True Up of Claims Clause Samples
The "True Up of Claims" clause establishes a process for reconciling and adjusting previously submitted claims to reflect actual amounts owed or paid. In practice, this clause allows parties to review and correct any discrepancies in claims, such as overpayments or underpayments, after more accurate information becomes available. Its core function is to ensure that financial settlements between parties are accurate and fair, thereby preventing disputes and maintaining transparency in ongoing transactions.
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True Up of Claims. On and through the 15th-month anniversary of the Closing Date (the “True Up Period”), Parent shall recalculate the Tax liabilities and the liabilities for Medical Costs of the Company, including, without limitation, incurred, but not reported claims (“IBNR”) (collectively, “Claims”) as of the Closing Date (considering the post-Closing experience of the Company related to such pre-Closing Claims). The Company will send to Agent within 60 days of the end of the True Up Period its computation as to the amount of Claims as of the Closing Date, together with its work papers used to compute the amount of Claims (the “True Up Report”). Within 30 days of receipt of the True Up Report (the “Review Period”), Agent will either accept the True Up Report or provide Company with written specific objections to such report. If Agent does not accept the True Up Report as presented, the parties shall submit the dispute to the Independent Accountant in accordance with Section 11.2 below, in which case the determination of the Independent Accountant shall be final and binding on the parties. If Agent accepts the True Up Report as presented, then at the end of the Review Period, the True Up Report will be deemed final and binding on the parties. Within five Business Days after the True Up Report becomes final, Escrow Agent shall pay Parent the amount, if any, of Claims as set forth in the True Up Report in excess of the amount of Claims in the Closing Balance Sheet. Within five Business Days after the True Up Report becomes final, Parent shall deposit into the Escrow Account the amount, if any, by which the Claims in the Closing Balance Sheet exceed the amount of Claims in the True Up Report.