with GAAP applied on the same basis, and using the same principles, policies and methods as the Seller has applied and used in connection with the determination of the items reflected in the Estimated Adjustment Amount (including the Target Working Capital Amount). The Buyer agrees to cooperate with the Seller in connection with the preparation of the Adjustment Statement and related information, and shall provide to the Seller and the Seller's Representatives such books, records, information, and access to such of the Companies' employees and properties during normal business hours, as may be reasonably requested from time to time by the Seller. (b) The Buyer may dispute the Adjustment Amount, the Adjustment Statement and the items reflected therein; provided, however, that the Buyer shall notify the Seller in writing of any disputed amounts, and provide a reasonably detailed description of the basis of such dispute, within sixty (60) days after the Buyer's receipt of the Adjustment Statement. In the event of a dispute with respect to the Adjustment Amount, the Buyer and the Seller shall attempt to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties. If the Buyer and the Seller are unable to reach a resolution of any such differences within thirty (30) days after the Closing DateSeller's receipt of the Buyer's written notice of dispute, the Buyer and the Seller shall prepare submit the amounts remaining in dispute for determination and deliver resolution to Buyer a statement (the “Net Assets Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves)Independent Accounting Firm, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s instructed to determine and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect report to the Inventory. For illustration purposesparties, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than within thirty (30) days after such submission, a resolution of such remaining disputed amounts, and such resolution shall be final, binding and conclusive on the date on which Seller delivered parties hereto with respect to the Net Assets Statement to Buyer, which notice remaining amounts disputed. The fees and disbursements of the Independent Accounting Firm shall specify be allocated between the nature of each dispute Buyer and the basis therefor Seller so that the Buyer's share of such fees and disbursements shall be in the same proportion that the aggregate amount of such remaining disputed amounts so submitted to the Independent Accounting Firm that is unsuccessfully disputed by the Buyer (a “Net Assets Objection”). Failure as finally determined by the Independent Accounting Firm) bears to the total amount of such remaining disputed amounts so submitted by the Buyer to deliver a Net Assets Objection within the thirty-day period will Independent Accounting Firm. For the avoidance of doubt, the Adjustment Amount shall be deemed to be Buyer’s acceptance modified to the extent of any changes thereto that become final, binding and conclusive on the parties based on mutual agreement or a determination of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt Independent Accounting Firm in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in accordance with this Section 3.33.2(b). (c) As used herein, Within ten (10) Business Days after the term “Final Net Assets Statement” means (i) date on which the Net Assets Statement if Buyer does not deliver a Net Assets Objection Buyer's written notice of dispute is required to be delivered in accordance with Section 3.2(b); , (i) the Buyer shall pay to the Seller an amount equal to the sum of all undisputed portions of the Adjustment Amount reflected in the Seller's Adjustment Statement if the sum of such undisputed portions is a positive number, or (ii) if the Seller shall pay to the Buyer timely gives a Net Assets Objection and an amount equal to the amount by which the sum of all undisputed portions of the Adjustment Amount reflected in the Seller's Adjustment Statement is less than zero, if the sum of such undisputed portions is less than zero. If there is a dispute with respect to any amount on the Adjustment Statement or the Adjustment Amount, within five (5) Business Days after the final determination of all such disputed items are resolved by mutual agreement amounts in accordance with Section 3.2(b), the Buyer shall pay to the Seller an amount equal to the disputed portion of the Parties, Adjustment Amount as finally determined to be payable with respect to the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iiiAdjustment Statement in accordance with Section 3.2(b) if any disputed items are submitted such amount is a positive number; provided, however, that if such finally determined portion is less than zero, then the Seller shall pay to the Arbitrator Buyer the amount by which such amount is less than zero. All payments made pursuant to this Section 3.2(c) shall be paid together with interest thereon for resolutionthe period commencing on the Closing Date through the date of payment, calculated at the Net Assets Statementprime rate of Citibank, as amendedN.A. in effect on the Closing Date, if necessary, to reflect any resolution in cash by wire transfer of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitratorimmediately available funds.

Purchase Price Adjustment. The August Balance Sheet and the August Statement of Tangible Net Book Value, after giving effect to the adjustments, if any, made thereto pursuant to Section 2.4(c), shall be deemed final for the purposes of this Agreement upon the earliest of (ax) the failure of Buyer to notify Seller of a dispute within the Review Period in accordance with this Section 2.4, (y) the resolution of all disputes, pursuant to Section 2.4(c)(ii), by Seller's Accountants and Buyer's Accountants or Seller and Buyer, as the case may be, and (z) the resolution of all disputes, pursuant to Section 2.4(c)(ii), by the Independent Accounting Firm. Within thirty three (303) days Business Days of the August Balance Sheet and the August Statement of Tangible Net Book Value being deemed final (such date, the "Adjustment Date"), a Purchase Price adjustment shall be made as follows: (i) in the event that the Target Tangible Net Book Value exceeds the Tangible Net Book Value reflected on the August Statement of Tangible Net Book Value (after giving effect to adjustments, if any, pursuant to Section 2.4(c)), then the Purchase Price by Buyer at Closing shall be adjusted downward in an amount equal to such excess or, to the extent the Adjustment Date is a date following the Closing Date, Seller shall prepare and deliver pay on the Adjustment Date the amount of such excess to Buyer a statement (the “Net Assets Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves)by wire transfer in immediately available funds to an account or accounts specified by Buyer in writing, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus and (ii) in the sum of event that the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business Tangible Net Book Value reflected on the August Statement of Tangible Net Book Value (after giving effect to adjustments, if any, pursuant to Section 2.4(c)) exceeds the Target Tangible Net Book Value, then the Purchase Price payable by Buyer at Closing Date (“Closing Net Assets”). The Net Assets Statement shall be preparedadjusted upward in an amount equal to such excess or, and to the Closing Net Assets shall be calculated, in accordance with extent the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Adjustment Date as determined through is a physical inventory conducted by Seller on or before the fifth day date following the Closing Date, Buyer shall pay on the results Adjustment Date the amount of which such excess to Seller by wire transfer in immediately available funds to the Seller Account; provided, however, that no adjustment to the Purchase Price shall be adjusted made based on any event, change or circumstance occurring after the date of the August Balance Sheet, including any results from Buyer’s the operation of the business of the Company and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of its Subsidiaries from such date until the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.

