Net Worth Adjustment Clause Samples
A Net Worth Adjustment clause is designed to modify the terms of an agreement based on changes in a party's net worth. Typically, this clause allows for recalculation of obligations, such as purchase price or collateral requirements, if the net worth of a party falls below or rises above a specified threshold during the contract period. For example, if a seller's net worth decreases significantly before closing, the buyer may be entitled to a price reduction or additional security. The core function of this clause is to protect parties from unexpected financial instability, ensuring that the agreement remains fair and that risks associated with financial deterioration are managed.
POPULAR SAMPLE Copied 2 times
Net Worth Adjustment. (a) On the Closing Date, or as soon as practicable thereafter (but no later than 45 days after the Closing Date), the Stockholders shall prepare and deliver to UAG a combined balance sheet of the Companies as of the close of business on the Closing Date (such balance sheet so delivered is referred to herein as the "Closing Date Balance Sheet"). The Closing Date Balance Sheet shall be prepared in accordance with GAAP applied on a basis consistent with the accounting practices and principles set forth on Exhibit "A-1" hereto and subject to the adjustments set forth on Exhibit "A-2" hereto. At the same time, the Stockholders shall also prepare and deliver to UAG a schedule of Net Worth as of the same date (as defined in Section 1.4(g)(iii) hereof ("Schedule of Net Worth")). In connection with the preparation of the Closing Date Balance Sheet, the Stockholders and the Companies shall permit the Reviewer (as defined below) and other representatives of UAG to conduct a physical inventory at each location where inventory is held by the Companies, and the Stockholders, the Companies, and their representatives shall be permitted to observe and participate in such inventory.
(b) Coopers & ▇▇▇▇▇▇▇ or such other "big 6" accounting firm (the "Reviewer") as may be selected by UAG shall audit or otherwise review the Closing Date Balance Sheet and the Schedule of Net Worth delivered by the Stockholders to the extent UAG and the Reviewer deem appropriate. Within seventy-five (75) days after delivery of the Closing Date Balance Sheet and Schedule of Net Worth, UAG shall deliver a reviewed balance sheet (the "Reviewed Balance Sheet") and a reviewed schedule of net worth ("Reviewed Schedule of Net Worth") to the Stockholders. The Reviewed Balance Sheet and the Reviewed Schedule of Net Worth shall be prepared by UAG with the Reviewer's assistance in the same manner as is provided in subparagraph (a) above for the Closing Date Balance Sheet and the Schedule of Net Worth.
(c) UAG and the Reviewer shall have the opportunity to consult with the Stockholders, the Companies and each of the accountants and other representatives of the Stockholders and the Companies and to examine the work papers and schedules prepared by the Stockholders, the Companies and each of such accountants after the preparation of the Closing Date Balance Sheet and Schedule of Net Worth. The Stockholders and their representatives shall have the opportunity to consult with UAG, the Companies and their accounta...
Net Worth Adjustment. (a) On the Closing Date, or as soon as practicable after the Closing Date, the Stockholders shall deliver to UAG balance sheets of the Companies dated as of the Closing Date (such balance sheets so delivered are referred to herein as the "Closing Date Balance Sheets"). The Closing Date Balance Sheets shall be prepared in good faith on the same basis and in accordance with the accounting principles, methods and practices used in preparing the November 30 Balance Sheets (as defined in Section 2.5 hereof) (such accounting principles, methods and practices and such procedures, are referred to herein as the "Accounting Principles"). In connection with the preparation of the Closing Date Balance Sheets, the Stockholders and the Companies shall permit the Reviewer (as defined below) and other representatives of UAG to conduct a physical inventory at each location where inventory is held by the Companies.
(b) Within sixty (60) days after delivery of the Closing Date Balance Sheets, (i) Coopers & ▇▇▇▇▇▇▇ or such other accounting firm (the "Reviewer") as may be selected by UAG shall audit or otherwise review the Closing Date Balance Sheets in such manner as UAG and the Reviewer deem appropriate, and (ii) UAG shall deliver such reviewed balance sheet (the "Reviewed Balance Sheets"), together with the Reviewer's report thereon, to the Stockholders. The Reviewed Balance Sheets (i) shall be prepared on the same basis and in accordance with the Accounting Principles and (ii) shall include a schedule showing the computation of the Final Net Worth (as defined in Section 1.3(g)(i) hereof), computed in accordance with the definition of Net Worth set forth in Section 1.3(g)(ii) hereof. UAG and the Reviewer shall have the opportunity to consult with the Stockholders, the Companies and each of the accountants and other representatives of the Stockholders and the Companies and to examine the work papers, schedules and other documents prepared by the Stockholders, the Companies and each of such accountants and other representatives during the preparation of the Closing Date Balance Sheets. The Stockholders and the Stockholders' independent public accountants shall have the opportunity to consult with the Reviewer and to examine the work papers, schedules and other documents prepared by the Reviewer during the preparation of the Reviewed Balance Sheets.
