Merger Consideration Adjustment Clause Samples

Merger Consideration Adjustment. The Company, Parent and the Participating Holders agree to treat each indemnification payment pursuant to this Article VI as an adjustment to the Merger Consideration for all Tax purposes and shall take no position contrary thereto unless required to do so by applicable Tax Law pursuant to a determination as defined in Section 1313(a) of the Code.

Merger Consideration Adjustment. (a) Pre-Closing Statement. At least five (5) Business Days prior to the anticipated Closing Date, the Company shall deliver to Parent a statement, certified by an officer of the Company, consisting of the Company’s good-faith estimates of the following amounts: (i) an estimated calculation of the Closing Cash (the “Estimated Closing Cash”), (ii) an estimated calculation of the Seller Transaction Expenses (specifying which Seller Transaction Expenses will be paid at the Effective Time and not prior thereto) (the “Estimated Seller Transaction Expenses”), (iii) an estimated calculation of the Closing Funded Debt (the “Estimated Closing Funded Debt”), (iv) an estimated calculation of Closing Working Capital (the “Estimated Closing Working Capital”) and the Estimated Closing Working Capital Adjustment, and (v) a calculation of the Estimated Merger Consideration. Parent may submit any objections in writing to the Company until 5:00 PM, Eastern Standard Time, on the Business Day prior to the anticipated Closing Date and the Company will cooperate in good-faith with Parent to revise the draft statement to reflect the mutual agreement of the Company and Parent with respect to the estimated amounts set forth in the preceding sentence (as so revised and agreed, the “Pre-Closing Statement”); provided, that if the Company and Parent cannot reach an agreement with respect to the amounts set forth in the preceding sentence, the Pre-Closing Statement will reflect the Company’s good-faith estimates with respect to such amounts. The Estimated Merger Consideration shall be subject to adjustment pursuant to this Section 2.11 (as adjusted, the “Merger Consideration”). The Pre-Closing Statement shall be prepared in accordance with the accounting principles, practices and methodologies set forth in Exhibit E (the “Applicable Accounting Principles”).

Merger Consideration Adjustment. (a) Within ninety (90) days after the Closing Date, Purchaser’s Chief Financial Officer (the “CFO”) shall deliver to the Purchaser Representative and the Seller Representative a statement (the “Closing Statement”) setting forth (i) a consolidated balance sheet of the Target Company as of the Reference Time and (ii) a good faith calculation of as of the Reference Time, and the resulting Merger Consideration using the formula in Section 1.8. The Closing Statement shall be prepared, and the Closing Net Indebtedness and the resulting Merger Consideration and shares shall be determined in accordance with the Accounting Principles and otherwise in accordance with this Agreement. (b) After delivery of the Closing Statement, each of the Seller Representative and the Purchaser Representative, and their respective Representatives on their behalves, shall be permitted reasonable access to the books, records, working papers, files, facilities and personnel of the Target Company relating to the preparation of the Closing Statement. The Seller Representative and the Purchaser Representative, and their respective Representatives on their behalves, may make inquiries of the CFO and related Purchaser and Target Company personnel and advisors regarding questions concerning or disagreements with the Closing Statement arising in the course of their review thereof, and Purchaser and the Company shall provide reasonable cooperation in connection therewith. If either the Seller Representative or the Purchaser Representative (each, a “Representative Party”) has any objections to the Closing Statement, such Representative Party shall deliver to the CFO and the other Representative Party a statement setting forth its objections thereto (in reasonable detail) (an “Objection Statement”). If an Objection Statement is not delivered by a Representative Party within thirty (30) days following the date of delivery of the Closing Statement, then such Representative Party will have waived its right to contest the Closing Statement, all determinations and calculations set forth therein, and the resulting Merger Consideration set forth therein. If an Objection Statement is delivered within such thirty (30) day period, then the Seller Representative and the Purchaser Representative shall negotiate in good faith to resolve any such objections for a period of twenty (20) days thereafter. If the Seller Representative and the Purchaser Representative do not reach a final resolution within such twe...

