Earn-Out Clause Samples
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Earn-Out. (a) Subject to the terms and conditions of this Section 2.6, the Earn Out Units shall be issuable to the Company Equity Holders in accordance with the terms of Section 2.2 as follows (any such issuable Earn Out Units, “Earned Earn Out Units”):
(i) if at any time during the twelve (12) months following the Closing the VWAP of the Surviving Pubco Class A Shares is greater than or equal to $12.50 over any twenty (20) Trading Days within any thirty- (30-) Trading Day period, 50% of the Earn Out Units; and
(ii) if at any time during the twenty-four (24) months following the Closing the VWAP of the Surviving Pubco Class A Shares is greater than or equal to $14.00 over any 20 Trading Days within any 30-Trading Day period, 100% of the Earn Out Units. Notwithstanding anything to the contrary set forth in this Agreement, the number of Earn Out Units to be issued pursuant to this Section 2.6 shall be limited such that in no event shall the Company Equity Holders receive more than 100% of the Earn Out Units. The Surviving Pubco Class A Share price targets in clauses (i) and (ii) shall be equitably adjusted for stock splits, stock dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the Surviving Pubco Class A Shares after the date of this Agreement (other than in respect of issuances of Surviving Pubco Class A Shares in connection with (i) any Additional Equity Financing or (ii) the issuance of the Equity Consideration (including the Estimated Equity Consideration)).
(b) In the event of the satisfaction of the threshold set forth in Section 2.6(a)(i) or the threshold set forth in Section 2.6(a)(ii), as soon as practicable (but in any event within five (5) Business Days) after such satisfaction, the Surviving Pubco will deliver to the Company Securityholder Representative a written statement (each, a “Stock Price Earn-Out Statement”) that sets forth (i) the VWAP over the applicable 20-Trading Day period and (ii) the calculation of the amount of Earned Earn Out Units in connection therewith. Any Earned Earn Out Units issuable as a result of the satisfaction of the threshold set forth in Section 2.6(a)(i) or the threshold set forth in Section 2.6(a)(ii) shall be issued to the Company Equity Holders in accordance with Section 2.2 and the Earn Out Payout Schedule within five (5) Business Days after such satisfaction.
(c) Following the Closing, including during the twenty-four (24) months following the Closing, the Surviving Pubco a...
Earn-Out. In addition to the Cash Portion of the Purchase Price, the Company shall be entitled to receive the Earn-Out Amount determined and payable as provided in this Section 2.3(e).
(i) The parties agree that, during the Earn-Out Period, (A) the operations previously conducted by the Company in the Network Group Operations shall be accounted for by PentaStar so as to enable a calculation of the Earn-Out Amount (and the Company shall have access to the records relating thereto), (B) the Network Group Operations shall be accounted for in accordance with the accounting practices of PentaStar, (C) the business of the Acquiror shall be conducted by the Acquiror and/or PentaStar in the usual and ordinary course of PentaStar's business operations and neither the Acquiror nor PentaStar shall have any Liability to the Company or any other Person for so conducting the business and (D) in operating the business of the Network Group Operations, the Acquiror and/or PentaStar may make decisions or take action with respect to the business of the Network Group Operations that impacts, directly or indirectly, positively or negatively, the potential benefit of the Earn-Out arrangement. The parties further agree that, absent willful and wanton conduct engaged in by the Acquiror and/or PentaStar with the sole purpose of materially affecting the potential benefit to the Shareholders of the Earn-Out arrangement, neither the Acquiror nor PentaStar shall have any Liability to the Company or any other Person arising from or relating to its or their conduct of the business of the Acquiror or any decisions made or actions taken with respect to the business of the Acquiror, including, without limitation, those of the type contemplated by clauses (C) or (D) above.