Purchase Price Adjustment. (a) Within sixty (60) calendar days after the Final Closing Date, Buyer shall prepare and deliver to Sellers a statement setting forth, as of 11:59 p.m. PDT on the Initial Closing Date, (i) the Applicable NAV Statement with respect to each of the Specified Financing and Lease Assets, Equity Assets and Assets Held for Sale or Lease, (ii) the calculation of the Adjusted Book Value of the Assets with respect to the Specified Financing and Lease Assets, Equity Assets, Assets Held for Sale or Lease and the Book Value of the Assumed Liabilities, in each case with respect to clauses (i) and (ii), only with respect to those assets that were transferred (including equitable assignment pursuant to Section 5.2(d)) to Buyer on or before the Final Closing Date and (iii) the amount of any cash that has not been reconciled or applied as of the date that the Draft Closing Book Value of the Assets Statement is delivered pursuant hereto (the “Unapplied Cash”) (such statement, the “Draft Closing Book Value of the Assets Statement”). The Draft Closing Book Value of the Assets Statement shall also include a statement of the Applicable NAV as of 11:59 p.m. PDT on the Initial Closing Date of the Opt-out Assets and those Equity Assets and other interests subject to the Option Agreement. Sellers shall cooperate with Buyer in connection with, and shall furnish to Buyer all such information as Buyer may reasonably require, in the preparation of the Draft Closing Book Value of the Assets Statement. The Draft Closing Book Value of the Assets Statement will be prepared using the Accounting Principles, and will not include any changes in assets or liabilities as a result of purchase accounting or other adjustments arising from or resulting as a consequence of the transactions contemplated hereby. (b) Each party shall provide the other party and its representatives with reasonable access to books and records and relevant personnel during the preparation of the Draft Closing Book Value of the Assets Statement and the resolution of any disputes that may arise under this Section 1.6. (c) Buyer and Seller shall jointly retain and engage McGladrey & ▇▇▇▇▇▇ LLP (“McGladrey”) to perform an audit and examination of the Draft Closing Book Value of the Assets Statement including the Applicable NAV of the Opt-out Assets and the Equity Assets and other interests subject to the Option Agreement. McGladrey will perform the audit procedures set forth on Exhibit C in order to confirm that the Draft Closing Book Value of the Assets Statement was prepared in accordance with the Accounting Principles and the completeness and accuracy of the Draft Closing Book Value of the Assets Statement. McGladrey will deliver to Sellers and Buyer a detailed report (i) confirming that the Draft Closing Book Value of the Assets Statement was prepared in accordance with the standards set forth in the immediately preceding sentence; or (ii) setting forth any items on the Draft Closing Book Value of the Assets Statement that do not conform to the standard set forth in the immediately preceding sentence (the “McGladrey Findings”). The fees, expenses and costs of McGladrey shall be borne equally by Buyer and Sellers. Based solely on the result of such audit and examination, if either Buyer disagrees or Sellers disagree with the McGladrey Findings, such party shall notify the other in writing of such disagreement within forty-five (45) calendar days after delivery of the McGladrey Findings, which notice shall be, to the extent practicable, based upon the documents and information of which the party giving such notice had possession and control or to which such party was afforded reasonable access by the other party during such forty-five (45) calendar day period, describe the nature of any such disagreement in reasonable detail, identify the specific items involved and the dollar amount of each such disagreement (on an item-by-item basis and including such party’s alternative amount) and provide reasonable supporting documentation for each such disagreement. During the forty-five (45) calendar day review period, Buyer and Sellers shall have reasonable access to any documents, schedules or work papers used in the preparation of the Draft Closing Book Value of the Assets Statement or the McGladrey Findings. (d) Buyer and Sellers agree to negotiate in good faith to resolve any disagreements regarding the Draft Closing Book Value of the Assets Statement or the McGladrey Findings. If Buyer and Sellers are unable to resolve all disagreements within thirty (30) calendar days after delivery of written notice of such disagreement, then such disagreements shall be submitted for final and binding resolution to PricewaterhouseCoopers LLP, or if PricewaterhouseCoopers LLP is not available, to another nationally recognized accounting firm (PricewaterhouseCoopers LLP or any such other accounting firm, “PwC”), to resolve such disagreements. PwC will only consider those items and amounts set forth in the Draft Closing Date, Seller Book Value of the Assets Statement or the McGladrey Findings as to which Buyer and Sellers have disagreed and must resolve the matter in accordance with the terms and provisions of this Agreement. PwC shall prepare and deliver to Buyer and Sellers, as promptly as practicable and in any event within ninety (90) calendar days after its appointment, a written report setting forth the resolution of any such disagreement and a statement (the “Net Assets Statement”) setting forth (i) the sum a revised Draft Closing Book Value of the Accounts Receivable (net Assets Statement and, if applicable, revisions to the McGladrey Findings, which shall reflect their resolution of reserves)any such disagreements. PwC shall make its determination based on presentations and supporting material provided by the parties. The determination of PwC shall be final and binding upon Buyer and Sellers. The fees, Business-related prepaids, Inventory (net expenses and costs of reserves) PwC shall be borne equally by Buyer and Equipment Sellers. Other than such fees and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbHPwC and McGladrey as provided herein, Buyer and Sellers shall each be responsible for their own costs and expenses incurred in each case as of the close of business on the Closing Date connection with any actions taken pursuant to Section 1.6(c) or (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(ad). (be) If Buyer reasonably believes that Promptly after PwC’s final determination of the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Proceduresresolution of any disagreement pursuant to Section 1.6(d), Buyer may deliver and Sellers shall cause McGladrey to Seller a written notice revise the Draft Closing Book Value of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”)reflect such final determination. Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance Any such revised Draft Closing Book Value of the Net Assets Statement or any Draft Closing Book Value of the Assets Statement which is not submitted to PwC pursuant to Section 1.6(d) is hereinafter referred to as the “Final Net Closing Book Value of the Assets Statement. .” The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all Adjusted Book Value of the disputed items are resolved by mutual agreement Assets reflected on such statement is referred to as the “Closing Book Value of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.the

Purchase Price Adjustment. (ai) Within thirty sixty (3060) days after of the Closing Dateand determined as of the Closing, Seller shall at its expense cause an audit for the purpose of preparing a statement of Subject Assets acquired and Assumed Liabilities (the "Closing Statement of Assets and Liabilities") in the form attached hereto as Exhibit 1.3. Within five (5) days following completion of such audit, Seller shall prepare and deliver the Closing Statement of Assets and Liabilities to Buyer Buyer. The Closing Statement of Assets and Liabilities shall be accompanied by a check or wire transfer of an amount equal to the "Net Worth Difference" (as defined below), if any, together with interest as described in Section 1.3(a)(iv). It is understood by the parties hereto that any such payment may not represent payment in full of the final Purchase Price, which such final Purchase Price shall be determined as provided in this Section 1.3. Said Statement shall (x) be complete and correct in all material respects, (y) represent a fair statement of the Subject Assets and Assumed Liabilities in all material respects and (z) be prepared on the “Net same basis, and in accordance with generally accepted accounting principles using the same methods and procedures applied on a basis consistent with the methods and procedures used to prepare the Base Balance Sheet. In addition, in preparing the Closing Statement of Assets Statement”) setting forth and Liabilities, reserve levels, including reserves and allowances for accounts receivables, inventories, warranty claims, and other items, 5 11 shall be determined on a basis consistent with that used to determine such reserves in the Base Balance Sheet, adjusted only for changes in circumstances, such as known bad debts, increases in dollar amount or quantities, or identified potential liabilities. Notwithstanding the foregoing, the parties hereto agree as follows: (i) the sum "Accrued warranty reserve" on the Closing Statement of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) Assets and Equipment Liabilities shall remain at $219,630 and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus not be reduced; (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business "Obsolescense reserve" on the Closing Date (“Closing Net Assets”). The Net Statement of Assets Statement and Liabilities shall be prepared, and the Closing Net Assets shall be calculated, in accordance with sum of $591,992 from the agreed procedures and accounting practices set forth on Schedule 3.2(a) (Base Balance Sheet plus $439,000 that was recorded during the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of quarter ended June 30, 2011 1997; (iii) the inventory accounts on the Closing Statement of Assets and Liabilities shall not be adjusted upward by $165,000 which Seller and Stockholder have indicated they believe is included an amount by which such accounts in Schedule 3.2(a)the aggregate were understated on the Base Balance Sheet on account of overhead; and (iv) the fixed asset depreciation accounts on the Closing Statement of Assets and Liabilities shall not be adjusted downward by $35,000 which amount Seller and Stockholder have indicated they believe is an amount by which such accounts in the aggregate were overstated on the Base Balance Sheet. Buyer's accountants will be provided reasonable and timely access to the audit working papers of Seller's accountants documenting the procedures they performed in forming their opinion on the Closing Statement of Assets and Liabilities. (bii) If the amount of total Subject Assets less Assumed Liabilities ("Net Worth") as shown on the Closing Statement of Assets and Liabilities is less than $8,110,000 (such difference, the "Net Worth Difference") then the Purchase Price shall be equal to the Estimated Purchase Price decreased by the Net Worth Difference. (iii) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance disagrees with the Agreed ProceduresClosing Statement of Assets and Liabilities, Buyer may deliver shall, within forty-five (45) days after receipt thereof, furnish to Seller a written notice statement of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyersuch disagreement, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance together with an explanation of the Net Assets Statement as the Final Net Assets Statementreasons therefor. The Parties parties hereto shall attempt in good faith first use commercially reasonable efforts to reach agreement resolving all disputes set forth in resolve such disagreement among themselves. If the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties parties are unable to resolve an Objection the dispute within the sixty-day periodten (10) business days after delivery of such notification, the dispute shall be submitted to accountants other than Ernst & Young LLP or Deloitte & Touche LLP jointly selected by Buyer and Seller (the "Accountants"). The Accountants shall be instructed to apply the same methods, policies and procedures as were applied in preparing the Base Balance Sheet. The determination of the Accountants as to the resolution of any dispute shall be binding and conclusive upon all parties hereto. All determinations pursuant to this Section 1.3(b)(iii) shall follow be in writing and shall be delivered to Buyer and Seller. Any adjustment to the arbitration procedures set forth Estimated Purchase Price made pursuant to this Section 1.3(b) may be entered in and enforced by any court having jurisdiction thereover. The fees and expenses of the Accountants in connection with the resolution of disputes pursuant to this Section 3.31.3(b)(iii) shall be borne equally by the Buyer and Seller. (civ) As used hereinIf, pursuant to Section 1.3(b)(ii), the term “Final Net Assets Statement” means (i) Purchase Price is less than the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all of the disputed items are resolved by mutual agreement of the PartiesEstimated Purchase Price, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or difference (iii) if less any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes by the Arbitrator.adjustment amount previously

