Target Net Working Capital Clause Samples
The Target Net Working Capital clause establishes a specific benchmark for the amount of net working capital a business should have at the time of closing a transaction. This clause typically outlines how net working capital is calculated, which accounts are included or excluded, and the process for comparing actual net working capital at closing to the agreed target. If the actual figure deviates from the target, purchase price adjustments may be triggered to reflect the difference. The core function of this clause is to ensure that the buyer receives a business with an expected level of liquidity and operational resources, thereby preventing disputes and aligning both parties’ expectations regarding the company’s financial health at closing.
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Target Net Working Capital. As of the Effective Date, the Company shall have a Net Working Capital of One Million One Hundred Fifty Thousand Dollars ($1,150,000) (the “Target Net Working Capital”).
Target Net Working Capital. Target Net Working Capital is $20,000,000.
Target Net Working Capital. 2.01(d)(A) Taxes or taxes .................................................................................3.14
Target Net Working Capital. 24 Tax ............................................................................ 24
Target Net Working Capital. The term “Target Net Working Capital” shall mean Seven Million Dollars ($7,000,000).
Target Net Working Capital. The definition of “Target Net Working Capital” in Section 1.1 of the SPA is hereby deleted in its entirety and replaced with the following:
Target Net Working Capital. For purposes of calculating the Final Closing Payment, if, for the period from January 1, 2011, through February 28, 2011, the amount of CAPEX exceeds $8.3 million, then the Target Net Working Capital shall be decreased by such excess amount (the “CAPEX Adjustment”). For purposes of calculating the CAPEX Adjustment, (except as set forth below, the amount of CAPEX shall include all capital expenditures with respect to the turnaround of the sulfuric acid unit and all other capital expenditures incurred by the Seller, including, but not limited to turnaround maintenance and turnaround capital. For the avoidance of doubt, the amount of CAPEX shall not include (i) any amounts related to the melamine or acrylonitrile turnarounds nor (ii) the monthly turnaround amortization expense. The CAPEX Adjustment shall not exceed $2.2
Target Net Working Capital. Seller shall have delivered to Buyer at least 5 days prior to the Closing a schedule showing a minimum Target Net Working Capital which shall be computed consistently with the same methodology as set forth in Section 4.5(b) to the Disclosure Schedule.
Target Net Working Capital. The following provisions shall be deleted in their entirety: Sections 2.2(b)(iv), 2.2(b)(v) and 2.2(c)(ii).