(ii) As soon as reasonably practicable after September 30, 2001 and in any event by December 10, 2001, PentaStar shall cause Arth▇▇ ▇▇▇e▇▇▇▇ ▇.▇.P. ("Arth▇▇ ▇▇▇e▇▇▇▇") ▇o determine (A) the Earn-Out EBITA and (B) prepare a written calculation of the Earn-Out Amount (collectively, the "Earn-Out Financial Statements"). Arth▇▇ ▇▇▇▇▇▇▇▇'▇ ▇▇▇ermination under this Section 2.3(e)(ii) shall be made in accordance with GAAP, on a basis consistent with the accounting practices of PentaStar. PentaStar shall cause Arth▇▇ ▇▇▇e▇▇▇▇ ▇▇ promptly provide a copy of the Earn-Out Financial Statements to PentaStar and the Company. Within 30 days after receipt of the Earn-Out Financial Statements, each of PentaStar and the Company shall, in a written not...
Earn-Out. (a) Seller shall be entitled to receive the following payments (each, an “Earn Out Payment”) to the extent the Business achieves the applicable EBITDA (as defined below) targets:
(i) An Earn Out Payment of Two Hundred Thousand Dollars ($200,000), if the EBITDA of the Business for the trailing twelve (12) month period from the Closing Date (the “Initial Earn Out Period”) is $2,500,000 or greater;
(ii) An Earn Out Payment of Two Hundred Thousand Dollars ($200,000), if the EBITDA of the Business for the trailing twelve (12) month period from the first anniversary of Closing Date (the “Second Earn Out Period”) is $2,500,000 or greater; and
(iii) An Earn Out Payment of Two Hundred Thousand Dollars ($200,000), if the EBITDA of the Business for the trailing twelve (12) month period from the second anniversary of the Closing Date (the “Final Earn Out Period” and together with the Initial Earn Out Period and the Second Earn Out Period, the “Earn Out Periods” and each, an “Earn Out Period”) is $2,500,000 or greater.
(b) Within ninety (90) days following the end of each Earn Out Period, Buyer shall prepare and deliver to Seller a statement of the EBITDA of the Business for such Earn Out Period (the “Earn Out Statement”). Seller shall have thirty (30) days after receipt of the Earn Out Statement (the “Earn Out Review Period”) to review the calculation of EBITDA for such Earn Out Period. During the Review Period, Seller shall have the right to inspect Buyer’s books and records during normal business hours at Buyer's offices, upon reasonable prior notice and solely for purposes reasonably related to the determinations of EBITDA and the resulting Earn Out Payment. Prior to the expiration of the Review Period, Seller may object to the EBITDA calculation set forth on the Earn Out Statement by delivering a written notice of objection (an “Objection Notice”) to Buyer, which shall specify the disputed items and shall describe in reasonable detail the basis for such objection, as well as the amount in dispute. If Seller fails to deliver an Objection Notice to Buyer prior to the expiration of the Review Period, then the EBITDA calculation set forth in the Earn Out Statement shall be final and binding on the parties hereto. If Seller timely delivers an Objection Notice, the parties shall negotiate in good faith to resolve the disputed items and agree upon the resulting amount of the EBITDA and the Earn Out Payment for the applicable Earn Out Period. If the parties are unable to ...
Earn-Out. (a) At the Closing, in addition to the consideration to be received pursuant to Section 3.02 and as part of the overall consideration payable to the holders of Company Common Stock and holders of Company Vested In-the-Money Options pursuant to this Agreement, Holdco shall place the Earn-Out Shares into escrow with the Escrow Agent pursuant to the Escrow Agreement. If, at any time during the period beginning on the Closing Date and expiring at the close of business on the second anniversary of the Closing Date (the “Earn-Out Period”), the VWAP of Holdco Common Stock shall be equal to or greater than $12.50 for any twenty (20) Trading Days within a period of thirty (30) consecutive Trading Days (the “Earn-Out Trigger”), then within ten (10) Business Days following the achievement of the Earn-Out Trigger, Holdco shall instruct the Escrow Agent to deliver the Earn-Out Shares to the holders of Company Common Stock and holders of Company Vested In-the-Money Options, in each case in accordance with the Payment Spreadsheet.
(b) If a Change of Control occurs during the Earn-Out Period that results in the holders of shares of Holdco Common Stock receiving consideration equal to or in excess of $12.50 per share, then, immediately prior to the consummation of such Change of Control, (i) the Earn-Out Trigger, to the extent that it has not been previously satisfied, shall be deemed to be satisfied, and (ii) Holdco shall promptly instruct the Escrow Agent to deliver the Earn-Out Shares to the holders of Company Common Stock and holders of Company Vested In-the-Money Options, in each case in accordance with the Payment Spreadsheet.