Purchase Price Adjustment. (a) Attached hereto as Exhibit B is (i) a balance sheet of Seller as of the Effective Time, prepared in accordance with GAAP, (ii) a written statement setting forth Seller’s good faith estimate of (the “Estimated Closing Statement”): (x) the Net Working Capital and each of the components thereof as of the Effective Time (such estimate, the “Estimated Net Working Capital”) and (y) the Deferred Revenue amount as of the Effective Time (the “Estimated Deferred Revenue”), and (iii) based on the foregoing, the Estimated Adjustment Amount and a calculation of the Closing Consideration. (b) Within thirty ninety (3090) days after the Closing Date, Seller ▇▇▇▇▇ shall prepare and deliver to Buyer Seller a statement (the “Net Assets Closing Statement”) ), setting forth a balance sheet of Seller as of the Effective Time and its calculations of (i) the sum actual Net Working Capital and each of the Accounts Receivable components thereof as of the Effective Time (net of reserves), Business-related prepaids, Inventory (net of reservesthe “Closing Net Working Capital”) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case actual Deferred Revenue amount as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) Effective Time (the “Agreed ProceduresClosing Deferred Revenue”) and based on the net book value foregoing, the calculation of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as Adjustment Amount. (c) Within thirty (45) days following receipt by Seller of the Closing Date as determined through Statement, Seller shall deliver written notice to Buyer of any dispute (a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records “Dispute Notice”) it has with respect to the Inventorypreparation or content of the Closing Statement setting forth in reasonable detail the basis for such objection and the amount(s) in dispute. For illustration purposesIf Seller does not deliver a Dispute Notice within such forty-five (45)-day period, such Closing Statement will be final, conclusive, non-appealable and binding on the Parties and the Purchase Price shall be adjusted pursuant to Section 1.6(e) below. In the event of a Net Assets timely delivery of a Dispute Notice, Buyer and Seller shall use commercially reasonable efforts to resolve all disputes set forth in a Dispute Notice and all undisputed items in the Closing Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) shall be deemed final and binding on Buyer and Seller. If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver and Seller fail to Seller a written notice of objection no later than resolve all such disputes within thirty (30) days after Seller delivers a Dispute Notice, then Buyer and Seller jointly shall submit such disputes to the date Accounting Firm (as defined below). The “Accounting Firm” shall be Cherry Bekaert, LLP; provided, that if within ten (10) days after Seller delivers a Dispute Notice, Buyer and Seller are unable to agree on which an Accounting Firm, then each Party shall select an independent accounting firm of national recognition and such firms together shall select the Accounting Firm to resolve any outstanding items in the Dispute Notice. As promptly as practicable thereafter, Buyer and Seller delivered shall each prepare and submit a presentation to the Net Assets Statement Accounting Firm. As soon as practicable thereafter, Buyer and Seller shall cause the Accounting Firm to Buyerdetermine the amounts still in dispute based solely upon the presentations by ▇▇▇▇▇ and Seller, which notice shall specify the nature of each dispute and not on the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within of an independent review, and in accordance with the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes terms and provisions set forth in this Agreement. The Accounting Firm shall not assign a value to any item greater than the Net Assets Objection within sixty (60) days after its deliverygreatest value for such item claimed by either Party or less than the smallest value for such item claimed by either Party in the Closing Statement and Dispute Notice. In The fees and disbursements of the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties Accounting Firm shall follow the arbitration procedures set forth in Section 3.3. (c) As used herein, the term “Final Net Assets Statement” means be borne (i) by Buyer in the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b); (ii) if Buyer timely gives a Net Assets Objection and all proportion that the aggregate dollar amount of the disputed items that are resolved successfully disputed by mutual agreement Seller (as finally determined by the Accounting Firm) bears to the aggregate dollar amount of all disputed items and (ii) by Seller in the proportion that the aggregate dollar amount of the disputed items that are unsuccessfully disputed by Seller (as finally determined by the Accounting Firm) bears to the aggregate dollar amount of all disputed items. Absent manifest error or fraud, all determinations made by the Accounting Firm will be final, conclusive and binding on the Parties, the Net Assets and shall be concurrently furnished in writing to Buyer and Seller as soon as practicable following such determination. The Closing Statement, as amendedaccepted by Seller, if necessaryagreed to by ▇▇▇▇▇ and Seller, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes determined by the ArbitratorAccounting Firm, each, pursuant to this Section, shall be used to finally determine the Adjustment Amount (the “Finally Determined Adjustment Amount”).

