Schedule - Purchase Price Based on Completion Accounts with Escrow (Asset Sales Where Creditors & Debtors Transferred)
This Schedule - Purchase Price based on Completion Accounts with Escrow (Asset Sales where creditors and debtors transferred) is a direct replacement for the schedule in the relevant business/asset sale agreement which deals with the purchase price. The default provision in each of the agreements is for the purchase price to be paid in cash without any reference to the value of the Assets at Completion and without the possibility of a clawback if the Buyer has overestimated the value of the business and paid too much initially. It should only be used in transactions where the creditors and debtors are being transferred to the Buyer.
This Schedule allows for two payments at Completion. The first payment will be paid to the Seller(s) at Completion and the second is paid into an Escrow account. The accountants will calculate the net value at the Transfer Time of the Assets sold to the Buyer under the agreement. If, when they have done so, the first payment falls short of the net value of the assets, then a balancing payment will be made from the Escrow account. If the Escrow account is not sufficient to cover the shortfall, then the Buyer will make a direct transfer to the Seller(s) for the excess. If there is any money left in the Escrow account after payment of any shortfall to the Seller(s) then it will be returned to the Buyer. Conversely, if the Buyer has paid too much in the first payment, the Buyer will be entitled to a clawback from the Seller(s).
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