Purchase Price Adjustments Clause Samples
The Purchase Price Adjustments clause defines how the final purchase price in a transaction may be modified after the initial agreement. Typically, this clause outlines mechanisms for adjusting the price based on factors such as changes in working capital, inventory levels, or outstanding debts at the time of closing. For example, if the seller’s actual working capital at closing is higher or lower than a pre-agreed target, the purchase price is increased or decreased accordingly. The core function of this clause is to ensure that the buyer pays a fair price that accurately reflects the value of the business at closing, thereby preventing disputes over unexpected financial changes between signing and completion.
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Purchase Price Adjustments. The Purchase Price shall be adjusted as follows:
Section 4.02.1; Net Income Purchase Price Adjustment.
(a) If the Closing (as defined in Article XI below) occurs after October 15, 2002, the Purchase Price shall be adjusted by adding 75% of the net income (as determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”), as adjusted to exclude the impact of the expenses in connection with the transactions contemplated in this Agreement, pursuant to the provisions of Section 4.02.1(b) below earned by the Seller’s Business from October 1, 2002 to the Closing Date (“Net Income Purchase Price”). The Net Income Purchase Price shall be paid to Seller in immediately available funds paid by wire transfer to an account designated by Seller within 10 days after the Net Income Calculation has become binding and conclusive between the Parties pursuant to the provisions of Section 4.02.1(c) below.
(b) If the Closing occurs after October 15, 2002 then, within 60 days after the Closing Date, Purchaser will provide to Seller a calculation of the net income earned by the Seller’s Business from October 1, 2002 to the Closing Date (the “Net Income Calculation”) prepared in accordance with GAAP applied on a basis consistent with the preparation of the financial statements of Seller for the fiscal year ended September 30, 2001.
(c) If within 15 days following delivery of the Net Income Calculation, Seller does not deliver to Purchaser written notice of any objection thereto (which notice must contain a reasonably detailed statement of the basis of all objections), then the Net Income Calculation will be binding and conclusive on the Parties and will be used in calculating the Net Income Purchase Price. Seller and Purchaser will act in good faith to resolve between themselves any objections to the Net Income Calculation. If they are unable to do so within 30 days after Purchaser’s receipt of Seller’s notice of objection, then the issues in dispute may be submitted by either Party to Ernst & Young, certified public accountants (the “Accountants”), for resolution. The Accountants shall be instructed to review the issues in dispute and render a final determination of the Net Income Calculation. Each Party will furnish to the Accountants such work papers and other documents and information relating to the disputed issues as the Accountants may reasonably request and are available to that Party (or its independent public accountants), and will be affor...
Purchase Price Adjustments. In case at any time and from time to time the Company shall issue any shares of Common Stock or Derivative Securities convertible or exercisable for shares of Common Stock (the number of shares so issued, or issuable upon conversion or exercise of such Derivative Securities, as applicable, being referred to as "Additional Shares of Common Stock") for consideration less than the then Market Price at the date of issuance of such shares of Common Stock or such Derivative Securities, in each such case the Conversion Price shall, concurrently with such issuance, be adjusted by multiplying the Conversion Price immediately prior to such event by a fraction: (i) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such Additional Shares of Common Stock plus the number of shares of Common Stock that the aggregate consideration received by the Company for the total number of such Additional Shares of Common Stock so issued would purchase at the Market Price and (ii) the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of Additional Shares of Common Stock plus the number of such Additional Shares of Common Stock so issued or sold.
Purchase Price Adjustments. To the extent permitted by Law, any amounts payable under Section 12.2 or Section 12.3 shall be treated by the parties hereto as an adjustment to the Purchase Price.
Purchase Price Adjustments. (a) In the event that the Book Value as reflected on the Final Closing Balance Sheet shall be less than the Minimum Book Value, the Purchase Price shall be reduced dollar for dollar by an amount equal to the excess of the Minimum Book Value over the Book Value reflected on the Final Closing Balance Sheet (the "Book Value Adjustment"). For purposes of this Section 3.2, Book Value shall include certain assets of M&B Leasing Partnership as set forth on Schedule 3.2 hereto and valued at $175,000, which assets shall be transferred to the Company on or before the Closing. The Book Value Adjustment shall be satisfied by the payment by Seller of the amount of such adjustment by certified check or wire transfer of immediately available funds to such account as Purchaser may reasonably direct by written notice delivered to Seller by Purchaser within ten (10) days of the determination of the Final Closing Balance Sheet.
