Operating Adjustment Clause Samples
An Operating Adjustment clause defines the process for modifying certain operational terms or financial metrics within an agreement to reflect changes in circumstances or performance. Typically, this clause outlines how adjustments are calculated, what triggers them—such as fluctuations in costs, revenues, or external benchmarks—and the timeframe for implementing these changes. Its core practical function is to ensure that the agreement remains fair and relevant over time by allowing for recalibration in response to evolving operational realities, thereby reducing disputes and maintaining balance between the parties.
Operating Adjustment a. October 1, 1996, at 12:01 a.m. shall be considered the "Effective Date" of this Agreement, and the operations of ▇▇▇▇▇▇▇▇▇ and the Cogeneration Assets, including income derived from the P.G.&E. S.O. #2 Contract, shall be for the account of ▇▇▇▇▇ from and after that date, conducted in the ordinary course of business as described in Section 5.5 hereof; provided, however, that the application of such an Effective Date shall not be deemed to make ▇▇▇▇▇ liable for any costs or charges related to the SOCAL Contract. For all other purposes, and without limiting the generality of the foregoing, the representations, warranties, covenants and indemnities herein, and the delivery of the Purchase Price, shall occur and be effective at the Closing. The Operating Adjustment will occur at or after the Closing with a cash payment in an amount equal to the net income or loss of the Cogeneration Assets after the Effective Date, adjusted to reflect only necessary operating revenues and expenses which would have been credited to or incurred by ▇▇▇▇▇ had both this Agreement and the acquisition of the Cogeneration Assets under the Right to Purchase Contract been concluded and closed on the Effective Date. The operating revenues shall specifically include, but not be limited to, revenue from power and steam sales. Operating expenses shall exclude any payments made pursuant to the Cogeneration Lease or the Cogeneration Premises Lease, any SOCAL charges, legal fees, interest, amortization, unreasonable travel and entertainment and management fees in excess of Fifty Dollars ($50) per day. If the Cogeneration Assets produce a net income after the Effective Date, then ▇▇▇▇▇▇▇▇▇ shall pay ▇▇▇▇▇ an Operating Adjustment equal to such net income. If the Cogeneration Assets produce a net loss after the Effective Date, then ▇▇▇▇▇ shall pay ▇▇▇▇▇▇▇▇▇ an Operating Adjustment equal to the amount of the net loss.
b. In the event ▇▇▇▇▇▇▇▇▇ does not provide ▇▇▇▇▇ with its calculation of the Operating Adjustment (the "Calculation") prior to the Closing, ▇▇▇▇▇▇▇▇▇ shall provide ▇▇▇▇▇ with the Calculation within sixty (60) days after the Closing. ▇▇▇▇▇ shall have immediate access at reasonable times to such books, records and invoices as it deems necessary to verify the Calculation. If ▇▇▇▇▇ does not object to the Calculation within ten (10) days after receipt thereof by ▇▇▇▇▇, it shall be deemed to be final and binding upon the parties hereto. If ▇▇▇▇▇ objects to the Calculation within such ten...
Operating Adjustment. (a) The Purchase Price shall be adjusted as follows ("Operating Adjustments") in accordance with the procedures set forth in Section 2.5(b):
i. Adjustments on a pro rata basis as of the Closing Date shall be made for all expenses prepaid and deposits made by Seller, all as determined in accordance with GAAP consistently applied, and to reflect the principle that all such expenses and deposits attributable to the Business for the period prior to the Closing Date are for the account of Seller, and all such expenses and deposits attributable to the Business for the period on and after the Closing Date are for the account of Purchaser.
ii. All Subscriber deposits which have not been applied or refunded as of the Closing Date shall be retained by Seller and shall constitute a corresponding decrease in the Purchase Price credited to the account of Purchaser.
iii. All deferred or prepaid income as of the Closing Date shall be retained by Seller and shall constitute a corresponding decrease in the Purchase Price credited to the account of Purchaser (excluding any adjustment on account of the $200 Rebate Program of DirecTV, Inc.).
iv. All DSS System access card changeover costs for Subscribers that have been or will be billed by NRTC pursuant to NRTC's memorandum of August 7, 1996, as updated, shall be paid by Purchaser and shall constitute a decrease in the Purchase Price credited to the account of Purchaser, except for those costs previously paid by Seller.
