Initial Shares Value Sample Clauses

Initial Shares Value. If on March 31, 1999, (the -------------------- "Adjustment Date") the fair market value, as defined below, of the Initial Shares then held by the Seller and/or the Shareholders is less than $2,000,000 if all such Initial Shares are so held, or a pro-rata portion thereof if not all such Initial Shares are so held, the Buyer will deliver to Seller an additional number of shares of Common Stock (the "Adjustment Shares"), the fair market value of which shall be equal to the difference between the fair market value of the Initial Shares on the Adjustment Date and $2,000,000, or the applicable pro- rata portion thereof. Notwithstanding the above, the number of Adjustment Shares shall not exceed 200,000 shares of Common Stock, provided, however, that the Adjustment Shares shall be increased to a maximum of 250,000 shares if Buyer's income before taxes for the period from Closing through March 31, 1999, related solely to the Business is at least $400,000.00. Buyer's net income before taxes shall be determined in accordance with generally accepted accounting principles consistent with the methodology employed in the projections for Seller's 1998 calendar year and provided by Seller to Buyer which are attached hereto as Schedule 1.5. For purposes of this section, the fair market value of the Common Stock shall be the arithmetic average of the market bid prices for the Common Stock as reported on The NASDAQ Stock MarketSM or such other United States over- the-counter market or exchange on which the Common Stock is then reported, for the 30 trading days immediately prior to the Adjustment Date. The Adjustment Shares, if any, shall be subject to the Registration Rights Agreement. Notwithstanding the foregoing, Buyer shall not be obligated to deliver any Adjustment Shares in respect of any Initial Shares which, on or before the Adjustment Date (a) have been sold by Seller or the Shareholders for cash, (b) have become freely tradeable without restriction, if, on the date they became freely tradeable, their value measured on such date is at least $2,000,000.00 or the applicable pro-rata portion thereof, or (c) have been exchanged by Seller or the Shareholders for other freely tradeable securities, if, on the date of the exchange, such other freely tradeable securities have a value, measured on the date of the exchange, of at least $2,000,000.00 or the applicable pro-rata portion thereof.