Purchase Price Adjustment. (a) Within thirty ninety (3090) days after the Closing Date, Seller shall prepare and deliver to Buyer a statement (the “Net Assets Statement”) setting forth (i) the sum of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”or on the same date Seller publicly releases its audited financial statements dated as of and for the year ended December 31, 2007, whichever occurs later). The Net Assets Statement , Seller shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(aprovide to Purchaser (i) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand a final closing balance sheet for SGF as of the Closing Date prepared in accordance with generally accepted accounting principles (“GAAP”) consistent with the accounting principles used in the preparation of Seller’s financial statements dated as determined through a physical inventory conducted of December 31, 2006, which balance sheet must be audited by Seller Seller’s independent auditors if the Closing Date occurs on or before the fifth day following December 31, 2007 or reviewed by a nationally recognized independent auditing firm of Seller’s choosing if the Closing DateDate occurs after December 31, 2007 (the results “Final Closing Balance Sheet”), and (ii) based on such Final Closing Balance Sheet, a calculation of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory Adjusted Net Working Capital of SGF (as defined below) as of the Closing Date, determined as provided in this Section 1.2. Buyer or its representatives shall have the right to observe the physical inventory If and shall have full access to all books and records with respect to the Inventoryextent that the Adjusted Net Working Capital of SGF (as defined below) as of the Closing Date, as reflected in the Final Closing Balance Sheet and determined in accordance with this Section 1.2, exceeds zero, Purchaser shall pay such excess to Seller as additional Purchase Price, payable by wire transfer of immediately available funds to Seller within ten (10) Business Days following the final determination of Adjusted Net Working Capital as provided in this Section 1.2. If and to the extent that the Adjusted Net Working Capital of SGF as of the Closing Date, as reflected in the Final Closing Balance Sheet and determined in accordance with this Section 1.2, is less than zero, Seller shall pay such deficiency to Purchaser, payable by wire transfer of immediately available funds to Seller within ten (10) business days following the final determination of Adjusted Net Working Capital as provided in this Section 1.2. For illustration purposespurposes of this Agreement, a the term Adjusted Net Working Capital shall mean Current Assets Statement minus House Funds (as of June 30, 2011 is included defined in Schedule 3.2(a)Section 7.2) minus Current Liabilities. (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice For purposes of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3. (c) As used hereinthis Agreement, the term “Final Net Assets StatementCurrent Assets” means means, with respect to the financial information of SGF, the aggregate of the following assets to the extent that such assets are classified as current under GAAP and are acquired by Purchaser pursuant to the terms of this Agreement: (i) the Net Assets Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b)cash plus cash equivalents; (ii) if Buyer timely gives marketable securities; (iii) accounts receivable generated in the ordinary course of business, less a Net reasonable reserve for doubtful accounts consistent with past practices; (iv) inventories held for use in the ordinary course of business (excluding any inventories that are obsolete or otherwise unusable in the business); (v) prepaid expenses; and (vi) all other assets of any kind classified as current under GAAP. Current Assets Objection and all shall not include any amounts due from HHLV Management Company LLC or any affiliate of ▇▇▇▇▇▇’▇ Entertainment pursuant to the disputed items are resolved by mutual agreement of the Parties, the Net Assets StatementJoint Operating License Agreement, as amended, if necessarydated March 10, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to 2004 and the Arbitrator for resolution, the Net Assets StatementPurchase and Sale Agreement, as amended, if necessaryby and among Seller, to reflect any resolution HHLV and SGF, dated as of any disputes by agreement of the Parties and the resolution of all other disputes by the ArbitratorFebruary 9, 2004.

Purchase Price Adjustment. (a) Pursuant to Section 5.12, the Company shall deliver the Company Closing Financial Certificate to Acquirer not later than five Business Days prior to the Closing Date. (b) Within thirty (30) 60 days after the Closing DateClosing, Seller Acquirer shall prepare and deliver to Buyer the Stockholders’ Agent a statement (the “Net Assets Acquirer Adjustment Statement”) setting forth Acquirer’s calculation of (i) the sum aggregate amount of the Accounts Receivable (net of reserves)Company Cash, Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum aggregate amount of the Accounts Payable, reserve for Warranty Expensesoutstanding Company Debt, and accounts payable and accrued expenses (iii) the aggregate amount of Iteris GmbHCompany Transaction Expenses, in each case case, as of immediately prior to the close of business on Effective Time, and (iv) any Company Transaction Expenses pursuant to Section 5.11(b) (collectively, the Closing Date (“Closing Net AssetsAcquirer Adjustment Calculations”). The Net Assets Statement shall be prepared, together with supporting documentation and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3calculations. (c) As used hereinThe Stockholders’ Agent may object to the Acquirer Adjustment Calculations set forth in the Acquirer Adjustment Statement by providing written notice of such objection, together with supporting documentation and calculations, to Acquirer within 30 days after Acquirer’s delivery of the term Acquirer Adjustment Statement (the “Final Net Assets Statement” means Notice of Objection”). Any matters not expressly set forth in the Notice of Objection shall be deemed to have been accepted by the Stockholders’ Agent on behalf of the Company Securityholders. During such 30-day period and thereafter until the final determination of the (i) the Net Assets Statement aggregate amount of the Company Cash, (ii) the aggregate amount of outstanding Company Debt, and (iii) the aggregate amount of Company Transaction Expenses, in each case, as of immediately prior to the Effective Time, the Stockholders’ Agent and its advisors (including, without limitation, its independent accounting firm) shall be provided with reasonable access (including remote access to the extent reasonably practicable) to the relevant financial books and records (subject to the execution of customary work paper access letters and a confidentiality agreement with Acquirer on customary terms) and personnel of the Company to enable it to verify the Acquirer Adjustment Calculations. (d) If the Stockholders’ Agent timely provides the Notice of Objection, then Acquirer and the Stockholders’ Agent shall