(c) The Stockholders shall have a period of forty-five (45) days after delivery of the Reviewed Balance Sheets to present in writ...
Net Worth Adjustment. (a) Not later than five business days prior to the Closing Date, Sellers will prepare and deliver to Buyer an estimated consolidated balance sheet setting forth the Consolidated Net Book Value of Sellers and 99 West as of the Closing Date (the "ESTIMATED BALANCE SHEET"). Sellers will prepare the Estimated Balance Sheet in accordance with the methodologies set forth in Schedule 2.8 hereto. If the Consolidated Net Book Value shown on the Estimated Balance Sheet exceeds the Minimum Net Book Value, the cash portion of the Purchase Price payable at Closing shall be increased by such amount. If the Consolidated Net Book Value shown on the Estimated Balance Sheet is less than the Minimum Net Book Value, the cash portion of the Purchase Price payable at Closing shall be decreased by such amount.
(b) Within 90 days after the Closing Date, Buyer will prepare and deliver to Sellers a consolidated balance sheet (the "CLOSING DATE BALANCE SHEET") for Sellers and 99 West as of the opening of business on the Closing Date (determined on a pro forma basis as though the parties had not consummated the transactions contemplated by this Agreement). Buyer will prepare the Closing Date Balance Sheet in accordance with the methodologies set forth in Schedule 2.8 hereto. If Sellers have any objections to the Closing Date Balance Sheet, they shall notify Buyer in writing within 30 days of receipt of the Closing Date Balance Sheet and deliver a detailed written statement describing their objections. Buyer and Sellers shall use their reasonable best efforts to resolve any such objections themselves. If Buyer and Sellers cannot resolve any such objections within 30 days after Buyer receives Sellers' statement of objections, such dispute shall be referred to a mutually acceptable nationally recognized accounting firm that has not performed services for Buyer (or any Affiliate of Buyer) or Sellers or 99 West (or any Affiliate of Sellers or 99 West) within the preceding three years for conclusive and binding resolution. Buyer and Sellers shall each pay one-half of the fees and expenses of such accounting firm.
(c) If the Consolidated Net Book Value shown on the Closing Date Balance Sheet (as the same may be adjusted as described in Section 2.8(b) above) exceeds the Consolidated Net Book Value shown on the Estimated Balance Sheet, Buyer will pay Sellers in cash within five business days an amount equal to such excess by wire transfer of immediately available funds to an account designate...
Net Worth Adjustment. (a) As soon as practicable after the Closing Date, the Shareholders shall deliver to UAG a balance sheet of the Partnership dated as of the Closing Date (such balance sheet so delivered is referred to herein as the "Closing Date Balance Sheet"). The Closing Date Balance Sheet shall be prepared in good faith on the same basis and in accordance with the accounting principles, methods and practices used in preparing the Financial Statements (as defined in Section 2.5 hereof) (such accounting principles, methods and practices and such procedures, are referred to herein as the "Accounting Principles"). In connection with the preparation of the Closing Date Balance Sheet, the Shareholders and the Companies and the Reviewer (as defined below) and other representatives of UAG will conduct a physical inventory at each location where inventory is held by the Companies and the Partnership. From the results of such inventory and prior to the Closing Date, UAG and the Shareholders (or the respective representatives thereof) will prepare a schedule, which shall be signed by each of UAG and the Shareholders, setting forth the nature and quality of such inventory and such other items as shall be agreed upon by UAG and the Shareholders to be included in the Closing Date Balance Sheet.
(b) Within sixty (60) days after delivery of the Closing Date Balance Sheet, (i) Coopers & ▇▇▇▇▇▇▇ or such other national accounting firm (the "Reviewer") as may be selected by UAG, shall audit or otherwise review the Closing Date Balance Sheet in such manner as UAG and the Reviewer deem appropriate, and (ii) UAG shall deliver such reviewed balance sheet (the "Reviewed Balance Sheet"), together with the Reviewer's report thereon, to the Shareholders. The Reviewed Balance Sheet (i) shall be prepared on the same basis and in accordance with the Accounting Principles and (ii) shall include a schedule showing the computation of the Final Net Worth (as defined in Section 1.12(g)(i) hereof), computed in accordance with the definition of Net Worth set forth in Section 1.12(g)(iii) hereof. UAG and the Reviewer shall have the opportunity to consult with the Shareholders, the Companies, the Partnership and each of the accountants and other representatives of the Shareholders, the Companies and the Partnership and examine the work papers, schedules and other documents prepared by the Shareholders, the Companies, the Partnership and each of such accountants and other representatives during the preparatio...