v. To the extent that Purchaser elects at Closing to purchase Inventory, Seller shall receive credit therefor in an amount equal to (x) the number of units transferred to Purchaser multiplied by (y) the book value of such units; provided, however, that Purchaser shall purchase all new DSS Systems held in Inventory at Closing with a book value of $240 per DSS System, and at least 125 new DSS Systems held in Inventory at Closing which have a book value of greater than $240 but less than $300 per single access DSS System and a book value of not greater than $325 per dual access DSS System, and Seller shall receive credit therefor.
vi. All Closing Accounts Receivable that become 90 days or more past due within 60 days after Closing shall constitute a decrease in the Purchase Price credited to the account of Purchaser.
vii. All Accounts Receivable that are more than 60 days past due as of the Closing Date and are collected within 60 days after Closing shall constitute an increase in the Purchase Price credited to t...
Operating Adjustment. 5 2.5 Assets to be Conveyed to Berry.. . . . . . . . . . . . . . . . 6 2.6
Operating Adjustment. (a) The Purchase Price shall be adjusted as follows ("Operating Adjustment") in accordance with the procedures set forth in Section 2.5(b): i. Adjustments on a pro rata basis as of the Closing Date shall be made for all expenses prepaid and deposits made by Seller, all as determined in accordance with GAAP consistently applied, and to reflect the principle that all such expenses and deposits attributable to the Business for the period prior to the Closing Date are for the account of Seller, and all such expenses and deposits attributable to the Business for the period on and after the Closing Date are for the account of Purchaser. ii. All Subscriber deposits which have not been applied or refunded as of the Closing Date shall be retained by Seller and shall constitute a corresponding decrease in the Purchase Price credited to the account of Purchaser.
Operating Adjustment. The parties intend that the Seller operate the Business for the account of the Purchaser for the period commencing December 31, 1995 (the "Effective Date"). Accordingly, as an additional purchase price adjustment, the Adjusted Purchase Price shall be further adjusted as follows (as so adjusted, the "Final Purchase Price"). By no later than 10 business days following the Closing Date, the Seller shall prepare and deliver to the Purchaser a statement of the net cash generated or consumed by the Business (the "Operating Statement") between the Effective Date and the Closing Date. It is understood and agreed by the parties hereto that the Operating Statement shall be computed by the Seller without taking into consideration any cash consumed by the Business due to (i) the payment of any liabilities of the Business which are not Assumed Liabilities, and (ii) any transaction relating to assets of the Business which are not Assets being purchased by the Purchaser (it being understood that lease payments and insurance policy premiums shall be included in computing the operating Statement). In the event the Purchaser disputes the Operating Statement, the Purchaser shall notify the Seller in writing of the amount, nature and basis of such dispute within 5 business days after delivery of the Operating Statement (the "Operating Adjustment Dispute Notice"). The parties shall use their best efforts to resolve the dispute within 10 days after delivery of the Operating Adjustment Dispute Notice. If they are unable to agree upon a resolution of the dispute within such 10-day period, the dispute shall be submitted to Deloitte & Touche for resolution. The determination of such accountants as to the resolution of any dispute shall be binding and conclusive upon all parties hereto. The fees and expenses of such accountants shall be shared equally by the Seller and the Purchaser. Immediately upon the expiration of the 10-day period for giving the Operating Adjustment Dispute Notice (if no Operating Adjustment Dispute Notice is given), or immediately upon the resolution of disputes, if any, the Adjusted Purchase Price shall be reduced by the net amount of any cash generated by the Business between the Effective Date and the Closing Date, or increased by the net amount of any cash consumed by the Business between the Effective Date and the Closing Date. Any amounts due to the Purchaser or the Seller pursuant to this subsection (c) shall be payable no later than three business days...
Operating Adjustment. 10 2.6 Liabilities........................................................................12 2.7 Closing............................................................................12 2.8 Transactions at Closing............................................................12
Operating Adjustment. 5 2.5 Assets to be Conveyed to ▇▇▇▇▇.. . . . . . . . . . . 5 2.6
Operating Adjustment. The Base Purchase Price payable in respect of a Transferred Asset or a Non-Transferred Asset shall be adjusted on account of the Operating Cashflow associated with such Transferred Asset or Non-Transferred Asset, as applicable, (the “Operating Adjustment”) from the Adjustment Date to (i) in the case of a Transferred Asset, the applicable Asset Closing Date, and (ii) in the case of a Non-Transferred Asset, the date of adjustment specified in respect of such Non-Transferred Asset pursuant to Section 4.7(d)(i), 4.7(e) or 4.8(b)(ii), as applicable.