confer in good faith for a period of up to 10 Business Days following Acquirer’s timely receipt of the Notice of Objection in an attempt to resolve any disputed matter set forth in the Notice of Objection, and any resolution by them shall be set forth in a written agreement executed by each of Acquirer and the Stockholders’ Agent and shall be final and binding on the parties hereto and the Company Securityholders. (e) If, after the 10 Business Day period set forth in Section 1.6(d), Acquirer and the Stockholders’ Agent cannot resolve any matter set forth in the Notice of Objection, then Acquirer and the Stockholders’ Agent shall engage Deloitte Touche Tohmatsu Limited or, if Buyer does such firm is not deliver able or willing to so act, another independent and nationally recognized auditing firm acceptable to both Acquirer and the Stockholders’ Agent (the “Reviewing Accountant”), to review only the matters in the Notice of Objection that are still disputed by Acquirer and the Stockholders’ Agent and the Acquirer Adjustment Calculations to the extent relevant thereto. After such review and a Net Assets Objection review of the Company’s relevant books and records, the Reviewing Accountant shall promptly (and in any event within 30 days following its engagement) determine the resolution of such remaining disputed matters, which determination shall be final and binding on the parties hereto and the Company Securityholders, and the Reviewing Accountant shall provide Acquirer and the Stockholders’ Agent with a calculation of, as applicable, (i) the aggregate amount of the Company Cash, (ii) the aggregate amount of outstanding Company Debt and/or (iii) the aggregate amount of Company Transaction Expenses, in each case, as of immediately prior to the Effective Time, in accordance with Section 3.2(b); such determination. (f) If the Adjusted Cash Consideration, calculated based on (i) the aggregate amount of the Company Cash, (ii) the aggregate amount of outstanding Company Debt and (iii) the aggregate amount of Company Transaction Expenses, in each case, as finally determined pursuant to Section 1.6(b), Section 1.6(d) and/or Section 1.6(e), as the case may be (the “Final Adjusted Cash Consideration”), is: (A) $50,000 (or more) less than the Adjusted Cash Consideration as set forth in the Company Closing Financial Certificate (such difference, a “Shortfall Amount”), then (1) Acquirer and the Stockholders’ Agent shall jointly instruct the Escrow Agent to release the Shortfall Amount from the Escrow Fund to Acquirer; provided that if Buyer timely gives the Shortfall Amount shall exceed the amount of the Escrow Fund, then Acquirer shall have the further right to make a Net Assets Objection claim against each Company Securityholder for its Pro Rata Share of such excess amount, and all by its adoption of this Agreement and approval of the Merger, each Company Securityholder shall be deemed to have consented to such claim by Acquirer and agrees not to object to such claim and to pay such claimed amount to Acquirer as and where directed within five Business Days of receipt of such claim, and (2) if there is any amount remaining in the Escrow Fund following the release and distribution of the Shortfall Amount pursuant to clause (1), Acquirer and the Stockholders’ Agent shall jointly instruct the Escrow Agent to release such amount (less any amount of Stimulus Funds the Company received that Acquirer, in good faith, reasonably believes may become subject to repayment, which amount may be withheld only until such time as any portion thereof that is required to be repaid is finally determined and any such required repayment amount shall be paid from the Escrow Fund) to the Paying Agent and Surviving Entity, as applicable, for further distribution to the Company Securityholders in accordance with their respective Pro Rata Shares thereof, upon the terms and subject to the conditions set forth in Section 1.4; or (B) $50,000 (or more) greater than the Adjusted Cash Consideration as set forth in the Company Closing Financial Certificate (such difference, an “Excess Amount”), then (1) Acquirer shall promptly wire the Excess Amount to the Paying Agent or Surviving Entity, as applicable, for further distribution to the Company Securityholders in accordance with their respective Pro Rata Shares thereof, and (2) Acquirer and the Stockholders’ Agent shall jointly instruct the Escrow Agent to release the full amount of the Escrow Fund to the Paying Agent and Surviving Entity, as applicable, for further distribution to the Company Securityholders in accordance with their respective Pro Rata Shares thereof, upon the terms and subject to the conditions set forth in Section 1.4. (g) The fees, costs and expenses of the Reviewing Accountant shall be allocated between the Stockholders’ Agent (on behalf of the Company Securityholders), on the one hand, and Acquirer, on the other hand, in the same proportion that the aggregate amount of the disputed items are resolved by mutual agreement of the Parties, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, Reviewing Accountant that is unsuccessfully disputed by each such party (as amended, if necessary, to reflect any resolution of any disputes by agreement of the Parties and the resolution of all other disputes finally determined by the ArbitratorReviewing Accountant) bears to the total amount of such disputed items so submitted. (h) Any payments made pursuant to this Section 1.6 shall be treated as adjustments to the Merger Consideration for all Tax purposes to the maximum extent permitted under Applicable Law.

Purchase Price Adjustment. (a) Within thirty (30) days The Base Purchase Price shall be subject to adjustment after the Closing DateDate as follows. By no later than February 5, 1996, the Seller shall prepare and deliver to Buyer a the Purchaser an unaudited statement of the net tangible assets of the Seller as of December 31, 1995 (the “"December Net Asset Statement"). For purposes of this Agreement, the net tangible assets of the Seller shall mean the tangible Assets Statement”minus the Assumed Liabilities (as defined in Section 1.03) setting forth determined in accordance with generally accepted accounting principles applied on a consistent basis with the Balance Sheet (as defined in Section 1.03(a)) both as to classification of items and methodology for determining amounts; PROVIDED, HOWEVER, that (i) the sum amortization and depreciation of the Accounts Receivable (net of reserves), Business-related prepaids, Inventory (net of reserves) and Equipment and the cash, accounts receivable (net of reserves), prepaids, inventory (net of reserves) fixtures and equipment shall be terminated as of Iteris GmbH minus August 31, 1995, (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business bad debts shown on the Closing Date Balance Sheet will be reversed, (“Closing Net Assets”). The Net Assets Statement iii) a warranty reserve equal to $40,000 will be established, (iv) there shall be preparedno accrual for liabilities which are not being assumed by the Purchaser, (v) adjustments regarding reserves for excess and the Closing Net Assets obsolete inventory