Merger Consideration Adjustment. (i) If the Actual Closing Merger Consideration as determined pursuant to Section 2.17(b) and (c) exceeds the Estimated Closing Merger Consideration as determined pursuant to Section 2.17(a) (such excess, the “Upward Adjustment Amount”), then at the election of Parent, within ten (10) Business Days of such determination, (A) Parent shall pay to each Stockholder its Pro Rata Share of the Upward Adjustment Amount, by wire transfer of immediately available funds, or (B) Parent shall issue to each Stockholder its Pro Rata Share of additional Parent Shares (rounded up to the nearest whole number) equal to the quotient of (I) the Upward Adjustment Amount, divided by (II) the Closing Share Price. (ii) If the Actual Closing Merger Consideration as determined pursuant to Section 2.17(b) and (c) is less than the Estimated Closing Merger Consideration as determined pursuant to Section 2.17(a) (such deficit, the “Downward Adjustment Amount”), then at the election of the Stockholder Representative for and on behalf of the Stockholders, within ten (10) Business Days of such determination, Stockholder Representative shall (A) direct Parent or the Surviving Corporation to release to Parent, from the Stockholder Representative Expense Fund, the Downward Adjustment Amount (or a portion thereof), with any excess of the Downward Adjustment Amount over the amount of such release from the Stockholder Representative Expense Fund to be paid, at the election of Stockholder Representative, by (I) directing the Escrow Agent to release to Parent an aggregate number of Escrow Shares (rounded up to the nearest whole number) equal to the quotient of (1) the remaining Downward Adjustment Amount, divided by (2) the Closing Share Price, or (II) Stockholders to Parent in cash in immediately available funds in the amount of their respective Pro Rata Shares thereof, severally and not jointly, or (B) Stockholder Representative shall direct the Escrow Agent to release to Parent an aggregate number of Escrow Shares (rounded up to the nearest whole number) equal to the quotient of (I) the Downward Adjustment Amount, divided by (II) the Closing Share Price; provided, that (i) if the Stockholder Representative elects cash payment under the foregoing clause (A)(II), and any Stockholder does not pay any such excess amounts owed pursuant thereto within 30 days thereafter, such Stockholder shall, at the option of Parent, have such amounts settled in Escrow Shares pursuant to the foregoing clause (A)(I) ...

Merger Consideration Adjustment. Notwithstanding anything in this Agreement to the contrary, if, from the date of this Agreement until the Effective Time, the number of outstanding Shares shall have been changed into a different number of shares or a different class (including by reason of any reclassification, stock split (including a reverse stock split), recapitalization, split-up, combination, exchange of shares, readjustment or other similar transaction, or if a stock dividend or stock distribution thereon shall be declared with a record date and payment date within such period), the Merger Consideration shall be equitably adjusted to reflect such change so as to provide Parent and the holders of Shares the same economic effect as contemplated by this Agreement prior to such event; provided, that nothing in this Section 2.01(b) shall be deemed to permit or authorize the Company to effect any such change that it is not authorized or permitted to undertake pursuant to this Agreement.

Merger Consideration Adjustment. The Company, Buyer, the Surviving Corporation, the Stockholder Representative and the Stockholders agree to treat each indemnification payment pursuant to this Section 10 as an adjustment to the Merger Consideration for all Tax purposes and shall take no position contrary thereto unless required to do so by applicable Tax Law pursuant to a determination as defined in Section 1313(a) of the Code.

Merger Consideration Adjustment. (a) The Merger Consideration will be adjusted as of the Closing Date as follows: (i) If on the Closing Date, the Company’s cash on hand exceeds the sum of the Company’s total debt outstanding under the Convertible Notes and Credit Agreement, the Base Consideration will be increased by the amount of such excess. If on the Closing Date, the Company’s cash on hand is less than the sum of the Company’s total debt outstanding under the Convertible Notes and Credit Agreement, the Base Consideration will be decreased by the amount of such shortfall; and (ii) If on the Closing Date, the Estimated Net Working Capital (as defined below) of the Company, exclusive of the items covered in (i) above, exceeds the Target Net Working Capital (as defined below), the Base Consideration will be increased by the amount of the excess. If on the Closing Date, the Estimated Net Working Capital of the Company is less than the Target Net Working Capital, the Base Consideration will be decreased by the amount of such shortfall. The Company shall deliver to Alarm not less than three (3) Business Days prior to the anticipated Closing Date an estimated balance sheet of the Company prepared as of a date within three (3) Business Days of the anticipated Closing Date that sets forth a good faith estimate of the Closing Net Working Capital as of the anticipated Closing Date determined in accordance with the definition of “Net Working Capital” (the “Estimated Net Working Capital”) and which estimate is consented to by Alarm, which consent shall not be unreasonably withheld. (b) Within ninety (90) days following the Closing Date, Alarm shall, or shall cause the Surviving Corporation to, prepare and deliver to the Stockholder Representative a statement of the Net Working Capital as of the end of the Business Day immediately preceding the Closing Date (the “Closing Net Working Capital”). “Net Working Capital” means the amount by which accounts receivable, pre-paid expenses, inventory and other current assets, calculated in accordance with GAAP, exceeds accounts payable, accrued expenses, warrant liability if such warrant liability exists post-Closing, deferred revenues to the extent the Company is obligated to provide services post-Closing and, to the extent not paid directly by Alarm pursuant to Section 2.2(b)(iii) hereof, the fees and expenses of the Stockholders and the Company payable in connection with the negotiation, execution and delivery of this Agreement or the transactions contempla...

Merger Consideration Adjustment. The Parties agree that any indemnification payment made pursuant to this Agreement shall be treated as an adjustment to the Merger Consideration for Tax purposes, unless otherwise required by Law.

Merger Consideration Adjustment. Notwithstanding anything in this Agreement to the contrary, if, from the date of this Agreement until the Effective Time, the number of outstanding Shares shall have been changed into a different number of shares or a different class by reason of any reclassification, stock split (including a reverse stock split), recapitalization, split-up, combination, exchange of shares, readjustment or other similar transaction, or by reason of a stock dividend or stock distribution, the Merger Consideration shall be appropriately adjusted to provide the holders of Shares the same economic effect as contemplated by this Agreement prior to such event.