(i) In the event that, during the three fiscal years ending on the last day of the third full fiscal year following the Closing Date (the "Three-Year Period"), the Company generates cumulative EBIT (as defined below) in excess of Two Million and One Hundred Thousand Dollars ($2,100,000), Purchaser shall pay Seller Eight Hundred Thousand Dollars ($800,000) (the "Three-Year Amount") as additional purchase price. As used herein, EBIT shall mean, for any period, earnings before interest and taxes (as calculated according to GAAP), and shall exclude any corporate overhead of Purchaser and its Affiliates except the Company's pro-rata accounting fees, and further, shall exclude any amortization expense, including but not limited to, amortization of goodwill, resulting from any allocation relating to the transactions contemplated by this Agreement.
(ii) In the event the Company generates EBIT in excess of Eight Hundred Thousand Dollars ($800,000) in any Post-Closing Year, Purchaser shall pay Seller an amount (each, an "Annual Amount") equal to 20% of such excess as additional purchase price. For purposes of this Agreement "Post-Closing Year" means any of the first five full fiscal years of the Company commencing after the Closing Date. Any amount due pursuant to this subsection (ii) shall be in addition to any amount due and owing pursuant to subsection (i) above.
Purchase Price Adjustments. The Purchase Price shall be adjusted as of the Effective Time as follows without duplication (the “Adjustments”):
(a) Buyer shall be entitled to all revenues, production, proceeds, income, and products from or attributable to the Assets from and after the Effective Time, and shall be responsible for (and entitled to any refunds with respect to) all costs and expenses attributable to the Assets and incurred from and after the Effective Time. Seller shall be entitled to all revenues, production, proceeds, income, accounts receivable and products from or attributable to the Assets prior to the Effective Time, and shall be responsible for (and entitled to any refunds with respect to) all costs and expenses attributable to the Assets and incurred prior to the Effective Time.
(b) To calculate the Preliminary Purchase Price and the Final Purchase Price, the Purchase Price shall be adjusted as follows, without duplication,
(i) increased by the sum of the following amounts:
(1) the aggregate amount of proceeds received by Buyer for which Seller would otherwise be entitled under Paragraph 6(a) with respect to the Assets;
(2) an amount equal to the market value of all hydrocarbons attributable to the Assets in storage or existing in stock tanks, pipelines and/or plants (including inventory), in each case that are, as of the Effective Time, (i) upstream of the pipeline connection or (ii) upstream of the sales meter, in each case, net of burdens;
(3) the aggregate amount of all non-reimbursed costs and expenses which are attributable to the Assets during the period from and after the Effective Time and that have been paid by Seller;
(4) the amount of all Asset Taxes allocable to Buyer pursuant to Paragraph 18 but paid or otherwise economically borne by Seller; and
(5) any other upward adjustment mutually agreed upon by the Parties; and
(ii) decreased by the sum of the following amounts:
(1) the aggregate amount of proceeds received by Seller for which Buyer would otherwise be entitled under Paragraph 6(a) with respect to the Assets;
(2) the aggregate amount of all non-reimbursed costs and expenses which are attributable to the Assets during the period prior to the Effective Time and that have been paid by Buyer;
(3) the amount of all Asset Taxes allocable to Seller pursuant to Paragraph 18 but paid or otherwise economically borne by Buyer; and
(4) any other downward adjustment mutually agreed upon by the Parties.
(c) To the extent applicable, the Adjustments pursuant t...
Purchase Price Adjustments. The Original Purchase Price shall be -------------------------- subject to adjustment as follows:
Purchase Price Adjustments. Any indemnity payment made pursuant to this Agreement will be treated as an adjustment of the Aggregate Purchase Price for Tax purposes unless a determination (as defined in Section 1313 of the Code) or a similar event under state law with respect to the Indemnitee causes any such payment not to constitute an adjustment to Aggregate Purchase Price for United States federal or state income tax purposes, as the case may be. To the extent that an indemnity payment does not constitute an adjustment to Purchase Price under the prior sentence, the amount of any claim or other liability for which indemnification is provided under this Agreement and which is not an indemnity payment relating to the AMT Liability shall be (A) increased to take into account any Tax cost incurred by the Indemnitee arising from the receipt of indemnity payments hereunder and (B) reduced to take account of any Tax benefit realized by the Indemnitee arising from the incurrence or payment of any such Indemnified Loss or other liability. Any indemnification payment hereunder shall initially be made without regard to the prior sentence and shall be reduced to reflect any such net Tax benefit or increased to reflect any net Tax cost only after the Indemnitee has "actually realized" such benefit or such cost. For purposes of this paragraph, an Indemnitee shall be deemed to have "actually realized" a net Tax benefit or net Tax cost to the extent that, and at such time as, the amount of Taxes payable by such Indemnitee is (i) reduced below the amount of Taxes that such Indemnitee would have been required to pay but for deductibility of such indemnity payment, and (ii) increased above the amount of Taxes that such Indemnitee would have been required to pay but for the receipt of such indemnity payments.