Net Worth Adjustment. (a) As used in this Section 2.4:
Net Worth Adjustment. (a) To the extent that on the Closing Date the Net Worth (as hereinafter defined) of the Company, as determined in accordance with the procedures set forth in Section 1.3(b) hereof, is determined to be less than One Million dollars ($1,000,000), the Purchase Price payable by Buyer pursuant to Section 1.2(a) hereof shall be reduced by an amount equal to the amount by which the Net Worth of the Company is determined to be below One Million dollars ($1,000,000). Within five business days after the final determination of the Net Worth pursuant to the procedures in Section 1.3(b) hereof, in the event that the Net Worth is determined pursuant to Section 1.3(b) to be less than One Million dollars ($1,000,000), the Stockholders shall pay to Buyer, by wire transfer, in immediately available funds, the amount by which such final determination of the Net Worth shall be less than One Million dollars ($1,000,000). For purposes of this Agreement, the term "Net Worth" shall mean the total assets of the Company minus the total liabilities of the Company, and shall be determined in accordance with generally accepted accounting principles, except that for purposes of computing Net Worth (i) depreciation of assets (period and lives) shall be consistent with the Latest Balance Sheet; (ii) there will be no reserve for "bad debt" with respect to accounts receivable on the Closing Date Balance Sheet; (iii) inventory reflected on the Closing Date Balance Sheet shall be based on a physical inventory done on November 1 and 2, 1997 and there will be no reserve for obsolete or slow moving inventory; and (iv) the Closing Date Balance Sheet will not reflect as an asset any receivable from an employee. The Buyer and Stockholders agree that the Closing Date Balance Sheet will reflect all liabilities in accordance with generally accepted accounting principals, including without limitation, (i) the dollar amount of all Indebtedness (other than the dollar amount of Indebtedness which is subtracted from the Cash Purchase Price pursuant to Section 1.2); (ii) all accrued property taxes (real estate and other assets) to the Closing Date; (iii) accrued vacation pay to the Closing Date; (iv) accrued benefit costs to the Closing Date; (v) federal and state income taxes to the Closing Date; (vi) accrued payables to Guard Manufacturing Company Inc. to the Closing Date solely with respect to health insurance premiums with respect to employees of the Company, and compensation for Larr▇ ▇▇▇▇▇▇▇; ▇▇d (v...
Net Worth Adjustment. The "Net Worth Adjustment" means the amount by which the Closing Book Value (defined below) is greater than (which shall be a positive number) Two Million Five Hundred Thousand Dollars ($2,500,000) or less than (which shall be a negative number) Two Million Five Hundred Thousand Dollars ($2,500,000).
Net Worth Adjustment. The Purchase Price has been agreed to by the Purchaser on the basis of the representation of the Seller that the Purchase Assets including inventories at the Closing Date shall not be less than the market worth of $2,500,000. Should the Tangible Net Worth not equal at least $2,500,000 the Purchase Price shall be reduced by the difference between the Tangible Net Worth and the Purchase Price (the “Net Worth Adjustment Amount”). The Seller shall pay the Purchaser the Net Worth Adjustment Amount at the date and time of closing following the acceptance or deemed acceptance of the Financial Statements and Purchased Assets, or, as the case may be, the rendering of the arbitration award in connection therewith.
Net Worth Adjustment. The Purchase Agreement provides for adjustments to the Purchase Price (as such term is defined in the Purchase Agreement) which may be paid to the Sellers' Agents. In the event that the adjustment to the purchase price results in additional proceeds to Sellers, such amounts shall be distributed by the Sellers' Agents in accordance with the percentage interest set forth in Schedule B. In the event that the adjustment to the purchase price results in amounts being owed to Buyers, upon the request of the Sellers' Agents, the Sellers shall promptly pay to the Sellers' Agents their individual share of such amount owed in accordance with the percentage interest set forth in Schedule B.
Net Worth Adjustment. The Cash Portion of the Purchase Price shall be adjusted downward on a dollar-for-dollar basis by the amount by which the Net Worth of Sigma6 is less than $200,000 (the "Minimum Net Worth") as of the Closing Date. The Net Worth of Sigma6 as of the Closing Date shall initially be determined prior to the Closing Date by Sigma6 in good faith within two business days prior to the Closing Date (the "Closing Determination"). Following the Closing Date, the Net Worth of Sigma6 as of the Closing Date shall be determined by AA in accordance with the terms of this Agreement (at the expense of the Buyer), which determination (the "AA Determination") shall be submitted in writing to the Buyer and the Sellers not later than sixty (60) days after the Closing. Unless the Sellers' Representative on behalf of all Sellers objects in writing to the AA Determination within ten business days of the receipt of such determination, the AA Determination shall be final, conclusive and binding on the Parties. If no objection is made, Sellers shall pay to Buyer by wire transfer (or by the return to the Buyer, at Sellers' Representative's option, the equivalent number of shares of Buyer Common Stock (valued at $4.50 per share) equal to) the amount, if any, by which the amount of the AA Determination is less than the Minimum Net Worth (less any deduction against the Cash Portion of the Purchase Price as a result of the Closing Determination) within ten (10) days after the AA Determination.