(c) If the Earn-Out Trigger shall not be achieved during the Earn-Out Period, then, upon expiration of the Earn-Out Period, the obligations in this Section 3.04 shall terminate and no longer apply and Holdco shall instruct the Escrow Agent to deliver the Earn-Out Shares to Holdco for cancellation.
(d) The Earn-Out Shares and the Earn-Out Trigger shall be adjusted, and additional shares of Holdco Common Stock shall be delivered to the Escrow Agent as necessary, to reflect appropriately the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Holdco Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to Holdco Common Stock, occurring on or after the date hereof and prior to the time any ...
Earn-Out. (a) Subject to the terms and conditions of this Section 1.5, Purchaser will pay to the Individuals, as additional Purchase Price for the Acquired Shares, an amount equal to three times the amount, if any, by which the total EBITDA for the 2016 fiscal year for the Companies (the “2016 EBITDA”) exceeds $15,655,477 (the “Earn Out Amount”).
(b) To determine the 2016 EBITDA amount, Purchaser’s independent public accountants will calculate, in accordance with GAAP and consistent with the same manner in which the Companies’ 2015 Audited Financial Statements were prepared, the EBITDA of each of the Companies for its 2016 fiscal year and the sum of the total EBITDA of the Companies for their 2016 fiscal year. Such calculations will be undertaken promptly after the Closing, and a copy of such final calculations will be provided to Purchaser and Equityholders’ Representative by such accountants (such final calculations being referred to as, the “Auditor’s Report”). The parties agree that the costs incurred by the Companies in 2016 that are solely related to: (i) the Companies’ responses to the due diligence requests of Purchaser; (ii) the restatement of the Companies’ financials at Purchaser’s request; and (iii) preparing to consummate the transactions contemplated by this Agreement, including the Pre-Closing Reorganization, which costs will be set forth on Schedule 1.5 and attached hereto at the Closing, shall not be deducted from the Companies’ earnings for purposes of calculating the 2016 EBITDA.
(c) Following the receipt by Equityholders’ Representative of the Auditor’s Report, Purchaser shall permit Equityholders’ Representative reasonable access during normal business hours to the books and records pertaining to the preparation of the Auditor’s Report and provide Equityholders’ Representative with copies thereof (as reasonably requested by Equityholders’ Representative) and such additional information as Equityholders’ Representative may reasonably request to confirm the Earn Out Amount. The Equityholders agree that the scope of such audit shall be reasonable and as is customary in transactions of this kind. All costs and fees incurred by the parties related to the exercise of the audit right shall be borne by each of the respective parties. If the parties fail to mutually agree on the Earn Out Amount after 30 days following the receipt of the Auditor’s Report by Equityholders’ Representative, then the parties shall submit the issues then-remaining in dispute t...
Earn-Out. As additional consideration for the Purchase, Buyer agrees to pay Sellers a one-time payment of up to an additional Twenty-Five Million Dollars ($25,000,000.00) (the “Earn-Out Payment”), as follows:
(i) The Earn-out Payment shall be Seven Million Five Hundred Thousand Dollars ($7,500,000.00) if Platinum Vape earns Revenue of at least Eighty Million Dollars ($80,000,000.00) but less than Ninety Million Dollars ($90,000,000.00) within the twelve (12) months immediately following the Closing Date (the “Earn-out Period”);
(ii) The Earn-out Payment shall be Fifteen Million Dollars ($15,000,000.00) if Platinum Vape earns Revenue of at least Ninety Million Dollars ($90,000,000.00) but less than One Hundred Million Dollars ($100,000,000.00) within the Earn-out Period; and
(iii) The Earn-out Payment shall be Twenty Five Million Dollars ($25,000,000.00) if Platinum Vape earns Revenue of more than One Hundred Million Dollars ($100,000,000.00) within the Earn-out Period.
(iv) As a condition to earning the Earn-Out Payment, both of the following must be true: (x) the Company’s EBIT for the Earn-out Period was at least fifteen percent (15%) of Revenue during the Earn-out Period, and (y) Sellers have continued to be employed by RWB or any Company for the entire the Earn-out Period; unless, Sellers resigned for “Good Reason” or were terminated without “Cause,” pursuant to their respective Employment Agreements.