Purchase Price Adjustments. (a) Not later than three (3) Business Days prior to the Closing Date, Seller shall deliver to Buyer a statement (the “Estimated Closing Statement”) setting forth in reasonable detail, with reasonable supporting documentation, Seller’s good faith estimate of (i) the Cash of the Target Companies as of the Calculation Time (the “Estimated Closing Cash”), (ii) the Indebtedness of the Target Companies as of the Calculation Time (the “Estimated Closing Indebtedness”), (iii) the Company Transaction Expenses as of immediately prior to the Closing (the “Estimated Company Transaction Expenses”), (iv) the Net Working Capital of the Target Companies as of the Calculation Time (the “Estimated Closing Net Working Capital” and, together with the Estimated Closing Cash, the Estimated Company Transaction Expenses, and the Estimated Closing Indebtedness, the “Estimated Amounts”) and (v) a calculation of the Closing Purchase Price derived therefrom, expressed in Dollars in accordance with Section 2.05. Seller shall provide Buyer and its Representatives with reasonable access to appropriate employees, advisors, relevant books and records of the Target Companies during normal business hours and upon reasonable notice (subject to execution of any customary work paper access letter required by Seller’s or the Company’s accountants or other advisors) to the extent reasonably necessary to verify the information contained in the Estimated Closing Statement; provided that such access does not unreasonably disrupt the normal business operations of Seller or the Target Companies. In the event that ▇▇▇▇▇ notifies Seller prior to the Closing that Buyer in good faith disputes Seller’s calculation of the Estimated Amounts set forth on the Estimated Closing Statement, then Buyer and Seller shall cooperate in good faith to resolve any such dispute as promptly as practicable and, if so resolved, modify the Estimated Closing Statement and the Closing Purchase Price, as appropriate, to reflect any agreed adjustments to the Estimated Amounts; provided, that in case of any disagreement between the parties with respect to the Estimated Amounts that is not resolved prior to the Closing, in no case shall such disagreement delay the Closing and the Estimated Amounts of the Company set forth in the Estimated Closing Statement shall control.
(b) No later than ninety (90) days following the Closing Date (the “Delivery Period”), Buyer shall, at its expense, prepare and deliver, or cause to be prepared a...
Purchase Price Adjustments. If on any day:
(a) the Outstanding Balance of a Receivable is:
(i) reduced as a result of any defective or rejected goods or services, any discount or any adjustment or otherwise by Originator (other than cash Collections on account of the Receivables),
(ii) reduced or canceled as a result of a setoff in respect of any claim by any Person (whether such claim arises out of the same or a related transaction or an unrelated transaction), or
(b) any of the representations and warranties set forth in Article II are no longer true with respect to any Receivable, then, in such event, (i) in the case of clause (a), Buyer shall be entitled to a credit against the Purchase Price otherwise payable hereunder in an amount equal to the amount of such reduction or cancellation, and (ii) in the case of clause (b), Buyer shall be entitled to a credit against the Purchase Price otherwise payable hereunder in an amount equal to the full amount of the Outstanding Balance of such Receivable and, on the following Settlement Date after application of any payment required to be made by the Originator on such Settlement Date pursuant to the next sentence, such Receivable, its Related Security, and any future Collections, any Records, Contracts and other rights and documents relating thereto (the “Reconveyed Assets”), shall hereby be conveyed by Buyer to Originator, free and clear of any Adverse Claim on the part of the Buyer or any assignee of the Buyer. If the aggregate amount of all Purchase Price Credits during any Calculation Period shall exceed the aggregate amount of Purchase Price payable in respect of Receivables coming into existence during such Calculation Period, the Originator shall pay an amount in cash equal to such excess to Buyer on the Settlement Date following the end of such Calculation Period or on such earlier date as the Agent may direct. Buyer hereby grants to Originator a power of attorney, coupled with an interest, to act as its attorney for the purpose of doing anything which Buyer may lawfully do by attorney solely for the purpose of effecting any reconveyance of Reconveyed Assets to be effected in accordance with this Section 1.3.
Purchase Price Adjustments. Amounts paid to or on behalf of the Company or Buyer as indemnification shall be treated as adjustments to the Purchase Price.