Purchase Price Adjustment Allocation Clause Samples
The "Purchase Price; Adjustment; Allocation" clause defines the total amount to be paid for an asset or business and outlines how this price may be modified after the initial agreement. It typically details mechanisms for adjusting the purchase price based on factors such as working capital, inventory levels, or undisclosed liabilities discovered during due diligence or post-closing. Additionally, the clause specifies how the final purchase price will be allocated among various assets for accounting and tax purposes. Its core function is to ensure both parties have a clear understanding of the financial terms, provide a fair process for addressing changes in value, and facilitate compliance with tax regulations.
Purchase Price Adjustment Allocation a. Promptly following Assignor’s receipt of the statement setting forth the Estimated Working Capital Amount from Seller, Assignor shall forward a copy thereof to Assignee and, thereafter, as promptly as possible prior to the Closing Date, Assignor shall deliver to Assignee its good faith estimate of the Estimated Turkey Working Capital Amount.
b. In accordance with this Agreement, Assignee shall pay the following amount directly to Seller at Closing: the Base Turkey Purchase Price minus (i) the amount equal to any Crated Equipment Proceeds attributable to the Turkey Crated Equipment (defined in Section 8 below); plus or minus (ii) an amount necessary to adjust for any rent or other charges due under the Turkey Contracts and for Taxes applicable to the Turkey Assets in accordance with Section 17 of the Purchase Agreement; plus or minus (iii) an amount necessary to adjust for any costs and expenses in accordance with Section 18 of the Purchase Agreement, to the extent attributable to the Turkey Assets; and plus or minus (iv) an amount equal to the difference between the Target Turkey Working Capital Amount minus the Estimated Turkey Working Capital Amount. Assignor and Assignee agree to make such other payments to each other after the Closing as may be necessary to reflect further adjustments to the Base Turkey Purchase Price for costs or expenses allocable to the Turkey Assets, including to take into account any payments received by either of them from Seller in respect thereof.
c. Promptly following receipt of the Statement of Net Working Capital from Seller, Assignor shall forward a copy thereof to Assignee. No less than five (5) calendar days prior to expiration of the Objection Period, Assignee shall notify Seller in writing of (i) Assignee’s good faith determination of the value of the Turkey Inventory and the Turkey Prepaids (each defined in Exhibit B attached hereto), (ii) Assignee’s good faith determination of the amount of the Accrued Turkey Expenses (defined in Section 9 below), and (iii) any objections to be included in the Objection Notice, to the extent related to the Turkey Inventory, the Turkey Prepaids or the Accrued Turkey Expenses (the “Turkey Objections”), specifying in reasonable detail each Turkey Objection and the basis for each Turkey Objection. Assignor shall include all timely Turkey Objections in a timely Objection Notice to Seller and shall represent Assignee’s position with respect to such objections in good faith in its negotia...
Purchase Price Adjustment Allocation