(v) Procedures for Determination of Earn-out Payments.
(A) On or prior to the date that is ten (10) business days after the end of the Earn-out Period (the “Earn-out Calculation Delivery Date”), Buyer shall prepare and deliver to Sellers a written statement (the “Earn-out Calculation Statement”) setting forth in reasonable detail its determination of Revenue for the Earn-out Period, EBIT for the Earn-out Period, and its calculation of the resulting Earn-out Payment, if any (the “Earn-out Calculation”).
(B) Seller shall have ten (10) business days after receipt of the Earn- out Calculation Statement (the “Earn-out Review Period”) to review the Earn-out Calculation Statement and the Earn-out Calculation set forth therein. During the Earn-out Review Period, Sellers and their representatives shall have the right to inspect the Company’s books and records during normal business hours at the Company’s offices. Prior to the expiration of the Earn-out Review Period, Sellers may object to the Earn-out Calculation set forth in the Earn-out Calculation Statement by delivering...
Earn-Out. (a) Buyer shall pay annually to Seller an amount (“Annual Earnout Payment”) equal to (i) the excess, if any, of (A) Eligible Cash Flow for the Company during each fiscal year during the five (5) year period beginning on January 1, 2005 and ending on December 31, 2009 (each, an “Earnout Period”) in excess of (B) $300,000 (“Baseline Cash Flow”) (such excess being the “Annual Cash Flow Excess”), multiplied by (ii) 20%. In no event shall an Annual Earnout Payment exceed $60,000 for any Earnout Period (“Earnout Cap”); provided, however, that if the Earnout Cap has not been reached in an Earnout Period, the shortfall between the Earnout Cap and the Annual Earnout Payment actually paid with respect to such Earnout Period shall be carried over to future Earnout Periods and such amount may be payable in excess of the Earnout Cap in such Earnout Periods to the extent otherwise earned under this Section 2.03 and to the extent not previously used to pay an Annual Earnout Payment; provided further, however, that in no event shall the aggregate Annual Earnout Payments exceed $300,000. The Annual Cash Flow Excess shall be cumulative and shall be adjusted so that: (i) if in any prior Earnout Period(s) the Baseline Cash Flow exceeded the Eligible Cash Flow for that period (the “Annual Cash Flow Shortfall”), such cumulative Annual Cash Flow Shortfall is to be subtracted from the Annual Cash Flow Excess to determine whether a payment is due to Seller for such current period; and (ii) if, but for the Earnout Cap, the amount of Annual Cash Flow Excess in any prior Earnout Period(s) would have resulted in an Annual Earnout Payment exceeding the Earnout Cap (as adjusted pursuant to this Section 2.03), such unused portion of the Annual Cash Flow Excess (i.e., the amount of Annual Cash Flow Excess above the amount needed to reach the Earnout Cap for the relevant Earnout Period) shall be added to Eligible Cash Flow in subsequent Earnout Period(s), until such additional Annual Cash Flow Excess has been used in determining whether a payment is due to Seller for a subsequent Earnout Period. The Annual Earnout Payment will be paid to Seller within forty-five (45) days after the Eligible Cash Flow has been determined for a particular Earnout Period.
(b) By way of example:
(i) If in Year One, the Annual Cash Flow Excess equals $200,000, the Annual Earnout Payment would equal $40,000. In Year Two, if the Annual Cash Flow Excess equals $500,000, the Annual Earnout Payment would equal $80,0...
Earn-Out. Nothing in this Agreement shall affect Executive's right to Earn-Out payments under the Stock Purchase Agreement.