shall be calculated, made in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (Thermo Electron Corporation Policy/Procedure Statement dated October 1, 1993, as interpreted pursuant to the “Agreed Procedures”) and the net book value memorandum from Ken ▇▇▇▇ ▇▇ Davi▇ ▇▇▇▇▇ ▇▇▇ed October 26, 1995 which is attached hereto as part of the Inventory Disclosure Statement, and Iteris GmbH inventory (vi) the December Net Asset Statement shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand as of the Closing Date as determined through a physical inventory conducted by Seller on or before the fifth day following the Closing Date, the results of which shall be adjusted from Buyer’s and Seller’s books and records to reflect the Inventory and Iteris GmbH inventory as of the Closing Date. Buyer or its representatives shall have the right to observe the physical inventory and shall have full access to all books and records normal year-end adjustments consistent with respect to the Inventory. For illustration purposes, a Net Assets Statement as of June 30, 2011 is included in Schedule 3.2(a). (b) If Buyer reasonably believes that the Net Assets Statement contains errors or has not been prepared in accordance with the Agreed Procedures, Buyer may deliver to Seller a written notice of objection no later than thirty (30) days after the date on which Seller delivered the Net Assets Statement to Buyer, which notice shall specify the nature of each dispute and the basis therefor (a “Net Assets Objection”). Failure by Buyer to deliver a Net Assets Objection within the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its deliverypast practice. In the event that the Parties Purchaser disputes the December Net Asset Statement, the Purchaser shall notify the Seller in writing of the amount, nature and basis of such dispute on or before February 22, 1996 (the "Dispute Notice"). The parties shall use their best efforts to resolve the dispute on or prior to February 29, 1996. If they are unable to resolve an Objection agree upon a resolution of the dispute within the sixty-day such period, then either party may terminate this Agreement by notice to the parties shall follow other party. At the arbitration procedures set forth in Section 3.3. (c) As used hereinClosing, the term “Final Net Assets Statement” means Base Purchase Price shall be adjusted as follows (as so adjusted, the "Adjusted Purchase Price"): (i) if the net tangible assets of the Seller as shown on the final December Net Assets Asset Statement if Buyer does not deliver a Net Assets Objection in accordance with Section 3.2(b)are less than the Adjustment Amount, the amount of the deficiency shall be subtracted from the Base Purchase Price; and (ii) if Buyer timely gives a Net Assets Objection and all the net tangible assets of the disputed items Seller as shown on the December Net Asset Statement are resolved by mutual agreement of greater than the PartiesAdjustment Amount, the Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted excess shall be added to the Arbitrator for resolutionBase Purchase Price. If no adjustment is made pursuant to this subsection (b), the Net Assets Statement, as amended, if necessary, to reflect any resolution of any disputes by agreement of Adjusted Purchase Price shall be the Parties and the resolution of all other disputes by the ArbitratorBase Purchase Price.

Purchase Price Adjustment. (a) Within As soon as possible following the Closing Date (and, in any event, within thirty (30) days after thereof), the Closing Date, Seller shall prepare and deliver to the Buyer a statement (the “Net Assets Statement”) setting forth (i) the sum balance sheet of the Accounts Receivable (net of reserves)Diagnostics Business, Business-related prepaids, Inventory (net of reserves) and Equipment the EU Diagnostics Business and the cashUK Diagnostics Business, accounts receivable (net of reserves), prepaids, inventory (net of reserves) and equipment of Iteris GmbH minus (ii) the sum of the Accounts Payable, reserve for Warranty Expenses, and accounts payable and accrued expenses of Iteris GmbH, in each case as of the close of business on the Closing Date (“Closing Net Assets”). The Net Assets Statement shall be prepared, and the Closing Net Assets shall be calculated, in accordance with the agreed procedures and accounting practices set forth on Schedule 3.2(a) (the “Agreed Procedures”) and the net book value of the Inventory and Iteris GmbH inventory shall be computed based upon the quantities of Inventory and Iteris GmbH inventory on hand dated as of the Closing Date as determined through a physical inventory conducted by Seller on or before (the fifth day following the “Closing DateDivisional Balance Sheet”), that is prepared (x) from, and in accordance with, the results of which shall be adjusted from Buyer’s and Seller’s books and records of the Sellers using the same accounting policies, principles, practices, evaluation rules and procedures, methods and bases (including the accounting policies set forth in Schedules 3.2 and 6.22 hereto) on which the June 2003 Balance Sheet was prepared, and (y) subject to reflect Section 3.2(a)(x), in accordance with generally accepted accounting principles used in the Inventory United States, except that such balance sheet shall represent the best reasonable efforts of the Sellers to prepare such balance sheet reflecting the Diagnostics Business, the UK Diagnostics Business and Iteris GmbH inventory the EU Diagnostics Business on a stand alone basis as of the Closing Date. Buyer or its representatives shall have Date (clauses (x) and (y) above are herein referred to as the right to observe the physical inventory and shall have full access to all books and records with respect to the Inventory“Adjustment Standards”). For illustration purposesthe avoidance of doubt, a Net none of the Excluded Assets Statement except for the Assets (as defined in the UK Asset Purchase Agreement) and except for the assets of June 30the EU Seller Sub, 2011 is and none of the Excluded Liabilities except for the Transferred Liabilities (as defined in the UK Asset Purchase Agreement) and except for the liabilities of the EU Seller Sub, are to be included in Schedule 3.2(a)the Closing Divisional Balance Sheet; similarly all Assumed Liabilities, Transferred Liabilities (as defined in the UK Asset Purchase Agreement) and liabilities of the EU Seller Sub are to be reflected in the Closing Divisional Balance Sheet. Together with the Closing Divisional Balance Sheet, the Seller shall provide the Buyer with (i) such supporting documentation as shall be necessary (or as the Buyer shall reasonably request) to provide the Buyer with a clear understanding of the underlying data from which such balance sheet was prepared (including without limitation (A) a list of fixed assets setting forth a description, cost, date of acquisition, depreciation rate, accumulated depreciation and net book value for each item listed thereon and (B) a detailed list of inventory setting forth a description, value and age for each item listed thereon) and (ii) the Seller’s calculation of the Closing Net Book Value, along with a