Common use of Estimated Net Working Capital Calculation Clause in Contracts

Estimated Net Working Capital Calculation. On the Closing Date, Seller shall prepare and deliver to Purchaser an estimated balance sheet as of the Closing Date (the “Estimated Working Capital Statement”) setting forth Seller’s good faith estimation of the Net Working Capital of Seller as of the Closing Date (the “Estimated Closing Working Capital”). The Estimated Working Capital Statement will be based on the general ledger of Seller and prepared in accordance with GAAP. Seller and Purchaser will work together in good faith to resolve any disagreements regarding the Estimated Working Capital Statement or the Estimated Closing Working Capital reflected thereon. In the event the Estimated Closing Working Capital is less than $75,000 (the “Target Working Capital”), the Cash Consideration portion of the Purchase Price will be decreased, on a dollar for dollar basis, by the amount of such shortfall. In the event the Estimated Closing Working Capital exceeds the Target Working Capital, the Cash Consideration portion of the Purchase Price will be increased, on a dollar for dollar basis, by the amount of such excess. The resulting shortfall or excess is referred to as the “Initial Working Capital Adjustment”.