Earn-Out. (a) As additional consideration for the Purchased Interests, Sellers may be entitled to receive earn-out payments (the “Earn-Out Payments”) in the form of issued and outstanding equity interests in Buyer or its successor (“Buyer Shares”), up to an aggregate value of $15,000,000 (as used in this Agreement, the number of Buyer Shares issued to Seller is based upon the market price of said shares at time of issuance), in accordance with the following:
(i) For the calendar year ending December 31, 2023 (the “2023 Earn-Out Period”) (1) if Gross Revenues of the Company are greater than or equal to $47,200,000.00 (the “2023 Gross Revenue Target”) then Sellers shall be entitled to an Earn-Out Payment in an aggregate value equal to $2,500,000.00 of Buyer Shares, and (2) if the EBITDA of the Company is greater than or equal to $4,200,000.00 (the “2023 EBITDA Target”, and together with the 2023 Gross Revenue Target, the “2023 Targets”) then Sellers shall be entitled to an Earn-Out Payment in an aggregate value equal to $2,500,000.00 of Buyer Shares. Seller will be deemed to have met the 2023 Gross Revenue Target or the 2023 EBITDA Target if the final figures are at least ninety percent (90%) of the individual target. The highest Earn-Out Payment Sellers may achieve in 2023 is capped at $5,000,000.00 if both 2023 Targets are achieved.
(ii) For the calendar year ending December 31, 2024 (the “2024 Earn-Out Period”) (1) if Gross Revenues of the Company are greater than or equal to $57,700,000.00 (the “2024 Gross Revenue Target”) then Sellers shall be entitled to an Earn-Out Payment in an aggregate value equal to $2,500,000.00 of Buyer Shares, and (2) if the EBITDA of the Company is greater than or equal to $6,500,000.00 ( the “2024 EBITDA Target”, and together with the 2024 Gross Revenue Target, the “2024 Targets”) then Sellers shall be entitled to an Earn-Out Payment in an aggregate value equal to $2,500,000.00 of Buyer Shares. Seller will be deemed to have met a 2024 Target if the final figures are at least ninety percent (90%) of the individual Target. The highest Earn-Out Payment Seller may achieve in 2024 is capped at $5,000,000.00 if both 2024 Targets are achieved..
(iii) For the calendar year ending December 31, 2025 (the “2025 Earn-Out Period”) (1) if Gross Revenues of the Company are greater than or equal to $63,500,000.00 (the “2025 Gross Revenue Target”) then Sellers shall be entitled to an Earn-Out Payment in an aggregate value equal to $2,500,000.00 of Buye...
Earn-Out. Buyer shall issue the Additional Investment Shares to the Investors as follows:
(i) With respect to the period commencing October 1, 2008 and ending September 30, 2009, in the event that Buyer or its applicable Vessel-owning subsidiary nominees achieves EBITDA for such period equal to or in excess of $72 million derived from the Vessels owned by Buyer or its applicable Vessel-owning subsidiary nominees, assuming all of the Vessels are delivered to Buyer or its applicable Vessel-owning subsidiary nominees on or before October 1, 2008 and all such Vessels are included in such revenues for the entire one-year period, then on November 16, 2009, the Investors shall be entitled to receive the Additional Investment Shares.
(ii) For the purpose of calculating EBITDA in this Section, if any Vessel is delivered to Buyer or its applicable Vessel-owning subsidiary nominees after October 1, 2008, or any such Vessel is sold, or becomes an actual, constructive or compromised total loss or is compulsorily requisitioned prior to September 30, 2009, or any Vessel is off-hire for any reason other than failure of EST to comply with its obligations under the Management Agreement in good faith, then the EBITDA target for the fiscal year ending September 30, 2009, shall be reduced pro rata on a per diem basis in accordance with such Vessel’s or Vessels’ contribution to EBITDA for the portion of the period referred to in sub-paragraph (i) above during which such Vessel was off-hire for reason other than the failure of EST to comply with its obligations in good faith under the Management Agreement, in accordance with Schedule 3.2(f).
(iii) No later than November 16, 2009 (the “Determination Date”), Buyer shall deliver to Sellers a detailed notice setting forth Buyer’s calculation of EBITDA for purposes of determining whether the Additional Investment Shares have been earned in accordance with the terms of this Section. Seller shall have a period of 15 days after delivery of such written notice to review such calculations and provide Buyer with written notice of any objection thereto, which objections shall be in reasonable detail (the “Objection Notice”). In the event that Buyer does not receive the Objection Notice within such 15-day period that objects to the calculation of the Additional Investment Shares to be issued, the Sellers shall be deemed to have irrevocably accepted such calculations and determinations. In the event that Buyer receives the Objection Notice during such ...