written explanation of the adjustments that were made in determining such amount. (b) If If, within ten (10) business days following its receipt of the Closing Divisional Balance Sheet, the Buyer reasonably believes does not deliver to the Seller written notice that the Buyer disputes the Seller’s calculation of the Closing Net Assets Statement contains errors or has not been prepared Book Value, such calculation shall be deemed final and uncontested for all purposes under this Agreement. If, within such ten (10) business day period, the Buyer delivers to the Seller written notice that the Buyer disputes such Closing Net Book Value calculation, which notice shall include the Buyer’s calculation of the Closing Net Book Value in accordance with the Agreed ProceduresAdjustment Standards, Buyer may deliver to Seller along with a written notice explanation of objection no later than thirty the adjustments that were made in determining such amount and such supporting documentation as shall be necessary (30or as the Seller shall reasonably request) days after to provide the date on which Seller delivered Sellers with a clear understanding of the Net Assets Statement to Buyer, which notice shall specify ’s adjustment (the nature of each dispute difference between the values calculated by the Buyer and the basis therefor (a Seller being referred to herein as the “Net Assets ObjectionUnresolved Amount”). Failure by , the Buyer to deliver a Net Assets Objection within and the thirty-day period will be deemed to be Buyer’s acceptance of the Net Assets Statement as the Final Net Assets Statement. The Parties Seller shall attempt in good faith to reach agreement resolving all disputes set forth in the Net Assets Objection within sixty (60) days after its delivery. In the event that the Parties are unable use their best reasonable efforts to resolve an Objection within the sixty-day period, the parties shall follow the arbitration procedures set forth in Section 3.3such dispute as promptly as possible. (c) As used hereinIf such dispute is not resolved to the satisfaction of the Buyer and the Seller within ten (10) business days following the delivery of notice of the dispute, the term “Final dispute shall be referred promptly to Neutral Auditors. The Neutral Auditors shall act as an arbitrator to determine, based solely on the provisions of this Agreement and the presentations by the Seller and the Buyer, or representatives thereof, and not by independent review, only the Closing Net Assets Statement” means Book Value in accordance with the Adjustment Standards. The Neutral Auditors’ determination of the Closing Net Book Value, which shall be within the range of values calculated by the Buyer and the Seller, shall be made within fifteen (15) days of the submission of the dispute to the Neutral Auditors, shall be set forth in a written statement delivered to the Seller and the Buyer and shall be deemed to be mutually agreed upon by the Buyer and the Seller for all purposes of this Agreement. Each party hereto agrees to execute, if requested by the Neutral Auditors, a reasonable engagement letter. All fees and expenses relating to the work, if any, to be performed by the Neutral Auditors shall be borne pro rata by the Seller and the Buyer in proportion to the allocation of the dollar amount of the Unresolved Amount, in the aggregate, between the Sellers, on the one hand, and the Buyers, on the other hand, made by the Neutral Auditors such that the party with whom the Neutral Auditors agree more closely pays a lesser proportion of the fees and expenses. For example, if the Neutral Auditors determine that they agree more closely with Seller’s Closing Net Book Value calculation and further determine that two-thirds of the Unresolved Amount should be allocated in favor of the Seller as an increase in the Purchase Price, then Seller shall only be responsible for one-third of the fees and expenses of the Neutral Auditors hereunder. (d) During the Buyer’s review of the Closing Divisional Balance Sheet and the Seller’s calculation of Closing Net Book Value and throughout the period of any dispute within the contemplation of this Section 3.2, the Seller shall, and shall cause its auditor and such other agents and consultants of the Seller as may be reasonably requested to, (i) provide the Buyer and its authorized representatives with reasonable access to the books, records, facilities and employees of the Seller upon reasonable notice and during normal business hours, and (ii) cooperate fully with the Buyer and its authorized representatives, including providing the Buyer and its authorized representatives, on a timely basis, all information within the control of the Seller or its agents or consultants which is necessary for the Buyer in reviewing the Closing Divisional Balance Sheet and calculating the Closing Net Assets Statement if Buyer does not deliver a Book Value. (e) If the Closing Net Assets Objection Book Value, as determined in accordance with this Section 3.2(b); 3.2, exceeds the Projected Net Asset Value, then the Purchase Price shall be adjusted upward by one dollar for each dollar by which the Closing Net Book Value exceeds the Projected Net Asset Value and the Buyer shall pay to the Seller the amount of such upward adjustment within five (ii5) if days following the final determination thereof in accordance with this Section 3.2. If such Closing Net Book Value at the Closing is less than the Projected Net Asset Value, then the Purchase Price shall be adjusted downward by one dollar for each dollar by which the Closing Net Book Value is less than the Projected Net Asset Value and the Seller shall pay to the Buyer timely gives a Net Assets Objection and all the amount of such downward adjustment within five (5) days following the final determination thereof in accordance with this Section 3.2. (f) For the avoidance of doubt, there shall be no adjustment to the Purchase Price pursuant to this Section 3.2 for any inconsistency in the application of the disputed items are resolved by mutual agreement accounting policies and principles, as set forth in Sections 3.2 and 6.22 and Schedules 3.2 and 6.22 hereto, to each of the PartiesJune 2003 Balance Sheet and the Closing Divisional Balance Sheet and, the provided further, that no adjustment to Closing Net Assets Statement, as amended, if necessary, to reflect such resolution of all disputes; or (iii) if any disputed items are submitted to the Arbitrator for resolution, the Net Assets Statement, as amended, if necessary, to reflect any resolution Book Value shall be made in respect of any disputes by agreement fixed assets, except in the event that a fixed asset shown in the June 2003 Balance Sheet is not physically present at Sellers’ facilities in Stamford, Connecticut, Abingdon UK or Belgium and not otherwise in the possession of the Parties Sellers’ sales personnel or other personnel in their respective home offices or otherwise located at customer or research and the resolution development partner sites under terms of all other disputes consignment (including without limitation, instruments purchased by the ArbitratorSellers from Luminex).